Affordability gap between rich and poor

September 23, 2009

OTTAWA – There is a major affordability gap between Canada’s richest and poorest households, says a new Canadian Centre for Policy Alternatives study released today.

The Affordability Gap: Spending Differences Between Canada’s Rich and Poor reveals how Canada’s poorest households often forego buying things most Canadians consider essential, from eyeglasses and dental care to computers and newspapers.

“The poorest 20 per cent of Canadian households live in worlds far removed from the richest 20 per cent,” says the study’s author, Steve Kerstetter, a research associate with the Canadian Centre for Policy Alternatives. “In every spending category, the richest 20 per cent spend six or seven times more than the poorest 20 per cent.”

The study looks at new data from Statistics Canada on how households spent their money in 2007 – one of the best years for gains in personal income in recent history. It finds Canada’s poorest households are much less likely to buy sporting equipment for themselves or their children. They often don’t spend money on eyeglasses, dental care and home furnishings. They often don’t have cell phones, personal computers and high-speed Internet access. Even going to a movie or buying a newspaper can be a rare treat.

“We live in one of the most affluent nations on the planet, but Canada’s poorest households are struggling to buy basic goods and services that most Canadians would consider reasonable for normal living in the 21st century,” Kerstetter says.

The study finds none of these spending dilemmas trouble the richest households, who easily own homes, vacation places, and their own vehicles for transportation.

“These difference arise directly from a lack of sufficient income among Canada’s poorest households,” Kerstetter says. He calls on governments to increase welfare rates and the minimum wage to help combat the problem. The Affordability Gap is the latest report from the CCPA highlighting the growing gap between rich and poor in Canada.

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For more information contact: Trish Hennessy c (416) 525-4927, w (416) 551-2059.