Why $100K Feels Broke in Canada

Added: 2026-05-11

[00:00:00]Why are people complaining about earning $100,000 a year in Canada?

[00:00:05]>> Do you think that 100k as a salary is enough to live in Canada?

[00:00:08]>> No. 100k is a lot of money. Like, don't get me wrong, that's a lot of money, but it doesn't go very far nowadays considering rent and prices of everything. 100k can be a little tight.

[00:00:17]>> Is $100,000 not an impressive salary anymore? Because I'm getting a lot of comments where people are like that age.

[00:00:26]Scroll through a lot of Canadian forums and social media and you'll find the same complaint. Six figure earners saying that they feel broke. The internet's usual reaction is boohoo. You make $100,000. Just shut up. I kind of get their point. 100 grand should feel like a lot of money. So why doesn't it for a lot of people? By the end of this video, you'll know exactly why that 100K in Canada feels like nothing to many, and the traps that's been set for high earners, specifically in Canada. Now, the math says you should be rich. In 2023, to be in the top 10% of income earners in Canada, you had to have made about $116,500.

[00:01:09]Let's say today that's around $125,000 in 2026. If you're making $100,000, you're probably in the top around 15% to 20% of earners in Canada. So, why are all these people complaining? Well, there's a few reasons, and we're going to start with the one that hits you every single month, which is you're being squeezed by a handful of companies. So, pick any monthly bill in your life. Your cell phone, your internet, your groceries, your banking, your gas. Almost every one of those bills runs through a tiny number of companies that face very limited competition. Let's start with your phone and your internet. So, a mid-tier wireless plan in Canada runs about $63.80 a month. Looking at a country like Germany, they pay $15 for the same thing. UK is $16. France is only $19.

[00:01:59]Then there's the home internet at gigabyte speeds. Canada is the single most expensive country surveyed at $113 per month. Now, Italy pays $41 for the same speed and France pays 64. So, we're not just a little bit above average, we're at the top of the chart. Now, look at groceries. Now, the Competition Bureau's own report says the big three of Loblaws, Soies, and Metro pulled in over hundred billion in 2022 sales and more than $3.6 billion in profits. And what most people don't realize is the discount banners of no frills, fresh co, food basics, they're all owned by the same big three. So when you switch from loblaws to no frrills to save money, you're still paying Loblaws. The Bank of Canada says grocery prices have jumped around 22% since 2022 versus 13% for everything else. We're the food inflation leader of the G7. Go Canada.

[00:02:56]Now, banking. The big six hold roughly 90% of banking assets and with airlines at Canada's busiest airports, Air Canada and WestJet account for between 56 and 78% of domestic passengers. And we have a literal legal cartel for dairy, poultry, and eggs, which the OECD estimates supply management costs Canadian consumers about $2.7 billion a year. It's basically a cartel for milk set in law. Now, let's talk about gas, which bugs me the most because we produce so much of it, yet we still pay so much compared to uh say the US. Now, you think that that Canada US gas price gap is some type of oil company conspiracy, but in this case, it's not.

[00:03:42]It's even worse. It's Canada itself because most of the difference between Canadian and American gas prices come down as taxes as the federal government itself has spelled out. We produce the stuff then we tax it on the way out.

[00:03:55]Layer provincial fuel taxes on top, add GST or HST on top of all that and act surprised when the pump number is higher than in the US. So, before we even get to the part that really affects high earners, every bill you pay every month flows through a system designed for the company or the government, uh, not for you. Quick thing before getting into all that, if you're planning to leave Canada, you've noticed how much conflicting advice is out there. You're piecing it together from expat groups and Reddit threads, and every CRA page reads like it was written to confuse you. That's why my crossber team and I built this course on how to exit Canada cleanly. It's called Blueprint Abroad.

[00:04:39]If you're serious about leaving Canada, this is for you. Get on the wait list.

[00:04:43]I'll let you know the moment it's ready.

[00:04:45]The link is on screen and in the description. Now, the high earnner penalty box. Okay, now here's where it gets really interesting because the corporate squeeze that I talked about earlier that hits everyone, but there's a second layer of squeeze that hits people in this specific income range.

