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With the NDP campaigning on the promise of instituting a wealth tax in Canada, a new survey shows taxing people’s assets rather than their incomes might not always be a bonanza for governments. Case in point: Despite rapidly growing incomes, Canada’s super-rich had a super-bad year in 2018, losing wealth at a much faster pace than wealthy people elsewhere, a new report says. The report from research group Wealth-X, released Wednesday, found that “ultra high net worth individuals” ― defined as those with $39 million (US$30 million) or more in net worth ― saw their wealth shrink in many countries last year. Watch: Should Canada’s super-rich pay a super-tax? Story continues below.

But those in Canada saw some of the steepest drops worldwide, with their net worth shrinking by 8.8 per cent in 2018. That compares to a drop of 0.1 per cent among the U.S.’s super-rich. Among places with major concentrations of super-rich people, only Hong Kong saw faster wealth decline than Canada, at nine per cent. The result is that Canada’s super-rich population shrank by four per cent in 2018, to some 10,395 individuals. The U.S. population of super-rich grew by 2.2 per cent, to 81,340. On a per capita basis, Canada still has more super-rich people than the U.S. There are 334 super-rich Canadians for every 1 million people, compared to 306 in the U.S. The top 10 countries for “ultra high net worth” individuals:

The net worth of very rich people tends to be volatile because they are more reliant than the middle class on investments such as stocks for their wealth, and those can go up and down in value rapidly. In Canada’s case, the steep drop last year came from the country’s wealthy investors being exposed to a weak stock market. Canadian stocks were down 12 per cent in 2018, and the rich were also hit by “an underperforming energy sector, tensions with the U.S. over revisions to the North American Free Trade Agreement (NAFTA) and a depreciating currency,” Wealth-X said in its report. However, wealth is not the same as income, and new numbers from Statistics Canada, also released Wednesday, showed that incomes among the wealthy grew faster than other groups’ incomes in 2017 (the year before the one measured by the Wealth-X survey).

For the top one per cent, incomes grew by 8.5 per cent in 2017, compared to 2.5 per cent for all tax-filers. Those at the top also saw the largest reduction in taxes in 2017, helped along by significant income tax cuts in Quebec, StatCan noted. To be in the one per cent of earners in 2017, you had to make $236,000 or more, StatCan said, while to be in the top 0.01 per cent, you needed an income of $2.7 million or more. “The top one per cent were the only group to receive a greater share of total income in 2017,” the agency noted in its report. The one percenters saw their effective tax rate drop to 30.9 per cent, from 31.3 per cent the year before. Among all individual tax-filers, the rate was 11.4 per cent, while families paid 12.4 per cent, Statistics Canada found. The data comes as the idea of taxing wealth, rather than income, gains hold among some left-leaning politicians in the U.S. and Canada, who point out that wealth inequality is even larger than income inequality. Massive wealth inequality A 2018 study from the Canadian Centre for Policy Alternatives (CCPA) found that the 87 richest Canadian families control as much wealth as 12 million Canadians. The NDP has proposed a one-per-cent wealth tax on estates valued above $20 million, which the CCPA estimates would raise $5.7 billion per year, almost all of it from some 6,000 families, out of 15.3 million in Canada. The Parliamentary Budget Office projects it would raise $70 billion over 10 years. Critics of a wealth tax point to the examples of a number of European countries that experimented with the policy and then gave up on the idea, because of evidence it caused the super-rich to flee to other countries. They also argue such a tax is risky, because the fortunes of a small group of people would have outsized influence on government revenues. “For legislation of this sort to be effective it would have to be strong, with loopholes identified and quickly shut down, which can certainly present challenges,” the CCPA said in a report earlier this month.