COVID Reduced Dividend Income
The COVID-19 pandemic had a strong impact on financial markets in 2020 and this is reflected in large decreases in dividend income from Canadian corporations for tax filers in the high-income groups, says Statistics Canada. Individuals in the top one per cent had an average decrease of $10,500 in dividend income to $77,300 in 2020. The drop in dividends was even larger for filers in the top 0.1 per cent, falling by $82,600 to $348,600, and the top 0.01 per cent, dropping by $592,900 to $1,543,400. The relatively small changes in wages and salaries for the top tax filers were outweighed by the larger decreases in dividend income, resulting in decreases in average total income for high-income Canadians in 2020. Overall, Canadians with the highest incomes from 2019 to 2020 experienced the largest declines in average income. Average total income of Canadians in the top one per cent of income fell by $5,500 to $512,000. Individuals in the top 0.1 per cent saw average total income fall by $67,800 from 2019 to 2020, while those in the top 0.01 per cent experienced the largest drop of $506,800 during the same period. Changes in the income of high- and lower-income filers means that the top one per cent captured a lower share of total income relative to recent years. In 2020, the top one per cent accounted for 9.4 per cent of total income, its lowest value since 2016, and before then, 1996.