Income inequality and the number of low-income people declined significantly as after-tax family income experienced a marked increase, especially in single-parent households, according to new census data released today by Statistics Canada.
Average after-tax household income grew 9.8% from 2015 to 2020, doubling the growth rate seen by Canadian households from 2010 to 2015, when after-tax income grew to 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 the greater contributions of Canada’s child benefit and the benefits of the pandemic relief to household incomes with lower incomes, “the statement said.
In single-parent households headed by a woman, which account for 80% of single-family homes, average after-tax income grew 22.8% from 2015 to 2020, largely due to child benefit. Canada and its improvements implemented 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 Canada Child Benefit (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.
During the same period, the number of low-income Canadians decreased from 14.4% in 2015 to 11.1% in 2020, mainly driven by pandemic benefits for the working age population and the CWB for parents. and children.
Low-income seniors, however, experienced a decline, and the number of low-income seniors increased from 14.4% in 2015 to 15% in 2020.
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.