Mar. 17, 2025

Article by Alex Hemingway, Senior Economist & Public Finance Policy Analyst, BC Policy Solutions

The latest Statistics Canada data shed light on rising economic inequality in Canada as the federal election campaign gets underway. 

Extreme inequality is fuelled, in part, by the super-rich at the very top and growing divides in the housing market amid a shortage of homes. These inequalities damage our economy and social fabric, lowering economic growth, worsening health and social outcomes and distorting our democracy and politics.

The need to curb growing inequality is a critical conversation to have in the federal election. As we confront a trade war and threats of annexation from the United States, Canadians have something to fight for in this moment.

We can chart our own path—different from the colossus to the south. We can fight for a country where we stand up for the rights of all, share wealth, invest together in homes, schools and health care and build a stronger society and economy in the process. But this requires confronting the wealthy and powerful rather than letting them dominate the policy agenda.

Top-end and housing-driven wealth concentration

Two facets of economic inequality stand out in Canadian data today: the chasm of inequality between the super-rich and everyone else, i.e., the 99% versus the 1%; and the divide between the haves and have-nots of the housing crisis that has left homes scarce and expensive across the country. 

One recent set of inequality data comes from Statistics Canada’s Distributions of Household Economic Accounts. The latest numbers show a near-record gap in the share of disposable income—46.9 percentage points—held by Canadian households in the top 40% of the income distribution compared to the bottom 40%. 

The wealth gap is even larger than the income gap.

The same report found that the top 20% of Canadian households controls 64.7% of wealth, with an average $3.3 million per household, while the bottom 40% held only 3.3% of the total wealth with an average $83,189 per household. 

“The latest numbers show a near-record gap in share of disposable income.”

But this significantly understates wealth inequality in Canada, largely missing the extreme wealth of billionaires and the richest 1%. Indeed, Statistics Canada surveys are not well suited to capturing the wealth of the richest of the rich, which are often missed by its samples. This is a critical data gap.

Analysis from the Parliamentary Budget Office (PBO) sheds more light on the wealth of the super-rich.

The PBO’s wealth distribution modelling finds the richest 1% controls nearly a quarter of Canada’s wealth (24.3%), amounting to $3.5 trillion. Academic research using a similar modelling approach finds that the wealth share of the top 1% may be even higher at 29% of net wealth. “Real-time billionaires” data from Forbes find that 65 Canadian billionaires now control approximately $410 billion of wealth.1.¹ The Canadian Business rich list found the richest 10 billionaires alone controlled $261 billion.

Outside the realm of the top 1% and billionaires, another fresh batch of Statistics Canada data highlights the growing role of land and housing in driving wealth inequality among a wider swath of Canadians. 

The scale of housing-driven inequality is no less daunting.

“The richest 1% controls nearly a quarter of Canada’s wealth.”

Even if the owners of multi-million dollar detached houses in cities like Vancouver are not all billionaires or necessarily in the top 1%, the land wealth they hold collectively is enormous. The net wealth (property value minus any outstanding mortgage debt owing) held by homeowners in principal residences across Canada was $5.8 trillion in 2023. Households held another $1.3 trillion in real estate net worth outside of principal residences. 

This real estate wealth is especially concentrated in the most expensive cities like Vancouver and Toronto, driven by chronic housing shortages. In the greater Vancouver area, the value of detached houses’ land alone was $744 billion in 2024—more than the total wealth of Canadian billionaires —according to BC Assessment data. Land and housing wealth is enormous and cannot be ignored. 

At a household level, the wealth gap between renters and homeowners is vast, with homeowners holding 10 to 30 times more wealth than renters depending on the age group. For example, in the 55 to 64 age range, homeowners had a median net wealth of $1.2 million in 2023 compared to just $43,000 for renters. The median homeowner under 35 had a net wealth of $457,100 compared to $44,000 among renters.

Distorting democracy and fraying the social fabric

Each of these dimensions of wealth concentration has corrosive effects on our democracy and society.

Looking across the border to the US, we are witnessing how billionaires like Elon Musk can not only use their wealth to shape politics and policy but also directly wield power. Musk’s Orwellian Department of Government Efficiency (DOGE) is now trying to dismantle much of the United States’ federal public service. A growing body of research shows that income and wealth concentration has a distorting influence on politics and policy and it’s increasingly plausible to describe the US as an oligarchy. 

It’s not difficult to see indications of distorted democracy in Canada, too. Consider that despite huge backing with 80% to 90% support across party lines in opinion polling, implementing a wealth tax on the super-rich is nowhere to be found on the federal policy agenda. Even a considerably more modest capital gains tax reform announced last year has now been scrapped after vociferous opposition by lobby groups for corporations and the wealthy. Bay Street and the rich have long been adept at ensuring their narrow interests are protected in Canadian politics. 

“It’s not difficult to see indications of distorted democracy in Canada.”

Meanwhile, tech CEOs in Canada are becoming more open in their attempts to set the policy agenda. Some are even flirting with the creation of a Canadian version of DOGE to gut public spending. This dovetails with proposals from politicians like Pierre Poilievre to defund the CBC (at least its English-language services) at a time when strengthening national institutions is more important than ever.

