Stats Canada has released a report showing the growing wealth divide in Canada, with the wealthiest Canadians earning more than the bottom 20 per cent of Canadians.
“The widening wealth gap between the top and bottom 20% of Canadians is a trend that is not new.
It has been going on for decades,” said David Macdonald, an economist at Statistics Canada who authored the report.
“However, we now have a better understanding of the factors that lead to this widening wealth divide, and are seeing some of the solutions.”
The report, released Friday, looks at the number of Canadian families with net worth between $100,000 and $500,000.
It shows that the top 20 percenrs had a net worth of $1.6 trillion in 2016, an increase of 8.3 per cent from 2015.
The wealthiest 20 percent had a median net worth, at $2.2 trillion.
The top 20percents saw their wealth grow by 22 per cent, while the bottom 40percres saw a decline of 9 per cent.
Income in Canada’s wealthiest neighbourhoods, however, dropped from a record high of $6,876,849 in 2008 to $4,631,742 in 2015.
“This wealth gap is due in large part to a large gap between incomes and wealth,” Macdonald said.
Canada’s wealth inequality has been on the rise for decades, but Statistics Canada’s latest data shows the trend is accelerating.
As the top one per cent grew their net worth by 25 per cent between 2010 and 2016, the bottom 80 per cent fell by 20 per-cent.
The wealth gap narrowed slightly between 2015 and 2016 and then grew again, reaching $3,632,081 by 2016.
Despite this widening gap, Macdonald noted that many wealthy Canadians are also still paying taxes that are higher than the rest of Canada’s population.
A report released by Macdonald and other economists in 2017 found that the federal government collected $1,945,095 in income tax revenue for every $1 of tax paid in Canada between 2012 and 2015.
That’s an increase from the $1 per $1 paid by the top 0.1 per cent in 2011, the report found.
While the wealth gap has widened since 2008, it’s still far lower than the $16,000 per $100 of wealth Canadians have in Canada.
Macdonald said that while the increase in the wealth divide between the richest and poorest Canadians is significant, there are many solutions that could be put in place to address it.
For example, he said the federal governments could increase the amount of tax that goes towards education.
Another potential solution is to increase the retirement age.
Last year, the median age of Canadian households increased to 65 from 65.
That means Canadians have more to save for retirement.
And, it also means Canadians can invest more in their retirement.
Macdonald also said there are some measures that could make it easier for Canadians to live comfortably while living in their home.
He said the best way to make it happen is to encourage people to get more active.
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