Canadian Income Statistics

January 30, 2025

• Insolvency News
• Something to Think About

Average income in Canada can be calculated in various ways, such as using the mean, median, or mode. Statisticians tend to choose the method of averaging that best suits their reporting objectives.

Mean Income

The mean income is calculated by summing all reported incomes and dividing by the total number of people who received income. However, this figure may not accurately reflect the state of the economy and often comes with explanatory notes.

In 2023, approximately 33 million Canadians filed tax returns, with an average (mean) reported income of $57,000. This means that if each filer earned $57,000, the total reported income would amount to about $1.9 trillion.

It is important to note, however, that the population of Canada is estimated at around 45 million, which includes both registered and non-registered immigrants. Among the population, approximately 12 million people do not report any income, including children and individuals who are fully dependent on family. While some may be evading taxes, the majority fall into these categories.

Although the reported mean income of $57,000 might suggest that Canadians are doing relatively well, statistics can be framed in more favorable terms by focusing on the “mean full-time employment income.”

Full-Time Employment Income

It is essential to understand that not all income reporters are reporting employment income, and an even smaller proportion are reporting full-time employment income. Moreover, the definition of full-time employment has changed over time. Full-time work is currently defined as working 30 hours per week, which may include several part-time or gig jobs, whereas it was once defined as 35 hours or more per week.

When calculating the mean full-time income, all reported income (including high earners) is divided by the number of full-time employees, which totals 16 million people. As a result, the government reports an average (mean) full-time income of $63,000.

Median Income

The median is another statistical tool often used to present income data more favorably. For those unfamiliar with the concept, the median represents the middle value in a range of numbers. For example, in the range 1-7, the median is 4; in the range 1-5, the median is 3.

The government reports that the median income is $68,400, which presents a more favorable picture than the mean figures of $63,000 or $57,000. However, this statistic also warrants further examination.

Of the estimated 45 million Canadians, approximately 16 million are employed full-time. This means that only 20% of Canadians earn $63,000 or more annually. In other words, over 80% of Canadians earn less, with many earning significantly less.

Examining the median income for all tax reporters provides additional insight. For 32 million tax filers, the median income is around $41,000. This means that half of the people reporting income earned more than $41,000, while the other half earned less. Factoring in non-income earners reveals that 63% of Canadians earn either nothing or less than $41,000 annually.

The Official Poverty Line

Under the Trudeau government, the official poverty line was introduced, defined as 50% of the median reported income. This adjustment created the appearance of reducing poverty by elevating more individuals above the poverty threshold.

To clarify, the poverty line is not based on half of the median full-time employment income but half of the overall median income. Thus, if pre-tax income is below $20,500, one is considered to be living in poverty. Those earning nothing are not included in these figures.

Household Income and Government Employees

Household income is frequently reported by the media because it is often higher than individual income and presents a more favorable impression of national economic health.

However, household structures have evolved, with some households now comprising multiple generations or extended families living together. Adult children may remain at home due to financial constraints, and retirees may live with their children.

The Ontario Sunshine List, introduced in 1996 by Mike Harris, aimed to create transparency for government employees earning over $100,000 annually. Today, over 572,000 government employees in Ontario earn more than $100,000 per year.

However, when adjusted for inflation, the value for inclusion on the list would be closer to $180,000, meaning only about 21,000 of the 300,571 people on the list should qualify.

Additional income statistics reveal that about 25% of all full-time employees in Canada work for some level of government, contributing little to the tax base. Furthermore, 21% of full-time income earners earn more than $100,000 annually, but a significant portion of this group works in the public sector.

Only 15.75% of these high-income earners are employed in the private sector. This 21% represents approximately 9% of total income earners, or about 7.5% of Canadians.

This analysis underscores the need for careful consideration when interpreting Canadian income statistics, as data presentation can significantly affect perceptions of economic prosperity.

1. Statistics Canada Income Data: To access income statistics, visit the Statistics Canada website. The relevant sections include reports on income distribution, employment statistics, and population data.
2. Tax Filer Data for Canada: For specific information on tax returns and average income, you can refer to Canada Revenue Agency (CRA) for official tax filer data and analysis.
3. Canada Population Estimates: Population estimates can be found on Statistics Canada’s Population Estimates page.
4. Full-Time Employment Definition: Information on the definition of full-time employment and labor force participation rates is available on Statistics Canada’s Labour Force Survey.
5. Median and Mean Income Data: Median and mean income figures can be verified through Statistics Canada’s Income Highlights.
6. Ontario Sunshine List: Information on the Ontario Sunshine List, including the inflation-adjusted income, can be accessed on Ontario’s Public Sector Salary Disclosure.
7. Canadian Poverty Line: For official poverty statistics and details on the definition of the poverty line, visit Canada’s Poverty Reduction Strategy.
8. Household Income Statistics: Household income data is available on Statistics Canada’s Household Income and Wealth Portal.

These links would provide some supporting data and references needed for the document.