New Evidence on Wealth Inequality in Canada

Abstract

Measures of wealth inequality are important indicators, but only exist in a handful of countries. This paper is the first to estimate the distribution of wealth in Canada on a regular basis from 1990-2018. Using the income capitalization method of Saez & Zucman (2016), I find that while the top 1% wealth share rose from 15.3% in 1990 to 19.7% in 2008, it fell back to 17.5% by 2018. These results suggest that Canada has much less wealth inequality compared to the US and is even slightly more equal than France. Using linear decomposition methods, I show that this gap with the US is driven by greater concentration across every asset class and is not driven by a single asset or a different composition of assets held in each country. Then, using synthetic savings decompositions, I show that most of the variation in the top 1% wealth share can be explained by the collapse in the top 1%’s savings rate, which, while positive from an inequality perspective, could have important ramifications for future economic growth in Canada.