What is the Average Income in Canada?

Ever wondered how your paycheck falls amongst Canadians? Explore the average income in Canada, and the dynamics shaping incomes and their effects on life decisions.

14 Minute read

Originally published: September 28, 2023

average income in Canada

Ever wondered how your paycheck falls amongst Canadians? Explore the average income in Canada, and the dynamics shaping incomes and their effects on life decisions.

14 Minute read
Originally published: September 28,  2023

average income in Canada

Have you felt the pulse of Canada’s economic heartbeat? 2023’s economic landscape isn’t just numbers on a chart — it’s about you, me, and our neighbours. The country’s financial portrait speaks to each of us, influencing everything from our monthly budgets to our life insurance decisions. Let’s embark on a journey through Canada’s latest income flows, and see how they ripple into our insurance choices, regional differences, and even those age and gender income gaps we whisper about. Dive in with us into the real-life world of Canadian incomes and their intertwined dance with the insurance realm though this comprehensive guide.

In the constantly evolving economic environment of Canada, understanding the key income trends for 2023 has never been more crucial. Canada’s economic health can be gauged through various metrics that give us a bird’s-eye view of its strengths and areas of potential concern.

  • 🏙️Median Income Rise: Notable increase, particularly in major urban centers.
  • ⚖️Income Disparities: Gaps widened among certain sectors and demographics.
  • 💼Remote Work Impact: Growing prevalence led to modified wage structures in many industries.
  • 🍃Sustainable Energy Boost: Rise in opportunities in this sector changed income brackets.
  • 🗺️ Regional Variations: Some provinces outpaced others in terms of income growth.

Canada’s income landscape underwent significant shifts. The median income observed a notable rise, especially in major urban centers, signaling stronger earning capacities. However, this growth wasn’t universal. Certain sectors and demographics faced widened income disparities, raising concerns about equitable wealth distribution. The embrace of remote work reshaped wage structures in various industries, reflecting the evolving nature of the modern workplace. Concurrently, as Canada leaned towards sustainable energy solutions, new income opportunities emerged, with some sectors benefiting more than others. Yet, not all regions experienced growth equally; certain provinces notably outpaced others, highlighting the need to address regional disparities.

The Relationship Between Average Income and Life Insurance Premiums

As Canadians’ disposable incomes rise, so does their capability to invest in comprehensive life insurance policies. But how does one determine the ideal amount of life insurance coverage? Several thumb rules can guide this decision:

 The Relationship Between Average Income and Life Insurance Premiums

Income rule: 

The most basic rule is the income rule, which suggests that one’s insurance need should be six or eight times their gross annual income. For instance, someone earning a gross annual income of $60,000 should have life insurance coverage ranging from $360,000 (6 x $60,000) to $480,000 (8 x $60,000).

Income plus expenses: 

A more comprehensive approach takes into account not just income but also significant expenses. According to this rule, your insurance needs would be five times your gross annual income plus any mortgage, personal debt, final expenses, and special funding needs, such as college tuition. For example, if you earn a gross annual income of $60,000 and have combined expenses totaling $160,000, your insurance need would be $460,000 ($60,000 x 5 + $160,000).

Insurers frequently adjust their premiums based on average income levels, risk factors, and life expectancy. As average incomes grow, Canadians now have the flexibility to choose from a more extensive range of life insurance products that cater to their individual needs and financial objectives. This flexibility ensures that they can secure their families’ futures while also achieving their long-term financial goals.

Provincial Income Variations and Their Effect on Insurance Choices:

Life insurance is not just a tool to protect against unforeseen circumstances, but also a reflection of our financial circumstances and priorities. In Canada, there are noticeable variations in average annual salaries among provinces, which can influence life insurance choices. Below, we take a look at how provincial incomes have changed from 2021 to 2022, and how these changes might influence life insurance decisions for Canadians.