[00:05:00]But nobody really talks about this price. So if you're earning between roughly 100 and $200,000 in Canada, you are sitting in what I like to call the six figure penalty box because you're paying near top marginal tax rates in a lot of cases. In Ontario, for example, the combined federal and provincial top rate hits 53% and once your Sally climbs past about $117,000 in Ontario, every additional dollar hands more than 43 cents to the government. But that's only half of the trap. The other half is what happens to your benefits. Take the Canada Child Benefit. The clawback starts at about $37,000 of family income and accelerates from there. And by the time a family with two kids is sitting around with $130 to $150,000 of income, they've watched a meaningful chunk of that benefit disappear. And once you stack on that income tax, uh, CPPI and the disappearing CCB altogether, and a family with kids at $140,000 income can be giving up half of every additional dollar in tax and loss benefits combined. So, you're paying more in tax and you're getting less back in benefits both at the same time. But here's the part that should really sting because even when you finally retire, the penalty box doesn't let you out. The old age security starts getting clawed back the moment your retirement income crosses about $95,000. So if you save and invest well enough to fund a decent retirement, the government quietly takes some of that benefit back as well. They squeeze you on the way up and they squeeze you on the way down. And look, if any of this is making you wonder whether there's a smarter setup for your situation, this is exactly what we do at Blooper Financial. Crossber planning, uh, exit strategy, tax optimization, there's a link below to book a call and also to grab our free guide on the seven biggest CRA tax traps when leaving Canada. Find the link in the description. Now, let's talk about the six figure cliff. Now, look at the math.

[00:06:57]The Canadian tax system doesn't punish you in a steady curve. It kind of punishes you in steps and the steps get a lot steeper once you cross that 100k.

[00:07:08]Now, this is the marginal tax rate, the cut the government takes on your next dollar. I touched on it briefly before, but I really want to highlight it here because it's it's kind of shocking when you look at it laid out like this. So, here's a table of these rates for Ontario. Your province might be slightly different, but they're all kind of within the same range. Now, I really want you to look at this because note that from zero income to $95,000, you climb only three tax brackets. Though, from 95 to $200,000, you blow through five more. And that has the effect of really accelerating the taxes that you pay because at $100,000 in Ontario, if you're earning that, your marginal rate is still only 31%. But if you climb to $120,000, it jumps to 43%. That's a huge increase for only earning $20,000 more. And the rate on every additional dollar goes up 12 full percentage points, which is huge. That's not just a climb, that's a cliff. And if you gross $150,000, you're handing over uh 45 cents on every new dollar. If you cross 181,000, you're losing nearly half. So, when you take the bonus, pick up the overtime, negotiate the raise, you're not climbing just that one curve, you're tripping over a new bracket every $20,000. And it's not just Ontario. Every province has its own version. The system is engineered to take more from you at exactly the income range where you start to feel like you might finally be getting ahead. Now, let's talk about how $100,000 in Toronto is not the same as $100,000 in Halifax. Think about that last raise that you got. Uh, did it actually feel like a raise or did it just disappear into say a higher rent renewal, a grocery bill that climbs every month, a daycare fee that just ate all the difference up? The promotion might not have changed your life because it seems like that raise got swallowed up immediately as it hits your account.

[00:09:04]That's not a budgeting problem. That's the cost of living rising faster than your paycheck for many years now. And the data backs that up. Indeed's hiring lab puts real Canadian wages about 2.5 percentages points below where they were in January 2021, even after 5 years of nominal pay raises. We've fallen way behind and we haven't caught up. One thing to note, though, is $100,000 salary in Halifax or Edmonton buys you a fundamentally different life than $100,000 in Toronto or Vancouver. It's the same paycheck but a different planet because for example the average two-bedroom in Toronto runs around $3,300 a month. Now in Halifax it's only around $2,100. That's the difference between saving real money and just treading water. But obviously it's not so easy to just pick up and move. So this is a problem that probably won't go away anytime soon because a lot of people's jobs or lives are in Toronto or Vancouver. So internal migration isn't a real solution for most, I would say. So what can you actually do? So here's a few options. One is to stop leaving free money on the table. Things like your RRSP, your TFSA, FHSA, and I'm sure you've heard it all before, but people in that penalty box I mentioned have the most to gain from these accounts and use them. I would say maybe the least. Every dollar you put into your RRSP at a 53% marginal rate gives you that 53 cents back from the government this year. And that could have a huge impact for tax deferral in the future. The second thing you could do is change how you get paid.

[00:10:39]The top 0.01% Canada's wealthiest 2,800 or so tax filers have shifted dramatically away from wages. In 2016, 2/3 of their income came from a paycheck. By 2023, it was barely half. That's not a coincidence.

[00:10:54]It's a strategy. Things like incorporating consulting on the side, building something that pays you in say dividends or capital gains instead of T4 income because I do feel like the Canadian tax system rewards business owners and investors more and punishes uh employees. So, if your only relationship with money is a paycheck, you're playing the game on hard mode.

[00:11:16]Now, the third that I've been seeing a lot more of is people leaving Canada completely. Now, obviously this is not for everyone, but if your work is location independent, people like remote employees, consultants, online business owners, retirees with portfolio income, anyone whose paycheck doesn't depend on physically being in Canada consider going somewhere else. And for the right person, leaving Canada properly is the single biggest financial move available.

[00:11:41]And it's a move that we're helping a lot of people more with here at Blueprint.

[00:11:44]So, no, $100,000 in Canada might not be what you think it is anymore, but hey, head to blooperfinancial.ca to see how we help people exactly here build a real plan. And if this has resonated with you, please consider subscribing.

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