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Friday, February 4, 2022

Centuries of institutional and systemic racism have led to a significant disparity between the wealth of white individuals and those who identify as visible minorities.

Wealth is about more than a paycheck — it refers to the sum of financial assets and physical possessions owned by an individual or family. Less wealth means more challenges with homeownership, investment opportunities, student loans or the ability to pass accumulated wealth down to future generations.

To better understand racial inequality as it relates to money, we will explore the following questions: What is the racial gap? What are the historical impacts of racism? And what are ways to overcome these challenges?

What is the racial wealth gap?

The racial wealth gap is the difference in wealth between white and non-white households. This gap has been growing wider for decades, especially during the COVID-19 pandemic. Other contributing factors include:

  • Limited educational opportunities
  • Inheritance
  • Discrimination in housing and employment

A report from The Conference Board of Canada states that, for every dollar earned by a white worker, visible minorities earn on average 87.4 cents. This difference in wages, among other disadvantages, can impact opportunities such as one's ability to save or invest. If left unaddressed, this could result in continued imbalances between certain populations, leading to severely imbalanced wealth distribution.

Elements of family-wealth generation

Generational wealth, or family wealth, is a term used to describe the accumulation of assets from one generation to another. It can include income, savings, investments, and property. Building generational wealth allows families to provide their children with more options in life.

For example, if your family is able to help pay for your tuition, this takes away the stress of paying down a student loan debt and provides you the opportunity to save for your first home or retirement. Generational wealth has the potential to significantly impact one's financial future. This is why it’s so important to address the wealth gap so all families, no matter their race, can provide financial stability for generations to come.

History of racial inequality

The history of racial inequality in Canada is long and complex. It has been influenced by many factors, including the country’s colonial history, laws, policies, economic decisions and social movements. Racialized communities are still dealing with the repercussions and will continue to until change is made.

Recent census data from Statistics Canada reveals “black Canadians make significantly less money than non-racialized Canadians regardless of how long their families have lived in Canada”. Racism is ingrained in our history. It will take time and effort to begin to unravel these deeply rooted systems.

Addressing the racial wealth gap

The racial wealth gap is a persistent problem in Canada. The Canadian government has taken steps to combat the issue, but there are still many aspects of the problem that need to be addressed. The first step is to create policies and laws that ensure equality and equal opportunities for all Canadians.

The second step is to ensure economic decisions are made with equality in mind. This includes ensuring people of all races have the same access to jobs, housing, education, and other benefits.

We will never undo centuries of discrimination, but there are steps we can take to create change. The wealth gap is the product of systemic policy choices, and it’s going to take intentional policy interventions to make any significant progress in closing the gap.

Although we’ve come a long way, there’s still so far to go before we start to see true change. There are a wide variety of sources that provide further insight into the racial wealth gap and the disparity in Canada. We encourage you to further your research to learn more and continue to have these important conversations.

Ready to get started? Here’s a list of great resources regarding income inequality in Canada:

The Racial Wealth Gap is a Problem
Canada’s Colour Coded Income Inequality
Colour of Poverty — Colour of Change
Income Inequality
By the Numbers: Race, Gender and the Canadian Labour Market
How the Economic Landscape is Tilted Against Black Canadians