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OTTAWA–Canadians may view their country as a land of opportunity, but it is also a land of deep and abiding inequality in its distribution of personal wealth. This is the key conclusion of Rags and Riches: Wealth Inequality in Canada, a new CCPA study by social policy analyst Steve Kerstetter, a former Director of the National Council on Welfare.
The study features data never before published about the very richest and very poorest Canadians. It draws on special data runs commissioned from StatsCan by the CCPA to provide extensive new analysis on the distribution and characteristics of wealth dating back to 1970 for each of five regions of the country.
The study finds that gaps between rich and poor are evident in the statistics for each of Canada’s regions. There are also large differences in wealth across the regions themselves. Average wealth overall tends to increase from east to west.
While housing is the single largest asset of Canadians and also their single largest debt, financial assets play a more significant role in explaining the skewed distribution of wealth in Canada. The result is that financial security is an elusive goal for a large number of Canadians, wherever they live.
“In fact,” says Kerstetter, “financial insecurity may now be the norm in Canada, rather than the exception. Only people with above-average wealth truly enjoy financial security.”
The poorest 20 per cent of family units had financial assets that averaged only $1,974. “If their current income suddenly vanished–because of illness, layoff, or some other unavoidable circumstance–they would have barely enough in assets to sustain their families for five weeks,” adds Kerstetter. “This compares to more than four years for the richest 20 per cent.”
The findings of this study have significant implications for public policy in Canada.
“Our federal and provincial governments,” says Kerstetter, “would do well to rethink their policies–particularly their tax policies–that have conferred huge benefits on Canada’s wealthiest people: the ones who need government aid the least. These favoured few have been further enriched at the expense of the great masses of Canadians who have been able to scrape together only a tiny portion of the country’s personal wealth.”
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