Richest one per cent of Canadians earn one-tenth of all income

After rising for nearly three decades, the richest 1 per cent of Canadians shrank as a percentage of all tax filers in 2010, a study by Statistics Canada says.

The top 1 per cent earned 10.6 per cent of all reported income that year, the agency said in a publication released Monday.

That was down from a pre-recession peak of 12.1 per cent reached in 2006, according to the report, called “High-income trends among Canadian tax filers: 1982 to 2010.”

However, the decline may be a temporary blip, some observers said.

“It could reflect the timing of the survey. We had a significant recession in late 2008 and early 2009,” said TD chief economist Craig Alexander. “I’m not convinced the decline in share will persist. I suspect as the economic recovery takes hold, the share of income going to the top 1 per cent will increase.”

The report comes amid growing public concern about the gap between the highest income earners and everyone else, a sentiment captured by the Occupy Movementseries of protests.

Over time, the gap between the highest income earners and everyone else has been widening, the study by Statistics Canada also confirmed.

In the 1980s, the top 1 per cent earned 7 per cent of all income, the study found. By the 2000s, the figure had risen to 11 per cent as the incomes of the richest Canadians continued to rise while everyone else’s stagnated, the figures show.

“What happened between 2006 and 2010 was, of course, the big recession, where what got hit the most was investments and people’s bonuses and profit sharing,” said Brenda Lafleur, a director with the Conference Board of Canada. “It’s still a heck of a lot higher at 10.6 per cent than it was in the ’80s when it was 7 per cent.”

More worrisome, she said, is the report’s findings that a higher percentage of the richest Canadians are remaining rich over time, which suggests it’s becoming tougher to move up the income scale in Canada.

Among the top 1 per cent of tax filers, 72 per cent had been in that bracket for more than a year in 2010, said the study, which was based on 25.5 million tax filings.

In 1983, only two thirds had been in the top 1 per cent for more than a year.

To qualify for the top 1 per cent, a Canadian had to earn at least $201,400 in 2010.

That was up 37 per cent from 1982, when the top 1 per cent earned at least $147,500. All figures are expressed in constant 2010 dollars.

In 1982, the top 1 per cent earned 7 times the median income for everyone else.

But 2010, the richest were earning 10 times what everyone else earned.

Among the richest income earners, men continued to dominate but women made significant gains over the past three decades, the study found.

Women accounted for 21 per cent of the highest income earners in 2010, nearly double the level seen in 1982, the study said.

Jobs, rather than investments, played an increasingly important role among top income earners.

Just over two thirds of men earned their income from work in 2010, up from half in 1982.

Among the richest women, the effect was even more pronounced, with half earning their income from jobs in 2010, up from just over 20 per cent in 1982.

The top 1 per cent of tax filers paid a smaller share of federal and provincial or territorial income taxes in 2010, at 21.2 per cent. That was down from a peak of 23.3 per cent in 2007.

However, it’s still higher than in 1982 when the richest Canadians paid just 13.4 per cent of all income taxes, the study said.

Original Article
Source: the star
Author: Dana Flavelle