Canada's ultra-wealthy getting richer faster than the rest of us, report shows

Canada ranks fifth in the world when it comes to the number of people living in a country with anet worth ofat least $30 million USbeating out the likes of Switzerlandand Hong Kongaccording to a new wealth study.

According toresearch firm Wealth X, Canada had around 10,840 residents worth$30 million or more including their investable assets in 2017.The New York-based firm compiles the study basedon its database of wealthy individuals every year.

The $30 million figure isn't random that'swhat Wealth-X says it takes to be considered an ultra-high net worth individual.

Only the United States, Japan, China and Germany had more people with at least thatamount of moneythan Canada. France, Hong Kong, the U.K., Switzerland and Italy all ranked below Canada.

RicardoTranjan, seniorresearcher at the Canadian Centre for Policy Alternatives (CCPA),said research conducted byCCPAsuggests that "the rich are really sprinting ahead" of average Canadians.

Leaving the middle class behind

"[Our] research found thatwhile the average net worth of Canada's wealthiest families rose by 37 per centbetween 2012 and 2016, the net worth of middle-class families increased by 16 per cent," saidTranjan.

He said it didn't surprise himthat Canada had more high net worth residents thanseveral European countries on the list.

"One of ourrecent studiesand research conducted by French economist Thomas Piketty and colleagues have demonstrated that inheritance tax is a key mechanism for wealth distribution," Tranjan said."Canada doesn't have such a tax, whereas most European countries do."

Germany, the only European country to top Canada on the list, does have an inheritance tax but its economy is also far larger than Canada's.

The idea of a formal inheritance tax in Canada, the only G7 country without such a tax, is controversial. But it has been floated by some (including the NDP anda CCPAeconomist in a recent report) as a potential tool to put a dent in wealth inequality.

Meanwhile, the number of people in Canada with a net worth of $30 million or moreincreased by nearly 14 per cent last year from 2016, while their total wealth grew almost 15 per cent to a collectiveamount of more than$1.1 trillion, Wealth-X said.

High investment yields drive growth

That's slightly higher than the worldwidegrowth of people with the same amount, which rose almost 13 per cent to 255,810 individuals.

The biggest drivers of wealth for this groupin Canada werebetter economic growth in the region, higher investment yields and a stronger currency, according to the study.

Wealth-X said the boost was driven by several economic factors, including "modest acceleration" in growth in both Canada and the U.S. and a "late-year boost" from the Trump administration's tax reform bill which was "aimed squarely at providing generous exemptions to corporations and the ultra wealthy."

The Canadian economy grew a strong three per cent last year, while stock markets rallied on U.S. President Donald Trump's tax reform policies. The Canadian dollar also rose more than seven per cent against the greenback in 2017.

But that pace may not continue, Wealth-X said.

Decline in global share coming

The research companysaid theNorth American region is on track to record the slowest growth in the number of people with $30 million or more over the next five years.

"It will remain the dominant ultra-wealthy region in absolute terms, but compound annual growth rates of just below six per centin its ultra-wealthy population and total net worth imply a gradual decline in global share on both counts," the study said.

On the other end, the Asia-Pacific region is expected to close the wealth gap on individuals with $30 million or morewith regions like North America in the next five years. The fastest growing regions of the world for wealth are emerging markets like Asia, Latin America and the Caribbean.