Canada's richest 1% aren't the only ones prospering
Many people in middle brackets enjoy 'remarkable income mobility'
But what of the remaining 99 per cent?
In keeping with a recent Oxfam International report that projected that more than half of all wealth will fall under control of the most prosperous one per cent by next year, Canada's billionaires can expect to get richer than ever.
- Richest 1% will soon own 50% of all wealth, Oxfam warns
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- World's 85 richest own more than 3.5 billion poorest, UN report says
But so, too, should a tranche of the 99 per cent, some economists say, citing recent Statistics Canada data trends.
"It's not the doomsday predictions everyone's talking about," said Charles Lammam with the Fraser Institute, a think tank that has received funding from U.S. oil barons Charles and David Koch.
"There's remarkable income mobility here, and I don't see why the history of income mobility is set to change in a dramatic fashion in the future."
Good news for the financial outlook of the 99 per cent is a matter of perspective, said Philip Cross with the Macdonald-Laurier Institute, a research centre headed by a former president of the conservative Civitas Society.
"Clearly, the middle class is not keeping up with the one per cent. But is it important that they're keeping up with the one per cent?" Cross asked. "Or is it important that the middle class is doing well in its own right?"
Out of Statistics Canada's five income groupings, the highest-earning 20 per cent of tax filers made an average of $87,800 in after-tax income in 2011, up 2.4 per cent from $85,700 in 2007.
Topping that group, Canada's one-percenters earned at least $191,000 per year, Statistics Canada says.
In the same period, earners in the third quintile — a segment that could be slotted within the middle class — took in $39,900 in 2011, up 3.9 per cent. Collectively, the three arguably middle class subgroups increased their earnings by an average 3.6 per cent in that four-year period.
The cut-off for qualifying as the poorest half of Canadian tax filers in 2012 was $31,000, according to David Hulchanski, the principal investigator at the University of Toronto's Neighbourhood Change partnership.
Meanwhile, the median income of the bottom 50 per cent was just $15,300 in 2012, he said.
Hulchanski, who bemoans trickle-down theories as ineffective, believes higher taxation for the wealthy is one way to close the gap.
"More and more people can't afford the basics in food, rent, things for their children," he said.
"Something has to give. We experimented with trickle-down. We need percolate-up policies."
Cross, a former Statistics Canada analyst, rejects the notion that the rich are getting wealthier "at the expense of the middle class."
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If the middle class is being "hollowed out," Statistics Canada's numbers tell a different story, he argues.
Cross noted that the median net worth for family units — defined as the combined assets of two or more co-habiters, after clearing debt — has shot up.
"In fact, the net worth held by the middle income quintiles rose faster than the top income quintile in Canada," he said, "partly because we don't have the extremes of wealth you see in the U.S. with a Bill Gates or a Mark Zuckerberg."
The middle class is actually benefiting disproportionately than the rest of the country.- Philip Cross, Senior Fellow with the Macdonald-Laurier Institute
Most Canadians have also taken a more generous helping of the country's $8.07 trillion in net wealth over time, according to Statistics Canada.
Last year's Survey of Financial Security found the three middle brackets representing 60 per cent of Canadian families took a 1.8 per cent larger share of net worth in 2012 than in 2005.
That amounted to the biggest wealth gains of any quintile.
"This contradicts the whole narrative out there that wealth is only going to the rich people," Cross said. "This shows that the middle class is actually benefiting disproportionately than the rest of the country."
While the top 20 per cent of family units still owned 67.4 per cent of Canada's net worth in 2012, their share was down by 1.8 percentage points from seven years earlier. The bottom quintile remained stagnant.
Baby Boomers set to retire
Those at the bottom would almost certainly be aboriginal Canadians living on reserves, said Armine Yalnizyan, a senior economist with the Canadian Centre for Policy Alternatives.
She warned that the recent cut in the interest rate to 0.75 per cent could spur Canadians to borrow even more money and overextend themselves rather than saving.
"It's a disincentive," she said. "What's the point in saving if your rate of return is so low and wages aren't growing?"
Without home ownership or assets, prospects for that poorest segment to rise on the income ladder don't look promising, added Andrew Jackson, senior policy adviser with the Broadbent Institute, a think tank chaired by former NDP leader Ed Broadbent.
"Certainly there's a lot of particularly younger people whose debt outweighs their assets, and then the bottom 10 per cent have zero wealth. They have more debt," he said.
Households have managed to maintain their spending by going deeper into debt. The total amount of credit market debt reached record highs of 162.6 per cent of disposable income in December.
If there's any bright spot for the hard-up generation, Jackson said, it might be that the Baby Boomers are approaching retirement.
"Given the smaller size of the succeeding age cohorts, I think we may enter a period where wages start to rise, just because labour will become somewhat harder to find," Jackson said.
"There will be much more insistence for employers to train and raise skills rather than to use cheap labour."
1% had 6-year low in share of income
There was more hopeful news for the 99 per cent last November.
Statistics Canada's study of high-income trends found that for the first time in three decades, there was "a prolonged period" of six years between 2006 and 2012 "in which the total income shares of the bottom 90 per cent, 95 per cent and 99 per cent of Canadian tax filers rose or stabilized."
The top one per cent, meanwhile, lost ground in 2012, taking 10.3 per cent of total income, which was a six-year low and a drop from the previous year's 10.6 per cent share.
That's not to say they're struggling by any means.
"The upper one per cent are still leaving the rest of us in the dust, and there's no sign their incomes are plateauing at all," said David Gray, an economics professor at the University of Ottawa.
"You need not shed a tear for them."