The highest earning Canadians saw their incomes fall the fastest as a percentage between 2021 and 2022, as dividend income increased at a slower rate and capital gains from the sale of assets of other properties fell. This, according to a recent research note from Statistics Canada, entitled High-income Canadians, 2022.
Overall, inflation adjusted income levels for all tax filers remained higher during the period being studied when compared to income levels prior to the pandemic. That said, average income fell by 5.1 per cent to $586,900 among the top one per cent of tax filers in 2022; among the top 0.1 per cent, incomes fell 6.9 per cent to just over $2-million, on average, and the top 0.01 per cent saw their incomes drop 9.9 per cent to more than $7.4-million. Comparatively, the bottom 50 per cent of tax filers saw their income decrease 7.6 per cent to $20,800.
Investment income
Only women in the top 0.1 per cent saw their average income increase by $30,600 between 2021 and 2022, on average, mainly due to returns on investment income. “While the wage and salary income of women in the top 0.1 per cent fell by 5.8 per cent from 2021 to 2022, the effect of this decrease was countered by substantial increases in income from dividends, limited partnerships, rental income and investments, together accounting for a 22.9 per cent increase,” they write.
The report also looks at the slowing growth in dividend income and capital gains and examines high-income persistence: “Composition of the top income groups change over time, with many tax filers moving into and out of the high-income categories. Observing the top one per cent of income tax filers in 2022 shows that the majority (69.1 per cent) were in the same income group in 2021, but that less than half (49.2 per cent) were there in 2017.”
