Statistics Canada has determined decreases across income levels
Canadians who fall in the top income earners have seen a sharper decline in their income compared to those in the lower half of incomes.
Statistics Canada data for the 2021-2022 period reveals that average income for the top 1% fell by 5.1% to $586,900, while the top 0.1% saw a 6.9% decrease to $2,073,000, and the top 0.01% saw a 9.9% decrease to $7,436,400.
The stats, based on tax filers’ data, found that the average income of the bottom 50% of income earners was down 7.6% to $20,800.
Incomes were impacted by the winding down of government Covid support and inflation reaching a 40-year high of 6.8% on an annual average basis.
However, across the income distribution spectrum income levels in 2022 were above those of the pre-pandemic 2019, with increases for the bottom 50% of 1.9%, for the top 1% of 2.8%, for the top 0.1% of 5.1%, and for the top 0.01% of 4.3%.
The figures show that all provinces saw decreased income for the top 1% but for those in the three territories although wages were down $14,000, overall average income was higher, suggesting their increased income was from non-wage sources. In New Brunswick where wages were up $21,400, the overall decrease in income suggested this was from non-wage sources.
Women gain from investments
The analysis found that one in four tax filers in the top 1% were women and they saw their average income fall in 2022.
But for those women in the top 0.1% investments helped push their average income higher by $30,600 compared to 2021, despite wages dropping 5.8%. The combined gain for various investment returns for these wealthy women was 22.9% year-over-year.
Across higher income groups, men and women, dividend income increased at a slower rate than in the previous year. Average dividend income increased for the top 1% by 0.8% to $97,100 in 2022, while the top 0.1% (+4.6% to $479,700) and the top 0.01% (+1.5% to $2,178,600) also saw increases.
Meanwhile, capital gains for the top income groups decreased in 2022 from 2021 – by 30.3% or an average decrease of $34,200 for the top 1% of tax filers, while those in the top 0.1% saw a 29.0% decrease ($139,900) and the top 0.01% saw a decrease of 13.4% ($177,000).
The research found that 69.1% of tax filers were in the same income group in 2022 as they were in 2021, but that less than half (49.2%) were there in 2017. Even lower proportions of tax filers remained in the top 0.1% (58.9%) or top 0.01% (42.1%) groups in 2022 compared with 2017 (39.9% remained in the top 0.1% and 29.6% remained in the top 0.01%).
However, 77.1% in the top 1% of the income distribution in 2022 had incomes that put them in the top 5% annually since 2017, 88.9% in the top 0.1% group have had incomes in the top 5% since 2017, as did 92.9% of those in the top 0.01% group.
