As the federal government focuses on debates around defence, affordability, and investment, a stark disconnect is leaving millions of working Canadians behind, grappling with stagnant wages, weak unemployment benefits, and a growing sense of economic peril. According to a prominent economist, this gap between federal priorities and public reality is having serious social consequences.
A System Out of Sync with Modern Realities
Economist Lars Osberg, a professor at Dalhousie University, identifies the core issue as Canada's severely weakened social safety net. "The big missing link is that we don’t have much of a social safety net in Canada," Osberg stated. "We haven’t had it for quite a while and we’re facing an enormous amount of economic insecurity and a long period of stagnant real wages."
He argues that programs like Employment Insurance (EI) are not aligned with today's economic landscape, where more people work temporary or gig jobs and new technologies like artificial intelligence are transforming the job market. Statistics Canada data shows that more than 870,000 Canadians reported gig work as their main job in late 2022, with these workers facing far higher job insecurity.
How Canada's Safety Net Compares
The value of EI benefits has largely remained static, replacing only about 55 per cent of a person's wages. While this is higher than in the United States, it falls dramatically short of European standards. For comparison, Denmark's system replaces 90 per cent of wages, Sweden's 80 per cent, and the Netherlands' 70 per cent.
Osberg contends that the system requires a significant update to protect workers when their jobs change or disappear. "People are not seeing their problems recognized in Ottawa," he said. "A lot of people feel insecure and pressed financially, and the federal government just doesn’t seem to want to confront this in a meaningful way."
Mounting Pressure from Living Costs and Job Volatility
The sense of insecurity is compounded by a volatile labour market and soaring living expenses. Canada's unemployment rate has been higher and more unstable in 2025 compared to 2023 and 2024, though it dipped to around 6.5 per cent late in the year.
Meanwhile, the cost of living crisis continues to squeeze households. Research from Abacus Data released in December 2025 found that 67 per cent of Canadians believe the cost of living is worse than ever. Food prices climbed 4.7 per cent year-over-year in November, the fastest pace in two years. The Canada’s Food Price Report 2026 forecasts families will pay roughly $1,000 more for food next year.
Osberg warns that the political discourse on "affordability" often masks these deeper structural problems. He predicts that the most urgent issue facing the country in 2026 will be this pervasive sense of insecurity among working Canadians, a problem he says demands immediate and meaningful policy attention.
