Income inequality: Canada on the Brink

On Monday, economist Andrew Jackson had an article in Globe and Mail, “Census shows income inequality is on the rise” which documents increasing Canadian market income inequality. From 2005 to 2015 median individual incomes rose 12.7% but the top one percent increased their market income by 16.4%.

The good news is that the Organization for Economic Cooperation and Development (OECD) says that after taxes and transfers (e.g. old age pensions, social assistance, etc) Canadian economic inequality is about the same now as it has been for two decades. However, if market inequality grows, eventually the tax system and government programs cannot keep up.

That means we have to consider labour market reforms as well as fair taxation to ensure economic equity. As I pass through Toronto’s Pearson airport once a week, or so, I frequently see picket lines. Often this is because the workers have had their employer’s contract “flipped”. In other words every two years, Pearson contracts with a new temporary worker company which fires the existing workers and then hires them back for lower wages and more “flexible” working conditions. We can’t get better economic equality in Canada without banning these abhorrent practices while we implement fairer taxation.