As world leaders convened at the recent World Economic Forum in Davos, Switzerland, their agenda focused on global cooperation, technological transformation, and economic challenges like inflation and trade wars. However, one of the most pressing global issues—rising wealth inequality—was notably absent from official discussions, despite its profound implications for democracy and social stability.
The Stark Reality of Wealth Disparity in Canada
A new analysis by Oxfam Canada reveals that Canada is no exception to the global trend of increasing wealth concentration. The richest 0.01 percent of Canadians, comprising just 1,800 families, hold over $1 trillion in total wealth, accounting for nearly six percent of the nation's wealth. In stark contrast, the bottom 40 percent of Canadians—seven million families—collectively possess just over three percent of total wealth, with an average net worth under $87,000. This amount is less than what an average billionaire earns in a single hour, highlighting a deep and widening wealth chasm.
Human Costs of Inequality
On one end of this chasm, more than 25 percent of Canadians live in food-insecure households, hundreds of thousands experience homelessness, and food bank usage has doubled nationwide since 2019. A record 1.4 million children are living in poverty, underscoring the severe social impacts of economic disparity.
Meanwhile, Canada's 40 richest billionaires, with a combined net worth exceeding the GDP of countries like South Africa, Finland, or Chile, saw their wealth increase by 20 percent last year alone. This concentration of wealth not only harms individuals but also breeds polarization and perceptions of unfairness, which are deeply destabilizing to democratic institutions.
Millionaires Acknowledge the Threat
A recent survey of over 2,300 millionaires highlights that even the wealthy recognize the dangers of extreme wealth. Over half of those surveyed believe that extreme wealth poses a significant threat to democracy, indicating a growing consensus across economic strata about the risks of inequality.
Economic Implications
How can an economy truly thrive when it is so top-heavy that much of the workforce struggles to meet basic needs? Metrics like consumption and productivity become moot when Canadians cannot afford food or rent. The economic vitality of the nation is compromised by such disparities, necessitating urgent action to address the growing divide.
Proposed Solutions: A Wealth Tax
To combat rising inequality, Canada should implement a progressive wealth tax targeting individuals with a net worth of $10 million and above. This measure could generate an additional $121 billion in tax revenues over the next five years. These funds could be redistributed to support the most vulnerable populations and invest in essential services that foster a thriving economy, such as child care, health care, and affordable housing.
By taking decisive steps to address wealth inequality, Canada can work towards a more equitable society that strengthens democratic foundations and ensures economic opportunities for all its citizens.
