Last year Canada surpassed the United States to become the country with the most rapid growth of inequality. The U.S. still has the largest income gap, but Canada is quickly catching up.
Who controls Canada’s wealth?
The richest 20 per cent (the top quintile) of the population commands 67.4 per cent of the country’s wealth. Those in the bottom quintile own almost nothing; in fact, they are in negative territory.
Wealth distribution among the other segments of the population is as follows: the near-top 20 per cent control 21 per cent; the middle quintile hold 9 per cent; and the near-bottom quintile account for only 2.2 per cent. Thus, 88 per cent of Canada’s wealth is in the hands of only 40 per cent of the people – with overwhelming economic control concentrated at the tiny summit of the social pyramid.
Based on an online poll of 3,000 people, the social democratic Broadbent Institute reported that 80 per cent of those polled favour higher federal income tax rates for the richest Canadians. Almost the same proportion want to see higher corporate taxes.
But the tax trend has been going in the opposite direction. Canada’s general corporate tax rate has dropped from around 22 per cent to 15 per cent under the Conservative Stephen Harper government.
To make matters worse, the Conservatives have reduced spending on social programmes, and capped transfers to the provinces (thus taking a bite out of health care, education and social assistance). They’ve restricted elibibility of employment insurance (less than 40 per cent of the jobless now qualify), and introduced a series of tax breaks that mainly benefit the affluent.
What are the results? According to a report by the charity United Way, income inequality in Toronto ballooned by 31 per cent between 1980 and 2005. On average, the gap across Canada grew by 14 per cent. Previous research by United Way and McMaster University revealed that almost half of all workers in the Greater Toronto Area are in precarious employment.
One might think that these facts, combined with the popular appetite for change, would make growing inequality a prime target in the political arena.
But the big business-backed Liberal Party will not bite the hands that feed it. And Tom Mulcair, leader of the labour-based New Democratic Party, still intones the right wing populist mantra “no new taxes”.
The demand for equality has always run counter to the logic of the capitalist mode of production. Thus the movement for economic democracy starts in the streets and work places, travels through the main working class organizations, and can be fully realized only by the socialist transformation of society. — BW