Map of Canada displaying median income by province in 2021
 Map of Canada displaying median income by province in 2022

Income Fluctuations Across Provinces: 2021-2022

ProvincesAverage Annual Salary 2021Average Annual Salary 2022Percentage Change
Nunavut87 35582 875-5.13
Yukon61 81267 707+8.73
Northwest Territories65 01764 056-1.48
Alberta61 86560 000-3.60
Newfoundland and Labrador55 50857 900+4.20
Manitoba49 66159 426+17.90
Saskatchewan54 37151 300-5.65
Ontario55 52452 600-5.23
British Columbia53 41650 749-5.12
Quebec51 73553 300+3.03
Nova Scotia48 47045 900-5.45
Prince Edward Island45 91247 515-2.70
New Brunswick49 51143 400-12.34

How Income Fluctuations Impact Life Insurance Choices

Income plays a significant role in determining the type and extent of life insurance one might choose. 2023 has seen varying trends across different provinces in Canada, with these shifts directly affecting residents’ life insurance decisions.

In provinces such as Yukon, Newfoundland and Labrador, and Quebec, there’s cause for optimism. These regions have celebrated an uptick in average salaries compared to the preceding year. With more disposable income at their disposal, residents are now primed to reconsider their life insurance stance. It’s not just about maintaining existing policies; it’s about potentially expanding coverage or delving into policy variants that might’ve previously seemed a luxury.

On the other hand, provinces like Nunavut, Alberta, and Ontario didn’t fare as well. A downturn in average salaries can prompt a re-evaluation of expenses, and life insurance isn’t exempt. Residents might find themselves scouting for policies that promise the same protection at a leaner premium. For some, especially those on tight budgets, it could mean reducing coverage to keep policies sustainable.

Significant percentage changes, be it the impressive growth in Manitoba or the concerning decline in New Brunswick, likely caused notable shifts in residents’ insurance purchasing behaviors. It’s a spectrum: from those in Manitoba who might now view premium policies within reach to the New Brunswickers who could prioritize affordability over extensive coverage.

In these ever-changing financial landscapes, one constant remains: the value of expert advice. Whether you’re contemplating tweaking your existing policy, embarking on your life insurance journey, or somewhere in between, a financial advisor’s counsel can be invaluable. For a more informed start, you might find insights in our pieces on “How Much Life Insurance Do I Need in Canada” and “10 Biggest Life Insurance Companies in Canada.

Income Trends: Rising Industries vs. Declining Sectors:

Income Trends: Rising Industries

Industries on Ascent

IndustryRankRevenue Growth
Flour Milling127.3%
Semiconductor Machinery Manufacturing220.9%
Ski & Snowboard Resorts316.6%
Bars & Nightclubs:416.1%
Travel Agencies514.2%
Full Service Restaurants611.2%
Movie Theaters710.5%
Cannabis Production810.5%
Employment & Recruiting Agencies910.2%

Industries on Decline

IndustryRankRevenue Growth
Oil Drilling & Gas Extraction1-20.2%
Pesticide Manufacturing2-17.1%
Mining, Oil & Gas Machinery Manufacturing3-9.7%
Oil & Gas Field Services4-8.5%
Footwear Wholesaling5-6.8%
Newspaper Publishing6-5.8%
Natural Gas Distribution7-5.4%
Office Stationery Wholesaling8-5.3%

Income Trends - Bottom Sectors of Employment

In 2023, the Canadian job market and industrial landscape underscored the nation’s resilience and adaptability. On the one hand, burgeoning sectors like Flour Milling and Semiconductor Machinery Manufacturing showcased the nation’s prowess in tapping into global demand and adjusting to pandemic-induced challenges. The rebound of leisure industries such as Ski & Snowboard Resorts, Bars & Nightclubs, and Movie Theaters reflect a nation rejuvenating post-pandemic. Conversely, the declining industries serve as a testament to the ever-evolving nature of the economy. The challenges faced by sectors such as Oil Drilling & Gas Extraction, and Newspaper Publishing reveal the shifts prompted by technological advancements, global crises, and consumer behaviors. As Canada propels forward, understanding these trends becomes essential, not just for investors and job seekers, but for anyone keen on grasping the intricacies of the country’s economic tapestry.

