There is a major affordability gap between Canada’s richest and poorest households, says a new Canadian Centre for Policy Alternatives study released last week.
The Affordability Gap: Spending Differences Between Canada’s Rich and Poor reveals how Canada’s poorest households often forego buying things most Canadians consider essential, from eyeglasses and dental care to computers and newspapers.
“The poorest 20 per cent of Canadian households live in worlds far removed from the richest 20 per cent,” says the study’s author, Steve Kerstetter, a research associate with the Canadian Centre for Policy Alternatives. “In every spending category, the richest 20 per cent spend six or seven times more than the poorest 20 per cent.”
The study looks at new data from Statistics Canada on how households spent their money in 2007 – one of the best years for gains in personal income in recent history. It finds Canada’s poorest households are much less likely to buy sporting equipment for themselves or their children. They often don’t spend money on eyeglasses, dental care and home furnishings. They often don’t have cell phones, personal computers and high-speed Internet access. Even going to a movie or buying a newspaper can be a rare treat.
“We live in one of the most affluent nations on the planet, but Canada’s poorest households are struggling to buy basic goods and services that most Canadians would consider reasonable for normal living in the 21st century,” Kerstetter says.
The study finds none of these spending dilemmas trouble the richest households, who easily own homes, vacation places, and their own vehicles for transportation.
“These difference arise directly from a lack of sufficient income among Canada’s poorest households,” Kerstetter says.
He calls on governments to increase welfare rates and the minimum wage to help combat the problem. The Affordability Gap is the latest report from the CCPA highlighting the growing gap between rich and poor in Canada.
Study highlights:
• 34% of low-income households had high-speed Internet access compared to 89% of high-income households.
• 40% of poor households had cell phones compared to 85% of wealthy households.
• 31% of poor households had pets compared to 62% of wealthy households.
• Spending on transportation was more than 15 times higher in high-income households than low-income ones - $17,366 compared to $1,074.
• Spending on recreation was three times higher - $8,449 versus $2,680.
• 12% of poor households spent money on sports equipment compared to 61% of wealthy ones.
• Rich households were more than three times more likely to have computers than poor ones - 80% to 26%.
• 10% of poor households visited museums compared to 48% of wealthy homes.
• 15% of the poorest group spent money on the performing arts versus 57% for the richest.
• 36% of the poorest group spent money on eye care, compared to 72% of the richest.
• 64% of rich households spent money on dental care compared to 29% of poor households.
Download the full study - The Affordability Gap