87 Families Own Half of Canada's Wealth: Uncovering Inequality in Canada - Essay Sample

Introduction

Canada is one of the countries where wealth distribution is unequal, with only a few families owning over half of the country's total wealth. According to a report by the Canadian Centre for Policy Alternatives (CCPA), there are 87 affluent families in Canada whose worth is estimated to be 259 billion with is equivalent to the net assets owned by all people in the Prince Edward Island, New Brunswick and Newfoundland (Christopher, 2017). The wealth inequality in Canada is attributed to the dynastic nature of the top wealthy families. As the dynastic families get more affluent, there is more inheritance to the members who also enjoy low taxes. Members of wealthy families take essential positions in government increasing their opportunity for increased wealth. The wealth gap between the wealthy individuals and families and the poor in Canada has been widening over the past 100 years.

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The wealth inequality in Canada is a by-product of long-term income inequality between the members of the top affluent families and ordinary Canadians. Members of the top wealthy families have an opportunity to make more money and save more hence increase their net worth faster than ordinary Canadians. Wealth is accumulated over time, and the wealth inequality in Canada has been rising over generations (Özgür, 2018). Today, almost all rich individuals in the top affluent families were born wealthy, and their families control vast wealth. Taking the example of Westons and Saputons, the members of these wealthy families are top countries CEOs; hence despite having been born in wealthy families, they have the opportunity to earn more to grow their wealth at a fast rate compared to a Canadian born in an average family.

Wealth Distribution in the Early 1900

According to Özgür (2018), the genesis of wealth inequality in Canada can be traced to early 1900 when few Canadians started taking control of the entire society. First, there were over two million immigrants who arrived in Canada in the period between 1901 and 1911, and most were poor and had come to search for jobs in the railway construction projects in Canada (Christopher, 2017). Here the few Canadians with influence earned well compared to the immigrants hence beginning the wealth inequality between the influential Canadian families and the poor and immigrants’ families. By 1930, some Canadian individuals had accumulated individual wealth and could control great wealth as some poor Canadians, and specifically, those from the immigrants' families lived a disparate life stuck in the same job for their lifetime (Jordan and Jim, 2013). It is during the beginning of the 1900s where the difference in wealth distribution between the rich and the poor took a wide gap.

Wealth Distribution In the period between 1930 and 1980

In the period between 1930 and 1980, the level of wealth inequality sharply increases with the rich or members of influential and wealthy families accumulating more wealth compared to poor individuals or families. Statistics indicate that during the period between 1930 and 1980, the total national income that went to the wealthy 0.1 percent of the total Canadian population reduced significantly, the few affluent families increased in their wealthy levels to command considerable influence in many sectors of the Canadian economy (Özgür, 2018). It is also during this period when the concept of dynastic families originated with the few affluent families opting to operate as a society. Members of the few wealthy families gained influence and took positions in government positions and, in the corporate world hence had the opportunity to grow their family wealth.

Wealth Distribution in the Late 1900s

In the late 1900's most of the investments of the few affluent families had grown to maturity as well as most of the members from the wealthy families controlled most parts of the Canadian economy. During this period, a reversed trend to what happened between 1930 and 1980 was noted. The total national income that went to 0.1 percent of the Canadian population, who are the rich in the society, took an upward trend (Christopher, 2017). The access to a high total national income by the wealthy families widened presented the few affluent families an opportunity to grow in wealth compared to the ordinary Canadian from an average family. According to Jordan and Jim, (2013), it is estimated that by the year 2000, 0.1 percent of the Canadian population composed of wealthy families enjoyed about 3 percent of the total national income.

Wealth Distribution in Early 2000

Early 2000 was a continuation of what was noted in the late 1900s. The difference in income levels between the poor and the wealth led to a wide gap in the wealthy distribution between the wealthy 0.1 percent of the Canadian population and the rest of the people. Using the Gini coefficient as a measure of income inequality between the wealthy 0.1 percent of the people and the rest of the Canadian population, the Gini score had risen to over 0.5 by the year 2010 (Jordan and Jim, 2013). To explain the Gini Coefficient is that it ranges from 0 as the lowest indicating perfect equality, and the highest is 1 indicating perfect inequality (Özgür, 2018). With a Gini score of over 0.5 in the early 2000's, it is an indication that the wealth distribution between the ordinary Canadian and the wealthy 0.1 percent of the population is too broad.

Will the COVID Crisis Affect that Trend?

With the rapid global spread of the Coronavirus, governments and individuals' life shall be impacted in Canada and globally. Trade and employment shall be the hardest-hit areas leading to a reduced national income (Yeo, 2018). Many employers in Canada implemented what they refer to as temporary layoffs leading to over a half a million jobs lost. With the government directives to impose lockdowns and direct employees to work from home, companies have had no option but to reduce their operations and work with the minimal workforce. The concept of working from home has not realized better outcomes, and there has been reduced labor participation from the work from home concept. With less labor participation in the entire economy, the most affected are the low-income earners who are also high taxpayers. Thus, as the poor lose their source of income, the wealthy few will still remain wealthy, and the wealth distribution shall even widen further with the wealthy 0.1 of the population being too high in the scale and the many poor remain constrained with fewer resources.

Conclusion

In conclusion, COVID-19 shall widen the wealth distribution gap between the poor and the wealthy 0.1 percent of the Canadian population since the poor suffer income constraints out of the unemployment while the wealthy 0.1 percent of the Canadian population control their wealth, businesses and participate in the decision making for how to revive the Canadian economy back to normalcy. The COVID-19 shall deepen the already existing wealth inequality as, despite high consumption and low income among all Canadians, the wealthy 0.1 percent of the Canadian population shall be able to sustain themselves for long compared to the ordinary Canadians hence the wealthy few shall remain wealthy while the poor shall constrain their accumulated wealth or resources.

References

Christopher, A. S. (2017). Understanding Wealth Inequality in Canada. Fraser Institute. 4:1-60. https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwi62fyto-zpAhVECxoKHQniAsoQFjAAegQIARAB&url=https%3A%2F%2Fwww.fraserinstitute.org%2Fsites%2Fdefault%2Ffiles%2Funderstanding-wealth-inequality-in-canada.pdf&usg=AOvVaw0jEsWHYwH5K4e_u50SUQd5

Jordan, B., and Jim, S. (2013). The growth of inequality in Canada cannot be denied. The star. 9:1. https://www.thestar.com/opinion/commentary/2013/09/26/growth_of_inequality_in_canada_cannot_be_denied.html

Özgür B. S. (2018). Poverty, growth, and inequality in Canada, International Journal of Current Research. 10, (10), 74326-74332. https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwi62fyto-zpAhVECxoKHQniAsoQFjACegQIBBAB&url=https%3A%2F%2Fwww.researchgate.net%2Fpublication%2F328580729_THE_POVERTY_GROWTH_AND_INEQUALITY_IN_CANADA&usg=AOvVaw0oNuwIwqm7uC6xIfu4dIyZ

Yeo, L. H. (2018). Impact of Covid-19 pandemic on Asia-Europe relations. Asia Europe Journal, 1.https://link.springer.com/content/pdf/10.1007/s10308-020-00575-2.pdfAppendix