Income, pensions, spending and wealth
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After four years of growth, the median after-tax income for Canadian families of two or more people remained virtually stable in 2008 at $63,900. The level was unchanged in all provinces except British Columbia and Saskatchewan, where median after-tax income for families of two or more rose 5.7%. After-tax income for unattached individuals was also unchanged nationally in 2008, at $24,900, the first time in three years with no notable change.
Having dropped to its lowest level in 30 years in 2007, the proportion of Canadians living below the low income cut-off after tax was at 9.4%, virtually unchanged from 2007. Just over 3 million Canadians lived in low income in 2008. The proportion of children in low-income families was 9.1% in 2008, half the 1996 peak of 18.4%.
For most types of families, the median amount of income taxes, federal and provincial, paid in 2008 was stable from the year before. Families of two or more people paid $8,800 and unattached individuals paid $2,400, both unchanged from 2007. Senior families (families with at least one person aged 65 and older) paid $2,400, around $500 less than in 2007.
Pension values rebound
In 2009, the total value of pensions rebounded almost to their 2007 level. After a steep decline in 2008, pension assets increased to $2.1 trillion, reflecting 2009's stock market advances. The value of individual registered savings plans increased 20.5%, followed by social security pensions (13.3%) and employer-based pension plans (12.8%).
In 2008, contributions to pension plans rose 0.4% overall, although contributions to individual registered savings plans fell by 2.2%, reflecting the deterioration in household finances. Withdrawals from pensions increased 3.0% in 2008, compared with 7.1% the previous year.
In 2009, membership in registered pension plans (RPPs), which are established by employers or unions for employees, edged up 0.2% from 2008 to reach 6,024,000. The entire increase came from the public sector, where RPP membership rose 2.6% to 3,026,400. In the private sector, membership fell 2.1% to 2,997,300.
The proportion of employees covered by an RPP was 39.2% in 2009 (40.4% for women and 38.1% for men). The rate for women was higher because of the high proportion of women in the public sector, where the majority (87.3%) of female employees are covered by a pension plan.
The coverage rate for RPPs in the private sector was just over 25%.
In 2009, the average Canadian household curbed spending by 0.3% to $71,117 during the 2008–2009 recession. This was the first year-over-year decline since these data were first collected in 1997. While overall spending fell, prices rose in 2009: the annual average inflation rate measured by the Consumer Price Index was 0.3%.
Households cut back on non-essential items or those that could be postponed, such as recreation and household furnishings. Spending on home repairs and maintenance, however, rose 22% in 2009, likely because of the federal government's Home Renovation Tax Credit program.
Food, shelter and clothing took up the largest share of household budgets in 2009, accounting for 34% of the average household's spending, while personal taxes represented 20% and transportation, 14%. The one-fifth of households with the lowest income spent nearly 52% of their budgets on food, shelter and clothing.
Wealth varies by family type
Married couples without children at home had the highest average total assets of any family type in 2009, at nearly $659,000. Female lone-parent families had the lowest average total assets, at $187,000, and unattached women aged 65 and older had the second-lowest, at $249,000.
Debts—including money owed on a mortgage, loan, line of credit, credit card or student loan—were highest for two-parent families with children, at an average debt of just over $130,000 in 2009. Married couples without children had an average debt of $61,000.
Family status plays a role in net worth, which is the value of assets minus debts. In 2009, married couples without children at home had the highest average net worth, at $597,000. Two-parent families with children had an average net worth of just over $442,000, whereas lone-parent fathers' net worth was $135,000 and lone-parent mothers' net worth averaged $119,000.
For senior families, home ownership plays an important role in their income. The income generated by the equity of homeowners increases the income of retirement-age households from 10% to 13% for those aged 60 to 69 and from 12% to 15% for those aged 70 and older.
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