If you think the average compensation of Canada’s highest-paid 100 CEOs is outrageous, take a look at what CEOs headquartered in Ontario get paid.
On average, the highest-paid 100 CEOs in Canada now make $14.9 million, which is 246 times more than the average worker. For the first time below, we’ve broken down CEO pay by province, based on where the highest-paid 100 CEOs’ head office is located.
Given that almost half of those highest-paid CEOs are headquartered in Ontario (mostly in Toronto), it might not shock you to learn that their average compensation is higher than the national average. But it’s much higher—at an average of $18.5 million in compensation, the highest-paid CEOs in Ontario make 298 times more than the average worker there.
The next highest paid CEOs are in Quebec—the 21 top CEOs in this province make, on average, $13.1 million, well below those in Ontario, but still 225 times more than the average worker in Quebec (a more detailed French analysis for Quebec is available here) .
Every province except New Brunswick and P.E.I. has a company with at least one top CEO. There is a heavy concentration of head offices in Ontario and Quebec, where two-thirds of Canada’s highest-paid 100 CEOs work.
The lowest CEO-to-average-worker ratio is in Nova Scotia, which has the lowest average workers’ pay and also the lowest average pay for its two top CEOs, who nonetheless make 142 times more than the average worker.
On average, workers make the least in Nova Scotia, at $53,000, and workers make the most in Alberta, at $65,000—there is over a $10,000 a year difference between them.
The breakdown of where the CEOs’ companies are located is outlined in Table 1. For the smaller provinces, there is a single CEO in Newfoundland, two in Nova Scotia, two in Saskatchewan and three in Manitoba. Averages are calculated for these provinces, but these are pretty small groupings.
Even though there are differences between the provinces, the ratio of CEO pay to average worker pay is still so high that it makes little difference in terms of the time it takes for a CEO to make the average worker’s annual salary—the answer for every province is “not very long.” Here we assume everyone works 52 weeks a year, five days a week and is paid for statutory holidays (like New Years Day).
Ontario has the highest ratio of CEO to worker pay. That means that Ontario CEOs make the average Ontario worker pay in seven hours flat. Since both get paid vacations, like Monday January 1, 2024, that means that by 3:58 p.m. on January 1, the top CEOs in Ontario already made what the average worker will make all year.
In all of the other provinces, the top CEOs made the average annual worker’s pay at some point on Tuesday, January 2, by 3:41 p.m. at the latest, in Nova Scotia.
We don’t have to like extreme pay packages, but that doesn't mean we can’t tax them. Each of these provinces can levy their own tax changes on wealth, higher tax brackets and capital gains.
For those concerned that higher taxes are somehow scaring away the wealthy, Ontario and Quebec have some of the highest marginal tax rates in the country and yet, that’s where three-quarters of the top paid CEOs are based. Ontario also has the highest-paid CEOs in the country. The lowest top marginal tax rate is in Saskatchewan, where only two top CEOs are located—and which have the second-lowest average CEO pay compared to other provinces. This is the exact opposite of what the picture would look like if CEOs moved based on tax rates.
If anything, they do the opposite: they move to where the tax rates are the highest. Why? Well because that’s where the opportunities lie. Nunavut has the lowest top marginal rate in the country, but corporations tend to locate in Ontario instead and that’s where CEOs go.
No matter where Canada’s highest-paid CEOs are headquartered, the gap between their pay and the average worker’s pay remains as stark as ever. It’s time governments look at tax measures to narrow the gap and redistribute that revenue to Canadians on the lower end of the income spectrum.