In our 2019 Forecast we noted that despite the Canadian economy going strong and unemployment reaching a 40-year low, Canadians were not feeling the same level of optimism about their personal economic prospects or their quality of life. This lack of optimism was constant throughout 2019 with the Ipsos Disruption Barometer* (IDB) suggesting that the rosy macro-economic metrics being reported early in 2019 were out of line with what Canadians said they were experiencing on the home front. The November job numbers (the biggest monthly loss in Canada since the end of the 2008/09 recession) suggests that the macro numbers may finally be catching up with what the IDB first showed in late 2018.
Other aspects of our 2019 forecast played out to varying degrees throughout the year. We projected that:
- Affordability of day-to-day necessities would become a top concern. Eight months later we saw this play out in the Federal Election with all Parties making affordability a key plank in their platforms and the new Liberal Government will soon deliver on its promise of tax relief
- A higher potential for social and political disruption and that regional and demographic fissures would widen. The Federal election was indeed disruptive with the Liberals returning in a minority position, the rise of the Bloc Québécois and significantly increased regional tensions. Fifty-nine percent of Canadians now say that Canada is more divided than ever.
- Increased pressure on consumer finances would lead to more frugal spending. Comfort in making both large and small purchases started low, dipped mid-way through the year but has since returned to Q4 2018 levels. Reports of consumer spending late in 2019 have been at best mixed and many banks missed their expected performance.
Our 2019 outlook was based on our Context Advantage work and more specifically the Canadian Ipsos Disruption Barometer, which dropped in the last quarter of 2018 into negative territory for the first time in almost two years. As we get ready to report on the fourth quarter of 2019, the IDB remains mired in negative territory. Over the past five quarters it has gone from -5% to -11%.
Looking Ahead to 2020
Looking ahead to 2020 we think that the 2019 forecast of an increasingly challenging and disruptive year still holds. We also see a rapidly changing social and economic climate in Canada.
The current citizen/consumer angst is about more than the performance of the national economy. Over the course of the past twelve months, Canadians’ assessment of their personal situation today (e.g. current quality of life, personal finances, etc.) has remained flat. Most had expected that they would see the benefit of the strong macro-economic gains of 2016 to 2018. But with the macro numbers fading, those expectations have disappeared and many now feel they have little to show on the personal level and are left out of the progress others have made.
Canadians still show some hope for their personal future but less so for the future of our society. Their preoccupation is personal (me) and short-term (today). This “me-first-now” theme looks like it will be sustained and is salient to the public and private sector alike. We may have already seen the early stages of this manifested in declining charitable donations and volunteer rates. It might also be driving, in part, the record consumer debt levels as people are thinking increasingly about the short term. We anticipate that citizens/consumers will increasingly be asking the organizations that serve them “what are you doing for me today?” It will be harder to engage Canadians on issues which require them to make decisions through a longer-term lens.
Going forward our clients should also expect:
- Canadians will increasingly expect their governments and the companies they buy from to demonstrate their efforts to address the key issues they face. Canadians are not enthusiastic about the state of Canadian society today and they don’t expect things to improve in the future. Not surprisingly, they see many issues in need of attention including healthcare (the top concern), climate change (the fastest rising concern), the economy, immigration, taxes, poverty/social inequality and regional disparities, and they look at these issues through a personal lens. As the views and expectations of citizens and consumers continue to converge, business should expect to be asked about their contribution to society and to making people’s lives better as often as they get asked about the quality of their products or the responsiveness of their services
- Climate Change (and environmental issues more broadly) will continue to be a growing concern for Canadians. We already see both the public and private sector ratcheting up their efforts on this front, but citizens are leading on this issue and the organizations that serve them are playing catch-up. In 2020 we will see more Canadians buying second-hand goods, choosing companies and products that are part of the circular economy and buying enviro-friendly products. Their motivations will be one part altruistic with an eye to a better environment and one part a practical economic reaction as they feel the financial squeeze at home. What they won’t do is pay significantly more to ease their environmental conscience.
- The current economic angst, pessimistic long-term expectations and decreased social cohesion that have created a “me first” view of the world will strengthen. This will make it more difficult for organizations (public and private) that rely on community spirit and mobilization to realize their objectives. Canadians seem increasingly OK with the notion of bowling alone, living alone and focusing on their personal challenges first and foremost.
- As demographic and regional fissures grow it is increasingly clear that there is no typical Canadian. We see significant differences in the public’s outlook based on region and demographics. Our genderation analysis shows that there are different ways to reach men and women depending on their age. As well, home ownership is emerging as an increasingly relevant variable with those who own vs. those who don’t vs. those who aspire to own, holding very different personal expectations for today and the future.
- Finally, we should expect to hear marketers and politicians alike talking about how they are helping Canadians who are struggling to make ends meet. There is a small segment of society that is trading off their needs for needs every day. For example, food vs. medication vs. housing. These folks are in desperate straits. However, there is a much larger segment who feel they are trading off their wants (vacation, early retirement, new purchases) for their needs (cost of food, housing, etc.) and it is this latter group that makes up the poorly defined, decidedly grumpy and ever expanding “middle class”.
There are opportunities for those organizations that can position themselves to show how they are helping Canadians cope. To do this organizations need to move quickly and with certainty. They need to understand the social-political environment of today and tomorrow and align their actions and communications to meet the expectations of their stakeholders. For our part, we will continue to help our Context Advantage clients plot their path to success, we will ensure they have the deeper societal insights they need to move forward and make sure they are the first ones to see when the public mood swings for the better or the worse.
Please contact us if you are interested in attending a Context Advantage Symposium near you in 2020.
[WEBINAR] The Path Forward: Financial Services Post Covid
Join Ipsos for our next Covid-19 The Path Forward complimentary webinar featuring a wide-range of insights to help inform your business recovery strategies – today we focus on the future of financial services which has appeared to be fast-tracked during lockdown.