Conservative leader Pierre Poilievre during a recent campaign video.
Conservative leader Pierre Poilievre during a recent campaign video. Credit: Pierre Poilievre / X Credit: Pierre Poilievre / X

The PR flacks working in the Conservative Party’s media war room are nothing if not zealous. They regularly issue inflammatory, offensive, and often just-plain-false statements and social media posts.

As part of their broader strategy to discredit conventional journalism, the Conservatives’ spinners don’t hesitate to post fake news. And usually their misleading missives evade significant blowback. The more inflammatory the better, in their books: their main purpose is to harvest names and digital contact information from people who sign a petition, or take some other token act of digital resistance, against the Trudeau regime.

Occasionally the mainstream political and journalism worlds pay more sustained and crucial attention to this propaganda. For example, the party’s recent nationalistic ‘Our Home’ video had to be pulled after it was found to contain bizarre stock footage—including Russian fighter jets, a Venezuelan sunset, and Ukrainian schoolchildren.

Of course, complaints about the economy, inflation, and taxes are a mainstay of Conservative rage-farming. But in this arena, too, the adolescent overreach of their war room can get them into trouble. An example is a recent ‘X’ post from leader Pierre Poilievre, trying to exploit a recent Statistics Canada report that showed a decline in median real household incomes in Canada in 2022.

The post claimed that in 2022 prices were rising ‘3 times faster’ than incomes, that ‘wages’ lagged far behind inflation (2.5 per cent versus 6.8 per cent), and that as a result Canadians suffered a ‘pay cut’ of 4.3 per cent. The post was illustrated with a striking high-contrast graph that conveyed a sense of emergency in living standards.

As someone who makes their living studying wages, prices, and living standards, I immediately saw that Poilievre’s post was far off-base. And so I posted my own ‘X’ thread, complete with a revised chart, to correct the record.

The first and most obvious issue was the time frame Poilievre chose. The Statistics Canada report was based on a detailed census of income tax returns, which naturally take some time to compile and analyze (hence we receive their 2022 report in mid-2024). But there is much more recent data showing up-to-date trends in wages and prices.

Indeed, within hours of Poilievre’s post, Statistics Canada released its latest data on consumer price inflation: year-over-year inflation slowed in the 12 months ending in July to 2.5 per cent. That’s the slowest in 40 months (ever since inflation first accelerated after the end of COVID lockdowns in 2021), and well within the Bank of Canada’s target range for inflation (they aim for 2 per cent, plus-or-minus 1 percentage point).

Meanwhile, labour market data released by Statistics Canada a few days earlier had confirmed that wages are growing at a strong clip: up 5.2 per cent in the same 12-month period. This made for an easy update to Poilievre’s chart:

Unlike the Conservatives, I listed the statistical sources used in the graph. Needless to say, my chart tells a very different story: hourly wages (measured by the labour force survey) have grown twice as fast as prices (measured by the CPI) in the last year. Real ‘pay,’ adjusted for inflation, has increased strongly: up 2.6 per cent in one year.

Indeed, nominal wages have been growing faster than inflation since spring 2023. That’s due to a couple of factors. First, the surge in post-COVID inflation was clearly due to temporary factors (supply shortages, the Ukraine invasion, and short-term profiteering by companies) that have largely abated. Inflation came down as fast as it went up.

Second, time lags normally occur when workers try to win wage adjustments to offset unanticipated inflation. Contract provisions that automatically index wages to prices are very rare now, unlike the 1970s and 1980s. So workers have to wait for a chance to negotiate higher wages to offset previous changes in inflation. It is thus normal for real wages to fall when inflation accelerates, and then rebound when inflation slows down—since the path of wages adjusts to inflation, but with a lag. This explains the rapid pace of real wage growth right now, which won’t likely continue.

By using two-year-old data for their war chart, the Conservative flacks missed these subtleties of labour market behaviour. But that was the point: they are promoting anger, not enlightenment.

But on top of the problem with the time frame, their chart had several other serious problems:

