By JANET BAGNALL, The Gazette - Prime Minister Stephen Harper's efforts to resurrect Canada's colonial past, ordering portraits of Queen Elizabeth to be hung in Canadian embassies and plastering "Royal" over the country's armed forces, should have been scrapped after the Mother Country exploded in rioting last month. As a role model, Britain has lost its lustre.
Days of rioting and looting laid bare the fissures in a society where the income gap is one of the most unequal in the developed world. Unemployment among young blacks is close to 50 per cent.
Britain's Conservative government responded to the unrest by continuing to cut services to young people and punishing rioters - in a way that members of Parliament recently found guilty of pocketing thousands of pounds in fraudulent expenses were not.
This is what Harper wants to emulate? The barely contained anger of an unequal society? The feeling among have-nots that the deck is stacked against them and they'll never belong?
Canadians need to watch what Harper wishes for. We may end up looking like Britain. The gap between rich and poor here has been widening sharply. The pace of that growth is even faster than in the United States, a country where the very idea of hedgefund managers earning millions of dollars be taxed more to help the people sleeping in doorways is fantastic.
In the last 20 years, the income of 80 per cent of Americans has stagnated while that of the richest one per cent has nearly doubled. Similarly, the Conference Board of Canada reported this week that a third of the wealth created in this country in the past 22 years has gone to the top one per cent of the population. The story for most other Canadians was income stagnation or slight growth.
That top one per cent of Canadians - who number about 246,000 - made their phenomenal gains mainly in the years 1998 to 2007, years when Canada experienced its fastest economic growth since the 1950s and '60s. Fifty years ago, however, the richest one per cent of Canadians took a much smaller portion of the country's income growth: eight per cent.
Talking about these findings last year, Canadian Centre for Policy Alternatives researcher Armine Yalnizyan said: "The last time Canada's elite held so much of the nation's income in their hands was in the 1920s. Even then, their incomes didn't soar as fast as they are today. It's a first in Canadian history and it underscores a dramatic reversal of longterm trends."
In the years after the Second World War, Canada saw the rise of a large middle class. The income share of the richest one per cent fell from 14 per cent to 7.7 per cent. But by 2007, that trend had reversed. The richest one per cent of Canadians was back to holding nearly 14 per cent of the country's total income.
But in a change from the Gilded Age of the 1920s, when the super-rich relied on unearned income from assets, today's wealthy earn their money the way most people do: in paid compensation. Canada's highest-paid executive in 2009, Aaron Regent, chief executive officer of Barrick Gold, received $24,217,040 in compensation that year. In the same year, the median income for a single Canadian was $22,800.
This extreme inequality in income - a feature in many developed countries today - can have serious consequences. It can undermine the social and economic health of a country, if the skills and capabilities of all its citizens are not being used. Citizens who feel cut off unfairly from their country's wealth won't want to invest in a society that refuses to reward their efforts.
For years, Canada's progressive social programs and tax policies helped keep the income gap in check. More recently, however, a number of forces began driving the gap wider: stagnating minimum wages, decreased unionization, tighter access to unemployment benefits, lower welfare payments and the halving of the top marginal tax rate between 1948 and 2009, from 80 per cent to 42.9 per cent. Quebec, with its tradition of social solidarity backed by legislation, is the province where income inequality has grown the slowest. Market forces - especially globalization and high demand for skilled labour - also drive income inequality.
The news isn't all bad. Canada remains a land of equal opportunity. The children of impoverished parents can still achieve high incomes. And government transfers and taxes still play an important role in reducing income inequality, even if that role has diminished in the past 15 years.
But the Conference Board report is a warning beacon, one we should pay attention to.
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jbagnall@montrealgazete.com