Income of Canadians (correction)

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Median after-tax income for Canadian families of two or more people amounted to $63,800 in 2009, virtually unchanged from 2008. This was the second consecutive year without significant change in after-tax income following four years of growth.

While the after-tax income remained stable for most types of families in 2009, its three main components (market income, government transfers and income tax) moved in different directions. Median market income and income tax declined for most family types. At the same time, median transfers from governments to families increased by $1,400 to $6,200.

The median after-tax income for two-parent families with children amounted to $75,600, while for senior families it was $46,800.

After-tax income for unattached individuals remained stable at $25,500, though this was not the case for all unattached individuals. For senior unattached individuals, the median rose 4.5% to $23,300.

Components of after-tax income

After-tax income is the total of market income and government transfers, less income tax. Market income consists of earnings, private pensions, income from investments and other sources.

Median market income for families with two or more people fell 3.2% to $63,000 in 2009. It was the first significant drop in market income since the early 1990s.

About 86% of families and 79% of persons not living in families received some form of government transfer in 2009. The total amount transferred to all Canadians increased 10% in 2009.

More than half of this increase took the form of Employment Insurance benefits. The number of families who received EI benefits increased by 20%, while the number of unattached EI recipients rose 29%. Among families that received EI benefits, the median amount rose 22% to $6,100.

Note to readers

This report examines the incomes of families and unattached individuals, as well as low income and income mobility in Canada. It is based on 2009 annual income information provided by the participants in the Survey of Labour and Income Dynamics. Because a large portion of the participants have provided information for several years, a closer look at how income changes over time is possible.

This report largely analyses income on the basis of medians. The median is the level of income at which half of the population had higher income and half had lower. All figures in this report are sample survey estimates, unless otherwise stated. All income estimates are expressed in constant 2009 dollars to factor in inflation and enable comparisons across time in real terms.

The distributional and mobility analyses are done at the person level where each individual is represented by their household after-tax income. This income is further adjusted to take into account the number of persons in the household, and the relative increase in expenses associated with larger households.

Forthcoming studies will attempt to explain the relationship between mobility and the economic cycle while taking into account household composition, changes in Canadian demography and other factors.

Transfers received by different family types varied widely. For non-senior families, median government transfers amounted to $3,600 in 2009, while for senior families, the median was $24,700. Families receiving child benefits saw a $200 increase in the median, which reached $2,600.

Median income taxes were lower in 2009. The median amount of income taxes paid by non-senior families fell $900 to $9,400, while the median paid by senior families fell $600 to $1,900.

Little change in low income rates

The incidence of low income in Canada remained relatively stable in 2009 using the after-tax low income cut-offs. Nearly 3.2 million Canadians, or 9.6% of the population, lived in low income, virtually unchanged from 2008.

About 634,000 children aged 17 and under, or 9.5%, lived in low-income families in 2009, also virtually unchanged. This proportion was roughly half the peak of 18% in 1996.

About 196,000 of these children, or 31%, lived in a lone-parent family headed by a woman. Roughly 22% of children living with a single mother were in low income in 2009, compared with 56% in 1996.

After-tax income mobility

Absolute after-tax income mobility measures the changes in individual after-tax income between two periods. It shows how many people had an increase in income over time, and how many experienced a decline. For this analysis, individuals are represented by their adjusted after-tax household income.

Correction: Between 2008 and 2009, after-tax income rose for 58% of individuals, while 42% experienced a decline. Between 2006 and 2007, prior to the economic downturn, income rose for 62% and declined for 38%.

Correction: From 2008 to 2009, the average after-tax income remained virtually unchanged, while for the 2006-to-2007 period, individual's average after-tax income increased by 3.7%.

On the other hand, the relative mobility which shows changes from one income level to another has increased in recent years. This analysis was done by dividing the population of individuals into five equal-sized groups, or quintiles, from the lowest adjusted after-tax income to the highest.

Between 2008 and 2009, an average of 35% of Canadians moved from one income quintile to another. During the five-year period between 2005 and 2009, 53% of Canadians switched income quintiles.

In 2009, 19% of Canadians moved up to a higher quintile relative to their position a year earlier, while 16% moved down. Between 2005 and 2009, 28% of Canadians moved up and 25% moved down. More Canadians moved up than down during all of the one- and five-year periods from 1993.

Provinces: Median incomes for families stable in all but two

Median after-tax income in 2009 was stable for families of two or more people in every province except Saskatchewan and New Brunswick.

In Saskatchewan, median after-tax income of families of two people or more rose 7.5% to $69,900; in New Brunswick, the median increased 3.2% to $55,000. In both, median after-tax income rose only for non-senior families.

Median after-tax income was significantly higher in Ontario and Western Canada than in Quebec and Atlantic Canada. Alberta has had the highest median after-tax income for economic families with two or more people since 2004. In 2009, it was $77,800.

Available on CANSIM: tables 202-0101 to 202-0107, 202-0201 to 202-0203, 202-0301, 202-0401 to 202-0411, 202-0501, 202-0601 to 202-0606, 202-0701 to 202-0709, 202-0801 to 202-0809.

Definitions, data sources and methods: survey numbers, including related surveys, 3502 and 3889.

A more detailed report, Income in Canada, 2009 (75-202-X, free), is now available from the Key resource module of our website under Publications. This report contains analysis, charts and time series at the Canada, province and some census metropolitan area level. To provide a more complete picture of low income, the report includes analysis using three complementary low income lines: the low income cut-offs, the low income measures and the market basket measure (MBM). The first two were developed by Statistics Canada; the MBM is based on concepts developed by Human Resources and Skills Development Canada.

For further information regarding this release from the Survey of Labour and Income Dynamics, contact Statistics Canada's National Contact Centre (613-951-8116; toll-free 1-800-263-1136; infostats@statcan.gc.ca). To enquire about concepts, methods or data quality of this release, contact Client Services (toll-free 1-888-297-7355; 613-951-7355; income@statcan.gc.ca), Income Statistics Division.