Standard of Living Index

Now, I’m certainly no expert on the matter, but why, exactly, is a nation’s standard of living tied directly to economic output? Were I to calculate a standard of living index, I’d factor in some details like, say, life expectency, social-support systems, perceived happiness, access to education/medicine, time vs. play ratios, etc. But apparently, I’d be on crack:

Critics say last week’s federal budget was short on measures to boost Canada’s productivity and therefore its standard of living. They cited the document’s tepid tax cuts, some of which don’t kick in for three years, and big increases to social spending.

(taken from an article in today’s G&M). So is this index just one particular, right/economics-leaning index, or when I hear talk about Canada’s standard of living, they’re always speaking of our production numbers, etc? Because to me, tepid tax-cuts countered by large social spending would seem to help our standard of living. But maybe that’s just me.