A new measure of progress

This past Wednesday, Roy Romanow, the chair of the newly established Institute of Wellbeing (IW), published an op-ed in the Toronto Star, on the Institute’s creation of a new method of measuring progress: Canadian Index of Wellbeing (CIW).

The CIW is intended as an alternative to GDP, which is currently used as the standard measure of progress by most countries. The GDP measures the value of all goods and services produced in a country in a given year. However, while it can indicate economic growth, the accuracy of GDP as a measurement of genuine ‘progress’ is limited. GDP does not distinguish between spending on goods and services that have a positive impact on society and those that have a negative impact.

For example, the cost to clean up an oil spill will cause the GDP to rise, even though environmental damage can hardly be considered a benefit to society. And GDP does not measure how increases in wealth are distributed – meaning that an increase in GDP does not necessarily mean that the majority of Canadians are benefiting from it.

The Canadian Index of Wellbeing, which is currently under development, is being designed as an instrument for measuring the quality of life of Canadians as an indicator of progress. It will monitor eight areas: standard of living, health, quality of the environment, education and skill levels, leisure time, the vitality of communities, civic participation, and the state of the arts, culture and recreation in order to asses . These subjects were taken from grassroots consultations with Canadians across the country about what people believe to be key indicators of wellbeing.

The IW also aims to “connect the dots” between these different areas to provide not only a composite measure of well-being, but to understand further the connections between these areas (for instance, the relationship between poverty and health outcomes).

The first report of the Institute of Wellbeing, “How are Canadians Really Doing?” combines the Institute’s findings on three areas: living standards, health and community vitality. It finds that, while our communities are stronger and on average Canadians are wealthier than in previous decades, progress has also been limited in other ways.

The vast majority of wealth created during the economic boom of the past two decades has gone to the wealthiest of Canadians, causing income inequality to rise dramatically while the poor have remained so. The report also emphasizes previous research which shows the direct correlation between household income and health.

What I found both surprising and disturbing was that the health of young Canadians (ages 12 to 19) has declined over the past decade. While the researchers could not pinpoint a direct cause for this, they did cite the high levels (1 in 5) of child poverty in Canada as a possible contributing factor.

The work of the Institute of Wellbeing reminded me of Peter Victor’s Managing without Growth, which also challenges the notion that GDP should be our primary marker of progress and offers alternative policies.

I was really excited to hear about the CIW and I hope it receives the attention from mainstream society and policy-makers that I think it deserves.

We need a measure of progress in our society that focuses upon human dignity and wellbeing. While the creation of wealth can improve our standards of living, it is shortsighted to consider economic growth to be the primary indicator of progress, and we would do well to incorporate the CIW into policy-making strategies in the future.