The impact of redistribution on income inequality in Canada and the provinces, 1981-2010

The objective of this report is to provide an overview of trends in income inequality, defined as the Gini coefficient, in Canada and the provinces over the 1981-2010 period and to investigate the impact of redistributive policies - namely, taxes and transfers - on these trends. Income inequality is measured in terms of market income, total income, and after-tax income, with the latter considered the most important from a well-being perspective. The report consists of five sections. The first section provides a brief discussion of why equality matters and defines the key variables. The second section looks at income distribution and redistribution at the level of Canada. The third section examines income distribution and redistribution at the provincial level. The fourth section provides an international perspective on Canada's level of income inequality and redistribution. The final section concludes.