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How the CCPA sparked a national conversation about income inequality

Understanding inequality, and providing policymakers the tools to combat it, is a role the CCPA is happy to fill.

February 28, 2023

9-minute read

The CCPA grew out of a fight for greater equality and protection of Canada’s democracy.

It was established in 1980 by academics and labour activists as a progressive counterweight to the economic upheaval of the late 1970s, which gave way to a corporate-dominated neoliberal policy paradigm. The Keynesian-inspired postwar reconstruction era of full employment, rising wages, building a social safety net, and reducing inequality were supplanted by a preoccupation with inflation and deregulating the market from government interference.

The corporate sector was ramping up funding to think tanks and lobby organizations: the Business Council on National Issues, the Conference Board of Canada, the Fraser Institute, CD Howe Institute, Canada West Foundation, and more. After several near-death experiences in its first decade, the CCPA became a prominent progressive voice in public policy debates.

The CCPA’s founders understood that ideas matter in shaping the direction of our country. From the beginning, CCPA research reports exposed the negative consequences of neoliberal policies of privatization, deregulation, austerity, shredding the safety net, free trade agreements that were accelerating corporate concentration and driving up unemployment, income and wealth inequality.

CCPA research reports have documented both the aerial view of spiralling income and wealth inequality, and crucially, what it has meant for peoples’ lives on the ground. They have provided an authoritative portrayal of an unprecedented pyramid of privilege and wealth in Canada.

Let’s take a brief survey of the current landscape: For the top 1%, average market income doubled between 1982 and 2018. For the top 0.01%, it soared by 189% during this period. And this understates the increase, given their ability to engage in tax avoidance and evasion. The average real income for those in the bottom half of the income distribution declined over four decades.

Born To Win: Wealth concentration in Canada since 1999, compares the net worth of Canada’s 87 wealthiest resident families to the wealth of average families over the previous 17 years. The wealthy 87 now own 4,448 times as much wealth as the Canadian average and have as much wealth as 12 million Canadians combined.

Over half of this wealthy elite inherit their wealth—including leading corporate CEOs. During the worst six months of the Covid pandemic, while millions of Canadians lost their jobs, the country’s top 20 billionaires amassed a combined total of $33 billion due to the lack of a wealth tax.

The Monitor has been a public square for progressive policy research and analysis for almost 30 years.

The Monitor’s commitment to closing the gap

Although the CCPA was strongly supported by unions, there were limits to their capacity to grow their funding, in part because of the havoc neoliberal policies were wreaking on their membership. We needed to expand our individual supporter base, which was less than 100 in 1994. To help accomplish this goal, we created a user-friendly magazine to reach Canadians more broadly, supplying them with information and thought leadership that wasn’t available in the mainstream media.

We were fortunate to have accomplished editor Ed Finn take charge in running what we named the Monitor. The front-page story on the first issue of the Monitor in May 1994 was “Annual Cost of Unemployment to the Economy: $109 billion.” In that first issue, there were articles comparing CEO salaries with those of workers, the exodus of jobs under free trade, and much more.

The Monitor has been a public square for progressive policy research and analysis for almost 30 years. Given its history, it’s no accident that this issue of the Monitor is focused on income inequality.

The Alternative Federal Budget (AFB) as an agent of change

The Alternative Federal Budget (AFB) is the CCPA’s inequality solutions vehicle. It came out on the eve of the infamous 1995 Paul Martin budget. It was a joint project of the CCPA and the Winnipeg-based coalition, Cho!ces—the brainchild of John Loxley—which brought together labour, environment, and social groups. Together, AFB participants crafted a counterweight to the deficit-reducing social cuts mantra of the economic establishment reflected in the 1995 budget. It provided a credible plan to get the country out of deficit, through stimulus measures and taxes on the wealthy, which would not require massive social cuts.

Paul Martin was aware that there was resistance within his own government to what was being planned. He agreed to meet with AFB representatives in advance of his budget. He was impressed by the rigour of the AFB’s fiscal framework. However, locked to the austerity priority of the policy establishment, Martin went ahead with his original budget. The consequence was devastating for inequality and poverty. However, with the AFB in the public domain, he could no longer pretend, “there was no alternative.”

