The Centre for the Study of Living Standards (CSLS) has  released two reports of general interest. Today the CSLS released a report entitled “The Impact of Redistribution on Income Inequality in Canada and the Provinces, 1981-2010” (PDF). The objective of the study is to provide an overview of trends in income inequality, defined as the Gini coefficient, in Canada and the provinces over the 1981-2010 period and to investigate the impact of redistributive policies – namely, taxes and transfers – on these trends.

Income inequality is measured in terms of market income, total income, and after-tax income, with the latter considered the most important from a well-being perspective. The main findings are outlined below:

• Between 1981 and 2010, the market Gini coefficient increased by 0.084 points, or 19.4 per cent. This growing market income inequality was partially offset by a larger dampening effect of both transfers and taxes on inequality (by 0.027 points and 0.010 points respectively), resulting in the after-tax Gini coefficient increasing 0.047 points or 13.5 per cent.  In other words, 44 per cent of the increased market income inequality between 1980 and 2010 was offset by changes in the transfer and tax system.


• The lion’s share of the increase in after-tax inequality over the 1981-2010 period (87 per cent) took place between 1989 and 2000. Since 2000, the after-tax Gini coefficient has only increased 0.003 points (0.8 per cent). Thus counter to popular perceptions, after-tax income inequality, while at an historically high level, has remained basically unchanged in the 2000s.


• If Canada’s redistributive effort were to be  raised to the OECD average, nearly two thirds of the increase in after-tax inequality that has take place in Canada since 1981 would be eliminated. Equally, if the level of redistributive effort that was in place in Canada in 1994, the year where redistribution was greatest, had still been in place in 2010, one half of the rise in after-tax inequality between 1981 and 2010 would be reduced. Canada thus has much room to increase its redistributive effort. What is needed is political will.

Earlier this week  the CSLS  released a report entitled “Canadians Are Happy and Getting Happier: An Overview of Life Satisfaction in Canada, 2003-2011”  http://www.csls.ca/notes/Note2012-3.pdf. The objective of the report is to provide an update and overview of trends in self-reported life satisfaction in Canada, based on data from Statistics Canada’s Canadian Community Health Survey (CCHS). Key findings are found below.

• In 2011 more than 9 out of 10 Canadians aged 12 and over (92.3 per cent) reported that they were satisfied or very satisfied with their lives.


• According to a Gallup World Poll taken in February 2012, Canada is the second happiest country in the world preceded only by Denmark. Our ranking has increased from 5th place (2007-8 Gallup World Poll), indicating that Canada is becoming happier relative to its international peers.


• Between 2003 and 2011, the percentage of the population reporting being satisfied or very satisfied with life in general increased a small but statistically significant 1.0 percentage points from 91.3 to 92.3.


• In general, younger Canadians were more likely to be satisfied with their life overall in 2011 than other age groups. Of the five age groups, persons aged 12 to 19 were the happiest, with 96.9 per cent reporting being satisfied or very satisfied with their lives. In contrast, those 65 and over were the least happy, with 89.1 per cent reporting being satisfied or very satisfied).


• A significant gap in life satisfaction has emerged between the very young and old. In 2003, the proportion of persons aged 12 to 19 who were satisfied or very satisfied was only 2 percentage points higher than for persons 65 and over (94.0 per cent versus 92.0 per cent). By 2011 the gap had jumped to 7.8 percentage points. With the growing importance of persons 65 and over in the population, the absolute decline in life satisfaction among seniors represents an important emerging public policy issue.

The CSLS has also released the reports listed below.

• “Aboriginal Labour Market Performance in Canada: 2007-2011,"  (June 2012) Report number: 2012-04


• “A Detailed Analysis of Nova Scotia's Productivity Performance, 1997-2010," (June 2012) Report number: 2012-05


• “Innovation in Canadian Natural Resource Industries: A System-Based Analysis of Performance, Policy and Emerging Challenges,"  (June 2012) Report number: 2012-06


• “The Impact of Information and Communication Technology on the Productivity of the Canadian Transportation System: A Macroeconomic Approach for the Air and Rail Sectors," (June 2012) Report number: 2012-07


• "Overview of the Developments in ICT Investment in Canada, 2011”  (September 2012) Note number: 2012-2

For further information, please contact:
Andrew Sharpe
Executive Director
Centre for the Study of Living Standards
710-151 Slater Street
Ottawa, Ontario K1P 5H3
613-233-8891

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The Centre for the Study of Living Standards (CSLS) is a national, independent, Ottawa-based not-for-profit research organization. Its primary objective is to contribute to a better understanding of trends and determinants of productivity, living standards, and economic wellbeing in Canada through research.