Calgary’s wealth gap ‘most unequal in the country’

A University of Alberta think-tank has dubbed Calgary the “most unequal city in the country,” saying provincial government policies have helped create an income gap between the wealthiest one per cent and everyone else that is the widest in Canada.

In an analysis of Statistics Canada income-tax data released Monday, the University of Alberta’s Parkland Institute said Calgary’s richest one per cent earned 26 times what people in the bottom 90 per cent did in 2010.

The gap has grown in part because Alberta’s personal income-tax policies favour the rich, and our province’s resource royalty regime subsidizes massive salaries paid to oil and gas executives, said the Parkland Institute’s research manager.

“You can chalk it up to a mentality in the provincial government of winner takes all,” said David Campanella.

Alberta is the only province in Canada with a flat personal income-tax rate, which currently sits at 10 per cent.

“By nature, it does away with the idea that those who could contribute more to the common good, should,” Campanella said.

In Calgary, that has meant real annual income — adjusted for inflation — increased $570,000 for the top one per cent between 1982 and 2010.

By contrast, Campanella said real income for the bottom 90 per cent increased only $2,000 during the same period.

Flat personal income taxes have favoured the wealthy during good times and sustained them during downturns, but other Albertans haven’t benefited from a higher minimum wage or similar measures at the other end, Campanella said.

“The booms disproportionately benefit the rich, the busts disproportionately hurt the poor,” he said.

However, the economic benefits among the city’s wealthiest have trickled down, said Ben Brunnen, the Calgary Chamber of Commerce’s chief economist. The bottom 90 per cent of wage earners in Calgary experienced a real increase in income since 1982, while the same demographic in Toronto, Montreal and Vancouver makes less.

Calgary’s prosperity has kept investment, consumer spending and job creation strong, Brunnen said.

“The bar is moving in the right direction,” he continued.

At the top end, competition in the oil and gas sector is helping drive executive salaries higher, Brunnen added.

“They have to be paying top wages for top global talent,” he said.

But Campanella said those executive salaries are being subsidized by the public because resource royalties paid by oil and gas companies are too low.

“Our bargain-basement royalty rates transfer massive amounts of public wealth into private pockets,” he said.