By 9:23 a.m. on Jan. 2, Canada’s 100 highest-paid chief executive officers had already earned what the average Canadian worker makes in an entire year, according to a new report by the Canadian Centre for Policy Alternatives (CCPA).
The report calculates the milestone using average annual worker earnings of $65,548 and average CEO compensation of $16.2 million—about 248 times more than what a typical worker earns. That figure surpasses the previous record of $14.9 million set in 2022, when the pay ratio stood at 246 to one.
At current compensation levels, the report says, top executives earn a full year of worker pay in just over eight working hours.
David Macdonald, senior economist at the CCPA and the report’s author, said the time marker is intended to make the scale of income inequality easier to understand.
“It’s hard to conceptualize that kind of gap,” Macdonald said in an interview with CTV News.
According to the report, CEO pay has risen 49 per cent since 2020, compared with a 15 per cent increase in average worker wages over the same period.
While pay disparities have long existed, Macdonald noted that the gap has widened sharply over the past several decades. In the 1980s, CEOs earned roughly 40 to 50 times the average worker’s pay. By the 1990s, that ratio had climbed to about 100 times.
“All the extra money people are paying at grocery stores, in rent, and in mortgage interest is going somewhere,” Macdonald said. “One place it’s going is to much higher corporate profits in Canada.”
Bonuses drive executive pay growth
The report finds that base salaries for CEOs—now averaging just under $1.3 million—have changed little over the past decade. Instead, the surge in compensation has been driven largely by bonuses.
In 2024, more than 84 per cent of CEO pay came from bonuses, including cash incentives, stock awards, and stock options.
“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.”
Before the COVID-19 pandemic, Canadian companies earned about $400 billion annually in pre-tax profits, according to the report. While profits fell sharply during the pandemic, they have since rebounded to more than $600 billion a year, driven in part by inflation.
Macdonald said many companies adjusted bonus formulas during downturns, allowing executives to continue receiving large payouts even when performance suffered.
“When performance is bad, you just change the formula and go to the government for a bailout,” he said. “When it comes to corporate pay, it only moves one way—up.”
Workers fall behind inflation
Between January 2020 and January 2025, the average price of goods and services in Canada rose by 18 per cent, while worker pay increased by 15 per cent, the report found.
“That means workers took an effective three per cent pay cut,” the report said. “Their wages went up, but prices rose faster, leaving them worse off by the end of 2024.”
DT Cochrane, senior researcher at the CCPA, senior economist with the Canadian Labour Congress, and adjunct professor at Carleton University, said the widening pay gap reflects power dynamics rather than productivity.
“Orthodox economic theory says incomes are determined by how much value we produce,” Cochrane said. “I think most workers would question the idea that one person produces thousands of times more value than they do.”
Cochrane added that declining union membership, the rise of contract and temporary work, and increased job insecurity have weakened workers’ bargaining power, making it harder to secure wage gains.
Union leaders call gap ‘obscene’
Lana Payne, national president of Unifor, described the growing pay disparity as a symptom of deeper structural inequality.
“It’s absolutely outrageous and obscene,” Payne said.
She said workers are under mounting pressure from rising costs, even when corporate profits are strong.
“Working people are being told to mute their demands, even as executives continue to take more,” Payne said. “That’s why so many people feel the system isn’t fair.”
Payne and Macdonald both pointed to tax policy as a contributor to inequality. While workers pay income tax on nearly all their earnings, much of CEO compensation—particularly stock-based pay—is taxed at lower effective rates under the Canadian Income Tax Act.
Proposals to increase capital gains taxes on top earners were ultimately shelved after opposition from corporate leaders.
“Wealthy Canadians have had a disproportionate influence on public policy,” Payne said. “When tax rules are shaped to benefit the wealthy rather than the majority, that becomes a democratic issue.”
Without policy changes, Macdonald warned, the pay gap is likely to keep widening.
“Corporate profits are heading toward new highs again,” he said. “If nothing changes, CEO pay will continue to rise—regardless of what happens to workers.”