Metro Vancouver has Canada's third-highest rate of income inequality: report

July 28, 2017

Derrick Penner, Vancouver Sun: 2017-07-28

Income inequality in Metro Vancouver has increased by more than twice the national average since 1982, according to a new report that shows inequality concentrated in Canada’s biggest cities.

“The reality is, downtown Vancouverites are probably feeling the effects of inequality far more than the people we tend to think of,” said Francis Fong, chief economist for the Chartered Professional Accountants of Canada and the report’s author.

“We wanted to promote a better conversation (on the topic) by asking ‘who is it that is suffering from rising inequality?'” Fong said. “And the research shows that it’s actually people in the cities. And we don’t talk about them enough.”

Fong said part of it is a function of population growth — cities are where new citizens are landing and settling — but it is also due to the changing nature of jobs and employment.

Many middle-class jobs have been eliminated through automation and out-sourcing, particularly in manufacturing, and aren’t being replaced, Fong said. And new jobs being created are either farther up or farther down the income scale in Canada’s growing service-sector economy.

However, while inequality is concentrated in cities, Fong said, the key tools to get at correcting it rest with senior levels of government, so the report is aimed at informing politicians at the provincial and federal levels about the issue.

Provincially, inequality played a role in B.C.’s election with the winning NDP and Green party tickets vowing to address the issue and the newly installed government adding poverty reduction to the title of its social-development ministry.

“The (CPA) report doesn’t tell us things that are a big surprise,” said Shane Simpson, the new Minister of Social Development and Poverty Reduction. “We’ve been struggling in British Columbia with growing inequality for a long time.”

B.C. has the second-highest poverty rate in Canada, with a large number of the poor working full time.

Simpson said the new government has more work to “dig down” and understand the factors behind rising inequality, but that the government has ideas about some of the tools they can use to fill the gaps.

“Some of it is pushing wage growth a little bit at the bottom,” which government has vowed to do by raising B.C.’s minimum wage to $15 per hour, from $10.58 now.

Simpson said his party has also talked about “some reallocation to close that gap at the very top,” by bringing back a surtax on the highest income earners.

However, Simpson said the government needs to find ways of improving housing affordability — the biggest cost pressure on urban British Columbians.

For his report, Fong crunched Statistics Canada data on Canadians’ earnings using a complicated statistical measure of income distribution to conduct his analysis.

The results showed that the gap between the lowest income earners and highest occurred in the biggest cities where the most people live.

http://vancouversun.com/news/local-news/metro-vancouver-has-canadas-thir...

depenner@postmedia.com

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