The Montreal region is home to the municipalities with the most extreme income gaps in the country, as well as the most egalitarian communities in Canada, according to a new a**lysis of Statistics Canada data.
Income inequality, known for its corrosive effects on health, happiness and community connections, is worse in Westmount, Quebec, than anywhere else in Canada, according to a ranking compiled by the University’s Local News Data Hub metropolitan Toronto. The top 10 percent of households in Westmount earned nearly 11 times more than the poorest 10 percent in 2020.
Other Quebec municipalities at the top of the list were the Town of Mount Royal in fourth place, Côte Saint-Luc in 12th position, Beaconsfield, which was 17th, and the city of Montreal, which ranked 29th.
At the other end, nearly two dozen other municipalities in the Montreal region stood out with the narrowest gap in Canada between high- and low-income earners. Saint-Amable, a community of just over 13,000 residents east of Montreal, had the smallest difference in the country, with the most affluent households earning 2.6 times more than the less affluent.
Sebastien Breau, a geography professor at McGill University who has studied regional income inequality for years, said income disparity tends to be less pronounced in the “manufacturing crescent” around Montreal. There we find Saint-Amable, ranked 418th on the list of income inequalities, Mirabel (396th), L’Assomption (398th) and Saint-Basile-le-Grande (401st). All have economies that rely on manufacturing, which has fewer very high-wage jobs and fewer very low-wage jobs compared to other sectors.
Breau said Quebec’s income tax system, the most progressive in the country, combined with its more generous social programs, also helps reduce levels of income inequality. According to Statistics Canada, Quebec spent more in 2021 than any other provincial government on support for the unemployed, on transfers such as child benefits and other social protections.
Despite these government policies, Quebec’s most populous city is deeply divided by income. Marie-Lyne Brunet, vice-president of social development at the non-profit Centraide of Greater Montreal, said the gap between high- and low-income residents in the city of Montreal is worse than elsewhere in the province because it has a greater proportion of residents in low-wage work, including members of visible minority groups, students and refugees.
Although there are many poor and unhoused people in downtown Montreal, Brunet said there are also isolated, low-income communities on the far east and far west of the city where people people have little access to public transport. “If you don’t have a car, you can’t leave neighborhoods” to access better-paying jobs and opportunities, she added.
In cities with high inequality, high- and low-income residents tend to “become socially isolated among people like themselves,” said Ivan Townshend, a social geographer at the University of Lethbridge.
People of different means have fewer opportunities to cross paths when neighborhoods separate those who “have” from those who “have not,” Townshend said. Isolation allows rich and poor people to form ideas about each other based on stereotypes and then blame the other group for social ills, he added.
Income inequality has been a*sociated with a reduced sense of community belonging, greater distrust among residents, more financial worries, and increased anxiety about social status – outcomes all a*sociated with lower levels lower happiness and poorer mental and physical health. Research has also linked large income gaps to greater political polarization and increased theft and vandalism fueled by desperation and a sense of injustice.
Breau said the consequences of income inequality in Montreal were particularly evident during the worst days of the pandemic.
“The parallels with the highest death rates 1/8 from COVID-19 3/8 and low-income neighborhoods are incredible,” he said.
To compare income inequality across Canada, the Local News Data Hub ranked the country’s 418 municipalities with populations over 10,000 using Statistics Canada’s 2020 Gini Index for adjusted after-tax income of households.
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The Gini index is an internationally recognized tool used by statisticians to measure the distribution of income in a society. In this case, income takes into account wages, pension income, investment income such as dividends and interest, as well as government transfers such as social a*sistance. The municipality ranked number 1 had the highest level of inequality.
The national rankings, which were examined by Xuelin Zhang, senior research a**lyst at Statistics Canada, reveal significant variations between communities. For example:
- Cities with populations over 200,000 tend to rank high in the Gini inequality rankings. Besides Montreal, the list included Toronto in ninth, Vancouver in 11th and Calgary, which ranked 22nd.
- In Westmount, which has about 20,000 residents, the most exclusive enclave has a median household income of $360,000, according to data from Centraide Montreal. But the municipality also includes people who live in extremely disadvantaged neighborhoods on the outskirts.
- Twenty-three of the 30 most egalitarian municipalities in Canada are located within about an hour’s drive of Montreal. Besides Saint-Amable, places with the smallest gaps between high- and low-income residents include Sainte-Marthe-sur-le-Lac, at 414th, Sainte-Sophie, at 415th, and Saint-Lin– Laurentides, which was 417th on the list.
- Among the other large urban areas of Quebec, Sherbrooke ranks 200th, Quebec in 252nd and Gatineau in 300th.
Statistics Canada data shows that income inequality declined nationally between 2015 and 2020, largely thanks to the Canada Child Benefit introduced in 2016 and pandemic-related government transfers like the Canada Child Benefit. emergency (PCU). But David Macdonald, an economist at the Canadian Center for Policy Alternatives in Ottawa, said inequality and poverty are expected to rise now that CERB payments have ended.
Macdonald also pointed out that the Gini measure tends to underestimate inequality because it is calculated based solely on income data and does not include inherited wealth, capital gains or non-financial a*sets like real estate. “If you include capital gains in the definition of income,” he added, “then you actually see income inequality widening.”
A recent Statistics Canada report illustrates Macdonald’s point of view. The richest 20 percent of households controlled two-thirds of the country’s net worth at the start of 2023, the report said, while the poorest 40 percent accounted for just 2.7 percent. The report also highlights that the wealth gap between the rich and poor in Canada widened at the fastest rate on record in the first quarter of this year. Compared to wealthier households, low-income Canadians accumulated more debt, saw their savings decline and received less investment income.
Social justice advocates say there are many ways to reduce income inequality. Bridget Clarke, advocacy coordinator at the St. John’s Status of Women Council in Newfoundland and Labrador, said stronger pay equity legislation would help.
Labor organizations are advocating for increased social a*sistance, a higher minimum wage and updated labor laws that would reduce the number of precarious jobs and make it easier for workers to unionize.
Last year, Halifax Regional Council and the Union of British Columbia Municipalities both pa*sed resolutions calling for a guaranteed basic income funded by the federal government.