Pat McCutcheon authored the article below the separator line. Pat will be hosting a livestreamed panel discussion about Wealth and Inequality for The Canada West Forum Society. The event is scheduled on Zoom for February 4 and the outstanding panel members will be introduced later this week on the CWF website.

The first event of CWF will be followed later in February by a forum on Affordable Housing and Homelessness. This panel will also feature experts who have spent much of their careers addressing issues related to the chosen topics.

Please visit the Canada West Forum website and use this LINK for a $10 membership in the society. The nonprofit was incorporated in British Columbia in 2025, and will hold its first Annual General Meeting in February.

Wealth inequality is a lot like the climate crisis. Both are slow-moving train wrecks of immense proportions. Just as climate change is wreaking societal destruction around the globe, so is wealth inequality. Society tends to think they can ignore these problems, until they can’t anymore.

Runaway wealth inequality did not happen by accident. Its recent iteration began in the early 1980s with the implementation of unrestrained free market economics by President Reagan and Prime Minister Margaret Thatcher. Both leaders dramatically slashed regulations and tax rates and sold off public assets. They promised a strong economy and said the riches would trickle down through the population, except the riches did not trickle down.

Here in Canada, Statistics Canada recently reported that the wealthiest 20% of Canadians control 65% of the country’s wealth, while the poorest 40% control only 4%.

According to a 2024 study by Oxfam, “The richest 1 percent have more wealth than the bottom 95 percent of the world’s population put together.”

Like ignoring the climate crisis, ignoring the build-up in wealth inequality has severe consequences. We feel these throughout our economy, including social programs, housing, media, and educational and democratic institutions.

An economy will decay and sputter if wealth continues to concentrate in the hands of the few. If someone of lower or middle income has $1,000 of disposable income, they spend it quickly and stimulate the local economy. On the other hand, the rich use surplus funds to build their asset base, often acquiring foreign assets.

Demand destruction due to extreme wealth inequality will collapse the economy. Healthcare, education, and other social programs are threatened because government revenue streams are not adequate to fully fund these programs. In a wealthy country like Canada, it is not because the money is lacking. It is because politicians have rigged the tax code in favour of wealth accumulation.

Our society is built on the hard work of healthcare workers, carpenters, teachers, engineers, etc. One hundred percent of their employment income is taxed. On the other hand, capital gains resulting from real estate (non-primary residence), stock, crypto and derivative transactions benefit from a 50% inclusion rate for tax purposes.

It is the wealthy that gain from this upside-down tax structure. Our tax system should reward work done by everyday Canadians who build our society. Accumulators of wealth should not receive special treatment.

Our housing market has been commodified. People lucky enough to own a house have benefited tremendously, while younger generations know they may never own a house. We can identify several reasons for the decades-long rise in real estate prices. One of the big contributors is asset accumulation by the wealthy elite and Real Estate Investment Trusts (REIT).

Extreme inequality also threatens democracy. The wealthy and corporate interests have greater access to government members than ordinary citizens. While political donations are limited in Canada, the wealthy and corporate interests lean heavily on lobbyists to influence legislation in their favour. They have been very successful on this front.

Mainstream media and think tanks are concentrated, and funded by or controlled by large corporations, which are in turn controlled by wealthy individuals. They use these positions to control the public narrative in their favour. This unbalanced access to government and control over mainstream media results in a serious threat to democracy.

Wealth inequality is not a natural law. Through proper legislation, an equitable distribution of wealth is possible. Solutions that governments across the country need to be looking seriously at include:

• Shifting tax policy away from income and more towards wealth.
• Close the capital gains loophole by increasing the inclusion rate to 100%. A buck is a buck is a buck.
• Raise the highest marginal income tax rates.
• Implement a wealth tax.
• Introduce a super-profits tax on corporate net-income over $1 billion.

• Interestingly, taxing the super wealthy is strongly supported by the public. A recent Economist / YouGov poll found:
• ✅ 80% of Americans say the rich have too much political power.
• ✅ 62% of Americans say billionaires are taxed too little.
• ✅ 59% of Americans want the federal government to reduce the wealth gap.

So why isn’t the government acting on what the people want? We need to raise the volume.