The Broadbent Blog


Big cities much more unequal than Canada as a whole

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It is no secret that big, global cities like London and New York are highly unequal and display harsh extremes of wealth and poverty. This is increasingly true of Canada's largest cities, as shown by recently released Statistics Canada data on the geographical distribution of high income earners.

The data are for 2014, and income is defined as total before tax income including capital gains. Overall, the top 1% of  individual tax filers in Canada earned a minimum of $246,200, had average incomes of $548,500, and declared 11.6% of all income.

The top 0.1% (just one tax filer in every one thousand) earned a minimum of $867,1000, had average incomes of $2,013,300 and declared 4.3% of all income.

At the very summit of the income pyramid, the top 0.01%, a tiny group of just 2,685 tax filers, reported an average income of $7,070,100 or 1.5% of all income.

The very affluent tend to live in our four largest cities,  the Toronto, Montreal, Vancouver and Calgary Census Metropolitan Areas. While 38.9% of all tax filers lived in these cities, this was true of the majority (55.5%) of the top 1%, and two in three (66.6%) of the top 0.1%.

Given that very high income earners tend to be investors, senior business executives, and top professionals, it is not too surprising that Canada's high earners are to be found in the country's leading business centres. What is shocking is the degree of inequality within our biggest cities.

Then booming Calgary led the way in 2014. The top 1% of tax filers in that city earned a minimum of $476,100 and earned almost one fifth or 18.5% of all income declared in Calgary. Interestingly, that is far more than the 10.9% income share of the top 1% in Edmonton, which has more blue collar workers and a larger public sector.

Toronto was not too far behind Calgary, with the top 1%, earning at least $311,800, and declaring 16.0% or one in six dollars of all income in the city.

The top 1% in Vancouver and Montreal declared incomes of 12.8% and 11.8% of all city income respectively. In all other urban and rural areas of the country, the share of the top 1% was below, and usually well below, the national average.

The picture is even more extreme for the top 0.1%. They declared 7.8% of all income in Calgary and 6.3% of all income in Toronto. The average income of the top 0.1% was $5,557,000 in Calgary and $3,130,800 in Toronto.

Looking at the situation from the bottom of the income pyramid, the bottom 95% of Canadians received 74.9% of all income in 2014, but this proportion was just 69.3% in Toronto and 66.0% in Calgary.

Based on other Statistics Canada data, low income is less concentrated in big cities than is high income. Of the four biggest cities in 2014, only Toronto had a poverty rate that was well above the national average (15.0% compared to 13.0% going by the low income measure.) Calgary had a well below average poverty rate. That said, this metric does not capture the impact of well above average housing costs on low income households in large cities.

The dry statistics on high income are visible in our big cities in wealthy residential enclaves and sky high prices at the top end of the housing market, as well as in the many high end retail outlets and service providers catering to the needs of the very affluent. As social commentator John Stapleton has noted, the retail scene in Toronto has seen a major shift to both high end and deep  discount options.

Along with the poor, the squeezed urban middle class, especially the young, are increasingly unable to enjoy the benefits of big city life. These growing spatial inequalities will increasingly shape urban politics in the years to come.

Andrew Jackson is an Adjunct Research Professor in the Institute of Political Economy at Carleton University, and senior policy adviser to the Broadbent Institute. This article was originally published in the Globe and Mail.

Photo: Benson Chan Photography. Used under a creative commons BY-NC-ND license.