Fewer than 90 families in Canada hold roughly as much wealth as what everyone living in Newfoundland and Labrador, New Brunswick and Prince Edward Island collectively owns.
That’s the finding of a new report by the Canadian Centre for Policy Alternatives (CCPA), which compares the net worth of Canada’s 87 richest families to the wealth of average families since 1999.
“Canada’s dynastic families have got it all — more wealth, more inheritance, and are as lightly taxed as they were the last time we looked in 2014,” study author and CCPA senior economist David Macdonald said in a statement.
The country’s most affluent families are worth $3 billion on average, while the median net worth in Canada is just under $300,000, meaning that half of families own more and half less than that. And while wealth at the top grew by $800 million per family between 2012 and 2016, a rate of 37 per cent, Canada’s median net worth grew by only $37,000, an increase of 15 per cent. Net worth is the total value of a family’s assets minus any debts and other liabilities.
Taken together, the country’s top 87 families hold $259 billion in wealth, just shy of the $269 billion in net assets collectively owned by everyone living in Newfoundland, New Brunswick and Prince Edward Island, including “all houses, cottages and other properties, all cars, every savings account in the region, RRSPs, pensions, etc.,” Macdonald writes.
The study analyzes wealth inequality using information on Canada’s richest dynasties as compiled by Canadian Business magazine and data on household net worth from Statistics Canada’s Survey of Financial Security.
While much of the current debate about inequality has been focused on the growing gap between the top one per cent of earners and the rest, wealth disparities are just as concerning, Macdonald argues.
Wealth inequality is, in part, a by-product of income inequality. After all, the more you make, the more you can save, and the faster your net worth grows.
“And since returns on larger sums of invested money are naturally higher, we should expect the growth in the net worth of the wealthiest Canadians to outpace everyone else by a larger and larger factor with each passing year,” Macdonald writes.
But the story doesn’t end there, he adds.
Wealth is also accumulating at an increasing rate across generations, according to the report. While in 1999 46 of Canada’s 87 wealthiest families were nouveau riche,by 2016 that number had gone down to 39, meaning that most of today’s top scions were born into wealth.