The Broadbent Blog


Analysis: Canadian Income Survey 2017

Statistics Canada has just released the Canadian Income Survey for 2017.

This allows us to look at changes in income, income inequality and poverty over the first two years of the federal Liberal government.

Income growth, overall, was very modest. When adjusted for inflation, the average after tax income of all families and individuals rose by just 2.8%, from $71,200 in 2015 to $73,200 in 2017.

The average income of the top 10% of families and individuals rose from $197,200 to $201,400 and their share of all after tax income remained almost the same, 27.7% in 2015 and 27.5% in 2017.

The rate of poverty for all Canadians fell from 14.2% to 12.7% using the Low Income Measure (LIM), which defines poverty as having less than one half of the median or mid point income of a similar family. Based on the proposed new official measure of poverty, formalized by the federal government last year, the basic needs or Market Basket Measure (MBM), poverty fell significantly more, from 13.3% to 9.0%.

The child poverty rate fell from 13.3% to 9.0% according to the Market Basket Measure, due to the introduction of a reformed system of child tax credits in 2016. Using the Low Income Measure, it fell from 15.2% to 12.1%.

However, the poverty rate for seniors rose from 14.3% in 2015 to 15.4% in 2017 using the Low Income Measure. While the senior poverty rate is lower using the MBM measure (just 3.9% in 2017), despite the incomes of many seniors are lagging behind those of working age Canadians.

Changes to market incomes, taxes and income transfer programs have had some impact upon poverty, but less impact on income inequality which seems to have changed very little over the first two years of Liberal government.

While both measures are useful, a basic needs measure like the MBM only tells us that low income people can survive. The LIM tells us how many people are distant from the social mainstream.

 

Andrew Jackson is Adjunct Research Professor in the Institute of Political Economy at Carleton University, and senior policy adviser to the Broadbent Institute.