A new analysis of the 86 wealthiest Canadian residents reveals they have so much money they could buy the province of New Brunswick and still have cash to spare, says the Canadian Centre for Policy Alternatives (CCPA).
Outrageous Fortune: Documenting Canada’s Wealth Gap, by CCPA Senior Economist David Macdonald, finds Canada’s Wealthy 86 increased their net worth from $118 billion in 1999 to $178 billion in 2012—a 51% increase (in 2012 dollars).
“Canada’s Wealthy 86 represent only 0.002% of the population but they’re so flush they could buy absolutely everything owned by every person in New Brunswick,” says Macdonald. “They could buy up all of New Brunswickers’ cars, all of their houses, all of their undeveloped land, all of their stocks, bonds, pension funds and RRSPs, all of their jewelry, all of their furniture—everything—and still have billions to spare.”
Key findings in the study include:
- Canada’s wealth gap is bigger than its income gap. The richest 20% of families take almost 50% of all income but when it comes to wealth, almost 70% of all Canadian wealth belongs to the wealthiest 20%.
- Canada’s Wealthy 86 held the same amount of wealth in 2012 as the bottom 11.4 million Canadians combined – up from 10.1 million Canadians in 1999.
- Only 10 of Canada’s 100 highest paid CEOs are part of The Wealthy 86 in 2012 and every one of those 10 either founded or is related to the founder of the company they’re heading.
“The very wealthy got that way by creating or trading assets, usually companies or real estate,” says Macdonald. “When they make money trading assets, those capital gains are taxed at only half the rate of what a working Canadian would pay in income taxes on the same amount.”
In order to help narrow Canada’s wealth gap, the analysis recommends a higher inclusion rate on capital gains and higher income taxes at the top of the income spectrum.
“There are few direct taxes on wealth in Canada. A fairer inclusion rate for capital gains would help offset the flood of wealth that is accumulating in the pockets of Canada’s wealthiest and ensure some of those benefits are returned to the majority of Canadians,” Macdonald concludes.