Latest government statistics show top 1% of tax filers accounted for an outsized share income and saw the most income growth
New data from Statistics Canada shows that even before the pandemic, the gap between low-income and high-income Canadians was widening as higher-earning individuals saw outsized increases.
According to the agency, the average total income for all tax filers went up by 0.7% to $51,000 in 2019. A disproportionate share of that growth went to the top 1% of tax-filers – those with total incomes of over $250,300 – who received 10.1% of the national total income for that year.
That marked an 80-basis-point rise from a year earlier, as well as the third consecutive year when the top 1% of tax filers saw their share of total income rise. Meanwhile, the income share of the upper-middle tax filers, whose incomes were between $37,200 and $100,000, declined by 90 basis points.
The numbers also showed that Canadian tax filers at the top of the income distribution in 2019 saw faster total income growth than those in the upper middle or bottom of the spectrum.
While the top 1% of Canadian tax filers showed a 1.8% increase in average total income in 2019, those in the upper-middle segment were relatively unchanged, while those in the bottom 50% logged a 0.8% rise in income.
“The growth in the total income of high-income tax filers was largely driven by dividend income,” the agency said. “For example, while average employment income for tax filers in the top 1 percent increased by half a percentage point in 2019, their average dividend income grew by 10.5%.”
The same story played out for those in the uppermost income strata of the economy. Tax filers in the top 0.1% (those with incomes of at least $790,000) saw income growth of 5.5%, and the top 0.01% (those with at least $2,973,000 in income) experienced an acceleration of 13.9%.
Their average dividend incomes rose even more sharply, clocking in at 18.9% for the top 0.1% of tax filers and 34.8% for the top 0.01%.
The agency also reflected a shift in the financial balance between genders: the number of Canadian women among the top 1% of tax filers increased by 3.2% in 2019, reaching 70,990. With that, the share of women in the top 1% of tax filers rose 0.4% to 24.7%, and the total income share of women in the top 1% of tax filers ticked up 0.1 percentage points to 2.2%
Still, it’s not all good news. “While improved education and their entry into high-paying occupations helped Canadian women make gains in their share at the top, the gender earnings gap still persisted for the top 1 percent and also across the income distribution,” StatsCan said.
