OTTAWA, ONTARIO – Two things are clear from this morning’s Statistics Canada Family Income Census Data: Free trade hasn’t brought Canadians to the economic promised land and the gap between the rich and the poor continues to widen.

Overall, median family income has barely increased, between 1990 and 2000, going from $54,560 to $55,016. Median income, which represents the middle point, so that 50% incomes are above this level and 50% are below, is a better indicator than mean income, which is easily distorted by very high incomes by a few people at the top income level.

“The free trade mantra of the 80’s was that the FTA and NAFTA would bring economic prosperity to Canadians. It has brought prosperity, alright… to those we said would benefit the most and who were, incidentally, the biggest free trade boosters,” said Guy Caron, spokesperson for the Council of Canadians.

These winners of the past ten years are easy to identify: the average income of the 10% of households with the highest incomes increased by 14.6%, or $23,610 to reach $185.070.

However, The average income for those families amongst the 10% with the lowest income increased by 0.8%, a mere $80 in that decade to reach $10,341. For the middle decile, those families with incomes between $45,860 and $55,015, the free trade benefits haven’t materialised either. Their average income increased by only 0.3%, or $167 to $50,423.

These income numbers are before-tax numbers, adjusted for inflation and expressed in 2000 dollars. The redistribution of national income through taxation and social transfers softens the blow, but the decrease in government transfers due to cuts in social programs witnessed since 1995 as well as tax cuts targeted primarily at the highest income brackets is lessening the impact of these transfers.

“This study is one more example demonstrating the fallacy of trickle-down economics. John Kenneth Galbraith’s definition of the trickle-down theory is right: If one feeds the horse enough oats, some will pass through to the road for the sparrows,” concludes Caron. “The horse is more fed than ever. It just knows how to keep its oats from falling on the road.”

-30-