Mark Carney flashed that he was a different kind of central banker in 2011 when he expressed empathy for the Occupy Wall Street movement. He described the protests as an “entirely constructive” outlet for the frustration over growing inequality. “You’ve had a big increase in the ratio of CEO earnings to workers on the shop floor,” Carney told the CBC’s Peter Mansbridge in a televised interview.

Carney was running the Bank of Canada at the time. He would play a big part in overhauling global financial standards, but there was little he could do as a central banker to narrow the wealth gap between the C-suite and the lower rungs of organizational charts. Now that he’s prime minister, that’s no longer the case. 

The Occupy movement faded away, but the questions it raised remain unresolved. Inequality might even be getting worse. The COVID-19 pandemic was conspicuous in its sorting of winners and losers. The inflation that followed amplified the unfairness, tilting life’s advantages in favour of those who owned assets and/or possessed certain skills. Statistics Canada reported last week that the income gap—which the agency measures as the difference between the top 40 per cent’s share of disposable income and that of the bottom 40 per cent—widened to 49 percentage points in the first quarter, a record divide.

Does it matter? Let’s have Thomas Piketty and Michael Sandel take that question. Few have given the subject more thought. Piketty is the French economics professor known for his 2014 book Capital in the Twenty-First Century, the international bestseller that rooted the left’s critique of the one per cent in novel study of historical data. Sandel is an American professor of government at Harvard whose work on ethics can be found quoted in Carney’s book, Value(s). 

Earlier this year, Polity published an edited version of a conversation Piketty and Sandel had at the Paris School of Economics in May 2024. The distribution of wealth and income is a proxy for equality, a value Canadian society has expressed in policies such as progressive taxation, universal health care and equalization payments. For Piketty and Sandel, income inequality undermines such programs by skewing who gets access to basic goods. 

An unequal society quite likely will be an unstable one because political power tends to favour a small elite. They also say that inequality matters because of dignity. “My hunch is that this third dimension is the most potent politically, and maybe also morally,” Sandel said. “And that any hope we may have of reducing inequality in the first two dimensions, economically and politically, will depend on creating the conditions for greater equality of recognition, honour, dignity and respect.” 

Canada’s Occupy protests were more in sympathy for what was happening in the U.S. than in response to conditions in Canada. The gap between the one per cent and the rest has tended to be smaller here, and there were no direct taxpayer bailouts of banks and the millionaires and billionaires who ran them. The World Bank uses something called the Gini index to compare inequality from country to country, where a score of zero implies perfect equality and 100 implies perfect inequality. Canada’s most recent score was 29.9, while the U.S. was at 41.8. Those two numbers say a lot about why so few Canadians are attracted by Donald Trump’s offer to become the 51st state. 

Yet the forces that have pulled American society apart are creating a wedge in Canada, too. Prudent financial regulation and conservative banks provided only a partial shield from the economic effects of the COVID-19 pandemic. The government rescues were generous, but the inflation that followed was a shock, exposing fault lines that made Canada look more American. 

The rising cost of living animated the public discourse for several years, fuelling Conservative Leader Pierre Poilievre’s ascent and contributing to former prime minister Justin Trudeau’s political demise. Those questions probably would have determined the outcome of the election if President Donald Trump hadn’t introduced an even greater existential threat. If Trump stops talking about annexation, or we simply get used to the chaos, you wonder if those frustrations will reassert themselves. 

There’s a tendency to exaggerate the situation. Canadians are wealthier now than they were before the pandemic—and not just the one per cent. Wages have been growing faster than inflation for a couple of years and higher asset prices mean many of us are sitting on plumper financial cushions.  

But it’s also true that those forces have yet to fully offset the effects of the pandemic. Time might have run out. The trade war has introduced a headwind that has already slowed economic momentum, and could result in a recession. The jobless rate has climbed to around seven per cent. With more potential workers about, and the threat of a slowdown looming, employers will be less inclined to keep pumping up wages. Life could start to feel harder again. 

One reason the Trump tariffs haven’t stalled the economy is that Canadians still have spending power. Household disposable income was 19 per cent higher in the first quarter than in the same period in 2022, while the level of the consumer price index was 12.5 per cent higher over the same period. But that spending power is unevenly spread. Statistics Canada separates the income distribution into quintiles. The disposable income of the lowest quintile was only seven per cent higher in the first quarter than in early 2022, and that of the second and third lowest also trailed the increase in the consumer price index.

Disposable income of the fourth-highest bracket was about 20 per cent higher. The disposable income at the top of the distribution rose some 28 per cent. Canada’s commitment to equality is about to be tested. Many of us are probably better off than we think, but some of us are doing notably better than everyone else. 

It’s not a problem that Carney or anyone else can fix in a single stroke, but it’s something that should inform everything policymakers attempt to do. There’s lots of evidence around that bad things happen when opportunity stops trickling down. 

 Kevin Carmichael is The Logic’s economics columnist and editor-at-large. He has spent more than two decades covering economics, business and finance for outlets including Bloomberg News, The Globe and Mail and the Financial Post, where he also served as editor-in-chief.