Thursday , 9 July 2020


How Much Do You Need To Be Super-Rich In Canada?

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…The Parliamentary Budget Officer, a non-partisan office that advises the Canadian government, has created a new model to estimate wealth held by the country’s richest households and the new estimate shows Canada’s one-percent actually holds a much bigger share of total wealth than previously thought…

The top 1% of households were previously estimated to hold 13.7% of wealth in Canada. Under the new model, that number rises to 25.6% of total wealth. The top 0.01% alone saw their estimated share jump from 0.4% to 5.6% of wealth…

Naturally, that redistribution of the pie means someone’s share of wealth was overestimated. Can you guess who?

  • The middle 40% of households were previously estimated to have held 30.5% of total wealth in Canada. That drops to just 25.3% under the newest model.
  • The bottom 40% went from 2.3%, to just 1.2% of wealth. In other words, 80% of families hold a little over a quarter of the wealth in Canada.

The revised numbers mean a ticket to the one percent club is fairly steep.

  • To be in Canada’s one-percent, you need a minimum net-worth (household assets minus liabilities) of $6.1 million.
  • The top 0.1% requires a minimum net-worth of $29.3 million now.
  • The 0.01% has a minimum net-worth of $143.1 million dollars.

The vast majority of people across Canada actually fit in the lower 80% of households.

  • The middle 40% of households have a net-worth between $100,000 and $1 million.
  • Below $100,000, and your household net-worth is in the bottom 40% of households.

Summary

The PBO’s new model reveals rich households have a much larger share of wealth than thought. This also means the share of wealth held by the majority of Canadians was massively overestimated...Most of you are poorer than you think.

Editor’s Note:  The original article by Stephen Punwasi has been edited ([ ]) and abridged (…) above for the sake of clarity and brevity to ensure a fast and easy read.  The author’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.  Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor. Also note that this complete paragraph must be included in any re-posting to avoid copyright infringement.

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One comment

  1. This analysis isn’t taking into account the percentage of people in a population that are economically non-productive, this ethat are on welfare benefits or disability, or who choose not to work for some other reason such as drugs or alcohol or a specific mindset. Its not reasonable to expect that portion of the population to accumulate wealth, so including them in the comparison skews the results.

    The conclusion that the vast majority is much poorer seems to me to be hard to defend. If this study was done ten years ago and compared to now, the great recession would be hardly over and since then the economy and the wealth of everyone has gone up quite a bit. It skews more to the richer portion because they have more invested in things like the stock market or real estate which are arguably in a bubble, exaggerating the gains. Yet even the regular middle class has better things for the same cost, things like flat screen TV, cars, computers and other goods. Its hard to say the middle class is worse off. I think the more likely explanation is that there is a lot more wealth that has been created since the last time the survey model was made and that a greater portion of the difference was accumulated by those with the types of investments that profited from both real growth and the asset bubble that is happening.

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