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Health, wealth and… wellbeing?

Health, wealth and… wellbeing?

In our New Year’s greetings, we often put an emphasis on health as the most precious commodity. By the way, are you familiar with the Canadian Index of Wellbeing? Meet the little-known younger sibling of the GDP.

Question: are we necessarily “better off” when the economy is thriving? The most recent report from the Canadian Index of Wellbeing Network gives an unexpected answer to this question. Take a look:

More money but not more happiness?


As we can see, the Canadian standard of living as measured by our gross domestic product (GDP) increased by nearly 29% between 1994 and 2010. At the same time, however, Canadians’ quality of life as measured by the Canadian Index of Wellbeing (CIW) only improved by about 6%. What’s more, in the depths of the last recession, when GDP was down by 8 points, the CIW plunged by 24 points! So is it true that money can’t buy happiness?

Frankly, it’s a bit more complicated than that.

Another view of our circumstances

The CIW is a composite index that a network of researchers created in the early years of this century to provide a more nuanced view of the Canadian standard of living. This network is based at the University of Waterloo and began publishing reports in 2009. The index they developed consists of 64 indicators that reflect the quality of people’s lives. These are grouped into eight “domains”:

  • community vitality
  • democratic engagement
  • education
  • environment
  • healthy populations
  • leisure and culture
  • living standards
  • time use (i.e. ability to maintain balance in the use of one’s time).

GDP vs CIW

The GDP, on the other hand, is an indicator that reflects the total value of goods and services produced in the country during a given period, regardless of their impact on quality of life. For example, an increase in tobacco sales or in expenditures related to natural disasters, crime or accidents will have a positive effect on the GDP, but a negative effect on wellbeing.

The GDP is still an important measure of our economic vitality, but the CIW gives us a more qualitative view of how things actually affect people’s lives.

Living standards

So, why did the CIW fall three times as much as the GDP in the recession of 2008? The following figures provide some idea.

What's the problem?


Not surprisingly, the “living standards” category took the biggest hit during the economic slowdown, a decline that the researchers explain as follows:

  • economic security was down (-6.4%);
  • economic activity was also down (-3.0%);
  • employment quality declined (-2.0 %);
  • and, especially, the percentage of the labour force with long-term unemployment rose significantly (+41.7%).

Of course, the indicators measured by the CIW are not felt equally by everyone: whether the index tanks or soars, you, yourself, won’t necessarily feel any more or less happy. On the other hand, if increasing numbers of people cut their vacation time short to stabilize their standard of living or see their access to quality care diminish, that will be reflected in the CIW. Thus, the index helps to put economic data into perspective by explaining why, for example, the social climate sometimes remains gloomy even when we are experiencing economic growth. It also makes it easier to gauge the challenges that await us as a society, beyond mere economic prosperity.

So, yes: all our best wishes for health, wealth, and wellbeing in 2014!