Top Paid CEOs Continue To Earn Staggering Amounts in Canada

The first couple of weeks back at work after the holidays can be tough. You have to get back into your routine and are usually dealing with pretty cold weather.

But going back to work in the new year wasn’t so bad for Canada’s top CEOs.

By 11 AM on January 2, the highest paid CEOs had made what a Canadian will take home on average per year – $49,738. Not bad for a couple of hours of work.

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The report from The Canadian Centre for Policy Alternatives showed that CEO salaries are on the rise and are widening the gap between the rich and the poor. This gap has reached new highs with the top earning CEOs earning an average annual compensation of $10.4 million.

This income gap in Canada has become a major concern, especially for women, visible minorities, Indigenous Canadians and recent immigrants.

A recent study by statistics Canada has found that the income gap between visible minorities, Indigenous or recent immigrants and the rest of Canada remains large, with the gap only narrowing by 2 per cent for Indigenous and recent immigrants and widening by 1 per cent for visible minorities between 2006 to 2016.

In Canada women earned $0.87 for every $1 earned by a man last year. This gender gap can be found in this study as well with only three out of the 100 top-earning CEOs who were women – Linamar's Linda Hasenfratz: $14.6 million, Transalta's Dawn L. Farrell: $7.4 million and Atco and Canadian Utilities Limited's Nancy Southern: $5.4 million total compensation.

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Unions are one of the strongest forces against inequality in the workplace and society. It is well known that as unionization has declined, inequality has increased. Not only do union members earn more than non-union members, but they help set the bar for salaries in industries across Canada.

As we enter into 2018 unions will continue to fight to make the income gap smaller in Canada.

Inequality An Issue In Canada's Major Cities

Inequality in Canada continues to rise across the country, but a recent study has shown that this problem is mainly in our biggest cities.

The Chartered Professional Accountants of Canada (CPA Canada) released a report on inequality and found that our major cities have had most of the income inequality since the early 80s.

Those cities are Toronto, Montreal, Vancouver and Calgary.

While Calgary has a lot to be proud of as a city over the past few decades, income equality is not one of them. Calgary's inequality has grown four times faster than the national average, followed by Toronto and Vancouver.

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Alberta as a province has the highest rate of inequality across Canada.

So why does this matter?

Because 80 per cent of Canadians live in cities, and 40 per cent of them live in the four cities mentioned above.

Francis Fong, chief economist for CPA Canada said that the replacement of 'middle-skilled jobs' may have contributed to the rise in cities in particular. He added that cities aren’t equipped with the proper means to fight the problem because those resources and funding are usually found at the federal and provincial levels.

Studies have shown that countries with a high level of income inequality are unhappy, with people reporting lower life satisfaction and ‘more negative daily emotional experiences.’

One answer to this is union membership.

According to a recent article in the New York Times, researchers used data from five different years between 1980 and the mid-2000′s to study the effect of union membership on life satisfaction.

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They found that overall union members are ‘more satisfied with their lives than those who are not members and that the substantive effect of union membership on life satisfaction is large and rivals other common predictors of quality of life.’

Unions built the middle class and guarantee their members good wages, collective bargains and health care benefits.

With the shrinking middle class and the steady rise of inequality, it is clear that unions are needed more now than ever in Canada.

Income Volatility Impacting Over 3 million Canadians.

Unstable employment and precarious work affects Canadians across the country in one way or another, but a new study has shown that some groups are particularly affected.

TD Bank Group released a study last week highlighting the fact that a steady paycheque is especially difficult for millennials and older men from Generation X.

Bharat Masrani, CEO of TD Bank Group, said that the volatility of income for these groups can affect people’s ‘confidence in creating a future.’

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“Our findings suggest the impact is both pervasive and profound – making it hard for many people to live the life they want today, let alone plan for and feel confident about their future. It’s a subject worthy of closer examination,” said Masrani.

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The report found that an estimated 10 million Canadians experience income volatility, with 3.3 million Canadians whose monthly income can fluctuate by 25 per cent or more.

Overall, self-employed Canadians appear to be the most impacted, followed by seasonal workers, those who can’t work, part-time workers, students and lower-income Canadians.

When looking at all of the provinces, the highest rate of income volatility was found in Alberta, a province that has been effected by the fall in oil and gas prices.

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In these precarious jobs people lack the ability to join a union, which can improve not only the quality of life at work, but home life as well. Unionized employees have better wages, more job security, benefits and the comfort of knowing they have support in the workplace.

One of the most important parts of being in a union is knowing you will not face job volatility with a collective agreement in place. With rising precarious work and job volatility, being a union member has become more important than ever.

CEO Pay On The Rise Once Again

After the holiday season, most Canadians will return to their jobs and get back to the usual routine.

When most workers were just about to take their lunch break on Jan. 3, Canada’s highest paid elite group of CEOs will earn the same amount average working person’s income for all of 2017.

It’s a shocking stat, that shows the difference between the super wealthy and the average Canadian.

The report was released by the Canadian Centre for Policy Alternatives and found that the 100 richest CEOs in Canada took in an average of $9.5 million in 2015. This number includes ‘salaries, bonuses, share grants and stock options, the report said.

The highest paid Canadian CEO in the report was J. Michael Pearson, CEO of Valeant Pharmaceuticals, who collected $182.9 million.

The report also found that CEO compensation in Canada has increased by 178 per cent between 1998 and 2015.

One issue pointed out by the author of the report Hugh Mackenzie is that board of directors have the authority to ‘set compensation’. He suggested having this decision be more accountable to shareholders rather than a board of directors.

Political economist Robert Reich suggested having a tax penalty on CEOs who earned more than a ‘given ratio’ to average pay. He said that the increase in average workers pay would simulate the economy.

Having a fair and steady wage is so important to quality of life both inside and outside of the workplace. With the rise of precarious work, it is so important to know you have rights when it comes to your wage.

Having a union representing you means you have a guaranteed fair wage and someone to look out for you. Unions also set the bar for all workers, non-union and union, for fair wages.

With rising CEO pay in Canada, it becomes ever more important to make sure you are guaranteed a fair wage.