Canadians needed to earn at least $293,800 in 2023 to crack the top 1% of income earners, according to new data from Statistics Canada released Friday. The average total income for this elite group stood at $606,000, down 0.6% from the previous year after adjusting for inflation.
The figures come from the Longitudinal Administrative Databank, which tracks a 20% sample of Canadian tax filers over 42 years. The data provides a snapshot of income trends as the country continued adjusting to post-pandemic economic conditions, including 3.9% inflation and rapid population growth driven by non-permanent residents.
Most Canadian income groups saw declines in 2023. The average income for all tax filers dropped 0.3% to $59,900, following a 3.2% decrease in 2022. The top 0.1% of earners saw their average income fall 1.0% to $2.1 million, while the top 0.01% bucked the trend with a 0.2% increase to $7.7 million.
Despite the recent declines, inflation-adjusted average income remained higher across all groups in 2023 than before the pandemic in 2019.
Women gain ground in top income brackets
Women made up 26.4% of the top 1% of tax filers in 2023, up 0.8 percentage points from 2022. Their average income in this group increased 0.4% to $547,500, while men’s average income declined 0.8% to $627,000.
The share of women in the top 0.1% also grew, rising from 19.1% to 20.7%. However, both men and women in this bracket saw their average incomes decline year-over-year.
Investment income replaces wages for highest earners
The income composition of top earners shifted notably away from employment income. From 2016 to 2023, the proportion of total income from wages and salaries for the top 0.01% fell from 67.3% to 50.8%.
Dividends, interest and other investment income now represent 43.8% of total income for the top 0.01% of earners, compared to 35.4% for the top 0.1% and 26.4% for the top 1%. For the bottom 99% of filers, these sources account for just 6.4% of total income.
The strength of financial markets in 2023 partly explains the higher dividend and interest income, according to Statistics Canada.
Income thresholds and persistence
To qualify for the top 0.1%, Canadians needed to earn $930,100 or more. The top 0.01% threshold stood at $3.5 million.
The one-year persistence rate — measuring how many people remain in the top 1% from one year to the next — rose to 70.9% in 2023, up 1.8 percentage points. Ontario had the highest persistence rate at 72.5%, while the territories recorded 60.2%, more than 10 percentage points below the national average.
Statistics Canada noted that slower GDP growth and rapid population increases affected incomes across the board in 2023. The agency is combining two income data programs into the new T1 Family File Plus, which will delay the 2024 data release from fall 2026 to spring 2027.
