Income gap between rich, poor increasing: Conference Board

Canada seeing fourth largest increase in income inequality – more than U.S.
||Last Updated: 09/19/2011

Since the mid-1990s, income inequality has been rising more rapidly in Canada than in the United States, according to the Conference Board of Canada's How Canada Performs analysis of world income inequality.

“Canada had the fourth largest increase in income inequality among its peers,” said Anne Golden, president and CEO of the Conference Board. “Even though the U.S. currently has the largest rich-poor income gap among these countries, the gap in Canada has been rising at a faster rate.”

High inequality both raises a moral question about fairness and can contribute to social tension, she said. And in Canada, the gap between the rich and poor has widened over two decades, especially compared to peer countries.

Between the mid-1990s and the late 2000s, Canada’s income gap grew the fourth fastest, behind Sweden, Finland and Denmark, found the report.

The most commonly used measure of income inequality is the Gini index, which calculates how the distribution of income deviates from a perfectly equal distribution. A Gini index of zero means that every person in the society has the same amount of income, whereas, an index of one would indicate that one person has all the income.

Canada's Gini index rose from 0.293 in the mid-1990s to 0.320 in the late 2000s. During the same period, the United States' Gini index increased from 0.361 to 0.378.

Although the Canadian economy has seen growth in recent years, the majority of the wealth has been accrued among the wealthiest 20 per cent of the population, found the report. And about one-third of all new wealth created in Canada over the past two decades has gone to the top one per cent of the population, Golden said.

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