While nearly three million Canadians lost their jobs in 2020, many due to the pandemic that hit the country that March, the nation’s highest-paid CEOs took home an average of $10.9 million, about $95,000 more than the year before.
The only year in which the top 100 CEOs got more was in 2018, when they raked in an average of $11.8 million, according to a report released on Jan. 4 by the Canadian Centre for Policy Alternatives (CCPA) titled Another year in paradise: CEO pay in 2020.
Many low-wage, part-time, temporary, and self-employed Canadians lost their jobs in 2020, reported CIBC Economics in January 2021. Furthermore, the income gap between a CEO and the average worker widened at “an even faster rate than we’ve assumed so far,” wrote CIBC deputy chief economist Benjamin Tal in the report.
The “(top) 100 CEOs now make, on average, 191 times more than the average worker,” the CCPA report says.
Nearly one-third of the highest-paid CEOs worked for companies that received a federal subsidy, the Canada Emergency Wage Supplement (CEWS), to help pay their employees.
From March to December 2020, Ottawa paid out more than $50 billion to cover 75 per cent of eligible companies’ payroll expenses. (CEWS ended in October 2021).
“2020 was a horrible year for many workers hit hard by the pandemic,” said David Macdonald, a senior economist with the CCPA who wrote the report.
“CEO pay appears to be impervious to any shock to the system,” he said in a statement. “If there is a singular reason why CEO pay is in the stratosphere, it’s because out-of-control bonuses are protected from going down, even in a pandemic.”
In 2020, the top 100 CEOs — only four of them women — earned at least $6.1 million, which included bonuses, direct shares, and stock options that saved them millions in taxes, the report notes.
To narrow the income gap, the CCPA report says Ottawa should do the following:
- Cap corporate deductions at $1 million;
- Eliminate loopholes in the rate for capital-gains inclusion;
- End stock-option deductions for large companies;
- Implement higher top marginal tax brackets; and
- Introduce a wealth tax.
Last month, the parliamentary budget officer reported that Canada’s richest families control 25 per cent of the country’s net wealth.
In order to reduce income inequality, the Liberal government has promised to introduce a luxury tax and to limit large companies’ stock-option deductions.