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Canada’s 1% Is Incredibly Rich. Their Wealth Needs to Be Taxed.

American leftists look to Canada’s more robust social-welfare state with envy. But all is not well north of the border: Canada’s richest families own 120 times their share of the country’s wealth. There’s never been a better time to introduce a wealth tax.

Taxing Canada’s richest families would socialize a greater portion of the country’s national wealth for investment in badly-needed new programs. (Christopher Furlong / Getty Images)

Despite its global reputation as an egalitarian and pluralist place, Canada’s official image has long helped to paper over deep and abiding social fissures at home and abroad.

This includes different forms of inequality, from those originating in the country’s inception as a colonial enterprise to extreme disparities of wealth and income. Though public opinion surveys suggest many Canadians are at least somewhat aware of these realities, they also suggest that quite a few continue to underestimate just how unequal Canadian society really is.

The data certainly lends weight to this conclusion, at least as far as disparities of wealth are concerned. A 2014 report, for example, identified strong public support for redistributive policies designed to rectify the country’s economic divides, while also noting widespread misperceptions about just how serious they really are.

Ahead of the 2015 federal election, Justin Trudeau’s Liberals made a successful bid to capitalize on exactly this sentiment by proposing a new tax bracket on those with higher incomes. Coupled with a misleadingly labeled “middle class tax cut,” the whole thing was a mirage, but the Liberal victory still suggests the idea of taxing the rich struck a chord with voters.

A more recent poll found that some 75 percent of Canadians support taxing the wealth of the country’s richest people to the tune of 1–2 percent of their assets to help finance the economic recovery post-Coronavirus.

Such a tax would certainly be a start, and would go far beyond the faux-populist posturing the governing Liberals adopted in 2015 while still in opposition. But new data released by the Parliamentary Budget Office (PBO) (an independent parliamentary position similar to the Congressional Budget Office) underscores how serious Canada’s economic divides really are — and the radical measures that would be needed to remedy them.

According to the PBO’s findings, the wealthiest 0.01 percent of Canadian families have a net wealth totaling $654 billion, or 5.6 percent of the national total — the top 0.1 percent and 0.5 percent owning 12.2 percent and 20.6 percent, respectively. With a net wealth of $132 billion, the poorest 40 percent of Canadian families control a minuscule 1.1 percent share of national wealth.

It’s a startlingly bleak picture, and one that calls for nothing less than a sweeping redistributive agenda. During the 2019 federal election, the social-democratic New Democratic Party encouragingly moved to the left of its 2015 position by embracing a super wealth tax on wealth exceeding $20 million. This would be a good start, but given the scale of inequality in Canada, would barely scratch the surface in terms of reversing structural imbalances of wealth in a lasting way.

The extreme concentration of wealth, after all, is ultimately both a distributive and a democratic issue. Taxing the country’s richest families would socialize a greater portion of Canada’s national wealth for investment in badly-needed new programs. But any wealth tax worthy of the name will ultimately look to roll back the power of billionaires and plutocrats for good.

With public opinion already inclined towards taxing extreme wealth, and Canadian society even more unequal than many think, Canada’s social democratic left has a golden opportunity to put the country’s material divides front and center — and make extreme wealth a major issue in the next federal election.