Canada’s Rich Forget to Trickle Their Money Down
If conversations among my friends are any indication, news that the gap between Canada’s rich and poor has widened will surprise no one. The Conference Board of Canada has just made it official.
Canada Inequality: Is Canada becoming more unequal? shows that the rich are gobbling more of the country’s wealth, leaving the poor and middle class to scramble for a smaller wedge of the economic pie.
The richest 20% of Canadians control nearly 40% of national income. That has widened the gap between rich and poor by some 27% since 1976.
If compensation for the super high-paid were subtracted, the picture would look even more dismal. According to Statistics Canada, in 2010 the CEOs of Canada’s Big Five banks earned $51.84 million. The next four in line at Royal Bank had to content themselves dividing up a pie worth only $28.08 million. Add all the other high rollers in the country, and the picture is one of rising inequality.
The irony is not lost on ordinary Canadians, who have a pretty strong sense of social justice and the common good. While financial markets were crashing and retirement investments were disappearing, the richest Canadians were increasing their share of the pie. That has left the majority of Canadians to gather up the crumbs.
While the wealthy were scooping more than their share, conservative governments were raiding the pockets of the poor and middle class. Holes in the social safety net widened as welfare rates stagnated and unemployment insurance got renamed “employment insurance” (and became harder to get). The money that theoretically trickles down when the wealthy are given tax breaks got dammed up at the top.
There is little comfort in knowing that Canada is fitting ever more neatly into its “peer” group of 17 developed countries. The U.S. is the worst for income inequality, Italy second, with Canada coming in a not-so-distant sixth.
There’s certainly little comfort in the report for the nearly one-quarter of children in my home province of British Columbia who live below the poverty line.
Anne Golden, President and CEO of the Conference Board of Canada, sums up the sorry state of affairs in this video, “Income Inequality in Canada.”
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Photo from Andrew Currie via Flickr