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Canada’s polymer bank notes are pictured on Nov. 7, 2013. New data from Statistics Canada shows that Canada’s top percentile of earners takes home over 10 per cent of the national income. (JONATHAN HAYWARD/THE CANADIAN PRESS)
Canada’s polymer bank notes are pictured on Nov. 7, 2013. New data from Statistics Canada shows that Canada’s top percentile of earners takes home over 10 per cent of the national income. (JONATHAN HAYWARD/THE CANADIAN PRESS)

Canada's top 1% take home 10.6% of country's income Add to ...

Canada’s top 1 per cent of earners took home 10.6 per cent of the country’s income in 2011, a share that plateaued from a year earlier but remains higher than in recent decades.

A first glimpse of how top earners fared in 2011 shows their share of income peaked in 2006 at 12.1 per cent, before the recession walloped the wealthy as investment income and bonuses dried up. However, the share is still higher than when Statistics Canada began tracking incomes in 1982, when it stood at 7.1 per cent.

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The report comes amid more public scrutiny of how top earners are faring amid growing income inequality and a concentration of income among the rich. Canada isn’t the only country seeing shifts; in the three decades to 2010, every industrialized economy saw an increase in top earners’ share of total income, with gains most pronounced in the United States, Australia, Canada and Britain, according to the Organization for Economic Co-operation and Development.

“I was struck by the similarity with U.S. trends – and the stability [between 2010 and 2011],” said Statscan economist Brian Murphy, who tracks income trends in Canada.

Income mobility is showing signs of declining, because as a person becomes a high earner, the likelihood of staying wealthy increases. The portion of people in the top five-percentile income group who were also there five years ago has climbed for the past three years, to 85.3 per cent. The proportion of people in the top-five percentile at least once during the past five years has also grown slightly.

In the U.S., the income share of the top 1 per cent of earners was 19.7 per cent in 2011, according to economists Emmanuel Saez and Thomas Piketty. By last year, it had grown to about 22.5 per cent – a similar level to both before the recession and the Great Depression. The economists found that incomes for the top 1 per cent grew by nearly a third between 2009 and 2012, compared with 0.4-per-cent growth for the bottom 99 per cent.

In Canada, the threshold to be in the top percentile of earners rose to $209,600 in 2011, up from $207,300 a year earlier in constant dollars. It requires $108,300 to be part of the top 5 per cent, while it takes $84,100 to be in the top decile of earners.

The rich typically pay a higher share of taxes in Canada, although that share has declined in recent years. The top 1 per cent of earners paid 20.8 per cent of the total share of federal and provincial or territorial income taxes, down from 23.3 per cent five years earlier.

There are slightly more women in the top group than in the past: 21.1 per cent in 2011, one percentage point higher than 2007. Most of the people in this category (83 per cent) are married or in common-law relationships. The median age is 52 and the median income in this group is $293,300.

Resource-rich Alberta is where the top earners have the biggest share of the provincial income. Its top 1 per cent of earners took home 17 per cent of total income, up from 16.6 per cent in the year earlier. The share also grew in Newfoundland and the Northwest Territories.

In New Brunswick, earners in the top percentile took home 4.4 per cent of the province’s income, the lowest level in Canada. The share going to the top 1 per cent fell in Quebec, Ontario, Manitoba, Saskatchewan and British Columbia between 2010 and 2011.

Among cities, the threshold to be part of the top 1 per cent is, by far, highest in Calgary at $391,700(although that’s down from five years earlier). The threshold is lowest in Trois-Rivières, at $152,300.

The top 5 per cent of earners in Canada held 23.8 per cent of total income in 2011, while the top 10 per cent received 35.1 per cent. The report is based on 2011 tax-file data, which includes incomes from earnings and investments, but is not a measure of total wealth, which includes assets such as housing.

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