Poverty remains a significant and growing problem in Canada. Income polarization is also increasing steadily, to a degree that could threaten social cohesion. Since technological advances and globalization both tend to increase inequalities as returns to unskilled labour decline, this is a problem that will not go away in the absence of significant policy action. It is also a problem, as our contributors stress, that is shared with many other developed countries, though recent increases in income inequality in Canada are towards the high end of the spectrum.
Income inequality in Canada has increased over the past two decades, although the extent and effects of this widening inequality have become most apparent in the past several years. The 2008 financial crisis, and the recession which followed it, led to job and asset losses, especially among those in lower income groups. Many people became rapidly and abruptly aware of the precariousness of their financial position.
Canada has established a reputation throughout the world as a peace-loving and stable nation. Inside our borders, an equally bright image emerges. A recent survey by the Centre for the Study of Living Standards (CSLS) found that most Canadians consider themselves happy – or very happy – with their lot in life.1 On July 1 this year, Maclean’s released an article on why it is a great time to be living in Canada.
Most developed countries have experienced increased market income inequalities in recent decades. A large number of factors have been identified as contributing to this development. The decline in unionization has meant that fewer workers enjoy the benefits of collective bargaining, an equalizing force in income distribution. Governments in many instances have failed to raise minimum wages in line with overall wage gains, disadvantaging the worst paid workers. Deregulation has often hurt certain groups of workers such as truck drivers and air flight attendants, as has privatization of public services.