I know, I know. I’ve been down this rich-get-even-richer rabbit hole too many times already. Before COVID did what it did to the economy. Before Donald Trump did what he did to the world. Before Justin Trudeau did what he did to… But I digress.
Even as I write these words, the inequality gap between the rich and the rest is almost certainly widening from its greater gulf into its yawning chasm and then the canyon that can’t be crossed, and then, well….
When Canada began in 1867, the wealthiest one per cent of Canadian families owned 10 per cent of the country’s bounty. Today, they own 25.6 per cent of a much greater bounty.
You can slice and dice that many different ways. Here’s one way. In 2019, Canada’s highest paid CEOs made 202 times what the average worker earned. Here’s another. By 11:17 a.m. on Jan. 4, 2021—four days after the last notes of “Auld Lang Syne” faded—the average top-100 Canadian CEO on the S&P/TSX Composite index had already made what the average worker will take the entire year to earn. Happy New Year!
You may think COVID changed everything about everything, but it changed almost nothing about this trending something: the rich keep getting richer and richest while the rest of us… well, we don’t.
According to the Canadian Centre for Policy Alternatives, a progressive think tank, Canada’s top billionaires added another $37 billion to their treasure chests during the first six months of the same pandemic that pillaged the pocketbooks of our least well-to-do citizens. In the real world, the CCPA estimates about half of all Canadian workers earning $17 or less an hour either lost their jobs or had their hours eviscerated.
But think about this: if the $61 million in bonuses Canada’s top four grocery chains paid their 63 highest paid executives in 2019 had been redirected instead toward their front-line employees’ salaries—the “heroes” of their own smug corporate PR campaigns—183,711 actual workers could have had their $2-an-hour top-up pay topped up for another month.
And then there’s this to contemplate. Nearly one-third of those top-100 executives—the ones lugging home their bonuses and stock options based on bottom-line—ran companies that received the COVID relief federal wage subsidy, meaning me and thee helped goose the corporate profits that allowed those companies to pay out those unconscionable bonuses.
There is nothing new about this, of course.
The only question is what are we as a society going to do about it?
The Trudeau government declared in its fall throne speech that it intends to “identify ways to tax extreme wealth inequality.” Trudeau himself emphasized the same point in a mandate letter to his recently anointed finance minister, Chrystia Freeland.
There are options the government could consider.
During her presidential campaign last year, for example, U.S. Senator Elizabeth Warren proposed a simple wealth tax—two per cent on fortunes over $50 million, rising to six per cent on nest eggs that fluff out at over a billion dollars. During the 2019 Canadian federal election, the NDP offered our own slightly more modest version—a one per cent tax on wealth above $20 million.
Even that could be significant. The Parliamentary Budget Office estimated such a tax could generate $5.5 billion in 2021-22—even after assuming our richest scofflaws would find ingenious new accounting ways to shelter 35 per cent of their net assets from the taxman!
There is a public appetite for reining in excessive wealth. A recent Broadbent Institute survey reported that 48 per cent of Canadians “strongly” support some sort of “wealth tax on the richest multi-millionaires and billionaires.”
The real question is, does this government—any government—have the guts to do what needs to be done? •