T1 Family File, Final Estimates, 2015
Section 1 - The data

Data Source

The data are derived primarily from income tax returns. For the most part, tax returns were filed in the spring of the year following the reference year. The mailing address at the time of filing is the basis for the geographic information in the tables.

The T1 Family File (T1FF) approximates the total Canadian population. It contains information on sources of income (from the taxfilers) and some demographic indicators (derived from both the taxfilers and the non filers). We have divided the T1FF data into three themes:

Census Families

Development of Small Area and Administrative Data T1 Family File (T1FF) is based on the census family concept, which is specific to Statistics Canada. Census families are married couples or couples living common law with or without children, or lone parents with at least one child living in the same dwelling. The residual population is called "persons not in census families" and is made up of persons living alone and of persons living in a household but who are not part of a couple family or lone-parent family. Other sources of data may use economic family or household. Economic families are groups of two or more people living in the same dwelling who are related to each other by blood, marriage, common law, or adoption. A ‘household’ is a person or a group of people occupying the same dwelling. Due to constraints associated with the data source, we are unable to disseminate data at the economic family and household level.

Starting with the 1992 tax year, common-law couples were recognized as a separate category on the T1 General Tax form. Beginning with the 2000 data, same-sex couples reporting as a couple are included as common-law couples, and therefore counted in the couple category.

The initial population used to develop the census family units comprises all taxfilers for the reference year and represents approximately two thirds of the Canadian population. The census family units are formed from information obtained on the tax returns of the taxfiling family members.

First, taxfilers from the same census family, including children, are matched using common links (e.g., spousal social insurance number, same name, and same address). Prior to 1993, non-filing children were identified from information on their parents’ tax form. Information from the Federal Family Allowance Program was used to assist in the identification of children. Since 1993, children are added to the census family by using the Canada Child Tax Benefit (CCTB) file, the provincial births files and previous years of the T1FF.

The remaining taxfilers who have not been matched in the census family formation process become persons not in census families (formerly non-family persons). They may be living with a census family to whom they are related (e.g., brother-in-law, cousin, grandparent) or unrelated (e.g., lodger, roommate). They may be living with other persons not in census families or living alone.

Individuals

Beginning with 1992 data, demographic statistics are included in the standard tables for both taxfilers and the non-filing population. These statistics are derived from the small area and administrative family data tables (T1 Family File) built from income tax records and other sources of administrative data. For tables of previous years (up to and including 1991), demographic statistics were provided for taxfilers only.

Seniors

The data tables on seniors is a subset of the individual and census families data tables and begin with 1990 tax year. These tables cover the entire population, but focus on older adults and seniors. A senior census family is a couple family where at least one of the partners is aged 55 or over, or a lone-parent family where the parent is aged 55 or over.

Data Vintage

The data are taken from tax records, and are the current data from tax returns filed for the year noted on the tables. For example, 2015 income records are taken from 2015 tax returns filed in the spring of 2016, with data released during the summer of 2017. Data are released on an annual basis.

Data Quality

The data appearing in the tables are taken directly from the T1 Family File (T1FF), built from the income tax and the Canada Child Tax Benefit records. Information on income is obtained from the taxfilers, for both themselves and their non-filing spouses. Demographic information is derived from taxfilers and non-filing spouses and/or children, such as the estimates of the "number of persons" and "total taxfilers and dependents".

In 2015, about 75.0% of Canadians (of all ages) filed tax returns (see Table A).

Most children do not file because they have low or no income. Improvements have been made to the process of identifying children. For example, the introduction of the Universal Child Care Benefit program in 2006 has allowed the identification of more children under the age of six.

These changes have resulted in improved coverage of children in the T1FF data compared to the official Statistics Canada population estimates. The impact of these changes is most notable in the counts and median total income of lone-parent families although it is not possible to distinguish the precise impact of the improvements separately from normal year-to-year change.