Income Distribution by Age

The disparity in earnings based on age groups is a reflection of the evolving Canadian job market. While the older demographic (55-64) is enjoying the fruits of career progression and investments, the younger age group (25-34) is navigating the early stages of their careers amidst global economic challenges. Insurers can tailor their offerings, providing comprehensive plans for older Canadians and flexible, growth-oriented plans for younger individuals.

Income Distribution by Age in Canada (2021)

Age GroupNumber of Persons Number with IncomeAverage IncomeMedian Income
16-244 055 0003 777 00020 00016 400
25-5415 018 00014 878 00064 50052 400
55-645 182 0005 105 00061 40046 400
65+6 891 0006 875 00044 30033 100

Age Group 25-54 years:
Highest Average Income: $64,500
Prime Working Years: Highest income due to being in prime working years.

Age Group 55-64 years:
Average Income: $61,400
Culmination of Career: Reflects benefits of work experience and peak of career trajectories.

Age Group 16-24 years:
Lowest Average Income: $20,000
Early Career or Education: Lower income due to many being in early career stages or pursuing education.

Age 65 and over:
Average Income: $44,300
Retirees’ Income Sources: Combination of retirement benefits, pensions, and other sources.

The median incomes provide additional insights, with every age group’s median income being somewhat lower than their averages, indicating income disparities within the cohorts. As we consider these figures, it’s vital to acknowledge the varying financial needs and responsibilities that come with each life stage, emphasizing the importance of tailored financial and life insurance planning.

Gender Income Disparity

CategoryMales (2021)Females (2021)
Number of Persons15 374 00015 771 000
Number with Income 15 157 00015 478 000
Aggregate Income 940 123 000 000713 850 000 000
Average Income62 00046 100
Median Income47 00036 400

The table above depicts a clear income disparity between males and females in Canada for the year 2021. Males, on average, earned a higher income compared to females. This distinction is vividly observed in both the average and median income metrics. The average income for males was recorded at $62,000, whereas females earned an average of $46,100. Similarly, the median income for males was $47,000, in contrast to females’ $36,400.

Such differences amplify the long-standing challenge of gender income inequality in Canada. Despite the vast numbers in both categories having an income source, there remains a significant wage gap. Various factors contribute to this wage discrepancy, including career choices, working hours, societal norms, and potential biases. Addressing this inequality is crucial for fostering a fair financial environment in Canada. Furthermore, when contemplating life insurance coverage, it’s essential to ensure that policies genuinely mirror real-world financial scenarios.

Balancing Life Insurance with High Tax Expenditures:

With an average Canadian household projected to spend about $41,500 on taxes in 2023, managing finances becomes crucial. Balancing necessary expenses, saving for future goals, and investing in life insurance requires meticulous planning. Life insurance, in this context, isn’t just a protective measure but also a strategic investment, ensuring that families remain financially stable despite heavy tax burdens.

Minimum Wage vs. Life Insurance: A Growing Concern? 

Amid rising costs of living and the overarching economic dynamics of the modern age, the topic of minimum wage is more relevant than ever before. As provinces across Canada adjust their minimum wages, it becomes evident that a significant portion of the population may be living paycheck to paycheck, making it challenging to invest in long-term financial security products like life insurance.

Province2023 Minimum Wages ($)
British Columbia15.65
New Brunswick14.75
Nova Scotia14.50
Prince Edward Island14.50
Newfoundland and Labrador15.00
Northwest Territories15.20

For those earning at these minimum wage rates, every dollar counts. The pressing challenge here isn’t just about meeting daily needs, but also about looking ahead, and envisioning a secure financial future. While some might argue that life insurance is a luxury for those earning a minimum wage, the counterpoint stands strong: it’s a necessity, ensuring that families aren’t burdened with financial hardships in the unfortunate event of a loss.

