Who are Canada's top 1%?

The National Household Survey released this week provides an intriguing look into the ranks of the country's top income earners. 

For one thing, it shows that while Canada may increasingly be a nation that celebrates its diversity, the rich are not terribly reflective of that.

In broad strokes, we know that the top one per cent tend to be middle-aged men who are married and live in a big city — much like it was 50 years ago. They also tend to have a university degree and work in the areas you'd expect — medicine, dentistry, law, engineering, business and finance, and management.

Despite the homogeneity of this group, it is true that some of the one percenters are outliers — they don't share the usual characteristics that tend to define membership in this group. Some don't even work at all. But they are a definite minority.

So who are these people? Statistics Canada sent their National Household Survey to 4.5 million Canadian households — about one-third of all households. The findings are detailed enough to shine light on this exclusive club and often reveal surprising truths about who belongs to this elite group. 

Income needed to be a 1 percenter

First, a look at the entry requirements. About 27.3 million Canadians were aged 15 and over in 2010. The vast majority of them (95 per cent) had some form of income. The top one per cent reported quite a bit of income. 

According to the 2011 survey, there were 272,600 Canadians who had incomes of at least $191,100 in 2010. That hefty number was the cutoff to make it into the top one per cent of Canadian income earners. 

That $191,100 is just the minimum to squeak into the one per cent club. Most of the people in that category earned much more. The average income among the top one per cent was twice that — $381,300.

To put this level of income into perspective, that’s almost 10 times the average Canadian income of $38,700.

The National Household Survey does not publish figures on the top 0.1 per cent of income earners. But previous work by Statistics Canada does reveal the income levels needed to enter the lofty ranks of the super-rich. In 2010, Statistics Canada said it took a minimum income of $685,000 to be a member of the top 0.1 per cent club.

Interested in what it takes to get into the top 0.01 per cent? The 2,550 taxfilers in this group in 2010 had a minimum income of $2.57 million and an average income of $5.11 million. 

One survey of CEO compensation provided some further insight into the earning power of that group. The Canadian Centre for Policy Alternatives said the average compensation package among the top 100 Canadian CEOs came to $7.7 million in 2011. Magna International's Frank Stronach topped the list with a pay packet totalling almost $41 million.

Married, middle-aged men dominate

The top one per cent of income earners are overwhelmingly male: almost four of every five members of the group. This will come as no surprise to those who've noticed the overwhelming dominance of men on many corporate boards and in senior management roles.  

Previous research by Statistics Canada has suggested that the dominance of men in the high-income slot has slipped in the past few decades. For instance, the agency said women made up only 11 per cent of the one percenters in 1982, while the National Household Survey suggested that the figure was 20.5 per cent in 2010. Still a minority, but a hint of progress nonetheless.

One percenters also tend not to be lone wolves. Almost 84 per cent are married or living in a common-law relationship.

The typical one percenter is also middle-aged, with more than three in every five between the ages of 45 and 64. But 4.4 per cent of this group managed to be big income earners despite being under age 35. 

Previous research from Statistics Canada has also shown that the overwhelming majority (90 per cent in 2010) of those in the top one per cent income group are white. 

Education and employment

One percenters are an educated lot. More than two-thirds of them have a university degree. Among the general population over the age of 15, only 20.9 per cent could say the same thing.

Indeed, a university degree was a major determinant of a higher income later in life. Almost a quarter of Canadians with degrees were in the top 10 per cent of income earners in 2010.

But standing alongside the educated members of the one per cent group are the surprising three per cent of them who had no certificate or degree — not even a high school diploma. This small group of pull-themselves-up-by-the-bootstraps high-income earners managed to have higher average incomes than even the one percenters with a degree — $405,100. 

Parents are famous for trying to nudge their children into such areas as medicine or law or business management. It is perhaps not a coincidence that these are some of the highest-income fields.

Almost two of every five members of the one per cent club occupy management jobs, with senior managers in this group averaging a juicy $466,300 in total compensation.

About one in seven one percenters have occupations in the health field, with doctors, dentists and veterinarians figuring prominently in the top income group. A similar share of one percenters came from business and finance areas.

Professional occupations in the legal and scientific/engineering fields round out the top five. Average incomes of each of the above occupations in the one per cent club top $300,000.

And then there are the one percenters who appeared to have no employment at all. Fully 5.6 per cent of those who reported income of at least $191,100 — the one per cent club — said they didn't work for pay in either 2010 or 2011. The only job they had, it seems, was to cash some rather large cheques for dividend income, capital gains, interest or rental income and other private income.

Where they live

Among all provinces and territories, Alberta is home to the highest percentage of those with incomes in the top one per cent. One in every 50 Albertans is in this $191,100+ category, with almost one in 30 Calgarians reaching that level.

Above-average membership levels in the one per cent club are also evident in Toronto, Edmonton and Vancouver. 

Statistics Canada says more than half of the top one per cent — a total of 154,900 people — lived in Toronto, Montreal, Calgary or Vancouver.

With most Canadian cities sporting clearly defined high-income neighbourhoods, it becomes evident that one percenters like hanging out with other one percenters. As the real estate agents say: "Location, location, location."