This just in: The rich are getting richer
The richest people in Canada got a lot richer in 2021, even as the poorest half of all tax filers saw their incomes decline by $1,400.
That’s one of the main takeaways of a new data analysis released by Statistics Canada on Friday looking at tax filings from 2021 and comparing them with the previous year.
According to the data agency, incomes of the top one per cent of all tax filers in Canada rose by 9.4 per cent to $579,100 in 2021.
The 10 per cent pay bump for the top one per cent contrasts with incomes moving in the opposite direction for many other Canadians.
“Filers in the bottom half of the distribution saw their average total income decline $1,400 from 2020 to $21,100 in 2021,” Statistics Canada said in a release on Friday. The agency said most of that decline was due to the lowering or ending of pandemic-era government programs like CERB and CEWS.
While the one per cent got an almost 10 per cent pay bump, the tiny group of people above them fared better still. “Filers in the top 0.1 per cent saw their average total income increase by 17.4 per cent to $2,086,100, while those in the top 0.01 per cent saw their average total income increase 25.7 per cent to $7,731,400.”
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Those figures do not include capital gains, which are increases in the value of things like real estate, stocks and other businesses
Stephen Gordon, a professor of economics at Université Laval, said the increase is even more stark if capital gains are included, because just about every type of asset gained in value in 2021.
Capital gains are mostly concentrated in a comparatively small number of hands: StatsCan says only about 12 per cent of tax filers had any sort of capital gain to report in 2021, with the average coming in at $37,600. Five per cent of recipients received $131,100 or more.
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“2021 was a year where the economy was overheating and interest rates were still at rock bottom, which boosted things like stock prices and housing prices,” Gordon said in an interview on Friday. “Anybody that had assets saw their value go up quite a lot, and that’s mainly at the top end of income distribution.”
If capital gains are included, average income for the top one per cent was $811,800 in 2021, up 20.5 per cent from 2020. In 2021, the average income for the top 0.1 per cent was $3,230,000, up 27.6 per cent, and for the top 0.01 per cent was $12,542,100, up 30 per cent.
If capital gains are stripped out, the income distribution looks a lot less stark.
“The median income for all tax filers is still above what they were in 2019,” Gordon said.
Income gap getting wider
Taken together, the figures released Friday show that the share of income taken in by the richest one per cent of Canadians got even more top-heavy during the years in question.
The top one per cent received 10.4 per cent of all the aggregated income earned by tax filers that year, “up from 9.4 per cent in 2020 and the highest level posted since 2015,” StatsCan reported.
If there was a sector of society where income distribution got more equitable during the year, it would be the balance between men and women within the one per cent.
“Overall, women composed 26.1 per cent of the top one per cent of income tax filers, up from 25.4 per cent in 2020,” the data agency reported. “The share of women in the top one per cent has been increasing steadily since this series started in 1982, when the share was 11.4 per cent.”