Affordable life insurance solutions tailored for this demographic are not just business strategies; they represent a more inclusive and empathetic approach towards financial services. Insurance providers have an opportunity here—to design products that fit the unique needs of minimum wage earners. This can range from flexible payment plans to coverage options that align with their financial realities. 

What it Means to be a Top 1% Earner in Canada

Canada, with its diverse economy and vast resources, boasts of a varied spectrum when it comes to income. While the national average income is just over $51,000, there are those who earn many times more than that. But what does it mean to be part of the elite 1% or even the top 10% of earners? Let’s dive in.

A Glimpse at the Top 1%

The top 1% of Canadian earners have an astonishing average annual income of $512,000. These individuals often possess homes that many can only dream of, drive luxury vehicles, and have the financial flexibility that comes with a high credit limit. Their careers typically demand extensive educational backgrounds, rendering these high-earning roles inaccessible to many. Despite the seemingly exclusive club, many Canadians are curious about the financial habits and characteristics of the 1%. Here’s a snapshot:

  • The top 1% income can differ widely depending on the region. From provinces to cities, the income fluctuates.
  • Interestingly, 11% of Canadians have an income exceeding $100,000 annually.
  • When considering gender distribution within the top 1%, 75% are men, with an average income of $534,000, while 25% are women earning an average of $450,400.
  • Breaking it down by provinces, it’s no surprise that Ontario houses the largest percentage of the top 1%. Yet, when considering the average income of the top 1% earners, British Columbia’s numbers surpass Ontario, even though B.C. has fewer residents.

Taxes and the 1%

High earners are not exempt from their financial duties. On average, the top 1% pay around $196,000 in annual federal and provincial/territorial taxes. Collectively, they account for 22% of all taxes paid in the nation.

Where Do Most Canadians Stand?

The average Canadian, irrespective of gender (data for non-binary individuals is currently not available), earns about $51,300 annually. A middle-class income in the country ranges from $45,000 to $120,000 per household. While not extravagant, these families usually own a home, a vehicle, and save for retirement.

Elevating Your Income

For those seeking to boost their income, there are numerous paths to explore. From transcription work, tutoring, and freelancing to more creative endeavors like writing and design, opportunities abound. With determination and a strategic approach, anyone can aim to climb the income ladder. In conclusion, while the figures associated with Canada’s top earners are undoubtedly impressive, it’s essential to remember that the heart of the nation lies in its average earners who, collectively, form the backbone of the Canadian economy.

Frequently Asked Questions (FAQs) about the Average Income in Canada

Yes, insurers offer premium policies for high earners, often including higher coverage and sector-specific benefits.

Regions with higher incomes might lean towards comprehensive coverages, while areas with lower incomes might prefer basic term policies. Personal income and regional living standards also play a part.

Yes, many insurers have policies tailored for women, addressing their unique needs, including benefits related to maternity and female-specific illnesses.

Absolutely. Products like whole or universal life offer tax-deferred growth benefits, and death benefits are usually tax-free for beneficiaries.

It provides a reference for the amount of coverage needed to replace one’s income and support dependents, ensuring they maintain their standard of living.

Navigating Canada’s Economic Landscape

As we witness a positive shift in average incomes, it’s imperative to delve deeper, appreciating the regional disparities and sector-specific fluctuations. Within this complexity, there’s a world of opportunities. At Protect Your Wealth, we extend more than just financial counsel. We establish genuine partnerships and unwavering pledges. Your aspirations, your reservations, and your security sit at the forefront of our mission. From advice tailored to Canada’s average income trends to strategic retirement blueprints, our complimentary services are designed to bolster your financial prowess.

Every financial voyage is unique, demanding bespoke solutions. Contact us at 1-877-654-6120 – we service anywhere across Ontario, Alberta, and British Columbia, including Calgary, Burnaby, and Mississauga. While the intricacies of life remain unpredictable, a calculated financial strategy can offer stability and assurance. Don’t wait, and contact us today!

Talk to an advisor today.

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