Canada’s richest families hold nearly 25 per cent of the country’s wealth while the bottom 40 per cent of Canadians own just over one per cent, according to a new report from the Parliamentary Budget Office (PBO) released Thursday.
“A bad situation is only getting worse and it doesn't have to be this way,” said Green MP Mike Morrice in an emailed statement to Canada’s National Observer.
“At a time when so many Canadians are on the brink of financial insolvency, the top one per cent hold a quarter of the country's wealth.”
The report studied the trends in wealth held by the richest families in Canada from 1999 to 2019 and found the top one per cent’s share of wealth increased by about five percentage points during that time.
There were approximately 160,600 families in the top one per cent in 2019, and they each had a net wealth of at least $6.3 million.
The findings are not surprising, says D.T. Cochrane, a policy researcher with Canadians for Tax Fairness (C4TF), a non-profit and non-partisan organization that advocates for fair and progressive tax policies.
“It shows the need for a long-overdue wealth tax,” said Cochrane.
For many Canadians across the political spectrum, a wealth tax is a welcome idea.
One per cent of families hold nearly 25 per cent of the total wealth and the bottom 40 per cent of Canadians only own 1.1 per cent, according to a new report from the @PBO_DPB. This reaffirms calls for a wealth tax, says @FairTaxCanada.
The poll, commissioned by the Broadbent Institute and the Professional Institute of the Public Service of Canada was based on the NDP’s proposed one per cent tax on wealth over $20 million from the party’s election platform.
The NDP’s 2021 platform also included a pledge to increase the capital gains tax from 50 per cent to 75 per cent. This would raise an estimated $44.7 billion over the next five years, according to the PBO.
Right now, only half of capital gains are taxed but all income from labour is available to be taxed, said Cochrane.
“This is just an egregious worsening of inequality,” he said. “If capital gains were taxed at the very least in the same way as labour incomes were taxed, that would be an important step towards constraining and possibly reversing this worsening inequality.”
Canada’s National Observer reached out to Finance Minister Chrystia Freeland’s office for comment.
“We are committed to ensuring that everyone pays their fair share of tax so we continue to have the resources needed to invest in people and to help our economy recover from the COVID-19 pandemic,” reads a statement from Freeland’s press secretary Adrienne Vaupshas.
“That is why in Budget 2021 and the 2020 Fall Economic Statement we committed to implementing a tax on multinational digital giants; introducing a luxury tax; limiting stock option deductions in the largest companies; and implementing a tax on the unproductive use of housing that is owned by non-resident, non-Canadians.”
The PBO report also points to a need for greater data gathering and analysis of wealth distribution, Cochrane said.
In this report, all types of wealth are added together, but we don’t know what assets make up the wealth portfolios of the top one per cent of families, he said. For most Canadians, houses are the largest assets they hold, which is very different from owning “hundreds of millions of dollars in corporate debt and equity,” he adds.
“We need more detail about what the asset mix is because that will add more information to the political and economic power that's associated with this wealth,” said Cochrane.
More than half of Canadians surveyed in the July Abacus Data poll think the pandemic has worsened inequality, and it’s clear many Canadians — regardless of party affiliation — want to see the wealthiest Canadians taxed.
Morrice hopes the PBO report will prompt those in power to consider policies like a wealth tax and guaranteed livable income.
NDP deputy finance critic Peter Julian did not respond to requests for comment by deadline.
Natasha Bulowski / Local Journalism Initiative / Canada’s National Observer