Canada's rich getting richer faster
Top 3.8% of households control 67% of Canada's wealth, study says
These are good times for Canada's richest one per cent, in fact the best of times, according to a new study by the Canadian Centre for Policy Alternatives.
About 246,000 Canadians earn incomes averaging $405,000 a year. They accounted for 32 per cent — nearly one-third — of all the growth in income during the boom years from 1997 to 2007.
"That's a bigger piece of the action than any other generation of rich Canadians have taken," noted the study's author, Armine Yalnizyan, senior economist at CCPA.
During the last great economic boom in the 1950s and 1960s, top-earning Canadians accounted for just eight per cent of income growth.
Disparity between rich and poor
The disparity between average Canadians and the very rich, which had been shrinking in the years after the Second World War, began growing again in 1977. Even then, when the economy was performing poorly, the very rich were rewarded with close to a third of income growth.
The study shows that the richer an individual is, the faster his or her income grows.
Since the 1970s, the richest one per cent have seen their share of income double. The richest 0.1 per cent have seen their share of income triple, while the wealthiest 0.01 per cent have seen their income share quintuple.
Unlike the past, the super-wealthy aren't making their money by owning businesses or investing wisely. They earn it the way everyone else does, by collecting paycheques — large paycheques, the report notes.
And while in 1948 those in the top tax bracket paid about 80 per cent of their income in taxes, today top earners pay a maximum of 42.9 per cent.
"Combine record-breaking growth in incomes with historically low top tax rates, and the richest one per cent is truly breaking new frontiers in income inequality," said Yalnizyan.
The report also draws on another unspecified private sector study that notes 3.8 per cent of Canadian households control $1.78 trillion in wealth. That accounts for 67 per cent, two-thirds of the money in Canada.
The Canadian Centre for Policy Alternatives is an independent, non-partisan research group focused on issues of social and economic justice.