Canada's Income Gap
Mar 05, 2007
In late 2006, the Canadian Centre for Policy Alternatives (CCPA) released a poll conducted by Environics Research that showed that 76 percent of Canadians believed that the income gap between the rich and poor was growing. In follow-up to that, the CCPA just last week released a report that confirms that this perception is reality: although Canada’s economy has been performing at a higher level than it has in decades, the gap is in fact growing at a faster rate than ever before.
Armine Yalnizyan’s study, entitled The Rich and The Rest of Us, also illustrates something even more surprising – that the income distribution gap is not only a problem for the “poor” or “working poor.” In fact, it shows that the majority of Canadian families are actually falling further behind compared to just a generation ago. This is affecting middle class families as well, not just the poorest segment of our population.
By 2004, the income gap in Canada had reached a 30-year high and has been growing steadily since the late 1990s. We have reached the point where the average earnings of the top 10 percent of Canada’s families is 82 times that earned by the poorest 10 percent. In 1976, that ratio was 31 times more, meaning it has nearly tripled in thirty years.
Given the robust state of the Canadian economy, the low unemployment and interest rates and strong economic growth, it’s all the more surprising that the only group that actually saw major income gains over the course of those 30 years was the richest 10 percent. Interestingly, that group was also found to be the only one that is not working more. The majority of Canadians are working harder and longer - just to remain at the same economic level.
The entire report can be accessed here. Later this week the CCPA will be releasing a companion piece that examines the results of a survey of Canadians on what should be done to address the income gap. It seems self-evident to state that this level of disparity between the “haves” and “have-nots” cannot continue indefinitely. Short of increased taxation, what measures can be introduced to address this income disparity? It will certainly be interesting to see the ideas that come forward.
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