Many workers are supplementing their primary income but long-term security is fragile
With rising costs having forced many Canadians to seek additional income, the gig economy has been growing fast.
But many of those doing work in this sector of the economy feel financially vulnerable and lacking the security they need for the long term according to a new report from Securian Canada in collaboration with the Angus Reid Institute that has been released today (October 8).
The report highlights the significant size of Canada’s gig economy with more than 7 million people, around 22% of Canadians, participating in work which includes delivery and other driving work but also specialized services like photography and consulting, online commerce, and freelance digital services such as tutoring and graphic design.
It also reveals that almost six in ten of those participating in the gig economy are relying on it to supplement their primary income and 73% are either employed full-time or part-time outside of their gig work.
While their gig may only account for a small part of their income, averaging 15%, it’s often a necessity with 31% of respondents citing the cost of living as the reason they do the work.
Insurance gap
The nature of gig work may mean irregular or insecure income and the report also found that the issue of financial vulnerability is exacerbated by a lack of life insurance and other coverage such as health and dental, critical illness or disability, and nearly one-fifth (18%) of gig workers said they do not have insurance.
“The economic climate in Canada continues to introduce new challenges and gig workers are finding themselves in a particularly vulnerable state," said Branker. “As the nature of gig work and the income it generates is often unpredictable, insurance is an important tool and can truly be a financial lifeline in times of need. Eliminating barriers, including offering digital-first solutions, is critical to improving access.”
The issue is worse for those for who gig work is their only income where 50% have no insurance and uninsured gig workers are more likely to rely on this work for a higher share of their income. Even those who are insured are often relying on coverage provided by someone else, which means they are not in control of their own financial security.
“Insurance should be a critical component of Canadians’ overall financial plans, helping to protect against unexpected costs and secure families’ futures,” said Branker. “Canada’s gig economy isn’t going anywhere. We look forward to continuing to work with our partners to develop efficient products that help remove barriers, meet today’s Canadians where they are, and empower them with better financial protection.”
