By 9:23 a.m. on Jan. 2, 2025, Canada’s 100 highest-paid CEOs had already earned what the average Canadian worker made in an entire year, according to a new report.
This milestone comes from data collected by the Canadian Centre for Policy Alternatives (CCPA), which tracked compensation for the highest-paid executives in Canada.
The calculation is based on the average worker earning $65,548 annually and CEO compensation now averaging $16.2 million (or 248 times what the average worker makes), surpassing the previous record of $14.9 million in 2022, when the gap stood at 246 times the average.
Now, top executives earn a year’s worth of worker pay in just over eight working hours.
David Macdonald, the author of the report and senior economist with the CCPA, told CTV News in an interview that the time marker is meant to put into perspective the scale of inequality.
“It’s hard to conceptualize that [gap],” Macdonald said.
Since 2020, CEO pay has increased by 49 per cent, compared to just 15 per cent for workers, the CCPA found.
While the wage gap has always existed, Macdonald notes it has grown dramatically over the last several decades. In the ‘80s, CEOs earned nearly 40 to 50 times what the average worker earned. By the ‘90s, the ratio jumped to 100 times.
“All the extra money that people are paying at the grocery stores, paying in rent and mortgage interest, that money is going somewhere,” Macdonald said. “One of the places that it’s going is to much higher corporate profits in Canada.”
Bonuses, not salaries, driving CEO pay: report
According to the report, CEO base salaries, at nearly $1.3 million, haven’t drastically changed over the last 10 years.
What has changed, however, is the structure of executive pay.
In 2024, more than 84 per cent of CEO compensation came from bonuses in the form of cash payments, stock awards, and stock options, the report found.
“CEOs used to be treated as managers,” Macdonald said. “Now they’re treated like superstars who need massive bonus packages to keep them from leaving, even though most CEOs are internal hires who’ve worked at their companies for decades.”
Canadian companies earned about $400 billion annually in pre-tax profit before the pandemic, the report said. While corporate profits sharply dropped during the COVID-19 pandemic, they have since climbed to more than $600 billion annually, in part due to inflation.
During that time, CEOs still received sizable bonuses after companies changed their bonus formula, according to Macdonald.
“When performance is bad, you just change the formula and go to the government for [a] bailout, and this is the way when it comes to corporate pay,” Macdonald said.
“Its only objective [is] one way: up.”
Between January 2020 and January 2025, the average price of goods and services for Canadians went up by 18 per cent, and workers’ pay increased by 15 per cent, the report found.
“It means that workers took an effective three per cent pay cut. Their pay went up, but the prices on everything they buy went up faster, so they ended up worse off by the end of 2024,” the report read.
Inequality reflects power, not productivity: researcher
CCPA research associate DT Cochrane, a senior economist with the Canadian Labour Congress and adjunct professor at Carleton University, said the growing pay gap is less about productivity and more about power.
“Orthodox economic theory says that our incomes are ultimately determined by how much value we produce,” he told CTV News.
“I think the average worker would take issue with the idea that one person could produce 3,000 times more value than they produce. There’s no evidence to support the orthodox perspective. They just simply assert it,” he added.
With executive compensation tied to profits and share prices, Cochrane said companies have little incentive to raise wages if profits can be maintained through price increases or cost-cutting instead.
Cochrane adds that Canada’s union density has declined, contract and temporary work has expanded, and job insecurity has increased, all of which weaken workers’ ability to negotiate higher pay.
“Corporations have made it really clear they’re not going to just absorb higher costs,” he said. “They’re going to pass them along. And so now it has become the workers who end up being the ones that are forced to absorb those costs.”
Cochrane says unions give collective leverage to claim a larger share of the economic output, while also improving workplace safety, pensions and access to benefits.
That security strengthens workers’ bargaining power, “but that is not what the owners of these companies, the executives… That’s not what they want,” he added.
‘Outrageous and obscene’: Unifor president
Unifor national president Lana Payne said the growing pay gap reflects a deeper power imbalance in Canada’s economy.
“It’s absolutely outrageous and obscene,” Payne told CTV News in an interview.
Payne says workers are feeling the pressure from rising costs on all sides, leaving many Canadians struggling to keep up.
“Even when the economy is doing well, workers are told, ‘Oh, lessen your demands. Mute your demands.’ This is the reality of what you hear, day in and day out,” Payne said.
“I think it is reflective of the kind of anger and discontent that we have. Generally, in our society right now, there is a reason that young people are upset with the state of affairs,” she continued. “There is a reason that working people are saying, ‘This isn’t fair,’ because it isn’t fair.”
Payne and Macdonald point to tax policy as another key driver of inequality. While workers pay tax on nearly all their income, much of CEO compensation, notably stock-based pay, is taxed at lower rates.
As per the Canadian Income Tax Act, employees earning through stock options are taxed on the difference between the market value at exercise and the strike price. A 50 per cent deduction is applied if certain conditions are met, effectively taxing only half the benefit.
Proposed reforms, including higher capital gains taxes on top earners, were abandoned following backlash from corporate leaders.
“Wealthy Canadians have had an ability to influence public policy,” Payne said. “I think we’re seeing that more and more. If you look at what’s going on in the United States right now, in terms of the kind of influence that the very wealthy CEOs and the richest corporations are having, this has an impact on the level of your democracy.
“If they have better access, obviously tax policies (are) being determined to suit the wealthy and not to suit the masses, then that’s a problem.”
Without meaningful policy changes, Macdonald warns the gap is likely to keep growing.
“Corporate profits are on track to hit new highs again,” he said. “If nothing changes, CEO pay will keep rising, no matter what happens to workers.”
CTV News, CP24 and BNNBloomberg are subsidiaries of BCE Inc., whose CEO is included in this list.
