BY ALEX HEMINGWAY and DAVID MACDONALD
Canada Centre for Policy Alternatives
ECONOMIC inequality has exploded in recent decades—globally, in Canada and here in BC.
When it comes to wealth inequality in BC, there’s plenty to be concerned about—25 billion reasons to be concerned in fact. That’s the combined net worth of the 10 wealthiest families in BC, as our new report shows. Together, these families have the same wealth as the bottom 1.32 million British Columbians combined, more than a quarter of the province’s population.
In fact, your typical top-10 BC billionaire is a whopping 5,845 times wealthier than the typical BC household.
Let that sink in a minute.
BC’s wealthiest families also have other things in common. First, much of their wealth is inherited. Seven of the 10 fortunes are now in their second generation or more, which means those billions aren’t solely the result of hard work or earned success. They’re a result of privilege—being born with the proverbial silver spoon in your mouth.
Second, all of the 10 wealthiest BC families have substantial investments in real estate or property development (some much more than others). Several of the families made their primary fortunes in real estate and development, while others only have side investments in this sector.
Extreme inequality has important implications.
It’s a reminder that we are one of the richest societies in the world. We are often told it would be far too costly to tackle urgent problems like the climate crisis, the housing affordability crisis or poverty and homelessness. In reality, our province is enormously wealthy, but we’ve allowed this wealth to be amassed by the richest few.
Inequality is also fraying an already threadbare social fabric. Research shows that countries with more income inequality are likely to have lower life expectancy, worse health outcomes, higher crime rates and lower levels of social trust – for everyone.
Extreme inequality is not inevitable so what can we do about it?
Canada is currently the only G7 country without an inheritance tax. We believe that an inheritance tax of 45 per cent on estates worth over $5 million would both reduce inequality and raise $2 billion per year nationwide, which could be used to make crucial public investments that benefit everyone. Only about 1.8 per cent of BC families have net worth over $5 million.
Canada should also close numerous tax loopholes that overwhelmingly benefit the richest 10 per cent of Canadians, such as lower taxes for investments than for income. This would raise billions of dollars more per year federally and provincially.
The CCPA has long called for progressive property taxes that would require the wealthiest landowners to pay more. BC’s new Speculation Tax and additional School Tax on residential properties over $3 million are important steps in this direction. They’re narrowly targeted, however, and more needs to be done to ensure the wealthiest pay modestly more.
Taken together, these recommendations would go a long way to reduce the damaging levels of wealth concentration in this province and country.
Alex Hemingway is an economist and Public Policy Analyst at the Canadian Centre for Policy Alternatives BC Office and David Macdonald is a senior economist in the CCPA’s national office in Ottawa.