In turn, the inequalities generated by the housing crisis are also deeply corrosive, though this facet of wealth inequality has its own distinct dynamics. In our most expensive cities, owners of detached houses have collectively become the holders of hundreds of billions of dollars in real estate wealth. Meanwhile, millions of Canadians struggle to make rent or find a suitable home at all. 

With so much household income diverted to rent and mortgage payments rather than purchasing other goods and services, the housing shortage is a drag on both household finances and the economy writ large. Many workers are excluded from high-wage cities by apartment bans and businesses struggle to recruit workers who can find available and affordable housing in these high-productivity centres. 

“Inequalities generated by the housing crisis are deeply corrosive.”

A recent Statistics Canada analysis notes that “among young Canadians experiencing financial difficulty” a majority of renters were “unable to move” due to rising home prices and rents, representing a major barrier to mobility. There has also been a sharp increase in the role of inherited wealth in enabling homeownership. In BC, more than a third of homebuyers relied on a “gift” (average size, $204,000) to purchase their first homes. The analysis notes that “increasingly tying the likelihood of homeownership to intrafamily transfers may have adverse implications for socioeconomic mobility.”

The role of inheritance in concentrating wealth is rising around the world. Some property owners and their heirs no doubt benefit from this wealth, but this zero-sum game threatens social cohesion and economic vitality. More broadly, a wide range of research shows that high levels of inequality tend to hurt economic growth, worsen health and social outcomes and skew public policy priorities. 

Tax the rich, unionize and build working-class power

We need a more just and equal Canada if we’re going to tackle the big challenges we face as a society and to strengthen our position to stand up to aggressive foreign powers like the United States. Fortunately, there is no shortage of policy levers available to address growing inequalities. 

Fairer tax policies are one set of tools that can be deployed to address wealth inequality at the very top, while raising revenue to help build housing, repair our infrastructure and strengthen public services.

For example, a federal tax on the net wealth of the super-rich could raise more than $32 billion in its first year (rising each year) with rates of 1% on net wealth above $10 million, 2% above $50 million and 3% above $100 million. A narrow wealth tax of this kind would capture only the richest 0.5% of Canadians, or about 87,000 families, and is backed by a growing body of economic research. Additional brackets with higher rates on billionaires should also be considered to erode their enormous fortunes and power, rather than to simply slow the rate of their growth (as the above rate structure would do). 

“There is no shortage of policy levers to address growing inequalities.” 

Canada should also move to end the preferential tax treatment of capital gains income, which is currently taxed at half the rate of income from work—a deeply unfair giveaway to the rich. As noted above, the federal government recently took a step in this direction but then reversed course. 

The government must also press ahead on working with other countries to advance global agreements on corporate taxation, from which the Trump administration recently withdrew. The recent creation of a global minimum tax on corporate profits reduces the ability of corporations to shift profits between jurisdictions to avoid tax and should be strengthened by a coalition of the willing without the US. 

Tax policy can’t do all the heavy lifting, however. Blunting the power of the super-rich and tackling inequality also require policies that help build working-class power, including making it easier to unionize and fight for higher wages, to increase working-class representation in government and to enable workers to take charge in the workplace through democratic employee ownership of firms.

Build homes for all and tax the wealthiest landowners

Policy action specific to housing is imperative to address growing inequality driven by the housing crisis. First and foremost, housing must be made affordable, abundant and available to all. This means significantly increasing public investment in dedicated non-market housing, along with robust efforts to increase the overall supply of homes and end the shortage that has taken hold after decades of underbuilding. This must include ending the exclusionary zoning that effectively bans apartments on the vast majority of residential land in our cities and confines most new apartments to noisy, polluted roads (often at the urging of a relatively small number of vocal and influential homeowners).

Canada should also end or reform billions of dollars in harmful subsidies that advantage homeowners over renters. These include policies like exempting principal residences from the capital gains tax (costing upwards of $6 billion per year in lost revenue) and giveaways like British Columbia’s Home Owner Grant, which could be reformed into a fairer income-tested benefit for renters and owners alike. These subsidies not only deepen the divide between homeowners and renters, but also—in the context of the housing shortage—further inflate housing prices as more money chases too few homes.

Given the $1.7 trillion increase in residential property wealth in BC in the past two decades, the province should also consider policy options to tax the wealthiest segment of landowners to fund housing.

For a stronger Canada, rein in the super-rich and end the housing shortage

Under threat from the United States, Canadians appear to be ready to fight for a better country. But if the wealth and power of the super-rich is left unchecked, this won’t be possible.

If the housing crisis—and the inequality it has wrought—aren’t solved, we won’t be able to build a stronger, more self-reliant, more just society and economy. We need to rein in billionaire power and build homes for all. 

There are well-researched policy solutions available if we can come together to force these issues onto the political agenda. The political will to implement them has been missing in the face of resistance from powerful interests. With a federal election upon us, these issues should be front and centre.

Note

1. As of March 18, 2025
   ↩︎

Image credits:

• Tent City in Victoria, BC. Photo by Mike Gabelmann (2016). Used under Creative Commons License BY-NC 4.0 international. | Modified by BCSPS.
• Elon Musk Brazil 2022. Photo by Ministério Das Comunicações (2022) Used under Creative Commons Attribution 2.0 Generic license. | Modified by BCSPS.
•