As COVID-19 pandemic restrictions eased and the labour market began to recover in 2021, the average total income of some of Canada’s highest earners rose by nearly 10 per cent from the previous year, while those considered in the “bottom half” saw their incomes decline, new numbers from Statistics Canada show.
According to the agency, the recovery seen by Canada following the first year of the pandemic produced uneven income gains.
In 2021, the average total income of the top one per cent of all tax filers rose by 9.4 per cent to $579,100, excluding capital gains.
Income among the top 0.1 per cent increased by 17.4 per cent to $2,086,100 and income made by the top 0.01 per cent soaring by 25.7 per cent to $7,731,400.
At the same time, tax filers in the bottom 50 per cent of the country saw their average total incomes decline by $1,400 to $21,100 in 2021 from $22,500 in 2020. The agency said this was, in part, due to the lowering or ending of government transfers that were put in place to help Canadians during lockdowns as a result of the COVID-19 pandemic.
These increases in income for the top earners were driven by wages and salaries, with the average wage and salary income rising between 12 per cent for the top one per cent up to 34.5 per cent for the top 0.01 per cent.
However, StatCan notes dividend income was also an important contributor to top earners’ income in 2021.
Capital gains surged in 2021
And while income estimates typically exclude capital gains, the numbers released Friday show this money — which typically include gains made from the sale of an asset, stocks, or property — rose sharply in 2021. Statistics Canada notes that’s in line with values seen in the housing and stock markets, which rose in 2021.
The agency says 12.2 per cent of all tax filers received capital gains, with an average value of $37,600. However, it notes these numbers can be skewed as it’s often a small proportion of those who file taxes who receive relatively large gains. Five per cent of capital gains recipients in 2021 received $131,100 or more that year.
When it comes to the top-income earners, they too saw big boosts from capital gains. When included in their income, the average income for the top one per cent increases to $811,800, with the top 0.1 per cent jumping to $3,230,000 and the 0.01 per cent skyrocketing to $12,542,100.
“These levels of income including capital gains were much higher than they were at any other point in the past 40 years, accounting for inflation,” Statistics Canada writes.
“The previous peak was in 2007, when the top one per cent made on average $712,000.”
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