Canada's Richest Families Are Almost 5,000 Times Wealthier Than the Average Canadian
The net worth of these families is $259 billion.
The net worth of the 87 richest families in Canada was 4,448 times higher than the average Canadian in 2016, according to a report released Tuesday.
The report by Canadian Centre for Policy Alternatives found that the 87 families “collectively own the same amount as the lowest-earning 12 million Canadians.”
The net worth of these families is $259 billion, which is almost equivalent to what everyone in the provinces of Newfoundland and Labrador, Prince Edward Island, and New Brunswick owns, according to the report.
The median net worth in Canada is just over $295,000 — Canada’s wealthiest families are worth $3 billion on average.
“Canada’s dynastic families have got it all — more wealth, more inheritance, and are as lightly taxed as they were the last time we looked in 2014,” David Macdonald, economist and author of the report, said in a statement.
Inheritance played an important role in the wealth of these families. In 2016, 39 of the 87 families were considered to be nouveau riche.
Nine of the top 20 most affluent families also included members that were high-paid CEOs.
“In other words, not only do these families control vast wealth, but their members are disproportionately likely to be among the highest-paid people in Canada,” the report said.
The gap between these families and all other Canadians is growing, according to Macdonald’s report.
This research brings up income inequality in Canada, an issue that is being thrown into the spotlight more often.
“Income inequality is, indeed, a serious issue for Canada. While the actual gap between the rich and the rest is far greater in the US, inequality is growing faster in Canada than in most peer countries,” Anne Golden, distinguished visiting scholar at Ryerson University, told the Globe and Mail for its Wealth Paradox Series. “The biggest jump in Canada's inequality occurred from 1994 to the early 2000s. Too much inequality is bad for society and the economy.”
This week’s report also suggests that Canada’s wealth inequality is made worse by the current tax system.
"Canada is the only country in the G7 without an inheritance, estate, or gift tax on tremendous family wealth," Macdonald said in the report.
Income from capital gains and dividends is also taxed less than wage income in Canada, and earlier research from Macdonald indicates that this benefits the most affluent in the country, according to The Guardian.
“You’d expect Canada’s tax regime would try to counteract this concentration of wealth at the very top, where it’s needed the least, but in fact, federal policies encourage it,” Macdonald said.
Macdonald suggested a 45% estate tax on estates valued at more than $5 million, saying that this kind of tax would not only align Canada with the other G7 countries, but would generate $2 billion in funding for public programs like education and child care.