Income inequality, known for its corrosive effects on health, happiness and community ties, is worse in St. John’s, N.L., than in any other municipality in Atlantic Canada, according to a new analysis of Statistics Canada data.
St. John’s ranked 28th for household income inequality on a national list assembled by the Local News Data Hub at Toronto Metropolitan University. Income levels among the city’s top-earning 10 per cent of households were 4.3 times higher than for the lowest-earning 10 per cent.
By comparison, the highest earners in Halifax, which ranked 98th in Canada for income inequality, made 3.7 times as much as the lowest income households.
The income disparities in Atlantic Canada’s cities were less extreme overall than in larger urban centres like Toronto, where the most affluent households took home nearly five times more than the lowest-earning segment of the population.
St. John’s resident Sara Moriarity said the low-paying jobs she held as a barista and baker were physically demanding and “just financially very difficult.”
“Ringing up orders that were the equivalent of [earnings from] half of your shift was an interesting (experience),” said Moriarity, who is now a community organizer with the Workers’ Action Network of Newfoundland and Labrador.
Joshua Smee, who leads the food security organization Food First NL in St. John’s, said low-wage workers in the city worry that if they “out themselves as having less, that's going to have negative consequences.”
People have told Food First they don’t go to local food banks for assistance because they don’t want to be seen getting help. In a smaller place like St. John’s, where neighbours are likely to know one another, that can be especially hard to avoid, Smee said.
Income inequality is evident throughout the city, Smee said. “Across the street from my house is The Gathering Place – which is the largest social service agency in the community – where the most marginalized people are coming by for a daily meal. Also across the street from my house are million-dollar condos.”
Smee said high-paying oil industry jobs in Newfoundland and Alberta contribute to income inequality in the city. Finding similar wages outside resource sector can be challenging, he said.
“Often you'll go by a house that has $150,000 worth of trucks in their driveway next to [a neighbour whose] home probably would cost you $50,000,” Smee said.
Howard Ramos, a political sociologist at Western University in Ontario, said that cities like Halifax, where income inequality is less pronounced, have well-paying jobs in the civil service, military and university sectors. These jobs, however, don’t generate the same sort of income as the resource industry.
Economic reliance on oil, he added, means “you end up with [the same inequality] trends you would see in Alberta.”
Nicholas Lynch, a geography professor at Memorial University, said income inequality in Newfoundland has been compounded by the decline of the once-thriving fishing sector.
The result, he said, has been a “bump in lower-income folks because they've lost their livelihoods.”
Other contributing factors, Lynch said, include the handful of ultra-rich families who have had money for a long time and the fact that the province has the oldest population in the country. Retirees generally earn less than they did while working.
Income inequality has been linked to a reduced sense of community belonging, greater distrust among residents, more financial worries and increased anxiety about social status – outcomes all associated with lower levels of happiness and poorer mental and physical health. Research has also associated big income gaps with greater political polarization and increases in theft and vandalism fuelled by desperation and a sense of unfairness.
To compare income inequality across Canada, the Local News Data Hub ranked the country’s 418 municipalities with more than 10,000 people using Statistics Canada’s 2020 Gini index for adjusted after-tax household income.
The Gini index is an internationally recognized tool statisticians use to measure how income is distributed across a society. Income, in this case, takes into account wages, pension income, investment earnings such as dividends and interest, and government transfers like social assistance. The number 1 ranked municipality had the highest level of inequality.
The national ranking, which was reviewed by Statistics Canada senior research analyst Xuelin Zhang, points to significant variations among communities. For instance:
- There were major differences in income inequality among Canadian cities with more than 200,000 people. Toronto was ninth on the overall Gini ranking, Vancouver was 11th, Calgary was 22nd and Montreal was 29th. In contrast, Brampton, Ont., a suburban municipality of more than 650,000 west of Toronto, was well down the list in 374th place.
- Among larger cities in Atlantic Canada, St. John’s was followed on the list by Charlottetown, which ranked 51st, while Saint John, N.B., and Fredericton, N.B., were tied for 93rd. Halifax was 98th and Moncton, N.B., placed 124th.
- The widest gap between high- and low-income residents in Canada was in Westmount, Que., home to about 20,000 people. In Westmount’s richest neighbourhood the median household income is $360,000, according to data from the non-profit Centraide Montreal. The municipality, however, also includes people who live in extremely low-income neighbourhoods on its periphery. The highest-earning 10 per cent of households in Westmount made nearly 11 times more than the lowest earners in 2020.
Statistics Canada data show income inequality declined nationally between 2015 and 2020, largely due to the Canada Child Benefit introduced in 2016 and pandemic-related government transfers like the Canada Emergency Response Benefit (CERB). But David Macdonald, an economist at the Canadian Centre 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 only on income data and doesn’t include inherited wealth, capital gains or non-financial assets like real estate. “If you include capital gains in the definition of income,” he added, “then you actually see income inequality grow.”
A recent Statistics Canada report illustrated Macdonald’s point. The wealthiest 20 per cent of households controlled two-thirds of the country’s net worth as of early 2023, the report says, while the bottom 40 per cent accounted for just 2.7 per cent. The report also noted that the wealth gap between rich and poor in Canada widened at the fastest pace on record in the first quarter of this year. Compared to the wealthiest households, lower-income Canadians accumulated more debt, saw their savings shrink and received less investment income.
Social justice advocates say there are many ways to reduce income inequality. Bridget Clarke, the advocacy co-ordinator at the St. John’s Status of Women Council in Newfoundland, said stronger pay equity legislation would help.
Labour organizations like the Workers’ Action Network of Newfoundland and Labrador argue for increases in social assistance, paid sick days, a higher minimum wage and updated labour laws that reduce the number of precarious jobs, address discrimination in the workplace and make it easier for workers to unionize.
Last year, Halifax Regional Council and the Union of BC Municipalities both passed resolutions calling for a federally funded guaranteed basic income.
This story was produced by the Local News Data Hub, a project of the Local News Research Project at Toronto Metropolitan University’s School of Journalism. The Canadian Press is the Data Hub’s operational partner. Detailed information on the data and methodology can be found here.
Carly Penrose, The Canadian Press