A recent survey indicates that many Canadians believe an annual household income of $100,000 is necessary for financial comfort. However, this figure varies based on factors such as age, household size, homeownership, and geographic location.

In June, MoneySense magazine collaborated with Leger Marketing to survey over 9,000 Canadians across 79 cities. Respondents were presented with five income options ranging from $74,200 to $250,000. The most frequently selected option was $100,000, chosen by 37% of participants. Following that, 25.8% opted for $150,000, while 23.8% selected $74,200. Smaller percentages chose the higher income brackets of $200,000 (8.5%) and $250,000 (4.9%).

Statistics Canada reported that the average disposable income for Canadian households in 2024 is $100,702. For individual earners, the top 10% make at least $125,945 annually, while the threshold for the top 25% is $81,184. Those earning between $57,375 and $114,750 are classified as middle-class.

The survey also highlighted how the cost of living influences perceptions of income adequacy. For instance, $100 in 2020 is equivalent to $118.14 today, indicating that inflation has eroded purchasing power. Canadians whose wages have kept pace with inflation may find themselves in a better position.

Major Canadian banks assess affordability based on the principle that average housing costs should not exceed 30% of gross household income. However, other factors such as transportation, food, utilities, clothing, and leisure also play a role in determining financial comfort. CareerBeacon analyzed income requirements for comfort in cities with populations over 50,000, revealing a range from approximately $58,000 to over $106,000.

Cities with the highest income requirements include Richmond Hill, Ont. ($106,536), Milton, Ont. ($106,392), and Whitby, Ont. ($105,624). In contrast, cities where residents can feel comfortable with lower incomes include Trois-Rivières, Que. ($57,936) and Sherbrooke, Que. ($64,920).

Inflation significantly impacts the purchasing power of income. Statistics Canada monitors inflation through a consumer price index (CPI), which tracks the prices of a basket of goods and services. For 25 years, inflation hovered around 2% annually until it surged above 8% in 2022, the highest rate since the 1980s. This spike was driven by increased demand and supply chain disruptions following the COVID-19 pandemic.

In response, the Bank of Canada implemented a series of interest rate hikes to control inflation. While higher-income Canadians have seen wage increases and improved investment portfolios, the situation has been less favorable for lower-income households. According to Parliamentary Budget Officer Yves Giroux, the price of the basket of goods has risen by 15% since 2019, while disposable income has increased by 21%. However, he noted that rising inflation and tighter monetary policies have diminished purchasing power for lower-income families.