Low income in census metropolitan areas
Andrew Heisz and Logan McLeod
|Recently, Statistics Canada released the first in a series of reports examining trends and conditions in Canada's largest urban areas. This article covers the main highlights. Readers are encouraged to read the full report for more details: Low Income in Census Metropolitan Areas, 1980-2000, by Andrew Heisz and Logan McLeod, 2004. Internet: /pub/89-613-m/89-613-m2004001-eng.htm|
All Canadians—business people, politicians and the general public—share a heightened interest in and awareness of the 'status' of Canada's metropolitan areas. They are concerned about renewing community life in the urban centres. This means addressing poverty, enhancing the business climate, and providing new opportunities to learn and to work for all Canadians—including new immigrants and Aboriginal people.
This article examines income and low income in Canada's 27 census metropolitan areas (CMAs) between 1980 and 2000 using census data. It looks at the situation of families and the neighbourhoods they live in. The objective is to present a statistical portrait of Canada's urban areas, and to describe the income of Canadians from an urban perspective. A diversity of outcomes across metropolitan areas, income levels, decades, and demographic groups are summarized.
Income between 1980 and 2000
The median income of families1 living in a metropolitan area in 2000 amounted to $62,300, a 1% increase from 1990 (Table 1). But on the whole, incomes rose faster during the 1980s. Median family income in metropolitan areas rose 5% during the 1980s and 7% over the entire 20-year period.
These aggregate trends were generally reflected among individual CMAs, but outcomes were diverse. In the 1980s, 15 of 27 CMAs posted growth of at least 5%, but 4 showed either no growth or a decline. These CMAs tended to be located in western Canada, where the recession of the 1980s hit hardest. In the 1990s, while 12 CMAs showed either no growth or a decline, the median income of some continued to grow. Altogether, 5 CMAs posted a growth rate of 5% or more in the 1990s.
Most CMA residents shared in the economic growth of the 1980s to some extent. Incomes increased at both ends of the income distribution, particularly at the top. Because of rising income at the bottom of the distribution, the low-income rate in CMAs fell from 18.3% to 17.2% between 1980 and 1990.2 Most centres shared in this decline.
In the 1990s, growth was concentrated more among high-income families, with the income of lower-income families growing little or declining in many CMAs (Chart A). An examination of income growth at the 10th and 90th percentiles serves as an illustration. At the 10th percentile, income is lower than 90% of the population and higher than 10%. At this percentile, income fell by 1.6% in the 1990s; in 9 CMAs, it fell by 5% or more. Similarly, at the 90th percentile, income is higher than 90% of the population and lower than 10%. At this percentile, income rose by 7.7%, with 21 CMAs registering 5% or more, and 7 CMAs 10% or more.
As a result of falling incomes at the 10th percentile, the low-income rate for all CMAs combined rose slightly, from 17.2% to 17.7% between 1990 and 2000. However, trends among CMAs were mixed, with low-income rates rising in some and falling in others. The largest rise was in Vancouver, where the rate increased from 15.8% to 19.1%.
Low-income rates higher and rising among recent immigrants
Low-income rates within CMAs were higher among certain groups, making them disproportionately represented among the low-income population. Three groups in particular tended to have higher low-income rates relative to the population of a given CMA: recent immigrants (those who arrived during the decade preceding the census),3 Aboriginal people, and lone-parent families.
The low-income rate for lone-parent families4 was 46.6% in 2000, compared with 15.4% for other types of families (Table 2). Although high in 2000, the low-income rate among lone-parent families was even higher in 1980 (54.2%). In 2000, individuals in lone-parent families made up a disproportionately large share of the low-income population in CMAs—19.3% compared with 7.3% of the overall CMA population.
In 2000, recent immigrants had a low-income rate of 35.0%, nearly twice the overall CMA average. In 1980, in contrast, their rate was only 23.1%. The growth was substantial in CMAs with large populations of recent immigrants. As with lone parents, recent immigrants represented a disproportionate share of the low-income population.
While low-income rates rose for recent immigrants, their share of the population also increased, especially in the 1990s. In 2000, 9.0% of CMA residents were recent immigrants, compared with 6.1% in 1990.
In Toronto and Vancouver, two large CMAs, the low-income rate increased in the 1990s. Virtually all of the rise in these areas was concentrated among recent immigrants. In Toronto, the low-income rate in 2000 was 17.7%, up 1.8 percentage points from 1990. Among recent immigrants, however, the rate rose by 4.6 points to 32.8%. In contrast, among all other groups, it was virtually unchanged. In Vancouver, the low-income rate rose by 3.3 percentage points to 19.1%, while among recent immigrants, it rose 10.7 points to 37.4%. In contrast, among all other groups, it increased only 0.7 points to 15.4%.
Among Aboriginal people in CMAs, 41.6% were living in low income, more than double the national average for CMAs. As with lone parents and recent immigrants, Aboriginal people represented a disproportionately large share of the low-income population. (Because of changes in collection of information on Aboriginal people, they can be consistently defined only in the 1996 and 2001 censuses.)
CMAs have widely varying proportions of Aboriginal people and immigrants. Consequently, the composition of the low-income population varied widely. In Winnipeg, Regina and Saskatoon, Aboriginal people represented more than 20% of the low-income population. In Toronto and Vancouver, little of the low-income population consisted of Aboriginal people. On the other hand, recent immigrants comprised much larger shares: 32.0% in Toronto and 32.6% in Vancouver (Chart B).
