Census Shows Growing Polarization of Income in Canada

The 2001 Census figures on income, released on Tuesday May 13, are telling us two very important stories. The first is that Canadian society is becoming increasingly polarized. The richest 10% of our population has seen its income grow by a whopping 14% while the bottom 10% has seen only a slight increase of less than 1%. Moreover the income of many working families has actually declined!

The second story is that we have been unable, as a nation, to tackle poverty in any meaningful way. The economic boom of the last part of the decade has clearly not benefited most Canadians, and it has failed to put any real dent in Canadian child poverty rates – despite the 1989 resolution, unanimously adopted by the House of Commons, to eradicate child poverty by the year 2000.

While we could have expected bad news during the first part of the last decade, we should have seen substantial improvements in the latter part given the economic boom. We cannot help but conclude that Canada is doing a less than impressive job in most social policy areas. In one of the richest countries on the planet, our lack of attention to social policy is hard to justify and an increasing source of embarrassment.

It is time that we start to pay careful attention to social policy and social programs. A few years ago we began to realize that our healthcare system was in real trouble, so government conducted numerous studies, launched provincial and royal commissions, and made substantial new investments. What the Census results are telling us is that we need to start doing the same thing for social policy in this country.

We need to be harnessing all of our collective efforts and energies towards turning the tide. Let's move beyond federal/provincial jurisdictional battles, let's recognize the role of cities and communities in strengthening our social fabric, and let's support our voluntary sector across the country so that we can truly begin to address the issues that the recent Census has made so evident.

The following are some of the highlights from the Census:

The total incomes of families in the top ten bracket increased by over 14.6% in real dollars over the last decade, while median family incomes stagnated (at $55,016 in 2000, they were almost unchanged from $54,560 in 1990). In one of the most prosperous decades in Canadian history, incomes among the 20% of Canadians just below the median bracket – low-income working Canadians – actually fell. Among the 10% of families with the lowest earnings, average income was $10,341 in 2000, only a slight increase from $10,260 a decade earlier.

polarization of income-chart2

Pre-tax poverty levels and child poverty rates remained basically the same as a decade before, at the unacceptably high levels of 16.2% and 18.4% respectively. (In 1990 these rates were 16.2% and 18.2%). The overall number of Canadians living in poverty actually increased over the decade, to 4.72 million from 4.28 million in 1990 (and 4.09 million in 1980).

Comparisons of income obtained by different groups reveal the extent of this growing polarization. In 2000 the total amount of income of the 10% of Canadian families in the highest income bracket accounted for 28% of all family income, up from 26% in 1990. The 10% of families with the lowest income made up less than 2% of all family income, similar to 1990 levels. The 10% of families with the highest incomes in 2000 received $18 for every $1 of income for families with the lowest 10% of incomes. These ratios are even more dramatic in the big cities where inequalities are greatest: in Toronto that ratio is $27 to $1, in Vancouver it is $23.50 to $1.

Children

In 1989 the House of Commons passed an all-party resolution to end child poverty by 2000. Clearly as a society we have failed to make a dent in child poverty over the last decade. Now over 18.4% of children are living in poverty, up slightly from 18.2% in 1990. The absolute numbers are greater as well: over 1,245,700 children under 18 are now living in low income, up by over 40,000 from a decade ago.

Children of Immigrants

For children from recent immigrant families the situation is dramatically worse. Poverty among children from two-parent families of recent immigrants (arrived in Canada within the last ten years), grew to 39%, up from 33% in 1990 and 22% in 1980 – it is now more than double the national figure of 18%. For children from families where one parent is an immigrant who arrived in the last ten years, the figures are only slightly lower at 33% in 2000, up from 27% in 1990 and 20% in 1980. In 2000 almost 231,000 children with at least one immigrant parent who arrived in Canada during the 1990’s were living in low income.

Two good news stories

Two groups have seen an improvement in their situation

Lone-parent families

The poverty rate of lone-parent families with children has dropped below the 50% mark for the first time in at last 20 years, based on their before tax income. The dramatic increase in incomes for lone-parent families has been due mainly to an increase in market income (just over half of the increase) and also to increasing government transfers. However, with low-income rates among lone-parent families still at 46% (compared with 54% a decade earlier and 55% in 1980) this is not the time to think we have solved the poverty issue for lone-parent families. The before-tax median income of lone-parent families in 2000 was still only 40% of the median before tax income of couples with children under 18.

Seniors

Another group that has been doing better is seniors, whose poverty rate declined from 20% to 17% over the last decade, and has nearly halved from its 30% rate in 1980. One of the major contributors to this trend has been the availability of higher CPP premiums - the CPP/QPP plan was established in the mid-seventies and has only recently paid out full benefits to Canadians. In 2000, two-thirds of the income of Canada’s low income seniors came from old age security benefits and guaranteed income supplement benefits.

