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

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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.

MrSqueegy on September 17th, 2020 at 17:19 UTC »

Really done hearing about this shit.

My rent keeps going up.

My Bills keep getting bigger.

My job pays less and pinches pennies where they can.

Life fucking sucks.

At least I have my wife and pets.

tcreds_ on September 17th, 2020 at 16:59 UTC »

I'm fine with heavily taxing anyone with a net worth of 1 billion dollars or more, but to pool a billionaire and someone making 400k a year (for example) in the same tax bracket is ridiculous. Progressive taxation is fine, but someone making 300k shouldn't be taxed the same % as a billionaire.

To clarify: Yes, I understand that just because someone is worth a billion or more doesn't mean you go and tax that full billion (wealth tax) I'm saying you tax their income which would be significantly higher than someone making anywhere from 200k to 500k. Someone making 200k-500k (for example) doesn't belong in the same tax bracket as someone making multiple millions per year.

cool_side_of_pillow on September 17th, 2020 at 16:56 UTC »

Do we have our own version of the Murdoch’s and the Koch’s, that fly under the radar because we (me) are distracted by America’s political dramas? Probably yes.