Dana Flavelle / Toronto Star
The rich are getting richer and the poor are getting poorer in Canada, a new analysis of Statistics Canada data by an Ottawa-based think tank shows.
The study found that, much like the income gap, Canada’s wealth gap is also widening, the Broadbent Institute said in a statement Thursday.
“With much of the public debate focused on the growing problem of income inequality, wealth inequality has been less scrutinized,” said Rick Smith, executive director of the Ottawa based think tank, which describes itself as progressive.
Wealth is a broader measure than income because it takes into account all assets, including housing and investment, minus debts, the institute said.
“Contrary to rosy reports of rising net worth and a post-recession recovery, these new numbers sound the alarm on Canada’s wealth inequality problem,” Smith said.
The top 10 per cent of Canadians have seen their median net worth grow by 42 per cent since 2005 to $2.1 million in 2012, the study found.
Meanwhile, the bottom 10 per cent of Canadians saw their median net worth shrink by 150 per cent. In 2012, their debts outweighed their assets by $5,100. That was worse than in 2005, when they owed $2,000 more than they owned, the study said.
“Looking at this broad picture of wealth using new Statistics Canada data released to the Broadbent institute, this report shows deep and persistent inequality,” the institute said Thursday.
“This unequal distribution — particularly for the wealthiest and poorest 10 per cent segments of the population — challenges the narrative that suggests Canadians are getting wealthier across the board,” the study found.
Even more striking is the fact the bottom 50 per cent of Canadians own just 6 per cent of the wealth, while the bottom 30 per cent own just 1 per cent, the institute said.
By province, the concentration of wealth was highest in British Columbia, at 56.2 per cent, and lowest in Atlantic Canada, at 31.7 per cent.
The Broadbent report is based on Statistics Canada’s Survey of Financial Security, which was released in February, 2014.
Statistics Canada found the median net worth of Canadian families had risen 44.5 per cent since 2005 to $243,800 in 2012.
Looking at the top 20 per cent and bottom 20 per cent, the federal agency also found the wealth gap had widened.
The Broadbent Institute found the gap was even more pronounced after it asked Statistics Canada to further subdivide the population into 10ths.
The report comes amid growing concern about widening income inequality in many industrialized countries, including Canada.
The Organisation for Economic Co-operation and Development has commented on the issue, saying countries need to rethink their tax policies to make them more distributive.
The International Monetary Fund has also looked at the topic, saying the growing imbalance could threaten future economic growth.