GINI Country Report: Growing Inequalities and their Impacts in Canada

Compared to many modern economies, the overall level of income inequality in Canada has been relatively high since 1980 and grown steadily since. Specifically, the Gini coefficient for household incomes grew from 0.37 in 1980 to 0.45 by 2009. The largest gains in incomes occurred at the very top of the income distribution. Overall, those in the middle of the income distribution were relatively unaffected. There were consequences for the poor, however. Most of the rise in inequality occurred during the 1990s, a period in Canadian history marked by government cuts to spending with the goal of tackling a huge public. Other important contributors to changes in inequality in Canada are a decline in large-scale manufacturing, which has been progressively replaced by lower paying service industry jobs, a decline in government expenditures as a proportion of GDP, and changes to the tax structure that favoured the rich. In short, Canadian governments became increasingly less concerned with social spending and redistribution from the 1990s onwards and focussed instead on decreasing Canada’s huge public debt.