Are Montrealers richer than they think? The question arises after an interview with Claude Marcotte, executive vice-president of Carbonleo, this week on Radio-Canada radio.
The host of All one morningPatrick Masbourian, jumped when Mr. Marcotte affirmed that “salaries above $150,000 [à Montréal]it’s very comparable, it’s even above Vancouver, Ottawa, Seattle, San Francisco.”
“Excuse me,” Masbourian interrupted. “There are more people, all things considered, who earn $150,000 in Montreal than in San Francisco?”
“Yes,” Mr. Marcotte retorted. “These statistics are fascinating.”
Montreal lagging behind
Fascinating indeed, because it is rare for political or economic figures to describe Montreal as a champion of wealth in Canada. “It is a surprising statement, because it does not match the data we are used to seeing,” confirms economist Geoffroy Boucher, of the Observatoire québécois des inégalités, established at the Université de Montréal.
According to the most recent data from Statistics Canada, nearly one in four families (24.8%) in the greater Montreal area had a total income that exceeded $150,000 per year in 2020. While these figures are surprising, they are still lower than the national average: 27.3% of Canadian families earn more than $150,000 per year.
Absolute numbers or proportion?
But the developer of the 170-store mall that opened to the public Thursday wanted to talk about the absolute number of wealthy Montrealers. Percentages matter less than absolute numbers when you’re trying to figure out how many people might walk the Royalmount’s luxury aisle.
No fewer than 284,740 families in the metropolitan area reported earning more than $150,000 in 2020. And indeed, this number is greater than what is found in Ottawa/Gatineau (148,320) and even in Greater Vancouver (228,035). It is difficult to compare with American statistics, due to exchange rate differences.
PHOTO HUGO-SÉBASTIEN AUBERT, LA PRESSE ARCHIVES
Claude Marcotte, Executive Vice President of Carbonleo before the inauguration of the Royalmount, Tuesday
That said, Claude Marcotte also stated that Montrealers’ “spending capacity” justified the construction of a shopping centre focused on luxury goods. To measure this spending capacity, it is preferable to use after-tax income, according to economist Geoffroy Boucher.
However, only 155,315 families had an after-tax income of more than $150,000 in 2020 in Montreal. There were 95,295 in Ottawa/Gatineau and 159,970 in Vancouver. Montreal therefore loses its gold medal.
Decision revealing inequalities?
The fact remains that “the decision of a private player” to open a shopping centre where luxury brands such as Louis Vuitton, Gucci, Versace and Saint Laurent will be concentrated demonstrates “that there is a market for it here”, explains Geoffroy Boucher. “So it shows that wealth inequality is increasing”, continues the economist, taking care not to make a causal link. It is not necessarily because inequality is growing that Carbonleo has smelled a business opportunity.
Moreover, even in the definition of wealth, there are nuances that are necessary. Are the rich becoming richer? It depends, Mr. Boucher replies.
When we look at income, there has not been a clear increase in inequality over the last two decades in Quebec. When it comes to wealth, however, inequality is growing.
Geoffroy Boucher, economist, Quebec Observatory of Inequalities
The difference between income and wealth is simple. Income is what we earn (in salary, benefits, annuities, etc.). Wealth is what we are “worth” (our assets such as real estate, for example, from which we subtract our debts such as a mortgage, for example).
According to an analysis published by Mr. Boucher with his colleague Sandy Torres last November, “the richest 20% of families hold 68% of the wealth [ou patrimoine] accumulated” in Quebec. It is perhaps rather these rich in heritage who are in the Royalmount’s sights.
See total income by income bracket in census metropolitan areas
See after-tax income by income bracket in census metropolitan areas
See the analysis of the heritage of Geoffroy Boucher and Sandy Torres