After-tax gap between Ontario's rich and poor at all-time high | National Union of Public and General Employees

After-tax gap between Ontario's rich and poor at all-time high

Top 10% earn 75 times more than bottom 10%

 

Toronto (9 May 2007) - Ontario’s after-tax income gap between the richest and poorest 10% of families raising children under 18 has reached an all-time high, says a new study by the Canadian Centre for Policy Alternatives (CCPA).

The richest 10% of families now earn 75 times more than the poorest 10%. In 1976, they earned only 27 times more. The study is entitled, Ontario's Growing Gap - Time for Leadership.

“The gap is growing during the best of economic times, in Ontario, one of the most prosperous jurisdictions in the world,” says the study’s author, Armine Yalnizyan.

“Under these economic conditions, the gap should be shrinking, not growing," she says. "And this isn’t just a story about the richest and the poorest. More and more families are struggling to make ends meet. Living costs are rising far more quickly than many people’s incomes.”

Compared to a generation ago, the bottom 40% of Ontario families raising children under 18 have experienced stagnant or falling incomes, despite the past decade of robust economic growth and job creation.

Gap now higher than Canadian average

Ontario’s after-tax income gap has been growing faster in the past decade than it has at any time in the past 30 years. The province’s after-tax income gap is now higher than the Canadian average.

“Provinces with far less prosperity, and a higher earnings gap than Ontario, have done a better job of closing the gap,” says Yalnizyan. “Governments do make a real difference. The government of Ontario could be doing much more to close its growing after-tax income gap.”

Governments have two ways of addressing the income gap, Yalnizyan argues. One approach is to implement measures to improve incomes. The second is to make the basics of life (such as housing, child care, and postsecondary education) more affordable.

An earlier CCPA report, also by Yalnizyan, found that the national picture is as discouraging in many respects as the situation in Ontario. The lion's share of economic growth is going to the richest 10% of Canadian families, not to the majority - the 80% of families earning under $100,000 a year, the first study reported.

The National Union of Public and General Employees (NUPGE) believes both reports should be required reading for all policy makers in Canada.

More information:
• Complete report: Ontario's Growing Gap - Time for Leadership - pdf
• Richest 10% in Canada earn 82 times more than poorest 10%

 

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