BUSINESS

Occupy Canada Protest: Income Disparity Not As Deep As In The U.S.

10/19/2011 04:30 EDT | Updated 12/19/2011 05:12 EST
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TORONTO - The income disparity that has prompted thousands of people to "Occupy Wall Street" in the U.S. is less of an issue in Canada, where the movement seems to have less momentum than its more robust American cousin, experts say.

Canadians benefit from a progressive tax structure and a number of social programs not available to Americans, universal health care being the most glaring example, said Ian Lee, a business professor at Carleton University in Ottawa.

Canada's tax benefits, welfare programs and health care systems help to level the playing field for those who fall on the lower end of the income divide.

"We're certainly not perfect — no country is — but we are not doing badly," Lee said

Figures from the Organization for Economic Co-operation and Development indicate that the ratio of income distribution in Canada is in the average range, well below that for the U.S., even before adjustment for the country's tax system and social programs.

When social programs are factored in, the gap between the two countries gets even wider, Lee said.

In addition, Canada's top earners in general make considerably less than their American counterparts, he added. While Canadian bank presidents earn tens of millions of dollars a year, CEO salaries for American banks measure in the hundreds of millions.

There are signs, however, that the gap in Canada is widening.

The top one per cent of Canada's earners took home 11 per cent of the country's total income in 2009, a sharp increase from 1982, when the top one per cent earned just 7.4 per cent of the national payroll.

The latest percentage is down slightly from the record high of 13.8 per cent recorded in 2007, but that doesn't signal a reversal of the trend, said McMaster University economist Mike Veall, one of Canada's leading researchers on the subject of income inequality.

Rather, it's likely the short-lived consequence of the economic unrest roiling markets around the world.

"This is likely temporary," Veall said. "If you look at the long-term trend, this is a blip."

In the past, the so-called "99 per cent" may not have felt the economic stagnation so acutely because they could mask it with home equity loans and cheap technology, said Lars Osberg, chair of economics at Dalhousie University.

As the divide widens, however, the reality becomes harder to ignore, he said, adding both public and private sector would need to take on major changes to level the playing field.

Lee said he believes Canada's "Occupiers" have legitimate grievances when it comes to government accountability, saying those who take to the streets to protest a lack of grassroots influence on social policy have every reason to be upset.

Efforts like the federal Accountability Act and so-called "sunshine laws" that disclose public-sector salaries higher than $100,000 have done little to make everyday people feel they have a say in the way the country is run, he said.

"A lot of legislation has moved towards transparency to bring decision making out of the back rooms and into the exposure of the light of day," Lee said.

"Even though we've been doing that for the past 20 or 25 years, I think there is a sense of frustration by many ordinary Canadians that they're looped out and that their views don't count. I think it's legitimate, and it's very difficult to address."