Some elderly Canadians receiving only Old Age Security (OAS) pension and Guaranteed Income Supplement (GIS) do not file because they have low or no taxable income. However, with the introduction of the federal sales tax (FST) credit in 1986 and the goods and services tax (GST) credit in 1989, the percentage of the elderly population filing tax returns has increased. In 2015, 94.9% filed tax returns, up from 75% in 1989 (when comparing taxfilers aged 65 years or more with the 65 years or more population estimate counts to July 1, 2016, available from Statistics Canada’s CANSIM database, table 051-0001).The introduction of the FST and GST credits has also resulted in more low-income families filing tax returns.

The initial population used to develop the estimated population counts comprise all taxfilers for the reference year and represents almost three-quarter of the Canadian population. Taxfilers from the same census family including children are matched using common links (e.g., same name, same address). When there are indications that one or several members of a census family are missing (for instance children), those members are imputed. The remaining taxfilers who have not been matched in the census family formation process become non-census family persons. The resulting population counts approximate the total Canadian population.

The Income Statistics Division’s population estimates compare well with estimates obtained through other sources. For example, coverage rates by age from the data tables, compared to the official population estimates, are:

Beginning in 1992, “Total income” and “family total income” were changed to include income of non-filing spouses reported on the taxfiler's income tax return. This increased the population of lower income individuals, subsequently lowering the median total income of the population. This also caused an increase in total census family income as well as an increase in median census family income for 1992. Starting with 2001 data, wage and salary income of non-filing spouses can be identified, in some cases, from T4 earnings statements.

When compared to other sources, T1FF median Census family income at the Canada level has been a few percentage points below. In 2015 there was a 4.4% difference in the median Census family income at the Canada level between T1FF and the Canadian Income Survey (CIS) (Table C).

As for the T1FF median income for individuals, when compared at the Canada level, it has been just a bit lower. In 2015 there was a 3.41% difference in the median income for individuals at the Canada level between T1FF and the CIS (Table D).

The table below shows the coverage of government transfers at the individual level for 2015.

Confidentiality and Rounding

All data are subject to the confidentiality procedures of rounding and suppression.

To protect the confidentiality of Canadians, counts and amounts are rounded. Rounding may increase, decrease, or cause no change to counts and amounts. Rounding can affect the results obtained from calculations. For example, when calculating percentages from rounded data, results may be distorted as both the numerator and denominator have been rounded. The distortion can be greatest with small numbers.

Starting with the 2007 data, all aggregate amounts are rounded to the nearest $5,000 dollars. Also as of 2007, median incomes in the data tables are rounded to the nearest ten dollars (prior to 2007 they were rounded to the nearest hundred dollars).

Since 1990, data cells represent counts of 15 or greater, and are rounded to a base of 10. For example, a cell count of 15 would be rounded to 20 and a cell count of 24 would be rounded to 20.

For 1988 and 1989 data, all counts are 25 or greater and they are rounded to the nearest 25. Reported amounts are rounded to the nearest thousand dollars.

For data up to and including 1987, all counts are randomly rounded to a base of 5, and reported amounts are unrounded, but are adjusted according to the rounding of the counts.

In the data tables:

• Medians, and average amount are rounded to the nearest ten dollars;
• Percentages, ratios and indexes are published with one decimal and calculated on rounded data; therefore, the sum of percentages might not equal 100% in the case of small counts.

Suppressed Data

To maintain confidentiality, data cells have been suppressed whenever:

• areas comprise less than 100 taxfilers;
• cells represent less than 15 observations;
• cells were dominated by a single observation;
• cells for median income were based on a rounded count of less than 20 observations.

Suppressed data may occur:

1. within one area:
   • when amounts for one of the income categories is suppressed, a second category must also be suppressed to avoid disclosure of confidential data by subtraction (called residual disclosure) (see Table F);
   • when amounts for one of the gender categories is suppressed, the other gender category must also be suppressed to avoid residual disclosure (see Table F);
   • when amounts for one of the age group category is suppressed, another age group must also be suppressed to avoid residual disclosure.
2. between areas:
   • when a variable amount in one area is suppressed, that variable amount is also suppressed in another area to prevent disclosure by subtraction.

