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Canada’s 86 wealthiest people could buy New Brunswick, study says

The 86 wealthiest people in Canada could buy every privately-owned asset in New Brunswick — every car, house and pension fund — and still have about $30-billion left over, David MacDonald figures.

The Canadian Centre for Policy Alternatives economist has published a paper on Canada’s wealth gap, which he found to be far bigger than its income gap. The former measures a person’s combined overall worth – everything you own, minus debt – while the latter measures what you earn.

The richest 20 per cent of families account for almost 50 per cent of all income. But the wealthiest 20 per cent control about 70 per cent of all Canadian wealth, he found.

READ MORE: Income inequality

MacDonald argues these numbers more accurately reveal the face of financial inequality in Canada.

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“When you take a look at the Wealthy 86 and find out that 0.002 per cent of the population has the same wealth as the bottom 34 per cent or so, this is a more extreme situation than you find on the income inequality side,” he said.

“And it’s more important because it better reflects the influence these types of individuals can have, as opposed to income, which is temporary wealth built up over time.”

And it means most Canadians aren’t reaping the full benefits of an economic recovery, he said.

“It’s benefiting a very small group of people that sit at the very top and collect this as income and their fortunes grow whereas the majority of the per cent at the bottom have small amounts of net worth and therefore they are not sharing to the same degree in this type of economic growth that Canada’s richest and wealthiest are.”

READ MORE: Decoding the She-cession: What did the downturn do to women’s work?

That growing gap’s a continuation of a broader trend, he said.

“That’s exactly what we’ve seen since 1999 when the first wealth survey was done. The vast majority of wealth that was created since 1999 went to the top fifth of the population. And now we’re seeing this incredible extreme disparity among the top 86 and the rest of the Canadian population.

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WATCH: The results of this study caused a heated debate Thursday in the House of Commons

Bur on a global scale, Canada’s not so bad.

David Rothwell, assistant professor of social work at McGill University, says Canada’s wealth gap pales in comparison to other countries’.

“The global trend in industrialized countries is moving towards more wealth inequality and I think that trend in Canada is may not as out of control as it is in other places,” Rothwell said. “In terms of wealth holdings, there are certain tax structures that are preferable to people who have assets and high income and some people take advantage of those and you can make an argument that they may be increasing wealth inequality.”

And some of Canada’s tax structures may not be helping, Rothwell said.

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“There are a lot of existing policies in place that are maybe not reaching the bottom-end of the distribution, like all of the registered savings products that we have. They’re disproportionately used and accessed by, in general, more higher-income, more higher-wealth people,” he said.

“To reduce [the inequality], policy-makers need to think about how to increase access and increase all types of financial security and financial capabilities, particularly for the bottom half of the distribution.”

READ MORE: Luxury retailers, Wal-Mart winners of growing income gap

Macdonald suggests changing tax rates on leased or sold assets or property would help balance out wealth disparity.

“When we’re talking about income inequality, the types of measures that we might implement, like a new top tax bracket like what just happened in Ontario or B.C., for example, actually wouldn’t really make a big difference in terms of these wealthy families because they didn’t make their wealth by becoming CEOs and saving their money. They made this wealth by creating or trading assets, usually companies or real estate.”

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READ: Canadian Centre for Policy Alternatives paper on wealth inequality in Canada

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