Are High Income Canadians Really Paying Their Fair Share?

We often hear that the rich should pay their fair share of taxes and few would dispute that principle. Interestingly, a recent Fraser Institute report revealed that that Canada’s highest earners already shoulder a significant portion of the country’s tax burden.

According to the report, “the top 20 percent of income-earning families—those earning above $270,472—pay 65.3 percent of the country’s personal income taxes and 58.3 percent of total taxes, despite earning 49.5 percent of total family income. By contrast, the bottom 20 percent pay just 0.7 percent of income taxes and 1.7 percent of total taxes. “

For tax and financial advisors, saving your clients from over-paying through tax planning is an important objective. No one should pay a penny more than they legally owe.

Tax Saving Tools and the Planning Conversation: To add value, tax and financial advisors can help clients understand strategies available to reduce their tax liability, all within the guardrails of legitimate tax planning:

• Are they maximizing tax-assisted savings opportunities through the RRSP or TFSA?
• Have they considered income splitting opportunities with family members where appropriate – pension income splitting, investment income splitting in conjunction with the Attribution Rules, hiring family members in the business, etc.?
• Could strategic charitable giving support their philanthropic objectives and their tax plan?
• Do they work from home, have missed medical expenses, or moving for work purposes? There are additional records to keep and deductions to explore.

Corporate Tax Planning Considerations: If your client has a business practice or professional service, corporate tax planning is also a benefit. Among the options to explore: incorporating allows your client to retain earnings within the corporation for continuous investment in the value of their equity. They might also be able to benefit from the Small Business Deduction which features lower tax rates and ultimately, qualify for the Capital Gains Deduction on the sale of the firm, if all eligibility requirements are met.

The Tax Astute Financial Planner’s Role:  Tax accounts are wise to collaborate with financial planners regarding decision-making about tax efficient investment accumulation, growth, preservation and transition – under the Real Wealth Management framework.   

An investment portfolio that features Canadian dividends and capital gains can be helpful but one must be careful.  An overweighting in dividend income for example can artificially increase net income for the purposes of refundable tax credits or per diem rates in personal care homes.  

Good Records Lead to Better Outcomes: No tax strategy is effective without proper record keeping. Your client must minimize future tax audit risk and you can be of great help here. Encouraging clients to maintain organized electronic and hard copy records not only helps maximize legitimate deductions but also makes responding to a CRA review or audit much easier.

The Bottom Line? High-income Canadians already contribute a substantial share of Canada’s tax revenues. Your role is to ensure they continue paying only their fair share, and no more. Be sure to join us at the September 23, 2026 CE Summit to learn more.

For more information, in an entertaining and easy listening format, tune into Real Tax News with Evelyn Jacks and Friends wherever you listen to your favourite podcasts.