For the bankers gathered at the RBC CEO Conference in January to plan for the year ahead, there were plenty of worrisome issues to consider.
They included the cost-of-living crisis, the U.S. tariff assault on Canada, the unknowable impact of AI, and geopolitical uncertainty.
But the issue to which Dave McKay gave greatest prominence at the CEO conference was the gap between rich and poor. The gap is a factor in the rise of disruptive populism worldwide and stalls improvement in living standards in Canada and the U.S.
“The growing differentiation and disparity is really driving the political agenda in both countries,” said McKay, CEO of Royal Bank of Canada, the country’s largest bank.
“That disparity is much greater in the United States and much more severe and is a huge political issue,” McKay said.
Income inequality also threatens to erode Canada’s social fabric.
In April, Statistics Canada reported on the Canadian income gap. StatCan measured the difference in the portion of total disposable household income held by the top 40 per cent and the bottom 40 per cent. It found that the gap had reached a record 46.7 per cent in 2025.
StatCan said the top 20 per cent of the country’s richest people held 65.7 per cent of Canada’s total net wealth at the end of 2025, or an average of $3.5 million per household.
The bottom 40 per cent, by contrast, accounted for only three per cent of the country’s wealth last year, or an average of $81,650 per household.
But those gaps in income and wealth mask an important distinction between Canada and the U.S., alluded to by McKay, who like his CEO peers does a lot of business in the U.S.
Canadians typically are a bit better off financially than Americans, something the bankers notice in comparing the volume of deposits, mortgages and personal investments in their U.S. and Canadian operations.
The latest annual UBS Global Wealth Report shows Canada ranking seventh in median wealth across 56 countries accounting for most of the world’s economic activity. Canada’s median wealth per adult was $147,811 (U.S.) in UBS’s 2026 report, released late last month.
By that measure, the U.S. ranked 28th, at $68,998.
The narrative that the Canadian economy chronically underperforms the U.S. arises largely from a comparison of average rather than median wealth per capita.
In average wealth per capita, the U.S. ranks second after Switzerland, at $696,277, and Canada ranks 13th at $399,886.
It’s that second gap that gets the attention, though the median is a better measure of how people typically experience the economy.
The median is the true midpoint in a group, while averages can be thrown off by extreme high or low values.
And that happens in the U.S., where more than 1,200 people became millionaires each day in 2025. That wealth inflates GDP per capita, though it only accrues to the richest strata of the population.
“Galactic hoards of Musk, Bezos, et al, inflate the U.S. average (of GDP per capita) but virtually none flows to most Americans,” Canadian labour economist Jim Stanford wrote in response to the UBS report.
Yet it’s the misleading gap in average GDP per capita that is the basis for the plethora of commentary that Canada is a second-rate economy.
As it happens, Canada outranks all its G7 peers in median per capita wealth and all but the U.S. among G7 countries in average per capita wealth, as well.
The danger in the unfavourable Canada-U.S. comparisons is the distorting effect they can have on political decisions about economic strategy.
Those run the gamut from irresponsible tax cuts to privatization of public services to extravagant spending on infrastructure projects — all meant in part to address the gap between rich and poor by increasing personal disposable income.
But those measures are often broad-based and don’t target those most in need of income support.
So, Ottawa and the provinces need to focus on those who are least advantaged for the assistance to have maximum impact. They should keep in mind that Canada’s income equality is high among advanced economies and roughly on par with the Scandinavian average.
And certain U.S. economic activity inflates American GDP — and GDP per capita. This includes private health care and higher tuition than in Canada for both public and private post-secondary education.
And if U.S. GDP is inflated, in Canada it is understated. For instance, most public services in Canada — including health care, education and public transit — are not fully valued in Canadian GDP calculations.
“Our economy has its challenges, but the idea that we’re in a crisis — based solely on GDP comparisons with the U.S. — is simply a myth,” Brian Lewis, Ontario’s chief economist from 2015 to 2021, wrote in a 2024 Maclean’s essay.
“Public policy should focus on measures that truly effect our well-being, like real median income, fairness and quality of life.”
