The beginning of a new year is a time when many people think about their finances, including making Registered Retirement Savings Plan (RRSP) contributions. Canada’s RRSP program, and other savings plans, encourage those who are able to save over the year to invest and grow their personal assets to safeguard their future.
In thinking about personal wealth, it is a good time to reflect on the increasingly unequal distribution of wealth in Canada. Inadequate taxation programs over the past decades, declining wages for most workers, increasing profit from investments, reduced public spending on important social programs and limited redistribution of income and wealth continue to make the problem worse.
Canada needs an array of policy solutions to address the troubling pattern of increasing wealth accumulation in the hands of a few. Wealth inequality is the foundation of many current health and social problems.
Here are some facts about wealth inequality in Canada. The rich are getting richer, with the top 20 per cent holding almost 70 per cent of the total national net worth. Those at the bottom of wealth distribution report debt that exceeds their assets. Wealth inequality in Canada is higher than income inequality and the gap is expanding.
The effects of wealth inequality are significant. When most wealth is held by a relatively small group, opportunities for building wealth and improving economic prospects for those at the bottom of the wealth hierarchy are relatively sparse. Not only are those with less wealth, who disproportionately represent racialized and newcomer groups, struggling to cover the cost of basic necessities, they also lack opportunities for building wealth.
Access to wealth provides greater opportunities to access housing, employment and education, all of which are well known social determinants of health. Being unable to afford the basic necessities has serious consequences for health. These differences in living conditions are the main cause of persistent health inequities between social groups.
It’s time to reimagine possibilities to promote economic security and health and well-being for everyone. This includes models of ownership that focus on collective wealth building and well-being. Housing, worker and food cooperatives as well as community land trusts (CLTs) provide interesting examples.
CLTs are non-profit organizations that acquire and maintain land for the long-term benefit of a community, providing potential opportunities for affordable housing, sustainable development and community governance. Cooperatives are organizations owned and controlled by members who come together to meet shared needs and benefits.
Interest in collective ownership models is increasing as a way to build local community capacity in the face of unaffordability and increasing barriers to the social determinants of health for low-income and racialized groups.
Internationally, CLTs and housing cooperatives have been found to improve the health of residents due to greater housing security, building social support and community, as well as improving the actual physical conditions in which people live. Additional benefits of both cooperatives and land trust models include their potential to facilitate access to health-promoting supports and services, such as better access to transportation or health services. These models also offer people greater decision-making control over their living conditions, which is important for health.
Importantly, both have been documented as improving economic security for those living with low incomes, as they are no longer at risk of displacement in the housing market and may even support pathways to ownership for a group struggling in the competitive rental market.
New approaches are needed to build wealth for those with little or no access to property and assets and to offset the negative impacts of wealth inequality. This could advance health for many.
Stay tuned for future work from Wellesley Institute that identifies policies and actions that have been undertaken internationally to address wealth inequality.