By Harinder Mahil
The wealth gap between the rich and poor in Canada widened at the fastest pace on record in the first quarter of 2023 compared with the year before, according to Statistics Canada.
The top 20 per cent of earners in Canada held 67.8 per cent of the country’s net worth in the first quarter, compared with the bottom 40 per cent holding 2.7 per cent. The difference between those amounts equals the wealth gap.
“Most wealth is held by relatively few households in Canada,” Statistics Canada said in a recently released report.
The gap in net worth between the rich (top 20 percent) and poor (bottom 40 percent) increased 1.1 percent in the first quarter of 2023 relative to the same period a year ago making the fastest increase on record.
Inequality in Canada is better than the rest of the world, but it is still a problem and a challenge for the government.
According to a Paris-based research group, World Inequality Lab, Global wealth inequalities are even more pronounced than income inequalities. The poorest half of the global population barely owns any wealth at all, possessing just 2% of the total. In contrast, the richest 10% of the global population own 76% of all wealth.
The widening wealth gap should be a challenge for Prime Minister Justin Trudeau and his government as they have pledged to reduce inequality. It can also be a consequence of the Bank of Canada’s aggressive increases to interest rates to combat inflation, which are squeezing the country’s poorest households.
According to a report released by Oxfam in January 2023,”Survival of the Richest”, the richest 1 percent grabbed nearly two-thirds of all new wealth worth $42 trillion created since 2020, almost twice as much money as the bottom 99 percent of the world’s population. The report stated that during the past decade, the richest 1 percent had captured around half of all new wealth.
Oxfam stated in its report that a tax of up to 5 percent on the world’s multi-millionaires and billionaires could raise $1.7 trillion a year, enough to lift 2 billion people out of poverty.
Gabriela Bucher, Executive Director of Oxfam International stated taxing the super-rich and big corporations is the door out of today’s overlapping crises. “It’s time we demolish the convenient myth that tax cuts for the richest result in their wealth somehow ‘trickling down’ to everyone else. Forty years of tax cuts for the super-rich have shown that a rising tide doesn’t lift all ships —just the superyachts.”
Inequality threatens long- term social and economic development, harms poverty reduction and destroys people’s sense of fulfilment and self-worth. This, in turn, can breed crime, disease and environmental degradation.
The government of Canada, if it is serious about reducing inequality, should implement suggestions made by Oxfam.
Harinder Mahil is a human rights activist and is secretary of Hari Sharma Foundation.
