Income of Canadians

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The Census release on May 1 showed an 11.1% increase in median family income (pre-tax) between 1980 and 2005. As a result of strong economic growth fostered by gains in employment, a further 2.1% increase was observed between 2005 and 2006, according to new data from the Survey of Labour and Income Dynamics. At the same time, government transfers also increased, leading to a similar increase in after-tax family income.

Families had an estimated median income after taxes of $58,300 in 2006, up 2.1% from 2005 in real terms. It was the third consecutive annual increase. In 2006, the increase was mainly the result of gains in both market income and government transfers.

The gain in after-tax income was shared by most family types, including senior families, those in which the main income earner was aged 65 and over, and younger, working-aged families. Senior families had a median after-tax income of $42,400, up 2.9%. Working-aged families had a median of $62,000, a 1.8% gain.

Both senior and working-aged family median after-tax income increased by roughly 18% in real terms since 1996.

Persons living alone or "unattached individuals" had a median after-tax income of $22,800 in 2006, up 4.6% from 2005.

Two of the three main elements of after-tax income, market income and transfers from governments, increased in 2006, while median personal income taxes remained virtually unchanged.

For the third consecutive year, Alberta families had the highest median after-tax income, at $70,500. They were followed by families in Ontario and British Columbia.

The incidence of low income in Canada remained relatively stable in 2006. An estimated 633,000 families were below Statistics Canada's after-tax low-income cutoff, 7.0% of the total. About 760,000 children aged 18 and under, 11.3% of the total, lived in low-income families.

Market income: Gains for working-aged families

Working-aged families (whose main income earner was aged 64 or less) had a median market income of $66,800, up 1.8% from 2005.

Market income for both senior families and lone-parent families headed by women remained unchanged in 2006. However, during the past 10 years, both groups have experienced significant gains, reflecting increases in their employment levels and higher earnings.

Senior families had a median market income of $23,300 in 2006, up 40% from 1996 after adjusting for inflation. Single mothers had a median market income of $23,100, compared with a 30-year low of only $8,700 in 1996.

Families and unattached individuals earned the lion's share of their total income from market income. For every $100 in total income, working-aged families received $93 in market income, and the remaining $7 from government transfers. In comparison, senior families received $39 from government transfers and $61 from market income for every $100 of total income in 2006.

Increase in government transfers, while no change in taxes

Families as well as unattached individuals saw an increase in government transfers in 2006 with the introduction of new programs. At the same time, the personal taxes they paid remained virtually unchanged.

Families reported a median government transfer of $4,500 in 2006, up $500 from 2005, while they paid a median level of $9,000 in taxes, which remained the same as the previous year.

Government transfers to senior families remained virtually unchanged at $22,600, the largest amount of all family types.

Two-parent families with children saw an increase in the amount of government transfers received from $2,800 in 2005 to $3,300 in 2006, in part because of modifications to programs, such as the new Universal Child Care Benefit. In 2006, 3.6% more families received a child tax benefit than in the previous year.

For unattached individuals, median government transfers increased from roughly $500 to $600; they paid $2,100 in taxes.

According to the Survey of Labour and Income Dynamics, an estimated $78.2 billion was transferred to families in 2006, up 5.9% from 2005. An estimated $25.3 billion was distributed to people living alone, up 2.8%.

Improvements in after-tax income for almost all income classes

For the purpose of this analysis, families were equally divided into five groups according to their after-tax income, with each group representing 20% of all families.

After-tax income improved for families in all five income groups, except for those at the top, where it remained stable.

The one-fifth of families with the lowest income had an average after-tax income of $24,600 in 2006, up 5.6% from 2005. In contrast, average after-tax income in 2006 for the 20% of families with the highest incomes was virtually unchanged at $133,900 (in real terms).

Nevertheless, the dollar difference between the average after-tax income of the one-fifth of families with the highest and lowest incomes remained stable in 2006.

Low-income rates stable but family low income gap declines

The incidence of low income in Canada remained relatively stable in 2006. An estimated 3.4 million Canadians (or 10.5%) lived in low income (after-taxes) in 2006.

About 760,000 children under 18 years of age, or 11.3%, lived in low income families in 2006, also unchanged. About 307,000, or 40%, of these children lived in a lone-parent family headed by a woman. In fact, about one in three children living with a single mother were in low income.

An estimated 633,000 Canadian families, 7.0% of the total, were below the low-income cutoff, unchanged from 2005. Families in low income needed on average $7,000 to climb above the low-income cutoff. This is an improvement over the 2005 low income gap of $8,000.

Senior families, who had the lowest incidence of low income in 2006, saw their rate remain relatively stable at 2.3%.

About 29% of unattached individuals lived below the low-income threshold. This rate varied between age groups; 34% of non-seniors were in this situation compared with 16% of seniors.

The provinces: Median incomes for Alberta families far ahead of other provinces

For the third consecutive year, families living in Alberta had the highest median after-tax income ($70,500), followed by those in Ontario ($62,400) and British Columbia ($60,300).

Alberta and Saskatchewan were the only two provinces for which the yearly change in after-tax family income was statistically significant. The median rose 7.0% in Alberta and 6.3% in Saskatchewan.

Median government transfers for families increased in three provinces: New Brunswick, Ontario and Alberta.

In Alberta, median government transfers doubled to $3,000 in 2006 from $1,500 in 2005. This large increase was generated by a one-time Energy Rebate program. The Survey of Labour and Income Dynamics estimated that this $400 rebate per taxfiler was distributed to about 910,000 families, and amounted to roughly $1.1 billion. In addition, approximately 454,000 unattached individuals benefited from this rebate for which $182 million was distributed.

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 202-0605, 202-0701 to 202-0706 and 202-0801 to 202-0807.

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

For more information, or to enquire about concepts, methods or data quality of this release, contact Client Services (toll-free 1-888-297-7355 or 613-951-7355; income@statcan.gc.ca), Income Statistics Division.

A more detailed report, Income in Canada, 2006 (75-202-XWE, free), is available today. This report contains analysis and 15 tables at the Canada and province level. Also available today, the 2006 Income Trends in Canada (13F0022XIE, free) provides 40 tables at the Canada and province level as well as some data at the census metropolitan area level.

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