Household after-tax income rises and income inequality declines, says new census data

Income inequality and the number of low-income earners declined significantly as household after-tax income saw a marked increase — especially in single-parent households — according to new census data released today by Statistics Canada. 

Household median income after tax grew 9.8 per cent from 2015 to 2020, doubling the growth rate that Canadian households saw from 2010 to 2015, when after-tax income grew at less than half that rate (4.5 per cent). 

Statistics Canada says the increase in median income was driven largely by federal government transfers during the pandemic, especially for lower-income families. 

“After-tax income growth was faster for households with lower incomes, reflecting greater contributions of the Canada Child Benefit and pandemic relief benefits to the incomes of lower-income families,” the release said. 

In one-parent families headed by a woman, which accounts for 80 per cent of single-family homes, median after-tax income grew by 22.8 per cent from 2015 to 2020, largely because of the Canada Child Benefit and its enhancements rolled out during the pandemic. 

The same was not true for all provinces. While Ontario, Quebec and B.C. all saw double-digit increases in after-tax income, Alberta and Newfoundland both saw declines in after-tax income of 4.6 and 1.3 per cent, respectively.

While after-tax income rose significantly in 2020 compared to 2015, income inequality declined across the country, with Alberta recording the largest decline, largely driven by pandemic benefits.

More to come.

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