Skip to main content

Canada sees resurgence in widening income gap between top 1% and bottom 50%

21 November 2023 By Angeli Galvez

Photo: Nate Johnston

photo of man on tall stand and man on small stand representing inequality

In good times and in bad, through a pandemic and inflation, the richest Canadians keep getting richer, according to Statistics Canada data from 2015 to 2021. 

Income Disparity 

High Income Tax Filers in Canada by Statistics Canada shows a significant income difference between the top 1% and the bottom 50%. The top 1%'s average income climbed from $529,600 in 2015 to $579,100 in 2021, indicating a consistent upward trend. In contrast, the lowest 50% 's average income increased more slowly, rising from $16,200 in 2015 to $21,100 in 2021. 

This growing disparity indicates a trend of rising economic inequality. 

The average income of the bottom 50% also increased over the period, though at a comparatively modest rate. The income for this group rose from $16,200 in 2015 to $21,100 in 2021. While there is growth, the disparity between the top 1% and the bottom 50% has widened over the years.



Proportion Ratio:

These Proportion Ratios represent how many times the average income of the top 1% exceeds the average income of the bottom 50% for each respective year. The increasing trend in these ratios further indicates a growing income disparity between the top 1% and the bottom 50% over the years. 

In 2015, the Proportion Ratio was approximately 32.72, signifying that the average income of the top 1% was over 30 times higher than that of the bottom 50%. Over the ensuing years, there was a fluctuating trend in the Proportion Ratio. By 2020, the ratio decreased to around 23.45, suggesting a marginal reduction in income disparity. However, in 2021, the ratio increased again to approximately 27.47, indicating a resurgence in the widening of the income gap between the top 1% and the bottom 50%.



Growing inequality highlights need for more progressivity in Canada’s tax system:

The tax system has a role to play in narrowing the gap between the rich and the rest of society. Canadians for Tax Fairness has identified a number of tax measures to redistribute wealth and raise revenue to support lower-income families. For example, only half of Canada’s capital gains are taxed, which disproportionately benefits the richest top 1% and 10%. Costing also shows that an annual wealth tax on the 1% could raise $32 billion annually. At a time when lower and middle-income families are facing higher costs of living and other economic challenges, it is important for the tax system to do a better job of reducing inequality.


Photo: Nate Johnston