While there are less seniors in poverty the numbers are not gender neutral. Of the seniors living in low income 71% were women and 29% were men. Almost twice as many women were living in low income.

Also there remains the major challenge of seniors living alone. While the low-income rate has declined from 65% in 1980, today 40% of seniors who are living alone are living in poverty; and for women the rate is a 43% compared to 31% for men living alone.

Government Transfers

Overall, government transfers have decreased. Although Statistics Canada declined to reveal the dollar value of the decrease, they did provide analysis of the changing significance of government transfers to different income groups.

Among working age families, the proportion of total income represented by government transfers dropped over the decade, from 6.4% to 5.6%. This drop did not actually begin until after 1995, and it reversed a trend of growth in government transfers to working age Canadians which had been evident since 1980.

However, the proportion of income attributable to government transfers has increased throughout the 1990s for the 30% of families at the bottom end of the income distribution. The proportion of their income derived from government transfers increased from 58.4% to 62.2%. Transfers to the other 70% decreased over the decade.

Annex

Provinces, Territories and Cities:

Regional Variations

  • Among the census metropolitan areas with the ten highest median family incomes in 2000, eight are located in Ontario. The remaining two are Calgary and Edmonton.

  • With the exception of Trois-Rivieres ($47,571) and Sherbrooke ($48,969), median family income was above $50,000 in all of Canada’s 27 large urban centres.

  • Between 1990 and 2000, median family income in Windsor increased by 13.3% from $57,967 to $65,649 representing the largest increase among all census metropolitan areas. The median at the national level was essentially unchanged over this period.

  • Family incomes were most unequal in Toronto and Vancouver

  • Family incomes were most equally distributed in Quebec City, ($12 to $1), Oshawa, Sherbrooke and Victoria

  • Families in St .John’s received $5,100 in government transfer payments in 2000, accounting for 8.1% of total family income in the city, the highest proportion among all urban areas.

  • Family income from transfer payments exceeded 7% in other cities as well: Trois Rivieres, Saint John, Chicoutimi-Jonquiere and Sherbrooke

  • Average government transfers received were less than $3,000 in three census metropolitan areas: Toronto ($2,900), Calgary ($2,900) and Oshawa ($2900). Government transfers represented 3.4% of total family income in Toronto, 3.4% in Calgary, and 3.7% in Oshawa

Montreal

  • The median income of families in Montreal was essentially unchanged between 1990 and 2000

  • In 2000 one half of families in Montreal had an income above $53,385, higher than the provincial median for Quebec of $50, 242 but lower than the national median of $55,016

  • The lowest 10% of families in Montreal had an income of $10,400 and the highest $179,700 or one dollar to $17.30 between the highest and lowest 10%.

Ottawa-Hull

  • The median income in Ottawa Hull increased 2.1% between 1990 and 2000

  • The median income was $69,518 significantly higher than the Ontario provincial medium of $61,024 and the national medium of $55,016

  • The lowest 10% of families in Ottawa had an average income of $12,800 while the wealthiest 10% had an average income of $214,000 or one dollar for every $16.70 for the richest group

  • On average families in Ottawa Hull received $32,00 in government transfer payments in 2000 representing 3.9% of total family income in Ottawa Hull

Toronto

  • In Toronto, the lowest 10% had an average of $9,600 while those in the highest 10% had an average of $261,000. The average income of the top 10% was higher in Toronto than in any other city in the country

  • For every dollar of income of the 10% of Toronto families with the lowest incomes the 10% with the highest was $27.30

  • The median income of families in Toronto declined 4.2% between 1990 and 2000

  • In 2000 half of the families in Toronto had an income of $63 700 down from $66 520 in 1990, higher than the provincial and national average

Calgary

  • The median income of families in Calgary increased 6.6% between 1990 and 2000

  • The lowest 10% of the population had an average income of $13, 000 while those in the top 10% averaged $248,600 or one dollar to every $19.10

  • On average, families in Calgary received $2,900 in government transfer payments, investment income, retirement pensions and other money income.

Vancouver

  • After Toronto, family incomes were most unequal in Vancouver, where the bottom 10% had an average income of $8,700 and the top 10% had $205,200 on average. The lowest 10% therefore had one dollar to every $23.50 the highest ten percent had.

  • The median income of families in Vancouver declined 3.9% between 1990 and 2000

  • The median income in Vancouver was $57,926 down from a medium of $60,254 a decade previous. This was higher than the provincial median of $54,840 and national median of $55,016

  • On average in Vancouver families received $3,300 in government transfer payments in 2000 representing 4.5% of all family income.

polarization of income-chart1

CCSD

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Phone: 613-236-8977

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