Low income in census metropolitan areas

Median family income and low-income rates showed little change in most census metropolitan areas (CMAs) in the 1990s. This followed a decade of growth in median income and decline in low-income rates in most metropolitan areas in the 1980s, according to the first of nine reports that shed light on issues of importance for Canada's urban areas.

The report, which examined income in 27 CMAs using census data, shows that median family-income growth stagnated in the 1990s.

Median income of families living in a metropolitan area in 2000 amounted to $62,300, a 1% increase from 1990. (Median is the point at which half of families had higher income and half less.) On the whole, incomes rose faster during the 1980s. Median family income in metropolitan areas rose 5% across the 1980s. Over the entire 20-year period, median income rose by 7%.

In the 1980s, most metropolitan area residents shared the economic growth to some extent. Incomes increased at both the top and the bottom of the income distribution, however, those incomes at the top tended to rise more. From 1980 to 1990, the low-income rate in all CMAs fell from 18.3% to 17.2% on average. Most urban centres shared in this decline.

In the 1990s, growth was concentrated more among high-income families, with the income of low-income families growing little or declining in most metropolitan areas. As a result, the low-income rate in all metropolitan areas combined rose slightly from 17.2% to 17.7% between 1990 and 2000.

Among particular metropolitan areas, trends were mixed in the 1990s, with low-income rates rising in some metropolitan areas and falling in others.

Two large metropolitan areas where the low-income rate increased in the 1990s were Toronto and Vancouver. In these metropolitan areas, rising low income in the 1990s was particularly concentrated among recent immigrants (those immigrants who arrived during the decade preceding the census).

This report also showed that the income gap between richer and poorer neighbourhoods rose. In addition, certain demographic groups like recent immigrants and Aboriginal people were much more likely to be in low income. Finally, people in low income who lived in urban areas received much less of their income from earnings, and more from government transfers than their counterparts two decades earlier.

Income gap widened between richer and poorer neighbourhoods

The increase in the income gap between higher- and lower-income families in metropolitan areas is reflected in an increasing income gap between lower- and higher-income neighbourhoods. In Toronto, for example, median family income in the poorest 10% of neighbourhoods amounted to $32,900 in 2000, up 2.6% from 1980. In the richest 10% of neighbourhoods, it was $92,800, up 17.4%.

The proportion of neighbourhoods that were low-income neighbourhoods remained relatively stable in the 27 metropolitan areas between 1980 and 2000. (A low-income neighbourhood is one where the low-income rate exceeds 40%.)

In 1980, 6.1% of neighbourhoods in metropolitan areas were low-income neighbourhoods. This proportion fell to 5.5% in 1990, doubled to 11.8% in 1995, then fell to 5.8% by 2000 as economic conditions improved.

The study also examines the location of low-income neighbourhoods in the largest CMAs.

Some urban centres, such as Winnipeg and Vancouver, have a single dominant cluster of low-income neighbourhoods in the downtown core. Others, such as Toronto and Montréal, have several distinct clusters of low-income neighbourhoods surrounding a relatively affluent downtown area.

In Toronto and Montréal, low-income neighbourhoods were also less likely to be found downtown and more likely to be found in clusters outside of downtown in 2000 than they were in 1980.

Low-income rates higher among certain groups

Low-income rates within CMAs were higher among certain groups, making them disproportionately represented among the low-income population.

This report focusses on three groups that tended to have higher low-income rates relative to the entire population of a given metropolitan area. These groups are recent immigrants (those who arrived during the decade preceding the census), Aboriginal people and members of lone-parent families.

The low-income rate for people living in lone-parent families was 46.6% in 2000, compared with a rate of 15.4% among people in other types of families. While still high in 2000, the low-income rate among lone-parent family members was even higher in 1980, at 54.2%.

In 2000, recent immigrants had a low-income rate of 35.0%, nearly twice the average rate for metropolitan areas overall. In 1980, in contrast, recent immigrants had a low-income rate of only 23.1%. This growth was substantial in all metropolitan areas with a large population of recent immigrants.

At the same time, recent immigrants increased their share in the population, especially in the 1990s. In 2000, 9.0% of residents in the largest 27 metropolitan areas were recent immigrants, compared with 6.1% in 1990.

Toronto and Vancouver were two large metropolitan areas where the low-income rate increased in the 1990s. Virtually all of the rises in low-income rates seen in these areas during the 1990s were concentrated among recent immigrants.

In Toronto, the low-income rate in 2000 was 17.7%, up 1.8 percentage points from 1990. Among recent immigrants, however, the low-income rate rose by 4.6 points to 32.8% in 2000. In contrast, the low-income rate among all other individuals was virtually unchanged in Toronto.

In Vancouver, the low-income rate rose by 3.3 percentage points to 19.1% in 2000. Among recent immigrants, however, the low-income rate rose 10.7 points to 37.4%. In contrast, the low-income rate among all other individuals increased only 0.7 points to 15.4%.

Among Aboriginal people in metropolitan areas, 41.6% were living in low income, more than double the national average for metropolitan areas.

Metropolitan areas have widely varying compositions of Aboriginal people and immigrants. Consequently, the composition of the low-income population varies widely from city to city.

In Winnipeg, Regina and Saskatoon, Aboriginal people represented more than 20% of the low-income population. In Toronto and Vancouver, a small portion of the low-income population consisted of Aboriginal people. On the other hand, recent immigrants comprised much larger shares in these cities: 32.0% in Toronto and 32.6% in Vancouver.

Three groups more likely to live in low-income neighbourhoods

The three groups-recent immigrants, Aboriginal people and lone-parent families-were more likely than other groups to live in low-income neighbourhoods.

In 2000, 11.7% of Aboriginal people lived in low-income neighbourhoods, as did 9.7% of recent immigrants and 8.7% of lone-parent family members. Among residents of all metropolitan areas, only 4.4% lived in low-income neighbourhoods.

Recent immigrants comprised a large and rising proportion of residents of low-income neighbourhoods in many metropolitan areas. In Toronto, the share of residents of low-income neighbourhoods who were recent immigrants rose from 24.4% in 1980 to 39.1% in 2000. In Montréal, this share went from 7.8% to 19.4%.

Aboriginal people comprised a large and rising proportion of residents of low-income neighbourhoods in metropolitan areas with large Aboriginal populations, such as Winnipeg and Edmonton. In Winnipeg, the share of residents of low-income neighbourhoods who were Aboriginal people rose from 24.5% in 1995 to 30.8% in 2000.

Low-income families received more from government transfers

In 2000, people in low income who lived in metropolitan areas received a smaller share of their income from earnings, and more from government transfers than their counterparts two decades earlier.

Among individuals in low income in 2000, 51.1% of their income came from transfers, compared with only 42.7% in 1980. This indicates an important change in the source of income for low-income persons.

Definitions, data sources and methods: survey number 3901.

The first research paper in the new series Trends and Conditions in Census Metropolitan Areas, Low Income in Census Metropolitan Areas, 1980 to 2000 (89-613-MIE2004001, free), is now available online. To access the series, go to the home page, select Studies on the left sidebar, then under Browse periodical and series, choose Free and for sale. Under Series, select Trends and Conditions in CMAs. Profiles of 12 CMAs are also available online.

For further information, or to enquire about the concepts, methods or data quality of this release, contact the Media Relations Hot Line (613-951-4636).