Study: Rural-urban income gap

Average incomes in Canada's rural population increased in every province during the past two decades, in many cases at a faster rate than average incomes in urban areas, according to a new study.

As a result, the gap in incomes between the urban and rural population narrowed in six provinces between 1980 and 2000. At the same time, the share of the rural population living in low income has also declined, relative to the share of the urban population living in low income.

The study, which updates a previous article, uses census data to compare the incomes of rural and urban residents in Canada from 1980 to 2000. (All income data are per capita and adjusted for inflation.)

Average income in Canada's predominantly rural regions amounted to $19,491 in 2000, up 25.7% from 1980. At the same time, average income in predominantly urban regions rose 21.6% to $24,248.

The study showed that people living in rural regions of Atlantic Canada improved their financial position more than any other rural area during the two-decade period. In percentage terms, the Atlantic provinces ranked at the top for rural income growth between 1980 and 2000.

Leading the way was New Brunswick, where rural residents recorded a 39.8% gain in average income from $13,000 in 1980 to just over $18,200 in 2000. The rural population in each of the other Atlantic provinces saw gains of over one-third.

In contrast, the average income of rural residents in Saskatchewan rose by only 9.4% from $15,900 in 1980 to $17,400 in 2000.

The income gap between the rural and urban population narrowed in six provinces during this period: New Brunswick, Quebec, Ontario, Manitoba, Alberta and British Columbia.

For example, in New Brunswick, the average urban income in 1980 was $3,224 higher than the average rural income. By 2000, this gap had narrowed to $2,220.

In 1980, 16% of Canada's rural population as a whole had average incomes below Statistics Canada's low-income cutoff. By 2000, this proportion had declined to 14%. This was in sharp contrast to urban regions of Canada, where the share of people with low incomes increased from 16% to 18%.

Overall, between 1980 and 2000, the incidence of low income in rural regions declined in all provinces, except British Columbia, where it rose from 12% to nearly 15%.

In 1980, only British Columbia and Quebec had a smaller incidence of low income in rural regions compared with urban regions. By 2000, the situation was almost reversed. All provinces except Nova Scotia and Newfoundland and Labrador had a smaller incidence of low incomes in rural regions than they did in urban areas.

This was due to a growing incidence of low incomes in urban areas, not to a declining incidence of low incomes in rural areas.

The Rural and Small Town Canada Analysis Bulletin, Vol. 5, no. 7, entitled "The rural-urban income gap within provinces: An Update to 2000" (21-006-XIE2004007, free) is now available on our Web site. From the Our products and services page, under Browse our Internet products, choose Free then Agriculture.

For more information, or to enquire about the concepts, methods or data quality of this release, contact Vik Singh (613-951-5666; vik.singh@statcan.gc.ca), Agriculture Division.