Low-Income Measures: Before-Tax and After-Tax

Low-Income Measures (LIMs) included in the T1FF census family tables 17 and 18 (CANSIM 111-0015) are a relative measure of low income. LIMs are a fixed percentage (50%) of adjusted median census family income where adjusted indicates a consideration of family needs. The census family size adjustment used in calculating the LIMs reflects the precept that family needs increase with census family size. A census family is considered to be low-income when their income is below the Low-Income Measure (LIM) for their census family type and size.

The following steps outline the method to calculate the LIMs and to establish the low-income population for census families and persons not in census families. The procedure for the Before-Tax LIM and the After-Tax LIM is the same but a different income variable is incorporated into each of the calculations. Total Income is used for the Before-Tax LIM while Income After Tax is used for the After-Tax LIM. (See Section 3 Glossary for the definition of these variables.) For both of these measures, an adjustment is made for capital gains.

Here are the key components behind the calculation of the Low-Income Measure (LIM). This measure is calculated for the census family.

1. Determine for each census family the adjusted family size whereby the first adult is counted as 1.0, each additional adult and each child 16 years of age and over as 0.4 and each child less than 16 years of age as 0.3 (except in a lone-parent family where the first child is counted as 0.4). Each person not in a census family is counted as 1.0.
2. For each census family calculate an adjusted family income “by dividing their family income by their adjusted family size”. For persons not in census families, for whom the adjusted family size is 1.0, the adjusted family income is the individual’s income.
3. Determine the median adjusted census family income which is the adjusted census family income where 50% of the census families, including persons not in census families, have a smaller adjusted census family income and 50% have a higher one.
4. The LIM for a census family of size one is 50% of the median adjusted census family income and the LIMs for the other census family types are equal to this value multiplied by their adjusted census family size.
5. Low-income census families and low-income persons not in census families are those whose incomes are below the LIM for their census family types. Census families and persons not in census families whose incomes are equal to or above the LIM for their census family type are not considered low income.
6. This process is repeated for each year. Thus, the LIMs for each year are derived from the reported incomes of that year.

Low-Income Measures by Census Family Type

Tables G and H outline the before-tax and after-tax Low Income Measures (LIMs) for 2015. Both tables have the same format. Various census family types are outlined: lone-parent families (one adult with one, two and ten children), couple families (two adults with zero, one, two, and ten children), lone-parent or couple families with older children and younger children (one to four adults with zero, one, two and ten children) and persons not in census families (one adult, no children). Low-income census families and low-income persons not in census families are those whose (census family) incomes are below the LIM for their census family type.

Example: The 2015 before-tax LIM for a person not in a census family is $20,623 and the 2015 before-tax LIM for a lone-parent family with two children 15 years of age and under is $35,059.

The before-tax LIM for any census family size can be calculated by multiplying $20,623 by the appropriate adjusted census family factor for a specific census family size. For example, the before-tax LIM for a couple family with two children over the age of 15 is $45,371. This is calculated by multiplying $20,623 by 2.2.

Example: The 2015 after-tax LIM for a person not in a census family is $18,213 and the 2015 after-tax LIM for a lone-parent family with two children 15 years of age and under is $30,962.

The after-tax LIM for any census family size can be calculated by multiplying $18,213 by the appropriate adjusted census family factor for a specific census family size. For example, the after-tax LIM for a couple family with two children over the age of 15 is $40,069. This is calculated by multiplying $18,213 by 2.2.

Other Low-Income Statistics

In addition to the census family information produced from administrative files which is described in this user's guide, low-income statistics are also available for economic and census families from the Survey of Consumer Finances (up to 1997), from the Survey of Labour and Income Dynamics (from 1993 to 2011) and from the Canadian Income Survey (from 2012 onwards). These include Low Income Cut-Offs (LICOs), Market Basket Measures (MBMs) and Low-Income Measures (LIMs).

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