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Is income inequality a big problem in Canada? Or have we imported this debate from the United States, where inequality really is a big problem? (Chris Young For The Globe and Mail)
Is income inequality a big problem in Canada? Or have we imported this debate from the United States, where inequality really is a big problem? (Chris Young For The Globe and Mail)

Income inequality in Canada: What’s the problem? Add to ...

Jim Stanford: I am a huge believer in public education, and we should collectively spend more on it. But don’t hold your breath hoping that education will moderate the rise in inequality. A greater share of Canadians already have higher education than in any other nation. That didn’t stop the income gap from growing. And a large share of new jobs in the future will not realistically require higher education at all. Among the career categories expecting the biggest increments in new positions are truck drivers, health care aides, and retail workers and managers. So unless we start paying truck drivers, health care aides, and retail workers better, the current trajectory will not change, no matter how well educated Canadians become.

Anne Golden: I agree with Jim that the employment structure forecast going forward does not bode well for reducing income inequality. Compensation change is part of the answer. But also, our becoming more of an innovation nation can create new opportunities with higher income possibilities.

PRIORITIES

Konrad Yakabuski: Say you’ve just been appointed as Canada’s new Minister of Equality of Opportunity with a mandate to allocate the proceeds from an “equality surtax” on the 1 per cent. How will you spend the money? Will you supplement the wages of low-income workers? Create a national daycare program?

Anne Golden: You won’t be surprised that my first priority, as the past chair of the Homelessness Task Force, would be social housing. Without secure housing it is impossible to have a normal life. This would target the funds to those most in need – single parents, Aboriginals and immigrants.

Kevin Lynch: As a life-long public servant, I would only aspire to be the Deputy Minister. My advice would be to create opportunity by stimulating both supply and demand factors. Supply can be enhanced by investing strongly in a public education system managed for student success from K-to-Work, with more emphasis on innovation, more managing for outcomes and results, and more input from the “consumers” of the system. Demand can be improved by building a more innovative and entrepreneurial economy, where many of the interesting new jobs will be created by globally orientated start-ups in all sectors.

Jim Stanford: First off, government doesn’t have to spend a cent to start to address inequality. I would implement wage-boosting measures like the minimum wage, collective bargaining, sectoral wage standards to address the effects of precarious work. Pushing employers to stop devaluing work will do more for inequality in the long run, than trying to offset the social consequences of low wages through public subsidies. Then, with the surtax , I would target two measures: expanding the child tax benefit, and revitalizing supports for affordable housing.

Miles Corak: My priority would be to reduce inequality in the lower half of the income distribution, while maintaining strong work incentives. I would enhance the Working Income Tax Benefit, an earnings supplement to those currently earning more than $3,000, tapering away and paying nothing to those making more than $10,000. A much more generous program would probably also require concomitant increases in minimum wages, should there be a tendency for employers to lower the wages they may offer.

William Robson: A 1 per cent “equality surtax” might yield $800-million. That could almost double what Ottawa spends on the Working Income Tax Benefit. Two ways to spend that money would be to raise the threshold where the WITB’s clawback starts and make the clawback less fierce. Clawbacks make the effective tax rates on low-income earners very high.

Anne Golden: I would support that.

Konrad Yakabuski: If Anne and Bill agree, I think we’ve made some progress. Thank you all for an illuminating discussion.

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