Canada’s wealth gap widening
TorontoSun.com – archives/money
Posted: Wednesday, July 13, 2011. By Sharon Singleton, Qmi Agency First
The gap between the rich and poor is widening as the rich get richer, according to a new report by the Conference Board of Canada.
The richest Canadians increased their share of the national wealth between 1993 and 2009, while poor and middle-income individuals lost ground. The poor are slightly better off than they were in 1993, though their income hasn’t risen as fast as that of the rich, the report said.
One of the most worrying trends has been a jump in elderly poverty, in particular among older women, it said. Between 2006 and 2009, nearly 128,000 more seniors fell into the low-income bracket, almost three-quarters of them women.
As prices of everyday goods, gasoline and housing march steadily higher, Canadians say it’s becoming increasingly hard to make ends meet, especially when children are added into the equation.
“Everything is increasing in price, yet wages are not,” said Leslie Galloway, owner of the Wee Piggies & Paws franchise in London, Ont., and mother of three children.
“They often say we have cut this and that in terms of taxes, but as a consumer I don’t notice the difference,” she said, referring to government policies.
The gap between the real average income of the richest and poorest Canadians rose from $92,300 in 1976 to $117,500 in 2009, the Conference Board said.
The lowest income group saw their earnings increase from $12,400 to $14,500 over the period, while the average Canadian was earning $59,700 in 2009, up 17% from three decades earlier, it said.
However, it you take the mean salary, which pinpoints the middle income, the gain has only been 5.5%, it said.
“While the poor are minimally better off in an absolute sense, they are significantly worse off in a relative sense,” said Anne Golden, president and chief executive of the Conference Board.
“High inequality can diminish economic growth if it means that the country is not fully using the skills and capabilities of all its citizens or if it undermines social cohesion, leading to increased social tensions.”
Since the recession, seven out of 10 Canadian provinces have seen a rise in the number of people in the low-income bracket. Prince Edward Island, Saskatchewan and New Brunswick are the exceptions, the report said.
The biggest jump in low-income earners was in Alberta, with an increase from 6.6% of the total workforce to 9.9%.
Canada is not the only developed country to see the wealth gap increase.
The Conference Board said the trend has been the same in most developed countries, with the exception of Finland and Austria.
The two European countries, which have a similar size population to Canada, have seen their wealth gap narrow.
In 2009, Canada’s Gini Index, which measures income inequality stood at 0.32. That means 32% of the country’s wealth should be redistributed in order to reach income equality.
Austria’s Gini number was 0.265 and Denmark was 0.232.
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