Atlantic Canadians Agree: Inequality is a Public Issue

Inequality has become a problem for all Canadians.  Nationwide, 3.8% of households control about 67% of total financial wealth.  The Conference Board of Canada recently addressed the issue, finding that, “High inequality can diminish economic growth if it means that the country is not fully using the skills and capabilities of all its citizens or if it undermines social cohesion, leading to increased social tensions.”

Inequality has been linked to social indicators like mental illness, drug use, obesity, teenage pregnancy, high school dropout rates, violent crime, youth crime, and imprisonment rates.  It is in all our interests to build a level playing field for all Canadian residents.

Entering the national dialogue, a new think tank, The Broadbent Institute, recently released a poll on the Canadian public's opinion of inequality, the role of government, and the public's real opinion of taxes.  The poll was conducted by an independent polling company called the Environics Research Group, commissioned by the Broadbent Institute for its new initiative: The Equality Project.

This poll goes far to overturn some common myths about public opinion.  Contrary to what business groups, elected representatives and the mainstream media often espouse, Canadians are well aware that the country’s wealthiest inhabitants have made enormous gains at the expense of the vast majority of working people.  In fact, rather than fearing taxes, we overwhelmingly favour increases in government revenue to maintain and increase our social programs.

More than 77% of Canadians deem income inequality a “serious problem”.  More than three-quarters of Canadians believe it will negatively impact our standard of living and community safety, while more than two-thirds believe it will negatively impact the quality of healthcare and public services, employment opportunities for young people, our democratic principles, and that it undermines Canadian values.

Canadians also support the public-sector as a key actor in the social sphere; 9 out of 10 residents agree that reducing the income gap should be a priority for government.

The poll asked Canadians what they thought about the role of corporate taxes’ contribution to government revenue.  The majority of Canadians, 73%, think corporations should be paying more.  It is reasonable to infer from this that most Canadians do not agree with subsidizing (through tax-breaks or otherwise) profitable industry.

What’s more interesting is the number of Canadians willing to contribute more of their own incomes to government revenue.  72% of Liberal voters, 71% of New Democrat voters, and even 58% of Conservative voters agree that they would pay more to protect social programs.

But how do Atlantic Canadians feel about inequality?  The results here suggest that we value social programs and the important role of government revenue in fighting inequality.  Collectively, Nova Scotia, New Brunswick, Prince Edward Island, and Newfoundland and Labrador have the highest proportion of respondents who consider inequality a problem: 81% compared to the national average of 77%.

Concerned about income inequality

A glance at the current state of Atlantic Canadian economies helps understand why we overwhelming see inequality as an important issue.

In Nova Scotia, growth in the past 30 years has almost entirely gone to the province's wealthiest citizens. A recent study found that, between 1981 and 2006, while “the provincial economy grew by 62%, average real weekly earnings actually fell by 4%. This means that after adjusting for inflation, workers in Nova Scotia were 4% poorer than they were 25 years ago. During those 25 years, productivity in Nova Scotia (measured in real GDP per worker hour) increased by 16%.”

Benefits of the province’s growth have been reaped, almost exclusively, by the ownership class. Businesses managed to increase the share of net domestic product that is allocated to profit from under 5% to more than 14% percent between 1991 and 2005.  In Nova Scotia, the pie is not shrinking—certain people are taking bigger slices, leaving less for the rest of us.  A recent project by the Canadian Centre for Policy Alternatives (CCPA) showed that the after-tax income share taken home by the richest fifth of Nova Scotians in 2009 was 43.5% while that of the poorest fifth was only 5%.

Similarly, New Brunswick’s richest fifth took 41.9%, leaving the poorest with only 5.4%.  In Prince Edward Island the numbers are only slightly better, with 39.7% going to the top, and 6.5% going to the bottom.  Newfoundland’s 2009 after-tax income went 42.2% to the top fifth and only 5.6% to the bottom fifth.

It is not surprising, then, that Atlantic Canadians identify economic inequality as a problem: we are faced with it every day.

There is also good reason that, from coast to coast, Canadians favour progressive taxation and program expenditures as a way to combat inequality.  In recent years, our wealthiest neighbours have benefitted significantly from tax breaks.  A CCPA study found that, “The tax rates of the richest 1% of Canadians have dropped dramatically since 1990…the tax system is still progressive for middle-income earners in Canada, but not for upper-income earners.  Not only do the top 1% pay a lower tax rate than they did in 1990, their rate is actually slightly lower than that paid by the poorest 10%.”

People living in the Atlantic region’s willingness to pay higher taxes to maintain social programs is much higher than that of other Canadians.  We are almost 8% more likely to offer our own incomes in support of public programs that combat inequality.

Willingness to pay higher taxes

What is even more interesting is the number of people who are “very willing” to contribute more to support program expenditure.  More than 1 in 5 Canadians, 23%, said they were very willing.  This number is the same in the Atlantic region: 23% of us, more than 1 in 5 people, are very willing to pay higher taxes in order to maintain public programs.

The overwhelming support Canadians express for increasing corporate taxes is slightly higher in the Atlantic region.  While 73% of Canadians support higher corporate taxes, 75% of the Atlantic region agrees.

Support increasing corporate taxes

Further, every region polled had at least 35% of respondents agreeing that they “strongly support” increasing corporate taxes.  This number is dwarfed by British Columbia, Ontario, and the Atlantic Region, whose populations are 45% strongly in favour of greater corporate taxation.

So much for the contention that Canadians are scared of corporate taxes scaring away investment!

The Broadbent Institute’s poll provides compelling evidence to support the notion that Canadians want a vibrant public sector.  We understand that inequality is a problem for everyone and we are willing to commit our own resources to fighting it.  Strong public services, funded through progressive taxation, are important weapons in this fight.  Now, let’s hope our elected representatives take public opinion seriously and act to reverse the damage that years of neoliberal policy has been done.