Income inequality and the number of low-income people declined significantly in 2020, compared to five years earlier, and after-tax family income experienced a marked increase, especially in single-parent households, according to new data of the census published today by Statistics Canada.
Average after-tax family income grew 9.8% between 2015 and 2020, doubling the growth rate that Canadian households saw between 2010 and 2015, when after-tax income grew less than half of this rate (4.5%).
Statistics Canada says the increase in average income was largely driven by federal government transfers during the pandemic, especially for lower-income families.
“After-tax income growth was faster for lower-income households, reflecting higher contributions from Canada’s child benefit and pandemic relief benefits to higher-income households low, ”the federal agency said.
In single-parent households headed by a woman, which account for 80% of single-parent households, average after-tax income grew 22.8% between 2015 and 2020, largely due to the benefit for Children of Canada (CCB) and its improvements. out during the pandemic.
The same did not happen for all provinces. While Ontario, Quebec and BC experienced double-digit increases in after-tax revenue, Alberta and Newfoundland experienced a decline in after-tax revenue of 4.6 and 1.3%, respectively.
Newfoundland was the most atypical in Atlantic Canada, with New Brunswick, Nova Scotia and PEI experiencing significant increases in their after-tax revenues in 2020 compared to 2015, with increases of 9.2, 8.3 and 10, respectively. 3%, respectively.
Public benefits are key to increasing revenue
Statistics Canada explains that in 2020, largely due to the blockade of COVID-19 and its impact on wages, average incomes declined to the point that Canadian households earned about the same as in 2015, but these revenues were increased by the benefits of the pandemic. and the CCB.
In 2020, for example, the average amount of federal or provincial pandemic benefits received by a Canadian family was $ 10,000, while the average CCB paid to a family in 2020 was nearly $ 6,000 a year, in compared to just over $ 4,000 in 2015.
Government transfers and benefits made a significant difference in families with children, who saw their median income after taxes increase by 10.5% in 2020 compared to 2015, while couples without children they saw an increase of 6.8% during the same period.
Also during the same period, the proportion of low-income Canadians fell to 11.1% in 2020, from 14.4% in 2015, mainly driven by pandemic benefits for the elderly population. work and the CCB.
Low-income seniors, however, did not fare so well; the proportion of low-income seniors increased to 15% in 2020, slightly more than in 14.4% in 2015.
Older people also experienced the largest drop in average incomes, with the median income of Canadians over the age of 65 falling 32.2% for men and 23.8% for women. The decrease in the average income of men under 65 decreased only 2.7%, while the average income of women under 65 decreased only 2.4%.
Inequality is declining in Alberta, but remains high overall
Although after-tax revenues increased significantly in 2020 compared to 2015, income inequality declined across the country, with Alberta recording the largest drop, largely driven by corporate profits. pandemic.
Although Alberta experienced the largest decline, income inequality in the province remains one of the highest in Canada, along with Ontario, BC and Nunavut.
Inequality was lowest in PEI, NB, Yukon and Quebec, following the general trend that regions with higher average family incomes also had higher income inequality.
Larger urban centers showed greater income inequality than smaller population centers, with Toronto, Calgary and Vancouver with the greatest inequality compared to Quebec City, Drummondville and Saguenay (both also in Quebec ), which had the lowest.
The impact of pandemic payments
The impact of pandemic support payments on average after-tax income was significant, Statistics Canada said, with 68.4%, or 20.7 million adults, receiving support from a program provincial or federal pandemic, or a complement to an existing program.
Statistics Canada said 27.6 per cent of Canadian adults received benefits from a federal program, such as the Canada Emergency Response Benefit (CERB), which received an average of $ 8,000 by 2020.
Another 55.9% of Canadian adults received payments through supplements to existing programs, such as the CCB or the GST tax credit, while more than 90% of seniors saw supplements to programs such as the Guaranteed Income Supplement.
Statistics Canada said 4.2 million Canadian adults also received support payments from provincial or territorial governments through localized pandemic relief programs.
Single-family homes remain the first
Statistics Canada also analyzed the breakdown of household demographics in Canada, and found that the number of Canadians living alone reached a record in 2021, rising 15% to 4.4 million since 1981, when only 1.7 million Canadians lived alone.
In 1941, the number of Canadians living alone was only six per cent, but by 2016 it had become the most dominant household type, accounting for 28 per cent of households. In 2021, the number of single-person households increased again, to 29 percent.
This compares with couples with children, who account for 25.3% of households, and couples without children, who account for 25.6% of households. Single-parent families account for 8.7% of households.
While the number of Canadians living alone is now a record, Canada has a relatively small number of people living alone compared to other G7 countries, which have more single-person households (except the United States).
Two or more people who live together and are not related to each other are the fastest growing type of household in Canada, although nationally they account for only four per cent of households.