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Canada’s poor took big financial hit in recent years, report finds

Janet McFarland / The Globe and Mail

The poorest 10 per cent of Canadians saw their net worth fall by 150 per cent between 2005 and 2012 while Canada’s richest 10 per cent saw a huge increase in their net worth in the same period, a new report shows.

A wealth study by the Broadbent Institute shows poorer Canadians have watched their proportion of the country’s wealth decline in recent years, but also shows improving income distribution for many people above the lowest tier. 

Rick Smith, executive director of the Broadbent Institute, said the numbers “sound the alarm” on wealth inequality in Canada.

“There are so many people being left behind, and there’s simply no excuse for this kind of deep and persistent wealth inequality in Canada,” Mr. Smith said in a statement.

The top 10 per cent of Canadians controlled 47.9 per cent of all wealth in 2012. That proportion has shown a small but persistent decline from 50.9 per cent in 2005 and 49.6 per cent in 1999, according to data provided to the Broadbent Institute by Statistics Canada.

At the same time, middle and upper tiers of Canadians have conversely seen small increases in their proportion of wealth in the same period. Only the poorest 30 per cent of Canadians have not seen their proportion of Canada’s wealth grow since 2005, the report shows.

The bottom 30 per cent of Canadians accounted for 0.8 per cent of all wealth in 2012, a decline from 1 per cent in 2005 and 1.2 per cent in 1999.

The median net worth of the top 10 per cent of Canadian families hit $2.1-million in 2012, a 42-per-cent increase since 2005. The bottom 10 per cent saw their median wealth fall by 150 per cent in the same period to negative $5,100, which means they had more debt than assets for a negative net worth.

The report also looked at income distribution provincially, concluding Atlantic Canada had the lowest levels of income inequality with the top 10 per cent controlling 31.7 per cent of wealth, followed by Quebec where the top 10 per cent owned 43.3 per cent of wealth. The divide between rich and poor was greatest in British Columbia, where the top 10 per cent hold 56.2 per cent of all wealth.

Statistics Canada published similar data in February from its Survey of Financial Security, which divided Canadians into five tiers to study their wealth distribution. The Broadbent Institute received customized data from the same survey, breaking the numbers into 10 tiers to show more detailed results for each decile of Canadians.