Income inequality in Canada has hit the highest level ever recorded as wealth becomes increasingly concentrated in fewer hands, says Canada’s statistics agency.
The gap in the share of disposable income between the richest two-fifths of Canadians and the bottom two-fifths grew to 47 percentage points in the second quarter of 2024, Statistics Canada reported Thursday.
That’s the widest gap recorded since 1999, when Statistics Canada first started collecting such data.
The gap was driven by the top 20 per cent of income earners, who saw the largest increase in their share of disposable income, the report said. That increase was driven largely by investment gains, which the statistics agency attributed to high interest rates.
“While higher interest rates can lead to increased borrowing costs for households, they can also lead to higher yields on saving and investment accounts,” the report said.
“Lower income households are more likely to have a limited capacity to take advantage of these higher returns, as on average they have fewer resources available for saving and investment.”
While those in the lowest 20 per cent saw a slight rise in their share of disposable income due to wage increases, the middle 60 per cent of Canadians saw a decrease in their share.
The Statistics Canada report said that in the second quarter, the top 20 per cent of Canadians held more than two-thirds of the country’s wealth, averaging $3.4 million per household. By comparison, the bottom 40 per cent of Canadians accounted for only 2.8 per cent of Canada’s wealth.
Asked about rising income inequality in Canada, Finance Minister Chrystia Freeland said the Liberal government has been focused on bringing forward policies — such as childcare and dental care programs — to help middle class and lower-income Canadians.
“We are working very, very hard to lean against this tendency in the global economy towards more inequality,” she told reporters at a press conference on Thursday.
“We’re leaning against it with very specific policies designed to support middle class Canadians and people working hard to join the middle class.”
But Conservative Leader Pierre Poilievre blamed Liberal policies for the widening wealth and income gaps.
“Today, StatsCanada reported that the gap between rich and poor is at its highest level in recorded history, after NDP-Liberal money printing inflated the assets of the super rich while inflating the cost of living for everyone else,” he told reporters at a press conference.