Quality of Life: Economic Environment Index

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Abstract

The economic environment represents the external conditions under which people are engaged in, and benefit from, economic activity. It includes aspects of paid employment, economic status and finances. Seven indicators have been used to assess aspects of the quality of household finances and paid work. Only communities (census subdivisions) with data for all indicators have been mapped.

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This map shows the quality of the economic environment: the environment in which people engage in, and benefit from, economic activity that includes aspects of paid employment and household finances. The indicators of the economic environment measure the ability of households to access goods and services important to quality of life.

Indicators of the Economic Environment

The following seven indicators are used to assess the quality of the economic environment:

Household Finances

• Average owner’s major payments (inverse)
• Percentage of income from government transfer payments (inverse)
• Ratio of percentage of households in lowest income category to that of households in highest income category (inverse)
• Percentage incidence of low income families (inverse)

Employment/Paid Work

• Ratio of individuals working part year, part time to individuals working full year, full time (inverse)
• Unemployment rate (inverse)
• Average employment income (direct)

Methodology

Five classes have been used to map the quality of the economic environment: low, fair, moderate, good and high. ‘Moderate’ quality of life can be seen as the average, whereas ‘low’ is well below the average and ‘high’ is well above average. A ‘low’ classification for a community implies that it scored low on all indicators of the economic environment; conversely, a community with a ‘high’ classification more than likely scored above average on all indicators. The score for each community (or census subdivision) was calculated using a methodology called the standard score additive method. In this method, the data are standardized. The resulting values, called z-scores, were then added or subtracted, according to the direction of the indicator. The indicator direction is either inverse (–) or direct (+), where inverse indicates that a high value implies a lower quality of life; conversely, a high value for a direct relationship implies a higher quality of life.

Refer to the Data and Mapping Notes section for further details on the methodology and the rationale for choosing the indicators listed above to map the economic environment.

Geographic Description

The map shows the variations in the quality of economic environment from the Atlantic coast to the Pacific coast. Unfortunately, there is insufficient data to map the three territories, since only communities with data for all economic environment indicators have been mapped.

Across Canada, the distribution in the economic quality of life is varied. In most provinces, the northern areas vary from low to high, except in Manitoba, Saskatchewan and Newfoundland and Labrador, which generally show moderate to low. The areas that score high in the north are larger unconsolidated communities or districts, such as Stikine Regional District in northern British Columbia and the James Bay unconsolidated area in northern Quebec. Most of the northern areas with high values, such as Wood Buffalo, Alberta, have very high average employment incomes compared to the average incomes in other rural areas in the south (for example, Eldon, New Brunswick). The geographic pattern at a larger scale in the south shows the distribution of the urban cities, which are generally low to moderate, and the surrounding urban areas, which show good to high. This pattern is illustrated in Figure 1 for Toronto and its surrounding area.

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Figure 1. Distribution of the Economic Quality of Life for Toronto, Ontario and surrounding area

One possible explanation for this pattern is that the urban centres of a larger metropolitan area possess a more diverse population than the cities surrounding larger metropolitan areas (such as Nepean, located outside what was, in 1996, the city of Ottawa, and Oakville, located outside Toronto) in terms of households with varied average incomes, greater differences in household income distribution, and greater levels of unemployment. All of this variance in the range of values for each these indicators contributes to a lower overall quality of the economic environment.

Use the various zoom mapping tools, found at the top of the map, to zoom into locations across Canada to compare the quality of the economic environment from region to region, city to city or town to town. Use the Get Statistics tool to view the data used to derive the index value for each community. Alternatively, turn on one of the indicator thematic map layers to view the distribution of each indicator of the economic environment. Each indicator is divided into five classes, with the average value falling in the middle and two classes occurring above and below. Table 1 is a comparison of the quality of the economic environment among larger urban centres, with populations of more than 150 000.

Table 1. Quality of the Economic Environment of Canada’s Most Populated Cities

For another perspective on the quality of the economic environment, please request the following .xls file ecoc_e.xls from Contact Us to view the results of the metropolitan influence zone classification, used to classify municipalities (census subdivisions) that lie outside census metropolitan areas (CMAs) and census agglomerations (CAs) according to the degree of influence that CMA/CAs have on them. This classification precedes standardization of the data, prior to the addition of the z-scores. In this table, only communities (census subdivisions) with the same classification are compared to one another. Refer to the Data and Mapping Notes section for more information on the classification methodology.