Canada’s top 1% saw fastest income acceleration, overall decrease in taxes

Those in the top one per cent saw average income growth in 2017 of 8.5 per cent to $477,700

The incomes of Canada’s top one per cent grew at a faster pace than everyone else in 2017 — and, overall, they saw their taxes edge down, says a new study.

Statistics Canada has found that in 2017 the average total income of all tax-filers rose 2.5 per cent to $48,400 compared to the previous year. The average income growth of the bottom half of tax filers increased 2.4 per cent to $17,200.

But those in the top one per cent saw average income growth that year of 8.5 per cent to $477,700.

And biggest surge in income growth was seen by those who made even more money.

Tax filers in Canada’s top 0.1 per cent, who made at least $740,300 in 2017, took home 17.2 per cent more income than in 2016. People in the top 0.01 per cent, who made $2.7 million or more, saw their incomes rise 27.2 per cent — making for the fourth-biggest annual increase in the last 35 years.

READ MORE: B.C. seniors’ poverty rate highest in Canada: report

The report’s release comes with the federal election campaign in full swing — and political pledges on taxes and helping regular folks with their finances have been prominent.

In 2016, the Liberal government increased the tax rate on income in the highest bracket. But the Statistics Canada report says that, even with the boost, taxes declined for those with the highest incomes because of reductions at the provincial level, especially in Quebec.

At the federal level, the report says, those in the top one per cent have been paying higher taxes since the government created a fifth tax bracket in 2016, which nudged the effective tax rate of people making the most money to 18.8 per cent from 18.4 per cent.

The overall effective tax rate, however, for those in the top one per cent declined to 30.9 per cent in 2017, down from 31.3 per cent the year before, the study says.

By comparison, all individual taxpayers, on average, saw an effective tax rate of 11.4 per cent in 2017, while families paid a rate of 12.2 per cent.

Families with kids, with incomes near the median, saw a lower federal rate because of a slight boost from enhanced tax-free child benefits, the report said.

The effective tax rate in the study is calculated by tallying the taxes paid at the federal and provincial levels as well as employee contributions to employment insurance and to the Canada and Quebec pension plans.

During the election campaign, major political parties have announced packages of tax credits and reductions, mostly directed at families.

For example, Conservative Leader Andrew Scheer announced a $6-billion plan to gradually lower income taxes — to 13.75 per cent from 15 per cent — over several years for the lowest federal bracket, which is applied on income between $11,809 and $47,630.

Liberal Leader Justin Trudeau promised to make the first $15,000 of income tax-free for people making $147,667 a year or less.

NDP Leader Jagmeet Singh has pledged to raise the top marginal tax rate — on income over $210,000 — by two percentage points to 35 per cent. Singh has also vowed to introduce a one-per-cent annual wealth tax for Canada’s “super-rich millionaires” — those worth more than $20 million.

When it comes to a breakdown of Canada’s top money-makers, the report said the one-per-cent club had 277,695 members in 2017, and 2,780 tax filers were in the top 0.01 per cent.

The vast majority — or 92.1 per cent — of those in the top one per cent in 2017 lived in Ontario, Alberta, Quebec or British Columbia.

Women made up 24.2 per cent of earners in the top one per cent, up from 23.9 per cent the previous year — and more than double their proportion in 1982.

Andy Blatchford, The Canadian Press

Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Summer Villages halt Stettler County’s Buffalo Lake amendment request

White Sands and Rochon Sands oppose density increase at Buffalo Lake RV Resort

Central Alberta’s Gord Bamford adds Bashaw and Hanna dates to the #REDNEK Music Fest

The tour features Jess Moskaluke and other special guests

The Stettler Board of Trade welcomes 2020 board of directors

The board is an organization comprised of business owners and municipal representation

On Feb. 26th, practice kindness and wear pink to symbolize that you do not tolerate bullying

Bullying is a major problem in our schools, workplaces, homes, and online

Working Well Workshop coming to White Sands

Informative water well management workshop will help residents protect their drinking water

VIDEO: Ottawa wants quick, peaceful resolution to pipeline protests, Trudeau says

The protests have manifested themselves as blockades on different rail lines across the country

Trudeau says Wet’suwet’en crisis, rail blockades a critical moment for country

First Nations leaders suggest it may be time to peacefully end the blockades

AFN national chief calls for calm on Wet’suwet’en crisis, rail blockades

Hereditary chiefs in the Wet’suwet’en First Nation oppose the natural-gas pipeline

Federal, B.C. ministers seek meeting with Wet’suwet’en in hope of blockade solution

Coastal GasLink signed agreements with all 20 elected band councils along the pipeline route

Flight to evacuate Canadians from cruise ship ‘expected’ to depart Japan on Thursday

Canadians seeking to return to home by commercial means will be subject to the Quarantine Act

Trudeau tightlipped on plan to end protests ‘quickly and peacefully’

The prime minister, who cancelled a two-day trip to Barbados this week to deal with the crisis at home

Canadian standards for coronavirus protection to be reviewed, health agency says

The protocols set out how health workers should protect themselves and their patients

Wetaskiwin RCMP Investigate Shooting incident in Poplar Grove

VW sedan may be linked to Wetaskiwin gun incident

Wetaskiwin RCMP seeking witnesses to car-jacking

Armed theft resulted in two subjects facing multiple charges

Most Read