Canada’s top 1 per cent remains a largely male group, but more women are now part of the rarefied club that requires annual income of at least $201,400 to join. And once they’re in, they tend to stay in.
Top earners are typically urban, living in cities like Toronto and increasingly Calgary. They’re more likely to be married. And they’re getting a growing portion of their income from their jobs, rather than investments.
This snapshot of the country’s wealthiest, released Monday by Statistics Canada, shows that the top 1 per cent of earners account for 10.6 per cent of the country’s total income. That has ebbed from a peak of 12.1 per cent in 2006, although it’s still higher than the 7-per-cent share they held three decades ago. Like other industrialized countries, the gap between Canada’s rich and the rest has grown over that 30-year period.
“The income gap between the top 1 per cent and the rest of [tax] filers has widened over time,” the agency said.
Statscan examined the top 1 per cent of Canada’s 25.5 million tax filers and compared 2010, the most recent year for which data are available, with trends back to 1982. It found the median income of the top 1 per cent of filers is now about 10 times higher than the median income of the other 99 per cent, up from 30 years ago, when it was seven times higher.
The gap has narrowed lately, in the 2006-to-2010 period. But that may stem more from the recession’s bite on stock options and bonuses among those at the very top rather than improvements among the 99-per-cent crowd. However, the rich are – broadly speaking – paying more taxes. The top group’s share of federal and provincial taxes increased to 21.2 per cent in 2010 from 13.4 per cent in the early 1980s, while that of the rest of us fell.
“What we want to get is that the income gap is shrinking because everybody is growing and those at the bottom are catching up,” said Brenda Lafleur, director of the Conference Board of Canada’s research on the country’s socio-economic performance.
on how the economy is performing.
Income disparity is a hot topic, and not just for the Occupy Movement alumni. Severe income inequality is the biggest risk to the global economy, the World Economic Forum’s annual study said this month. The World Bank and the OECD have also cautioned that the deepening chasm could hurt the sustainability of economic growth.
Canada doesn’t have nearly the same level of inequality as the United States. But climbing the ladder appears to be a harder task now, suggested Miles Corak, professor of economics at the University of Ottawa.
Four-fifths of Canadians in the top five income percentile have consistently been there in the past five years, the statistics show, and the proportion of people remaining in the upper echelons has been growing since the early 1980s.
That shift is “very worrisome” because it can ultimately curb peoples’ aspirations, Ms. Lafleur said. “You want people to feel that if you invest in education and work hard that you, too, can move up the economic ladder.”
And it’s not just bankers and oil executives in the top group. Given that the threshold is about $200,000, the picture is much more Main Street than Bay Street, with many doctors, dentists, senior managers and veterinarians, according to a study last year by a group of University of British Columbia economics professors. As a point of comparison, in the United States it took $343,927 (U.S.) to join the ranks of the 1-per-centers, according to Internal Revenue Service 2009 statistics.
The richest Canadians are more likely to live in bigger cities – with Toronto and Calgary accounting for much of the surge. Calgary saw its share of the national total of 1-per-centers more than double, to 11 per cent, between 1989 and 2010.
Men, meantime, still “dominate” the top, but women have made “significant gains,” now representing 21 per cent, compared to 11 per cent in 1982, Statscan said.