Westmount, TMR rank among 5 most unequal municipalities in Canada, analysis shows

The Montreal area is home to municipalities with the most extreme income gaps in the country, as well as Canada's most equal communities, according to a new analysis of Statistics Canada data.

Income inequality, known for its corrosive effects on health, happiness and community ties, is worse in Westmount, Que., than in any other place in Canada, according to a ranking assembled by the Local News Data Hub at Toronto Metropolitan University.

The highest earning 10 per cent of households in Westmount made nearly 11 times more than the lowest earning 10 per cent in 2020.

Other Quebec municipalities near the top of the list were the Town of Mount Royal in fourth place, Cte 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 Montreal-area municipalities stood out for having Canada's narrowest gap between high- and low-income earners. Saint-Amable, a community of just over 13,000 located east of Montreal, had the smallest difference in the country, with the most affluent households making 2.6 times more than the least well off.

Sbastien 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.

That includes places like Saint-Amable, which ranked 418th on the income inequality list, 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 industries.

Breau said Quebec's income tax system, the most progressive in the country, combined with its more generous social programs, also contributes to lower levels of income inequality. According to Statistics Canada, Quebec in 2021 spent more than any other provincial government on support for the unemployed, transfers like child benefits and other social protections.

Despite these government policies, Quebec's most populous city is deeply divided along income lines.

More students, refugees in Montreal

Marie-Lyne Brunet, vice-president of social development at the non-profit Centraide of Greater Montreal, said the gap between higher- and lower-income residents in the city of Montreal is worse than elsewhere in the province because it has a greater proportion of residents doing low-wage work, including members of students and refugees.

While there are many poor and unhoused people in downtown Montreal, Brunet said there are also isolated low-income communities on the city's far east and far west sides where people have little access to public transit.

"If you don't have a car, you cannot get out of the neighbourhoods" to get to better paying jobs and opportunities, she added.

In cities with a high degree of 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 neighbourhoods separate those who "have" from those who "have not," Townshend said. The isolation makes it easier for rich and poor to form ideas about each other based on stereotypes and then blame the other group for social ills, he added.

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.

Breau said the consequences of income inequality in Montreal were particularly evident during the worst days of the pandemic.

"The parallels with the highest levels of mortality rates from COVID-19and the lower-income neighbourhoods are incredible," he said.

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.

Measuring wealth disparity

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 No.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:

• Cities with more than 200,000 people tended to place high on the Gini ranking for inequality. In addition to Montreal, the list included Toronto in ninth position, Vancouver in 11th position and Calgary, which ranked 22nd.
• In Westmount, which has a population of about 20,000, the most exclusive enclave has a median household income of $360,000, according to Centraide Montreal data. The municipality, however, also includes people who live in extremely low-income neighbourhoods on its periphery.
• Twenty-three of the 30 most equal municipalities in Canada are within about an hour's drive of Montreal. In addition to Saint-Amable, the places with the smallest gaps between high- and low-income residents included Sainte-Marthe-sur-le-Lac, in 414th place, Sainte-Sophie, which ranked 415th and Saint-Lin-Laurentides, which was 417th on the list.
• Among other major population centres in Quebec, Sherbrooke was 200th in the ranking, Quebec City was 252nd and Gatineau ranked 300th.

Statistics Canada data shows 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, saysinequality 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 and Labrador, said stronger pay equity legislation would help.

Labour organizations argue for increases in social assistance, a higher minimum wage and updated labour laws that reduce the number of precarious jobs 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.