Canada’s Wealthiest 1% See Income Surge as Lower Half Faces Decline
November 10, 2023 — In a stark display of economic disparity, Statistics Canada’s latest report reveals a widening income gap in the country. In 2021, as pandemic restrictions eased and the labor market began to recover, Canada’s top 1% of earners saw significant income increases, while the bottom half experienced a decline.
The average total income of the wealthiest 1% of tax filers rose by 9.4% to $579,100, excluding capital gains. This increase was even more pronounced among the top 0.1% and 0.01%, with incomes soaring by 17.4% and 25.7%, respectively. In contrast, the bottom 50% of tax filers saw their average total incomes drop by $1,400 to $21,100 in 2021, partly due to the reduction or cessation of government transfers implemented during the COVID-19 lockdowns.
These income gains among the top earners were primarily driven by wages and salaries, with the average wage and salary income for the top 1% rising by up to 34.5% for the top 0.01%. Additionally, dividend income played a significant role in bolstering the incomes of these top earners.
Capital gains, typically excluded from income estimates, also saw a sharp increase in 2021. This rise corresponded with the growth in the housing and stock markets. The average capital gains for tax filers who received them was $37,600, with a small proportion receiving much larger gains. When capital gains are factored in, the average income for the top 1% jumps to $811,800, reaching unprecedented levels in the past 40 years when accounting for inflation.
Amidst these disparities, women are gradually making up a larger portion of the high-income earners. In 2021, women constituted 26.1% of the top 1%, an increase from 25.4% in 2020 and a significant rise from 11.4% in 1982.
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