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.

Just Posted

Climate, reconciliation and industry top all candidates agenda in Terrace

Debate was the candidate’s last opportunity to address voters in a public forum

Saik’uz and Stellat’en First Nations court battle against RioTinto Alcan to start next week

Saik’uz and Stellat’en First Nations are taking Rio Tinto Alcan to court over their functioning of the Kenney Dam that affects the Nechako River

Climate change, economy and reconciliation take centre stage at Oct. 15 All-Candidates Forum

Six of the eight candidates were in attendance at the Smithers event

Former Terracite Mathew Fee finishes cross-Canada trip on BMX bike

Fee biked more than 7,000 kilometres to raise awareness about addiction treatment

VIDEO: First all-female spacewalk team makes history

NASA astronauts Christina Koch and Jessica Meir did work on International Space Station’s power grid

Zantac, the over-the-counter heartburn drug, pulled in Canada, U.S.

Health Canada also investigates possible carcinogen in some ranitidine drugs

B.C. public safety minister says cannabis edibles not in stores til January

Mike Farnworth says he wants regional issues considered when it comes to licensing

Greta Thunberg calls for climate action in Alberta, but doesn’t talk oilsands

Swedish teen was met with some oil and gas industry supporters who came in a truck convoy

Scheer denies spreading ‘misinformation’ in predicting unannounced Liberal taxes

Conservative leader had claimed that a potential NDP-Liberal coalition could lead to a hike in GST

Council asks to limit cruise ship visits to Victoria harbour

Mayor says motion is not meant to curtail current visits or limit local cruise industry expansion

Chilliwack man pleads guilty in crash that killed pregnant woman

Frank Tessman charged under Motor Vehicle Act for accident that killed Kelowna school teacher

EDITORIAL: Is researched, reasoned journalism the next endangered species?

#Newspapersmatter now more than ever: “In print that privacy is yours to keep”

Kawhi Leonard, former Toronto Raptor, welcomed back to Vancouver at pre-season game

Fans go wild at pre-season game between L.A. Clippers and Dallas Mavericks at Rogers Arena

Most Read