A Pressing Problem and the Government Response

A great indicator of whether a government is responsive to the needs of its citizens is how they react when there is a clear and widely recognized problem in society that has negative impacts on a large majority of its citizens. Over the last several years, the distribution of wealth and income in Canada and around the world has been the topic of much discussion in civil society, while remaining completely off of the agenda of our government.

Statistics Canada has just reported high income trends among Canadian taxfilers from 1982 to 2010. As Statistics Canada states, “The income gap between the top 1% and the rest of filers has widened over time. In 1982, the median income of the top 1% of filers was $191,600. This was seven times higher than the median income of $28,000 for the other 99% of filers. By 2010, the median income of the top 1% of filers increased to $283,400, about 10 times higher than the median income of $28,400 for the rest (all dollar figures expressed in 2010 constant dollars).” The median income of the top 1% has increased by $91,800, but for all of our productivity gains and economic growth over the last thirty years, the median income for 99% of Canadians has only risen by $400. The situation is actually much worse than this. After huge austerity cuts in the 1990’s, and a steady decline in social and public services since 2006 when Stephen Harper came to power, our government now does far less for its citizens than it did in 1982. So despite the huge productivity gains and decades of much celebrated economic growth, the vast majority of Canadians are worse off than they were three decades ago. This is clearly a huge problem.

This should not be a partisan issue or something that only those concerned with poverty or social justice should be thinking about. The numbers speak for themselves. Even the World Economic Forum has recently released their annual Global Risks 2012 report in which they state that “chronic fiscal imbalances and severe income disparity emerged this year as the two most likely economic risks to manifest in the coming 10 years. In addition, these two risks are rated as having potentially high impact.”

Our economic system is not a law of nature or an edict handed down by God. As a society we have invented the economic rules that we live under in an attempt to better the lives of our citizens. When it no longer does that, we need to adjust it so that it does. Moreover, when we have a political system that doesn’t even compel the sitting government to address the issue, it might be time for some adjustment there as well.