Canadian Inequality: Recent Developments and Policy Options

Abstract

Considerable concern has recently been expressed worldwide about growing income inequality. Much of the discussion, though, has been in general terms and focused on the US experience. To understand whether and how Canada ought to respond to this development, we need to be clear on the facts. This paper documents Canadian patterns in income inequality and investigates the top 1 percent of earners—the group receiving the most attention. We summarize what is known about the causes of growing income inequality, including the role of gender wage differences. Finally, we outline policy options for reducing—or slowing the growth of—inequality.