The problem is income inadequacy, not affordability

Posted on by Dr. Trevor Hancock

The bottom half of the population has seen its share of national income dropping, while the top one per cent’s share has grown dramatically.

Dr. Trevor Hancock

22 September 2025

702 words

Food Banks Canada just released its annual report on poverty in Canada. Key findings are that one in ten Canadians are living in poverty, over 40 percent are paying more than 30 percent of their income on housing (which is the Statistics Canada definition of unaffordable housing), and 40 percent are feeling worse off compared to last year.

Of course the core business of food banks is hunger and food insecurity. The latter is defined by Statistics Canada as being unable to or uncertain of the ability to acquire or consume an adequate diet or sufficient food in socially acceptable ways. A May 2025 report from Statistics Canada stated that in 2023 one in four people in Canada – and almost half of people in one-parent families – reported they were living in food insecure households.

That was a roughly 15 percent increase over 2022, and the third annual increase in a row. Moreover, most of that increase was among those -19 out of 25 percent – who experienced moderate to severe food insecurity. This situation has led a number of cities in Ontario to declare food insecurity emergencies. The CEO of Toronto’s Daily Bread Food Bank noted in a CBC interview that “we need to feed more than one in 10 Torontonians.”

This is happening, we should remind ourselves, in one of the richest countries in the world.

Often, this situation is presented as an issue of affordability; food, housing and other basic needs are just too expensive. But while that is true, there is another way to look at it, as Valerie Tarasuk – a prominent Canadian food researcher at the University of Toronto – notes in that same CBC interview: “I think we have a fundamental problem with income that needs to be addressed.”

That fundamental problem with income is not new. In its 2022 report the World Inequality Lab noted: “Income and wealth inequalities have been on the rise nearly everywhere since the 1980s, following a series of deregulation and liberalization programs which took different forms in different countries.”

What they mean, of course, is the adoption by Margaret Thatcher in the UK and Ronald Reagan in the USA of neoliberal economic policies that were then adopted more widely. That is true of Canada too, as the Lab’s report on Canadamakes clear: “Income inequality in Canada increased significantly from 1982 until the mid-2000s.”

Between the Second World War and the mid-1980s the bottom half of the Canadian population had around 20 – 22 percent of Canada’s pre-tax income, while the top ten percent had a bit under 30 percent and the top one percent had between 6 and 7 percent. By 2005 that was dramatically different: The bottom half of the population received just 17 percent of pre-tax income, the top ten percent had reached 38 percent and the top one percent got 14 percent.

In other words, the bottom half of the population – half, note – saw their share of national income decline nearly one fifth, while the top one percent more than doubled their share. Since then, the report notes, “income inequality has decreased slightly although it remains far above the levels observed in the early 1980s.”

This inequality was worsened because while pretty much everyone paid between 40 and 44 percent of their income in taxes overall in 2022, the Canadian Centre for Policy Alternatives reported last year, the 90-95th percentile paid only 37 percent and the 95-99th percentile paid just 34 percent – less than the lowest ten percent, who paid 35 percent. Shockingly the top one percent paid a mere 24 percent of their income in total taxes.

The 2022 World Inequality Report made a vitally important point about this situation. Noting there are significant differences in the extent of the growth of inequality between different countries they concluded “inequality is not inevitable, it is a political choice.”

So it is up to us. Do we want to perpetuate the poverty, hunger and unaffordable housing situation for low-income Candians? Or do we want to go back to the decades after the Second World War when the rich paid their share and the bottom half took a larger share of the income?

© Trevor Hancock, 2025

thancock@uvic.ca

Dr. Trevor Hancock is a retired professor and senior scholar at the

University of Victoria’s School of Public Health and Social Policy

Building community capital

Posted on by Dr. Trevor Hancock
  • Published as “We can’t grow our way out of problems created by growth”

The challenges we face are a product of the economic and other societal systems we have created

Dr. Trevor Hancock

21 July 2025

700 words

Mark Carney may not have called his Bill C-5 – now the Building Canada Act – a big, beautiful bill, but it does come out of much the same mould as Trump’s bill. Essentially, it says we can and must grow our way out of our problems. But the problem is that growth itself IS the problem, as I wrote last month.

Our current economic system has taken us past seven of the nine planetary boundaries identified by Earth scientists, and has triggered a wide variety of other problems, constituting together a polycrisis. The cliff edge looms, and governments across Canada and around the world are hitting the accelerator!

But all is not lost. You know something important is up when Saul Klein, a former Dean of the School of Business at UVic and now CEO of the Victoria Forum, is co-author of an article in the Times Colonist (July 11th) that states: 

“For a long time, we believed that our systems just needed fixing, that they were broken or outdated. But we’ve come to realize something more unsettling.

These systems are not broken. Their negative outcomes are not bugs. They are features of the way they were designed. And they are producing exactly what they were incentivized to produce — environmental degradation, exclusion, concentration of wealth, and structural inequality.”

If the challenges we face are a product of the economic and other societal systems we have created then – as Einstein reportedly said – we can‘t solve problems by using the samekind of thinking we used when we created them. We cannot grow our way out of the problems created by growth. Nor can we just tinker with these systems, hoping we can make some reforms without changing the underlying systems. We need at the very least to transform them, we need revolutionary change.

A place to begin is to recognise that what we call capitalism is not true capitalism. It seems to have escaped the attention of mainstream economists, and the business and government leaders that embrace them, that there are four forms of capital. In addition to the economic capital that we are familiar with (basically, money and ‘stuff’, from widgets to large infrastructure) there is human capital – the attributes, abilities and wellbeing of individuals.

Then there is social capital – the ties that connect, through informal social networks to the publicly funded programs of the social contract to the underlying legal, political and constitutional systems that regulate our peaceful interactions.

Lastly, but by no means least, there is natural capital, the underlying bedrock of nature from which comes the air we breathe, the water we drink, the food we eat, the source of all the materials and fuels that underpin our societies and economies.

As the Worldwide Fund for Nature so wisely put it a decade ago, “Ecosystems sustain societies that create economies. It does not work the other way around.” And yet, what Carney and all the world’s conventional capitalists are trying to do is to make it work the other way around – a fool’s errand if ever there was one.

Real capitalists are those who work to build what I call community capital, by building all four forms of capital at the same time – and there aren’t many of them. But we need to transition as quickly as possible to – at the very least – a broader system of capitalism. Indeed, we really need to move to an entirely different economic system, one rooted in nature and society, one that puts people and planet first, what many now call a wellbeing economy, part of a wellbeing society.

In their July 11th article, Saul Klein and his co-author, Arti Freeman, president and CEO of Definity Foundation, went on to write:

“To build a better future, it’s not enough to bridge divides, we must also re-imagine the systems themselves. That takes more than policy reform. It takes collective imagination as a strategy to envision new ways of organizing our economies, our democracies, and our relationships with one another and the planet.”

Undertaking this process of collective imagination is an important task everywhere, including here in the Greater Victoria Region. More on that, and on how to initiate this transition, next month.  

© Trevor Hancock, 2025

thancock@uvic.ca

Dr. Trevor Hancock is a retired professor and senior scholar at the                                            University of Victoria’s School of Public Health and Social Policy