Widening income gap between richer and poorer neighbourhoods
The increase in the income gap between higher- and lower-income families in CMAs was reflected in an increasing income gap between lower- and higher-income neighbourhoods (defined by census tracts). In Toronto, for example, median family income in the poorest 10% of neighbourhoods rose 0.2% from 1980. In the richest 10%, it was up 23.3% (Chart C). This increasing difference was observed in all larger CMAs (Chart D). In areas such as Ottawa-Gatineau, Kitchener, St. Catharines-Niagara and London, income rose in both higher- and lower-income neighbourhoods, although more in the former. In Hamilton, Winnipeg, Calgary, Montréal, Québec and Edmonton, income rose in higher-income neighbourhoods and fell in lower-income neighbourhoods. In Vancouver, it fell in lower-income neighbourhoods, but was unchanged in higher-income neighbourhoods.
However, while the income gap between richer and poorer neighbourhoods grew, the proportion of low-income neighbourhoods remained relatively stable between 1980 and 2000 in the 27 CMAs. (A low-income neighbourhood has a low-income rate exceeding 40%.) In 1980, 6.1% of CMA neighbourhoods were low-income neighbourhoods. This fell to 5.5% in 1990, doubled to 11.8% in 1995, then fell again, to 5.8%, in 2000 as economic conditions improved.
The location of low-income neighbourhoods in the largest CMAs is also of concern. Are they clustered together in the downtown core or dispersed throughout the CMA? In fact, Canadian CMAs are diverse in this regard. Some, such as Winnipeg (Figure 1) and Vancouver, have a single dominant cluster of low-income neighbourhoods in the downtown core. Others, such as Toronto and Montréal, have several distinct clusters surrounding a relatively affluent downtown.
In Toronto and Montréal, low-income neighbourhoods were also less likely to be found downtown and more likely to be found in clusters outside of downtown in 2000 than they were in 1980. In Montréal for example, Plateau Mont-Royal was one of two areas with low-income rates greater than 40% in 1980, but not in 2000 (Figure 2). The other was Old Montréal, the site of a number of new condominium developments. At the same time, three clusters of low-income neighbourhoods farther from the city centre grew over this period: Hochelaga-Maisonneuve in the east end, Côte-des-Neiges, and Park Extension (near Mont-Royal).
Certain groups more likely to live in low-income neighbourhoods
Recent immigrants, Aboriginal people and lone-parent families were more likely than other groups to live in low-income neighbourhoods. In 2000, 11.7% of Aboriginal people lived in low-income neighbourhoods, as did 9.7% of recent immigrants, and 8.7% of those living in lone-parent families. Only 4.4% of CMA residents overall lived in low-income neighbourhoods.
Residents of low-income neighbourhoods reflected the demographic make-up of the CMA; recent immigrants comprised a large share of low-income neighbourhood residents in Toronto and Montréal, while Aboriginal people represented large shares in Winnipeg, Regina and Saskatoon.
Recent immigrants and Aboriginal people made up a large and rising proportion of residents of low-income neighbourhoods in many CMAs. In Toronto, the share of recent immigrants in low-income neighbourhoods rose from 24.4% in 1980 to 39.1% in 2000. In Montréal, this share went from 7.8% to 19.4%. In Winnipeg, the share of Aboriginal people in low-income neighbourhoods rose from 24.5% in 1995 to 30.8% in 2000.
Family income growth stalled for many CMA residents in the 1990s. During that decade, income grew for the highest-income families but fell for lower-income families in many CMAs. Consequently, low-income rates rose in some CMAs and fell in others. Rising low-income rates were seen among recent immigrants who, along with Aboriginal people and lone-parent families, had much higher rates than the general population in 2000. As a result, these groups were highly concentrated among the low-income population in CMAs.
Trends in income and low income observed at the family level were echoed at the neighbourhood level. In most CMAs, income rose more in higher-income neighbourhoods than in lower-income neighbourhoods. The share of neighbourhoods with a low-income rate greater than 40% was about the same in 2000 as in 1980, but recent immigrants, Aboriginal people and lone-parent family members were disproportionately represented. In some CMAs, low-income neighbourhoods were concentrated in the downtown core; in others, they formed distinct clusters surrounding a relatively affluent downtown. Low-income neighbourhoods shifted away from the downtown core in some CMAs over the period.
- Income of economic families after transfers and before tax. An economic family refers to two or more persons who live in the same dwelling and are related to each other by blood, marriage, common law or adoption. Unattached individuals are excluded. Trends using the adult-equivalent adjusted income of all persons (unattached individuals and economic family persons) were similar. Income refers to total income received in the year preceding the census.
- Low income is measured on an after-transfer, before-tax basis. A person is deemed to be in low income if their adult-equivalent adjusted income is below one-half the median adult-equivalent adjusted income in their particular CMA. This threshold will vary from CMA to CMA, but on average it was $33,600 for a family of two adults and two children measured in 2000 dollars. For other years, income was adjusted to 2000 dollars and compared with the fixed threshold.
- Canadian-born persons living in families headed by immigrants were included in the totals for immigrants. Persons who immigrated in the census year or the year preceding the census were excluded. Annual income for these immigrants will be biased downwards since they spent none or only part of the reference year in Canada.
- Includes only lone-parent families with at least one child under 18.
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Andrew Heisz is with the Business and Labour Market Analysis Division. He can be reached at 951-3748. Logan McLeod is with the Health Statistics Division. He can be reached at 951-4800. They can be reached at firstname.lastname@example.org.
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