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

Rainbow Saddleback faces 15 break and enter related charges

Maskwacis, Wetaskiwin men charged by RCMP in relation to break and enters

Five things you should know about Impaired Driving

Too many risks, no rewards for impaired driving

Pigeon Lake re-zoning defeated by 2-5 county council vote

County of Wetaskiwin council denies Frank Dyck’s re-zoning

Special guest to city rocked a Wetaskiwin stage Aug. 31

From ferries to festivals, Jeremy Dallas known for entertaining audiences

Smoking fire safety tips, for both indoors and out

Prevention is easy with a bit of forethought

No holiday for campaigning leaders on Thanksgiving weekend, but pace slows

There is a little over a week to go before election day, and advanced polls are now open

PHOTOS: Kipchoge becomes first runner to dip under 2 hours for marathon

Olympic champion and world record holder from Kenya clocks 1 hour, 59 minutes and 40 seconds

Mourners gather for slain teenager’s funeral in Hamilton, Ont.

Devan Bracci-Selvey’s obituary says he also had ‘a loving heart for animals’

1/3 of Canadian men won’t share their feelings for fear of being ‘unmanly’: report

Fifty-nine per cent of men said society expects them to be ‘emotionally strong and not show weakness’

Dog owners have reduced risk of dying from heart problems, says researcher

Researchers analyzed data on more than 3.8 million people taken from 10 studies

Winterhawks ice Rebels 5-0

Rebels take on Medicine Hat on the road Saturday night

Deceased adult male recovered from Battle River in Ponoka

Incident not considered suspicious by RCMP

Yukon declares climate emergency

Territory joins nearly 500 federal, provincial and municipal governments to do so in the last year

Final debate behind them, federal leaders begin sprints to Oct. 21 voting day

The final stretch in the federal election campaign has begun

Most Read