Canada’s wealthiest one per cent hold 25.6% of riches, new PBO report says

Canada’s wealthiest one per cent hold 25.6% of riches, new PBO report says

Canada’s wealthiest one per cent hold 25.6% of riches, new PBO report says

The concentration of wealth among Canada’s richest one per cent is deeper than previously believed, according to a federal government report based on a new modelling approach.

The top one per cent of Canada’s families hold about 25.6 per cent of the wealth — roughly $3 trillion — up from 13.7 per cent estimated under previous methodology, says the report from the Office of the Parliamentary Budget Officer.

“The distribution of wealth among households is heavily skewed toward the wealthiest families,” the report notes.

“In Canada, a small proportion of families at the top of the distribution possess net worth that is orders of magnitude higher than the country’s median net worth.”

The amount of money held by Canadian families would total $11.7 trillion if they liquidated all assets and paid off all liabilities, about five times larger than Canada’s annual gross domestic product, the report notes.

Real estate at $5.8 trillion and mortgages at $1.5 trillion are the single largest asset and liabilities categories.

The report adds that the top 0.5 per cent of Canadian families hold 20.5 per cent or $2.4 trillion of the wealth, up from the previous estimate of 9.2 per cent.

It was expected that the numbers would rise because the previous estimates were clearly too low, but the magnitude of the increase was surprising, said Parliamentary Budget Officer Yves Giroux in an interview.

“When we looked at the number from StatsCan in their survey, the wealthiest person had self-declared wealth of $27 million and we know that there are people in Canada that are richer than that,” he said.

“We were not surprised there would be upward revisions but to that extent, I was personally surprised to see it was that much.”

The new database calculation incorporates information from Canadian Business magazine’s 2017 Richest People List, with figures from Statistics Canada’s 2016 net worth survey and its fourth-quarter 2016 National Balance Sheet Accounts report.

Giroux said his office investigated new ways to estimate wealth in Canada following requests during last year’s federal election to provide an estimate of the revenues that could be raised by a tax on wealthy families, as well as ongoing interest in tax reform by legislators.

Last September, the federal NDP proposed a one per cent annual wealth tax on fortunes worth more than $20 million, claiming it could raise nearly $70 billion over the next 10 years.

Unlike a tax on income, a wealth tax would apply to all assets, including real estate, with the aim of reducing financial inequality among Canadians.

At the time, the PBO released figures suggesting the measure could raise $5.6 billion in the 2020-21 fiscal year and rise to nearly $9.5 billion in 2028-29.

That number was arrived at by using certain assumptions and, while it’s likely it would be higher using the updated database, it’s difficult to say what it would be without extensive new calculations, said PBO lead analyst Nigel Wodrich.

The NDP plans to ask for that recalculation, finance critic Peter Julian said in an interview.

He charged that the Canadian government has deliberately withheld the “appalling” statistics so that inequality in the tax system which favours the wealthy over average citizens remains hidden.

“With a fair tax system, we would be seeing a vastly different distribution of the nation’s wealth, a much more fair distribution,” he said.

The PBO says it’s not yet known if the wealth database will be updated on a regular basis.

This report by The Canadian Press was first published June 17, 2020.

Dan Healing, The Canadian Press

Business

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Alberta’s chief medical officer of health, Dr. Deena Hinshaw, confirmed eight additional virus-deaths Monday afternoon including one in central zone. (Photo by Chris Schwarz/Government of Alberta)
Central zone up to 1,249 active COVID-19 cases

Red Deer sits at 257 active COVID-19 cases

Agriculture Minister Devin Dreeshen (Alberta government photo)
Innisfail-Sylvan Lake to receive $5,000,000 in Municipal Operating Support Transfer funding

MLA Devin Dreeshen breaks down the funding communities will receive from MOST

Alberta’s chief medical officer of health, Dr. Deena Hinshaw, confirmed eight additional virus-deaths Monday afternoon including one in central zone. (Photo by Chris Schwarz/Government of Alberta)
New record: Red Deer at 236 active COVID cases

One more death in central zone reported

(Photo Courtesy of Fortis Alberta)
New FortisAlberta instillation in Sylvan means more reliability and shorter power interruption times

FortisAlberta recently installed a Distribution Automation system in Sylvan Lake

Sylvan Lake RCMP Detachment. Photo Courtesy of Google Maps
Sylvan Lake RCMP address three key areas of resident concern

RCMP were notified of these main areas of concern through an online Town Hall

Idyllic winter scenes are part of the atmosphere of the holiday season, and are depicted in many seasonal movies. How much do you know about holiday movies? Put your knowledge to the test. (Pixabay.com)
QUIZ: Test your knowledge of holiday movies and television specials

The festive season is a time for relaxing and enjoying some seasonal favourites

Ash and Lisa Van carry a freshly cut Christmas tree while wearing personal protective masks at a Christmas Tree Farm in Egbert, Ontario, Sunday, Nov. 29, 2020 THE CANADIAN PRESS/ Cole Burston
‘Everyone wants a tree and they want it now’: Christmas tree sales on pace for record

Anticipated demand for Christmas trees has sparked a rush by some to purchase more trees wholesale

A scene from last year’s Light the Night fundraiser at the Stettler Town and Country Museum. This year’s rendition is on a drive-through basis only, but it still promises to be a not-to-be-missed seasonal highlight. (Independent file photo)
Stettler Town and Country Museum hosts ‘Light the Night’

This year’s rendition is drive-through only, but will still prove to be a dazzling display

(Black Press File Photo)
Rimbey woman gathering Christmas gifts for seniors at Valleyview Manor

Margaret Tanasiuk says she doesn’t want anyone to feel forgotten on Christmas morning

Paramedics register patients at a drive through, pop-up COVID-19 test centre outside the Canadian Tire Centre, home of the NHL’s Ottawa Senators, in Ottawa, Sunday, Sept. 20, 2020. A new poll suggests most Canadians aren’t currently worried that people in other countries might get a COVID-19 vaccine first. THE CANADIAN PRESS/Justin Tang
Canadians not worried other countries will get COVID-19 vaccine first: poll

Forty-one per cent of respondents say they want the vaccine to be mandatory for all Canadians

Fossil finds at Mt. Stephen. (Photo: Sarah Fuller/Parks Canada)
Extreme hiking, time travel and science converge in the Burgess Shale

Climb high in the alpine and trace your family tree back millions of years – to our ocean ancestors

Deputy Prime Minister and Minister of Finance Chrystia Freeland listens to a question from a reporter on the phone during a news conference in Ottawa, Monday, Nov. 30, 2020. THE CANADIAN PRESS/Adrian Wyld
Spending too little worse than spending too much, Freeland says as Canada’s deficit tops $381B

‘The risk of providing too little support now outweighs that of providing too much’

Executive Director and Co-Founder of Rock Soup Craig Haavalsen is sleeping in a tent outside Rock Soup’s location until the Go Fund Me for Rock Soup raises $10,000. Shaela Dansereau/ Pipestone Flyer.
Putting normalcy into asking for help: New non-profit sets up in Wetaskiwin

Rock Soup non-profit is a new secular Food Bank putting down roots in Wetaskiwin.

Most Read