This report examines family income and low income in Canada. The data prior to 1996 are drawn from the Survey of Consumer Finances (SCF). Beginning with 1996, the data are taken from the Survey of Labour and Income Dynamics (SLID).

The publication is organized into chapters, each dealing with a specific income concept. Chapter 2  examines market income, also known as "income before transfers". It represents the money people earned from the labour market, investments and private pensions. Chapter 3  looks at government transfer payments, focusing on specific groups or family types (such as the elderly, lone-parent families and families without an earner) that are the target beneficiaries of most income security programs. Chapter 4 deals with the total income of Canadian families, examining the role of government transfers in total income. Chapter 5 presents information on income tax and how it varied by family type. Chapter 6 examines after-tax income. The joint effect of transfers and income taxes is assessed. Chapter 7 focuses on income inequality. Chapter 8 concentrates on low income in Canada, including low income persistence.

The companion product to this publication -- a compilation of tables on CD-ROM called Income Trends in Canada, (product number 13F0022XCB) — shows data tables for the period starting with 1980. It also contains data for the provinces in addition to 15 metropolitan areas. Tables on earnings (the major component of market income) and other related income concepts or statistics are also included.

When assessing data trends over time, there is always the choice of time period on which to make comparisons. Obviously, the analytical section at the beginning of chapters focuses on what's "new", the most recent year of data available. But it also draws on trends over the previous several years. The present edition shows stability of income for families and individuals between 2001 and 2002, after 5 year upward trend (1996-2001).

Finally, "structural" changes regarding income, such as in the distribution of incomes across the population, tend to require a longer time period to reveal notable changes. When commenting on the income distribution in Canada, such as quintile analysis or the Gini coefficient, we often compare the last few years. For analysis at the provincial level, it is again preferable to look at a longer trend for the purpose of separating real changes in income levels from estimate variation that could be caused by smaller sample sizes at the provincial level.

Quintile analysis is frequently used in this publication. Quintile data are produced by ranking economic families of two persons or more from lowest to highest by the value of their income, grouping the ranked families into five equal-numbered groups, or "quintiles", and then calculating statistics on each of the groups. The income concept used in this publication to rank families is always after-tax income, so they are called after-tax income quintiles. This way of defining the quintiles has the advantage of holding the population in each quintile constant while comparing different characteristics, such as market income versus after-tax income. But one can also analyse market income using market income quintiles, or total income using total income quintiles, as shown in the CD-ROM product, Income Trends in Canada, (product number 13F0022XCB), table 701.

Income is not adjusted for family size. Since changes in family size can account for changes in average incomes, it is worth noting that the average number of members in economic families of two or more persons decreased slightly over the period of analysis, from about 3.14 in the early 1990s to 3.08 in 2002.

All the figures included in this report (unless otherwise stated) are sample survey estimates. To factor in inflation when comparing income levels across time, all the income estimates are expressed in constant dollars of the last year for which data are presented.