This month, the federal Finance Committee will begin studying income inequality following up on a motion that was passed in Parliament last year. The motion introduced by Scott Brison, asked that the Committee consider the the following issues: i) a review of Canada’s federal and provincial systems of personal income taxation and income supports, (ii) an examination of best practices that reduce income inequality and improve GDP per capita, (iii) the identification of any significant gaps in the federal system of taxation and income support that contribute to income inequality, as well as any significant disincentives to paid work in the formal economy that may exist as part of a “welfare trap,” (iv) recommendations on how best to improve the equality of opportunity and prosperity for all Canadians. While I find the list of issues to be an odd mix, in particular why particular attention was paid to disincentives to paid work, it is heartening to see the issue of income inequality addressed at the federal level.
We submitted a brief to the Committee, which highlighted the evidence on the links between income inequality and health; and the links between the federal government’s austerity program and rising inequality. The government has an array of policy tools that it can use to decrease income inequality. We hope that this study will mark the beginning of an increased policy focus on using these tools.
You can read the brief here.