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WHAT IS AN AVERAGE INCOME?

September 5, 2017

Statistics Canada compiles oddly confusing information that seems to suggest that average Canadian income levels are higher than they really are.  Part of the problem is that in their calculations they factor high income earners into the averages.   

Of an estimated 25.5 million people – from the 2011 calculations – we find that the average income was some $30,180.  However, without the raw data that number does not provide very much information.  Nonetheless we do know that slightly more than 1.5 million people had incomes above the $100,000 level and less than half a million of those had incomes in excess of $200,000.  Approximately 10% of the, 1.5 million, high income people are on the Ontario Sunshine List – being paid by the government. 

Significantly to the discussion, the population of Canada is only about 35 million and a substantial number of those people are not in the workforce at all.  Accordingly, one can only conclude that income splitting accounts for the many included in the large number of income recipients.  It is also worthy of note that only higher income recipients split their income in order to take advantage of tax breaks.  We must conclude then that many of the higher income recipients reported by Stats Can belong to the “income splitting” group.

According to an article published in the Globe and Mail the top 10% of income recipients receive 28.1% of all the income reported.  When we exclude from Stats Can’s calculations those earning $100,000 or more we find that the Median Canadian Income drops to less than $24,000 per year. 

Is your income closer to the Stats Can average or the revised Stats Can average?