A study by a Canadian public policy group has found what many people have always thought: the rich get rich and the poor get poorer.

The study by the Canadian Centre for Policy Alternatives (CCPA) says the gap between rich and poor in Canada has grown over the past three decades and now rivals that of the Third World.

Using Statistics Canada data, the CCPA study concluded that half of the country's families control 94 per cent of its wealth.

It says between 1970 and 1999, the wealthiest 10 per cent of families saw their net worth more than double to an average of $980,000.

During the same period, the poorest 10 per cent of families saw their inflation-adjusted net worth fall 28 per cent, leaving them in debt by an average of $10,600.

Tax system part of problem

The study, paid for by the government of British Columbia, says the growing divide is partly the result of federal and provincial taxation policies. It says measures such as cuts to high-income surtaxes and capital gains taxes have favoured the rich.

At the same time, budget cutting has eroded social programs such as unemployment insurance and welfare, hurting the poor.

Study author Steve Kerstetter, a former director of the National Council on Welfare, said the findings show that governments are out of touch with the realities facing most Canadians.

He said a surprising number of Canadian families are a paycheque away from financial disaster.

The study also found disparity in income from east to west. The average wealth in Atlantic Canada was under $123,000, compared to $251,000 in B.C.

The study suggests that one way to create fairer income distribution would be to bring in an inheritance tax. Canada is one of the few developed countries without one.