Income inequality among Canadian households is growing at a record pace, according to a new report from Statistics Canada.
The share of disposable income between Canada’s richest and poorest households widened in this year’s first quarter and shows signs of accelerating, said the federal agency.
Specifically, the gap between the top 40% and bottom 40% of household incomes widened to 44.7%, marking a 0.2% increase from the same period a year ago.
In terms of overall net worth, the gap between the rich and poor in Canada increased at record speed in Q1 of this year, with a 1.1% increase from the same period in 2022.
The highest 20% of income earners increased their disposable income in the first quarter due to investment earnings such as dividends and bank deposits.
The lowest income earners also made financial gains but at a much slower pace, said Statistics Canada.
Average salary gains for the bottom 20% of income earners grew 1% versus 4% for all households, while self-employment income declined by 6.7% in Q1.
Low-income households also suffered a reduction in average net investment income due to increased interest rates on mortgages and other types of personal loans.
Every household except the highest income earners reported a drop in savings for the first few months of 2023, falling below levels seen at the outset of the pandemic, said Statistics Canada.
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