Canada is among the developed countries in the world. Hence, it’s safe to assume that its citizens enjoy many luxuries, and it has plenty of social safety nets to uplift them.
But income inequality is a problem that still persists in Canada. In this article, I’ll discuss the average income in Canada and its relevance in understanding the subtle and often overlooked earning divergences across various social, economical and ethnic groups.
Whether you are interested in data-driven insight or want to make the most of your income, this article could be helpful to you.
Average income in Canada
For the sake of clarity, average income means median income. Any statistics related to average income Canada, cited here in this article, will refer to median income. In 2023, the average income in Canada is $60000 Canadian Dollars (CAD). What it means is half the working population earns more than $60000 CAD a year, and the other half earns less than that amount.
Of course, regional and other differences play a big role in deciding the income. Canada is a huge country, so how much money one makes can vary a lot depending on where they live. In general, people who live in cities make more money than people who live in rural areas. People who live in suburbs fall somewhere in the middle.
Canada’s Cost of Living
Like most other developed countries, the cost of living is very high in Canada. So is the standard of living. Hence, they balance out each other. Regional differences, as stated earlier, matter big time. Cities like Toronto, Brampton, Vancouver, Kelowna, etc have a high cost of living. On the other hand, cities like Regina, Windsor, Saskatoon are among the cheapest cities in Canada.
Regional Income Inequality
In Canada, regional differences can be found in income inequality. For example, highest levels of income inequality can be observed in the western provinces of Alberta and British Columbia. On the other hand, the lowest levels of income inequality can be found in eastern provinces of Newfoundland and Labrador.
And it’s not simply a correlation as causative factors are behind this inequality. One of them is the presence of resource-based industries. The western provinces of Alberta and British Columbia are heavily reliant on mining, oil and gas. These industries tend to be cyclical and can experience large swings in employment and income levels.
Congregation of a high number of service-based jobs in certain geographical areas also contribute to income inequality. Most large brands have their retail outlets in the major cities like Toronto, Montreal, Vancouver, Edmonton, etc. As a result, many low-paid service workers move to those cities from other parts of the country, resulting in a stark income inequality. For example, in Toronto, the top 1% make 15 times more than the bottom 50% a year.
In my opinion, discussing the average income in Canada is incomplete without understanding the true depth of income inequality. That’s because as explained above, average income refers to the median income, and the top and bottom incomes help us comprehend the deviation from the median income.
Organized vs Unorganized Sector
Only 30% of the Canadian workforce is employed in the organized sector, meaning the remaining 70% work in the unorganized sector, and are not a part of a labor union. Not being a part of the labor union means not having any bargaining power to ask for higher wages.
People working in the unorganized sectors are low-skilled and don’t have enough experience. They have to work for lower wages and for unpaid extra time. The distribution of the working population across organized and unorganized sectors not only influences income inequality, but also outlines the average income in Canada.
Average income across professions
Physicians and surgeons earn the highest in Canada. They make over $250K a year. On the other hand, personal support workers, retail sales people and waiters and waitresses make the least amount, approximately $34K a year. High-paying professions are healthcare and medicine, hardware engineering, It and software development, legal services finance and investment, etc. Low-paying professions include retail salespersons, labors, cleaners, cashiers, customer service jobs, etc.
Industries with the Most Growth
- Finance and Insurance – +18.0%
- Forestry and Logging – +9.5%
- Retail – +6.3%
- Professional, Scientific and Technical Services – +6.2%
- Construction – +6.1%
Industries Where the Average Annual Salary Has Declined
- Administrative and Support – -1.1%
- Real Estate (Rental/Leasing) – -1.1%
- Information and Culture Industries – -2.2%
- Education – -3.6%
- Management of Companies and Enterprises – -6.1%
Average income in Canada by Ethnicities
Canada is home to many ethnic groups. Income disparities can be found among them. Europeans are the highest earning group. They make $68000 CAD a year. Chinese and South Asians are close behind. Indigenous people make the least amount of money, $57000 CAD a year. Many immigrants visit Canada every year, and they make substantially less than Canadian-born people, due to working in extremely low-paying jobs, and inability to speak English and French with fluency.
Average Income in Canada by Gender
Men, on average, earn $70000 CAD a year, while women earn $66000 a year. Occupational segregation owing to men and women working in different industries, men having more experience than women, and men working in higher-paying jobs are some of the reasons behind gender-based income discrepancy in Canada.
Conclusion
The Canadian government has taken various initiatives to reduce the income disparity between the groups mentioned above. Some of the initiatives are showing results, while some will take time to yield results. The cost of living has been increasing in recent times, so the average income Canada also needs to increase for people of Canada to sustain their living standards.