  • It’s wrong to calculate a change in real wage by simply subtracting the inflation rate from the rate of wage growth. Rather, the analyst must calculate a real wage index (dividing the nominal wage by the absolute value of the consumer price index), and then measure how that changes over time.
  • Therefore, the proper change in what the Conservatives called ‘pay’ (more on this term below) for 2022 was -4.0 per cent, not -4.3 per cent.
  • In fact, the Statistics Canada report which inspired Poilievre explicitly stated (in both text and charts) that the change in real median household income in 2022 was -4.0 per cent, not -4.3 per cent. Professional statisticians, it seems, can do the math right.
  • So the Conservative chart-makers deliberately chose to use the higher (but false) number. They cannot claim mathematical ignorance for this error. (And that’s why, on my own “Wages vs Inflation” chart above, the real pay increase does not precisely equal the rate of nominal wage growth minus inflation; the difference is due to this same indexing methodology.)
  • Another key error is how the Conservatives define ‘wages’ and ‘pay.’ The Statistics Canada report in question reports changes in real median household income, not ‘wages’ as suggested in the Conservative chart. Wages are just one form of income, among many others (including self-employment income, investment income, business income, pension income, and government transfer payments). Similarly, income is not synonymous with ‘pay’.
  • My guess is that the Conservatives referred to ‘wages’ and ‘pay,’ instead of the correct ‘income,’ because they are trying hard these days to look like they care about workers.
  • This error in terminology is more than just semantic. The weakest component of household income in 2022 was not wages (which grew strongly in aggregate terms, thanks to the rapid re-opening of industries after the 2020-21 lockdowns). It was government transfer payments, which fell sharply.
  • Government transfers fell 6.6 per cent in 2022 in aggregate terms. They fell by over 15 per cent per average claimant. This decline was due to the phase-out of emergency COVID benefits (like the CERB and all its related acronyms) in 2021 and 2022.
  • Remember, transfer payments fell because the government was quickly reducing the high overall spending that occurred during the pandemic. This is the very same government spending which Poilievre blames for inflation that Canada (and virtually every other country) experienced after the pandemic.
  • It’s incredibly hypocritical to blame government spending for causing inflation, but also blame reductions in government spending (via transfer payments) for the fact that incomes (in 2022) didn’t keep up with inflation.
  • Of course, there’s a much bigger controversy about Poilievre’s effort to blame worldwide post-COVID inflation (which was less severe in Canada than most other industrial countries) on the Trudeau government. (Here’s my take on the causes of post-pandemic inflation.)
  • In addition to lower transfer payments, the surge in inflation in 2022 (which peaked at over 8 per cent year-over-year in June) was the other key cause of the fall in real median incomes that year.
  • By the same token, however, we can’t forget the big jump in real median incomes that occurred in 2020. Real median incomes rose 7.3 per cent that year, also as a result of temporary pandemic-related factors: namely very low inflation that year (when prices were weak since consumers couldn’t go shopping) and a big increase in government transfers (like the CERB).
  • This volatility is why the same Statistics Canada report emphasized (in both text and tables) the cumulative change in real median household incomes since 2019. Counting both the ups (2020) and the downs (2022), real median household incomes were slightly higher in 2022 than 2019 (up +0.1 per cent).
  • Real incomes have grown further since then, thanks both to slower inflation and the pick-up in wage growth. The fact that Canadian real incomes traversed this painful chapter in history as well as they did, is a success story. No wonder the Conservatives’ chart department wanted to focus only on 2022.
  • Another Statistics Canada finding the Conservatives ignored is the impact of tax changes on household incomes in 2022. Median after-tax incomes grew a bit faster in 2022 (2.5 per cent) than before-tax incomes (2.1 per cent). Why? Because of a 1.3 per cent decrease in median tax paid, driven by a 0.4 percentage-point reduction in the effective tax rate.
  • Obviously, pointing out that a modest reduction in taxes partly protected real median after-tax incomes during a difficult year doesn’t fit the Conservatives’ number one narrative: namely, taxes are too high and rising, and are the source of all evil. (Especially the carbon tax.)
  • Finally, not to get too picky, but Poilievre’s initial statement that prices were rising “3 times faster” (6.8 per cent) than incomes (2.5 per cent) is also false. The actual ratio is 2.7. His misuse of rounding and significant digits would merit a failing grade in elementary school math. I could just as legitimately say prices rose only twice as fast as prices (round 2.5 to 3, round 6.8 to 7, then round their ratio to 2). It’s insulting to readers to treat them as unable to perform basic math. 

In sum, Poilievre’s chart was not just inaccurate, it was deliberately misleading. It’s more evidence that Conservative spinners care little about truth, and a lot about fomenting anger—and directing it at Justin Trudeau.

Allowing this kind of misinformation to spread unchallenged is a danger to democracy. It’s why we desperately need an independent and well-resourced media (like rabble.ca!) to call out these manipulations (rather than indulging in naïve both-sides-ism), and help Canadians better understand both the reality of the world around them, and the strategies of competing political forces.

Yes, Canadian workers experienced both ups and downs through the pandemic. The initial outbreak of inflation was deeply damaging to most (except for the corporations and their owners who benefited from the highest profit share of GDP in Canadian history in 2022—the same year covered by Poilievre’s chart). There is much damage remaining from the pandemic and its aftermath (such as the crisis in affordable housing) still to repair.

But the recent recovery in real wages in Canada is a positive sign of the capacity of workers (through their unions, backed up by strong minimum wage increases in most provinces, and by growing public sector employment) to protect themselves against the impacts of inflation.

Real wages have fared better in Canada than most other industrial countries: they are now growing quickly, and are about five per cent higher than when the pandemic started, and about seven per cent higher since the Trudeau government was first elected. Poilievre’s efforts to exploit legitimate working class frustration to win a ticket to power, from where he will undoubtedly dismantle many of the same institutions and policies that explain this wage success story, must be energetically challenged.

And in the meantime, his chart warriors should go back to making sentimental videos about Russian jets and Venezuelan sunsets. They are much better at that, than they are at economics.

Jim Stanford

Jim Stanford is economist and director of the Centre for Future Work, and divides his time between Vancouver and Sydney. He has a PhD in economics from the New School for Social Research in New York,...