Ontario’s income gap at all-time high

May 7, 2007

TORONTO – Ontario’s after-tax income gap between the richest and poorest 10% of families raising children under 18 has reached an all-time high, according to a new study released by the Canadian Centre for Policy Alternatives (CCPA).

The richest 10% of families now earn 75 times more than the poorest 10%. In 1976, they earned only 27 times more.

“The gap is growing during the best of economic times, in Ontario, one of the most prosperous jurisdictions in the world,” says the study’s author Armine Yalnizyan, research fellow for the CCPA. “Under these economic conditions, the gap should be shrinking, not growing.

“And this isn’t just a story about the richest and the poorest. More and more families are struggling to make ends meet. Living costs are rising far more quickly than many people’s incomes.”

Compared to a generation ago, the bottom 40% of Ontario families raising children under 18 have experienced stagnant or falling incomes, despite the past decade of robust economic growth and job creation.

Ontario’s after-tax income gap has been growing faster in the past decade than it has at any time in the past 30 years. The province’s after-tax income gap is now higher than the Canadian average.

“Provinces with far less prosperity, and a higher earnings gap than Ontario, have done a better job of closing the gap,” says Yalnizyan. “Governments do make a real difference. The government of Ontario could be doing much more to close its growing after-tax income gap.”

Governments have two ways of addressing the income gap, says Yalnizyan. One way is to implement measures to improve incomes; the second set of solutions focuses on making the basics of life more affordable (such as housing, child care, and postsecondary education). The report, Ontario’s Growing Gap, is available at www.growinggap.ca and www.policyalternatives.ca.

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For more information, please contact: Trish Hennessy, 416-263-9896.

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