The gap between the rich and the poor in Canada is widening at the fastest annual rate since Statistics Canada started keeping data on this metric in 2010, but the gap is smaller than it was pre-pandemic.
Investment gains, dividends and bank deposit interest helped the wealthiest 20 per cent, or quintile, of Canadians, according to the country's data gatherer. Those gains outpaced the cost of higher interest rates, which disproportionally impacted homeowners.
The wealthiest 20 per cent of Canada's population in the first quarter of 2023 owned about 67.8 per cent of individuals' overall net worth, while the least wealthy 20 per cent of the population owned only about 2.7 per cent of individuals' overall net worth. That gap is now 65.1 percentage points, up 1.1 percentage points from 64 percentage points in the same quarter in 2022, the nation's number cruncher determined.
While that 1.1-percentage-point annual increase was the largest in 13 years, the 65.1-percentage-point disparity between the wealthiest and poorest quintiles was not the largest ever. The disparity between those two quintiles was 65.6 percentage points in the first quarter of 2020.
It is significant that the wealth gap is increasing, however, given that it had been shrinking. The gap in wealth between the wealthiest and poorest quintiles of the population declined by 1.6 percentage points during the two-year period from the first quarter of 2020 and the first quarter of 2022.
The wealth gap is also now widening when the top two wealth quintiles of Canadians is compared to the bottom two wealth quintiles of the population. The gap between those top two wealth quintiles, and the bottom two wealth quintiles, grew at the much-smaller rate of 0.2 percentage points, to 44.7 percentage points, compared with the same quarter in 2022. That rate was also lower than it was pre-pandemic, given that gap averaged 45.1 percentage points between 2010 and 2019.
Average wages and salaries for the lowest quintile of Canadian income earners grew at the comparatively slow pace of one per cent, versus four per cent for all Canadian households, according to Statistics Canada data that compared the first quarter of 2023 to the same quarter one year earlier.
Poorer Canadians benefitted disproportionally more from rising transfer payments - for things such as Old Age Security, Canada Pension Plan and Quebec Pension Plan benefits. There were relatively strong gains in those net transfer payments, with those payments rising 48.5 per cent for the lowest quintile of income earners versus 18.8 per cent for all households.
Immigration may have contributed to the increased disparity in the past year, according to Statistics Canada.
Canada had record-high population growth in 2022, with 95.9 per cent of that growth coming from immigration.
Immigrants tend to be younger than the average Canadian, and younger people tend to be less wealthy, Statistics Canada said.
Households where the average age of residents was less than 45 years constituted 36.2 per cent of all households, whereas that group represented 55.2 per cent of those households in the lowest two wealth quintiles.
