OTTAWA—Canada’s wealthiest family dynasties are more than 4,400 times richer than the average Canadian family and much more likely to keep that money in the family than they were two decades ago, finds a new study released today by the Canadian Centre for Policy Alternatives (CCPA).
The report, Born To Win: Wealth concentration in Canada since 1999, compares the net worth of Canada’s 87 wealthiest resident families (the Wealthy 87) to the wealth of average families over the past 17 years. The results show that wealth inequality is extreme and growing in Canada, but could be corrected with progressive tax reforms.
“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,” says study author and CCPA Senior Economist David Macdonald. “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.”
Among the study’s findings:
Canada’s Wealthy 87 saw their net worth grow by an average of 37% between 2012 and 2016 from $2.2 billion a family to $3 billion on average, whereas middle class Canadian families saw their net worth grow by only $41,000, an increase of only 16% over the same period;
The Wealthy 87 now own 4,448 times as much wealth as the Canadian average, and have as much wealth as 12 million Canadians combined;
The collective net worth of the Wealthy 87 ($259 billion) is just shy of what everyone in the provinces of Newfoundland and Labrador, New Brunswick and Prince Edward Island collectively owns ($269 billion);
Inheritance is a bigger factor for today’s Wealthy 87, with 53% of wealthy families having passed their wealth down at least one generation compared to 45% in 1999;
Not only do these families control vast amounts of wealth, but their members are also disproportionately likely to be among the highest-paid CEOs in Canada.
“Canada is the only country in the G7 without an inheritance, estate or gift tax on tremendous family wealth,” adds Macdonald. “Instituting an estate tax and eliminating tax preferences for capital gains and dividend income could go a long way to curbing the tendency of Canada’s tax system to heighten socially, politically and economically harmful levels of wealth concentration in Canada.”