His Excellency the Right Honourable David Johnston - C.C., C.M.M., C.O.M., C.D., Governor General and Commander-in-Chief of Canada
Collectively, this index helps us to determine trends in our overall quality of life, giving us a powerful tool for action.
Canada, like most countries, lacks a single, national instrument for tracking and reporting on our overall quality of life. Gross Domestic Product (GDP) was never designed or intended to be a measure of social progress, or quality of life. It is simply a calculation of the value of all goods and services produced in a country in one year. Even the 'father of GDP', Nobel laureate Simon Kuznets, recognized that "the welfare of a nation can scarcely be inferred from a measurement of national income as defined by the GDP."
Over time, GDP has emerged as a surrogate for wellbeing. That's a big problem. As a measurement of national income, GDP doesn't distinguish between activities that are good and those that are bad for our society. Think of GDP as a giant calculator with an addition but no subtraction button. Activities like smoking, drinking to excess, building jails and hiring police to deal with crime, destroying green lands to build sprawling subdivisions, over-harvesting our natural resources to the point of jeopardizing their sustainability, using fossil fuels that pollute our air and heat up our planet – all these activities propel GDP upward.
At the same time, GDP fails to include a host of beneficial activities like the value of unpaid housework, child care, volunteer work and leisure time, because they take place outside of the formal marketplace. Nor does it make subtractions for activities that heat up our planet, pollute our air and waterways, or destroy farmlands, wetlands and old-growth forests. The notion of sustainability – ensuring that precious resources are preserved for future generations – doesn't enter the equation.
In reality, wellbeing involves a multi-dimensional array of social, economic and environmental factors. The way they connect and interact has a large effect on our wellbeing. To improve them through public policy, we first have to track and report on them so we can better understand the root causes of our current wellbeing.