Another critical moment in AFB history coincided with the 2008 global financial crisis and the implosion of the neoliberal paradigm. An AFB stimulus package was crafted while parliament was prorogued in the fall of 2008. It framed the debate for the media and politicians, supported by the opposition. Part of that AFB was even adopted by the Conservative Harper government—contrary to its ideology but necessary for its political survival.

The AFB continues to this day, with remedies to income and wealth inequality as its very heart and soul.

The Growing Gap Project

Beland Honderich, the former publisher of the Toronto Star, approached the CCPA in 2004 with the idea of a $300,000-a-year grant to conduct research and engage with the public on issues of income inequality and poverty in Canada. The goal was to help increase Canadians’ awareness of poverty and inequality, as well as to entrench their support for government policies to reduce poverty and inequality. He passed away before the project was launched, but his daughter Mary Honderich understood her father’s intentions and ensured the project’s success.

The Growing Gap team was assembled in spring of 2006, composed of director and communications guru Trish Hennessy and economists Hugh Mackenzie and Armine Yalnizyan.

The project launched in November 2006 with the release of a commissioned poll by Environics Research that found the vast majority of Canadians were concerned about the decades-long widening gap between the rich and the poor. They wanted governments to take decisive action to reduce the gap, including making postsecondary education more affordable, increasing the minimum wage, making housing and child care more affordable, increasing taxes on the wealthy and closing tax loopholes.

The project framed inequality as the rich and the rest of us. Canadians envisaged a society where the majority of workers contribute to growing the economy and benefit from that growth—not just a privileged few. This Canadian value of collective responsibility and mutual aid was part of the social contract that emerged from post-World War II reconstruction, which had come undone after 1980. It was the foundational framing that would underpin the Growing Gap project.

Armine Yalnizyan’s The Rich and the Rest of Us: The Changing Face of Canada's Growing Gap, released several months later, received saturation coverage in the mainstream media, clearly having the kind of influence on the public discourse envisaged by Beland Honderich.

Hugh Mackenzie kicked off the CEO pay project in January 2007 with a video explaining his just-released report. In it, Mackenzie is sitting with a coffee at work at 9:04 a.m., the same time that the 100 best-paid CEOs in Canada had already earned, on average, what the average worker would earn in the entire year.

Mackenzie then went outside and stood on a milk carton right under the CN Tower. His height standing on the milk carton compared to the height of the CN Tower reflected the relationship between the pay of the average worker and that of the top CEOs. It was hard to imagine a starker image of inequality and its impact on our country.

By 2011, tens of thousands of the centre’s publications were being viewed every month. Its YouTube channel was the most popular of any NGO in Canada. Its individual membership had grown to 12,000; its organizational support reached 400. Inequality was proving to be a galvanizing force for the CCPA.

Mackenzie authored the CEO report until 2017, when he passed the torch to Senior Economist David Macdonald, whose latest report showed Canada’s 100 highest paid CEOs made a record 243 times more than the average worker made in 2021. Plus ça change!

Trish Hennessy compiled a monthly compilation of soundbites, Hennessy's Index, about Canada and its place in the world inequality in Canada and provincially. It served as the model for the current Index feature in today’s Monitor.

As part of the Canadian Centre for Policy Alternatives’ Growing Gap project, The Income Gap between Aboriginal Peoples and the Rest of Canada, by Senior Economist David Macdonald and Daniel Wilson, formerly with the Assembly of First Nations, focused on groups whose earnings are so far behind that just catching up to the inequality faced by the general population would be a significant step forward for the First Nations, Inuit and Métis peoples. This groundbreaking research was funded through a generous donation from the Norus family.

A compilation of essays, Speaking Truth to Power: A reader on Canadian women's inequality, edited by Trish Hennessy and Ed Finn, was published in 2010. Following that, Senior Researcher Kate McInturff was brought on board to lead the centre’s women’s equality research, including her Making Women Count project and the game-changing report, Best and Worst Places to be a Woman in Canada, which broke the internet each year and went on to inspire policies in various municipalities, and even a documentary.

