Introduction and purpose

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Information on the incomes of the Canadian population is widely used to understand the financial situation of families and individuals, including the extent to which this income issufficient to purchase basic goods and services. To meet this need, Statistics Canada publishes information on personal income derived from a number of different sources. The current major sources¹ are:

• Survey of Labour and Income Dynamics (SLID): SLID is a longitudinal household survey that is able to produce annual estimates of income. The primary focus of the survey is on the income and work situation of the Canadian population².  Each year, two groups (panels) of respondents are interviewed, each having about 15,000 households³. Each panel remains in the survey for six years.
• Annual Estimates for Census Families and Individuals (T1 Family File) (T1FF) and the Longitudinal Administrative Data (LAD) contain data derived from administrative files obtained from Canada Revenue Agency⁴. The main source is the Income Tax and Benefit Return file (T1) but they also draw on information from other administrative sources (e.g., the Canada Child Tax Benefits file) to compute additional fields, impute information for non-filers, and to create families. The LAD is a sample of the T1FF and combines information over a number of years, to permit analysis of the changes in income over time. For this paper, the output of the T1FF will be used.
• Census of Population: the Census is conducted every five years, most recently in May, 2006. Its purpose is to develop a statistical portrait of the Canadian population. It provides information about the characteristics of that population and asks basic questions (e.g., age, sex, marital status, etc.) to everyone and additional questions to every fifth household. The income questions (for the previous year's income, 2005 in this case) are asked of that one in five sample.
• System of National Accounts (SNA): The SNA approaches personal income from a different perspective. Rather than looking at the income of individuals or families, it looks at the aggregate income of the Persons and Unincorporated Business Sector (PUBS), one of the four sectors of the economy. The National Income and Expenditure Accounts (IEA, one component of the SNA) includes data on personal income in their sector accounts, which are intended to "define and measure total economic production for the country"⁵.  The data are derived from administrative sources, as well as from surveys conducted by other areas of Statistics Canada.

Because the information from these sources is collected and/or generated in different ways, and through different vehicles, there are also differences in the income data that is produced from these sources. The purpose of this report is to document the most important of these differences, in order to help data users understand the reasons for any variations and assess the fitness of each source for different uses. Data for calendar year 2005 will be used to illustrate some of the differences. Although more recent years of SLID, T1FF and National Accounts data exist, 2005 was chosen because it corresponds to the latest available year with Census data.

Table 1 presents a few simple income concepts from different sources as can be seen in various standard products disseminated by Statistics Canada.This table highlights possible difficulties for the user as to coherence and interpretability of the selected statistics.

Table 1 Selected Income Components as Published by Source, 2005

 

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Notes

1. A number of other household surveys also collect information on personal income, to provide contextual or descriptive information on the situation of individuals or families. Several of these are mentioned in the 'Income' section of Your Guide to Data Sources on Census-related Topics (Catalogue no.: 92-135-GWE).The income data of these other surveys will not be considered for the purposes of this paper. Some of them have previously been compared in a similar fashion though with a focus on questionnaires with income year 2000 in Comparison of Income Estimates Across Household Survey Programs.
2. There are a few exclusions, which will be discussed in this document.
3. From 1993 to 1995, SLID was only one panel. Income years prior to 1996 were typically covered by the Survey of Consumer Finances (SCF), inactive since the 1997 publication.
4. The Statistics Act provides Statistics Canada with access to individual tax returns from Canada Revenue Agency (section 24); the confidentiality of the information on those individual returns is also ensured in that Act, in section 17.
5. Statistics Canada, Guide to the Income and Expenditure Accounts, catalogue 13-603, October 1990, page 31.