Canada’s Top 100 CEOs Have Already Earned More Than the Average Canadian Will All Year
In the first thirty-four hours of 2020, less than two days, and less than the average forty-hour work week, CEO’s across Canada made more than the average Canadian would all year. Less than two days to make a yearly salary, all within thirty-four hours. In an article by Brandie Weikle from CBC Business News, she states that the wage gap between CEO’s and their employees is continuing to grow. In 2018, the Canadian Centre for Policy Alternatives (CCPA) found that the 100 highest paid CEO earned 227 times more than the average Canadian. The average individual Canadian income was $52,061, and the top 100 CEO’s earned an average of $11.8 million each. Weikle states that “the average Canadian worker saw their pay rise 2.6% between 2017 and 2018, top CEO’s received an 18% pay boost in that same time period” (2020). Over a decade, average income workers saw a 24% raise while Canada’s CEO’s saw a 61% raise. With inflation continuing to rise, average income Canadians won’t see a rise anytime soon, however, CEO’s will continue to.
Weikle shuts down the questions if these “sky-high” salaries are required to keep these CEO’s, stating that there “doesn’t seem to be much poaching happening in C-suites”. In fact, senior economist David Macdonald from the Canadian Centre for Policy Alternatives states that CEO’s have spent an average of 18 years at their current company. He continues to state that they have earned these positions by truly understanding their companies to be successful in the CEO position. Macdonald states that it is even difficult for shareholders in these multimillion dollar companies to restrict CEO pay, “oftentimes there’s quite a tight relationship between the CEO, the board of directors for the company, the consultant that comes in to recommend what the CEO should make. These folks all know each other” (2020). Essentially, the CEO’s friend is the one signing their pay-check.
Government intervention is required to level the wage differences. Top CEO’s are making a year’s salary in less than a week when there are Canadians working tirelessly who can barely afford to support themselves. By implementing a rise in minimum wage and salary caps on CEO salaries, the government and companies should be redistributing their money back to their employees. In a 2018 article by the National Bank of Canada, they stated that the average household expenses in Canada in 2016 totaled $88,953. This allocated “CAN$20,434 was for housing, CAN$15,627 for taxes, CAN$12,347 for transportation, CAN$8,747 for food and CAN$2,258 for education”. This is more than the average salary that a Canadian will make in a year. Unfortunately, the average Canadian can barely afford the cost of living in Canada. There are few jobs in the middle ground that make a comfortable salary. There are really high paying jobs, like CEO, and very low paying jobs. Unfortunately, with the continuing rise of inflation, this problem doesn’t look like it will be going away any time soon.
https://www.cbc.ca/news/business/canada-top-100-ceo-salary-1.5413124
Jacqueline's EMPR 240 Blog 
Hi Jacqueline!
This was a very enlightening post. I really liked how you summarized all the numerical data in your paragraphs, making it clear and not overwhelming. It is incredible to think that one person can make more than the average Canadian’s yearly salary in less than two days.
I think your solution seems very rational and plausible. What do you think the appropriate salary cap for CEO’s might be? Would increasing taxes for higher income earners also help redistribute the wealth among employees, or are there too many loopholes in taxation to work around? Hopefully in the next decade, we see smaller disparities between income worker’s and CEO’s raises, decreasing the inequality seen in many Canadian companies.
Thanks for sharing, great read!
Julianne
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Hey Julianne!
Thank you for taking the time to read my post. I could not believe the article when I first read it. In terms of a salary cap, I think it is hard to think of a set number. I believe it all depends on the company, the education of the CEO, the work experience, and their skills that they require to be successful in the position. The article actually discussed loopholes that these CEO’s can go through to avoid these increased taxes. In fact, some companies will offer compensation in the form of stock or stock options. Although the article said that may be changing soon, I still think they will manage to find another way to get around it. I hope that it levels out soon as well, whether that is rises in minimum wage or calculated salary caps, anything would be helpful to bridge the pay gap.
Best,
Jacqueline
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Hi Jacqueline,
I thoroughly enjoyed reading your post and I felt that you did a very good job of keeping me interested in your writing. As well, I find this specific matter to be a very interesting topic, as this sort of inflation is seen in many fields, including that of pro athletes. While I understand that certain jobs should have a higher wage due to education required for that job and difficulty, I still cannot justify why one person is able to make $11 million in one year while in Canada, 1 in 7 people are living in poverty (Canada Without Poverty). Rather than keeping our top business partners happy, I think a nationwide focus should switch to overcoming rates of poverty and in addition to this, making education more affordable so more people are offered a chance to escape poverty. What sort of policy ideas do you suggest the government can potentially put into place to reduce this incline in poverty and the wage gap?
Again, great read and I look forward to working with you again during this course!
Jade
References:
“Just the Facts.” Canada Without Poverty, http://www.cwp-csp.ca/poverty/just-the-facts/.
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