Canada's Fraying Social Fabric:

Inequality on the Rise

Canada likes to tell itself a comforting story. A story of fairness, equity, and balance. It is a story of a nation where the gaps between the haves and the have-nots are narrow and manageable, where opportunity is abundant, and where success is earned. It's a nice story, but it is rapidly becoming fiction. Today's Canada is increasingly divided, not united—a place where wealth has become alarmingly concentrated at the top. At the same time, the middle class stagnates, and the poor fall further behind.

Consider the numbers. The top 1% of Canadians now control more wealth than the bottom 70% combined. That's right—fewer people who could fill a single NHL arena hold more wealth than most of the population. This isn't just an academic statistic; it's a stark indicator of a nation where economic power is consolidating in fewer and fewer hands. Meanwhile, the bottom 40% of Canadians hold just 1.2% of the nation's total wealth.

For instance, housing is a perennial Canadian obsession and a cornerstone of middle-class stability. The average home price in Canada is over $700,000, making ownership far out of reach for most young Canadians. In major cities like Toronto and Vancouver, those prices skyrocket to $1.2 million and beyond. The Canada Mortgage and Housing Corporation estimates the country needs an additional 3.5 million homes by 2030 to restore affordability, yet construction rates lag far behind. Even renting is becoming untenable: the average rent for a one-bedroom apartment in Toronto now sits at over $2,600 a month.

Despite the economic challenges faced by ordinary Canadians, corporate profits present a much different picture. In 2022, Canada's corporate sector achieved record profits, particularly in the oil and gas industry, which saw significant gains. For instance, Cenovus Energy reported a net profit of $6.5 billion, an astonishing 200% increase from the previous year. Additionally, Loblaws, a grocery chain whose CEO defended price increases during a cost-of-living crisis, announced a profit exceeding $2.3 billion.

It's worth noting that while these corporations thrive, they pay shockingly little in taxes compared to their earnings. A 2020 study by Canadians for Tax Fairness revealed that the country's 123 largest corporations paid an effective tax rate of just 15.8%, well below the statutory rate of 26.5%. And let's not forget the role of tax havens: Canadian corporations and individuals shifted over $381 billion to offshore tax havens in 2020 alone.

The Middle-Class Mirage

Once considered the nation's backbone, the Canadian middle class is a growing mirage. When inflation is considered, real wages in Canada have scarcely moved in four decades. Statistics Canada estimates that the equivalent average hourly wage in 1981 was $24.27 (in 2021 dollars). It's $26.92 today — less than an 11 percent increase over four decades. Meanwhile, inflation has surged, driving up the cost of living.

Childcare is a striking example of this imbalance. While the federal government’s $10-a-day childcare program has progressed, parents in cities such as Toronto still face monthly costs of over $1,300 per child in unsubsidized spots. The cost of post-secondary schooling has also skyrocketed. Three decades ago, tuition for undergraduate studies in Canada in 1990 was $1,464 per student. (The answer is $6,834—a 367 percent increase that outpaces wage growth.)

And then there's healthcare. While Canada's public healthcare system is often lauded internationally, cracks are becoming impossible to ignore. Emergency room wait times have reached record highs, with the median wait time for treatment in Ontario now exceeding 20 hours in some hospitals. Family doctors are in such short supply that more than 6.5 million Canadians—nearly one in five—do not have access to one.

Inequality by Design

These aren't accidents of the market or inevitable outcomes of globalization; they result from deliberate policy choices. For decades, Canadian governments have pursued a model of economic growth that prioritizes corporate profits over public welfare. Tax cuts for the wealthy and corporations, coupled with underinvestment in social services, have created a lopsided economy where the gains are increasingly privatized while the risks are socialized.

Consider the decision to cut the corporate tax rate from 28% in 2000 to 15% today. Proponents argued this would spur investment and job creation. Instead, a Canadian Centre for Policy Alternatives report found that corporate tax cuts have primarily benefited shareholders, not workers. Investment in new infrastructure, equipment, or jobs has not kept pace with the windfall profits these tax cuts have generated.

Similarly, austerity measures at the provincial level have eroded Canada's social safety net. In Ontario, cuts to public health funding under Premier Doug Ford's government left the province ill-prepared for the COVID-19 pandemic. Alberta's cuts to education have led to overcrowded classrooms and overworked teachers. Across the country, public housing investment has stagnated, contributing to a homelessness crisis that has reached unprecedented levels.

Canada is often called a resource-rich nation, yet this wealth has failed to translate into broad-based prosperity. Alberta, for example, has one of the highest GDPs per capita in the country, thanks to its oil and gas industry. Yet, the province's reliance on fossil fuel revenue has created a boom-and-bust cycle that leaves workers vulnerable during downturns. When oil prices crash, it's not CEOs or shareholders who feel the pain—it's the thousands of workers laid off without warning.

This pattern isn't confined to Alberta. Across Canada, resource industries like mining and forestry have extracted immense wealth while leaving behind environmental damage and economic instability. The International Institute for Sustainable Development report found that Canadian taxpayers subsidized fossil fuel companies to $18 billion in 2020 alone. These subsidies benefit corporations at taxpayers' expense, many of whom struggle to make ends meet.

This is not a sudden disaster in Canada but rather a slow, quiet crisis: the gradual unraveling of the social contract. Wealth cannot be equated to dollars and cents; it is about power. Who holds it? Who wields it? And to whose benefit?

Signs that no longer ask whether loved ones will return from work. At the bewitching heights, the wealthiest Canadians have accumulated economic and political power unprecedented in this country's history while most struggle to navigate an order against them. The same is true, whether with unaffordable housing, underfunded public services, or stagnating wages: the few prosper, and many are left behind.

This is Canada for 2024—not the fair and egalitarian country we fantasize about. Still, inequality expands without restraint, and the vision of collectively shared prosperity recedes further from view.