Upstream: Social determinants of health

Upstream, a non-profit focused on the social determinants of health, was founded in 2013 by physician Ryan Meili, which he eloquently described in the following parable. “Imagine you’re standing on the edge of a river. Suddenly a flailing, drowning child comes floating by. Without thinking, you dive in, grab the child, and swim to shore. Before you can recover another child comes floating by. You dive in and rescue her as well. Then another child drifts into sight…and another…and another. You call for help and people take turns fishing out child after child. Hopefully, before too long, some wise person will ask: Who keeps chucking these kids in the river? And they’ll head upstream to find out.” That project was initially an independent organization under CCPA sponsorship but became a project of the CCPA in 2020 under the leadership of Trish Hennessy.

Inequality and democracy

In 2008, the CCPA published a series of essays in Why Inequality Matters in 1000 Words or Less, with a variety of contributors. Former University of Toronto professor and CCPA research associate John Myles wrote about the threat that growing inequality can have on democracy itself: “If I were observing trends in Inequality Land, I would suspect I was observing a failed democracy. And I place a high value on democratic political institutions,” [Markets] “need democracy to make market economies viable for people. Quite reasonably, more economic growth isn’t of much interest to the bottom half of the electorate if all the gains are going to the top half.”

Former University of Toronto professor Frank Cunningham’s essay explored a myriad of ways inequality can undermine democracy and public spirit, including: “The creation of two publics, one mainly concerned with making ends meet, the other with keeping and enhancing its wealth. Inequalities foster elitism and resentment.”

Their commentaries anticipated Frank Graves and Michael Valpy’s analysis of the forces behind the 2021 “Freedom Convoy,” which identified a growing concentration of wealth that has triggered anxiety amongst a large segment of the population—disproportionately among youth in those who identify as working class—about their ability to earn a living and their resentment of government policy. Unprecedented inequality undermines democracy, breeding anger and resentment against corporate and government elites. It also breeds openness to authoritarian solutions.

The Canadian Centre for Policy Alternatives has documented four decades of rising income and wealth inequality, its consequences for our society, and how to fix it. An unprecedented pyramid of profit, power, and wealth now threatens our existence as a stable and healthy democracy.

Climate and inequality

Canada is the worst historic contributor to carbon emissions on a per capita basis. According to the World Inequality Report 2022, the national annual per capita average of emissions was 19.4 tonnes. The top 10% of Canadians emitted 60.3 tonnes of CO2 per capita per year; the top 1% 190 tonnes per capita. The poorest 50% of Canadians emitted an average of 10 tonnes per capita annually.

Canada provides more public finance to the fossil fuel sector, per capita, than any other G20 country. Canadian financial institutions continue to lend massive amounts of money to the fossil fuel sector.

According to a 2019 Abacus Data survey, commissioned by former CCPA BC Director Seth Klein for his book A Good War, when ambitious climate action is linked to tackling inequality, support dramatically goes up.

CCPA has been a pioneer in its work on inequality and climate change. In 2002, Dale Marshall, then with CCPA-BC, produced a landmark report on a just transition strategy that would meet Canada’s Kyoto protocol commitments and provide fair, equitable and revenue neutral transition support for any energy workers.

More recently, Senior Researcher Hadrian Mertins-Kirkwood and co-author Zaee Desphande, authored Who is included in a Just Transition? Considering social equity in Canada’s shift to a zero-carbon economy. The report is a critique of existing federal and provincial policies. It calls for just transition policies to be expanded so they apply to all workers in affected communities (rather than just to industry-specific workers) and for more direct funding to programs and institutions that recruit and train women, Indigenous and racialized individuals, as well as immigrants in the skilled trades.

Inequality is the river that runs through it

The Canadian Centre for Policy Alternatives has documented four decades of rising income and wealth inequality, its consequences for our society, and how to fix it. An unprecedented pyramid of profit, power, and wealth now threatens our existence as a stable and healthy democracy. Our corporate and political elites, bound by a status quo mindset, are largely inured to the danger.

The CCPA’s pessimistic analysis of the present is interlaced with its positive role as a standard bearer of transformative change informed by values of economic, social, and environmental justice.

Leonard Cohen wrote, “There is a crack in everything, that's how the light gets in." The centre is a crack that lets in the light of hope for a better future.

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