If any group is faring well in the COVID-19 pandemic, it’s Canada’s billionaires whose wealth has increased by $78 billion since March 2020 while the lives of millions of Canadians have been upended, new CCPA research shows.
Using data from Forbes’ “real-time billionaires” listing, economist Alex Hemingway found that 47 Canadian billionaires now control $270 billion in total wealth while 5.5 million Canadian workers lost their jobs or had more than half of their hours cut at the pandemic’s peak.
Hemingway found that among the biggest billionaire winners are the Thompson fortune ($14.4 billion increase in wealth), Tobi Lutke of Shopify ($8.8 billion increase) and BC’s Jim Pattison ($7.2 billion increase).
Inequality in Canada had reached new extremes before the pandemic with the richest one per cent controlling 26 per cent of Canada’s wealth in 2016, according to a Parliamentary Budget Office (PBO) report. Hemingway says recent academic research suggests that figure may be even higher at 29 per cent.
“Such extreme inequality is not only outrageous in itself, but leads to worse overall health and social outcomes and puts a drag on economic growth,” says Hemingway, explaining this billionaire wealth is not inevitable but due to policy choices.
“A range of policy tools are available to rein in extreme inequality while simultaneously raising revenue for sustained, long-term public investment in much-needed areas after the pandemic such as seniors and child care, affordable housing and climate change,” he adds.
A wealth tax on the super-rich is one policy to help achieve more equality, Hemingway says. He recently published research showing that a wealth tax in Canada would raise even more revenue than previously expected. A one per cent annual tax on wealth over $20 million would raise approximately $10 billion in revenue per year and a moderately more ambitious wealth tax could raise nearly $20 billion per year, he explains.
Hemingway points out that a wealth tax of this kind would only apply to the richest of the rich: the wealthiest 0.2 per cent of Canadians. This amounts to 25,000 households that currently control $1.8 trillion of Canada’s wealth.
And, he notes, there is enormous public support across party lines for a wealth tax. Opponents argue that the rich could simply evade it, but economic research from leading experts shows that a wealth tax can be designed and enforced effectively with political will.
“The tax system can’t solve all our problems, but it’s an important tool,” Hemingway says.
The latest Statistics Canada data show the number of jobs affected remaining at over half a million (with 300,000 fewer people employed and another 250,000 with the majority of their hours cut). Moreover, some recent job growth is likely to be reversed in response to the pandemic’s third wave and associated restrictions not yet reflected in the data. Low wage workers have consistently been hit hardest in the job loss numbers throughout the pandemic.
CCPA research shows that Canada’s 87 richest families each hold, on average, 4,448 times more wealth than the typical family. Together these 87 families hold more wealth than the bottom 12 million Canadians combined.