Canadians are paying the lowest income taxes in years
Canadians are handing over the smallest share of their paycheques to the taxman since the global financial crisis, according to new data from Statistics Canada.
On average, 11.4 per cent of individuals’ modified total income went to federal and provincial or territorial taxes, Employment Insurance (EI), and the Canada Pension Plan in 2017.
That’s a drop from the 11.8 per cent Canadians paid in 2016, which Statistics Canada says was due largely to a drop in provincial income tax rates and federal EI contributions — making up for a slight increase in federal effective income tax rates.
It’s also the second-lowest rate in 26 years. Even 2009 and 2010’s rate was only marginally lower at 11.3 per cent.
Quebec had the largest decline with the provincial effective rate falling from 5.5 per cent in 2016 to 4 per cent in 2017. This was due to a cut to the bottom income tax bracket from 16 per cent to 15 per cent, and a bump in the basic personal exemption, which went from $11,500 to $14,890.
Even the country’s top one per cent paid less because of lower provincial taxes, despite the introduction of a new federal tax bracket that raised the highest rate from 18.4 per cent to 18.8 per cent in 2016. The richest Canadians paid 31.3 per cent in 2016, but that number dropped to 30.9 per cent in 2017.
Our taxes show that the old adage of the rich getting richer holds true in Canada. The average income for all Canadians went up by 2.5 per cent to $48,400 in 2017, while the top one per cent enjoyed an 8.5 per cent increase to $477,700.
Incomes for the bottom half of taxpayers went up 2.4 per cent to $17,200, but growth was the smallest for low-income earners at 1.9 per cent.
Over 92 per cent of wealthiest people in the country are clustered almost entirely in Ontario, Alberta, Quebec and British Columbia.
Women made up 24.2 per cent of the one per cent in 2017, up from 23.9 per cent in 2016 and more than double the proportion in 1982.
Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains.
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