New Bank of Canada figures indicate income inequality is unchanged in a quarter-century, contradicting claims of a growing gap..The bank research follows a June 9 report the typical Canadian grew his or her net worth by an average $230,000 last year with real estate gains..“Data shows income inequality in Canada increased substantially during the 1980s and first half of the 1990s, but has been relatively stable over the last 25 years,” said the bank report Income Inequality In Canada. Figures showed while the top 10% had proportionately more income, the “wealth of low income households grew more than that of other groups” in the past decade..“We do know over the last decade net worth has increased among all quintiles [one of five values that divide a range of data into five equal parts] with households in the lowest three income quintiles seeing the biggest increases over the last five years,” said the report. “The overall increase in net worth was in both the value of real estate holdings and financial assets.”.Income inequality was much worse in the United States, wrote analysts. “Income inequality in the United States has been higher than in Canada for the last four decades.”.MPs also repeatedly pointed to US trends in claiming income inequality was worse in Canada..“Address the enormous income inequality that is growing in Canada,” Green MP Elizabeth May (Saanich-Gulf Islands, BC) told the Commons June 17. “The rich are getting richer and Canadians are paying the price,”.New Democrat MP Niki Ashton (Churchill-Keewatinook, Man.) said March 21. “The NDP has a solution: Tax the rich.”.The Bank of Canada in a June 9 Financial System Review said historic gains in real estate values saw the typical Canadian grow their net worth by an average $230,000 in the past year, especially longtime homeowners..“The increase in overall net worth seen in 2020 and 2021 hides important changes in its distribution and composition across households,” said System Review..“Most homeowners have more home equity to borrow against if they experience an income shock, but the gains are lowest for those who purchased a house most recently,” wrote staff, adding:.“A rising number of households have financially stretched to purchase a house amid elevated house prices. Increasingly over the past year households have taken on mortgages that are large relative to their income.”.Bank Governor Tiff Macklem in March 3 testimony at the House of Commons finance committee said the key to reducing income inequality was keeping unemployment low. More than three million Canadians were jobless at the peak of the pandemic, “an unbelievably huge number,” said Macklem..“Probably the most important thing you can do to create more equality in this country is to get everybody back to work,” said Macklem.
