Rise of income inequality in Canada ‘almost exclusive’ to major cities: study

Income inequality in Canada is “almost exclusive” to major cities, while it’s “surprisingly equal” in the rest of the country, a recent study found.

Research by Chartered Professional Accountants of Canada (CPA Canada) found that major cities such as Toronto, Montreal, Vancouver and Calgary see the widest gap in wages.

“This rapid pace of urbanization is happening at a time when inequality is rising in our cities,” the study noted.

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It added that the growth of inequality in major cities has been occurring since the mid-1970s.

Calgary’s inequality is four times higher than the national average, while Toronto’s is three times higher and Vancouver’s is 2.5 times more, according to the study.

These results are particularly concerning because more than 80 per cent of Canadians live in urban cities, with 40 per cent living in those four cities, the study stated.

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However, when major urban cities were removed from calculations, the study found that there was much less of a wage gap. Without their major cities included, Ontario and British Columbia, which typically top inequality charts, have actually been improving.

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“This is not to say that less-populated communities across the country do not feel the effects of inequality, but rather that the increase in inequality is more concentrated in urban centres,” the study explained.

Bigger cities tend to see a larger income gap partly because they have more executive and leadership positions, economist Andrew Jackson said.

“They have the top end of the income spectrum,” he noted, adding that on the flip side, low-income jobs generally pay the same across Canada.

Jackson noted that poverty is still an issue in the rest of Canada.

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“You just don’t have the income extremes,” he explains, “Wages are generally low.”

The report added that most municipal governments don’t have the ability to tackle inequality, so the onus falls on provinces and federal governments.

Jackson agreed that most of the work falls on the federal government, as it can adjust taxes, transfer income and provide wage supplements for low-income families.

The economist adds that affordable housing is a key factor in minimizing the discrepancies.

“It’s an area where the federal government needs to take the lead,” Jackson said.