Census Income Update (Pt 1) National Median Income: Resource-Rich Industries Lead the Pack

September 27, 2017
Kristine St-Laurent

How much does the median Canadian household make? Recently released Census income[1] data points to a median[2] household[3] income of $70,336 in 2015. Compared to a decade ago, when the national figure came in at $63,457 (adjusted for inflation), median household income is up 10.8%. On an annualized basis, growth is underwhelming at a little more than 1% a year.

These numbers reflect a bumpy decade for Canada, one that included a financial crisis, a recession, and a full-scale collapse in oil prices – a development that hit some provinces especially hard. The 2008 financial crisis and subsequent recession are mostly to blame for sluggish growth in household income. In 2014, national household incomes took another hit with when the price of crude oil fell by 44%, resulting in one of the most dramatic declines in the price of oil in recent history. Statistics Canada points out that the latest Census income figures only capture income through 2015; future releases will more accurately reflect the multi-year consequences of slumping oil prices on Canadian income.

The Census 2016 income figures point to a few promising trends, including rising female labour force participation, a relatively stable incidence of low-income households, and declining child poverty at the national level. Nearly all (95.9%) married or common-law couples[4] in Canada reported dual incomes in 2015, up 30% since the mid-1970s. Nearly one-third of all married or common-law couples also reported “fairly equal”[5] incomes, up from one-fifth of such couples in the mid-1970s. These gains are largely due to higher rates of female workforce participation. In the meantime, the rate of low-income among Canadian households is little changed from 2005 levels (14%), while children in low-income households declined from 18.8% in 2005 to 17.8% in 2015.

At the provincial level, the more resource-rich provinces saw significant increases in median household income over the 2005-15 period. Over the decade, a boom in energy and some other resource markets drew investment and bolstered incomes in the prairies, the North and to a lesser extent Newfoundland. The three territories have among the five highest median household incomes, along with Alberta and Saskatchewan. Nunavut and Saskatchewan led the pack in growth, gaining 36.7% and 36.5%, respectively, in real median household income over the last decade.

While the West and the North fared well in income growth, the steady decline of manufacturing hit the economies of Ontario and Quebec, two provinces with historically high levels of manufacturing activity. Employment in the manufacturing sector dropped by 25.5% in Central Canada over the decade.[6] This, in turn, contributed to a pattern of weak real wage increases in Ontario (3.8%) and Quebec (8.9%).

Where does British Columbia fit into the mix? The latest Census data finds that BC is a middle-of-the-pack performer in terms of incomes. Median household income grew a bit faster than in Canada, at 12.2% from 2005 to 2015. But the level of median income remains below the national average, at $69,995, even though BC has chalked up fairly robust economic growth over the last few years.

Policy makers and community leaders should take note of where BC stands on measures of household income compared to our provincial peers, especially given high housing and living costs in Metro Vancouver and some other urban areas. Increased business investment, a shift toward smarter and more efficient regulation, and a stronger base of corporate head offices would all help to lift incomes and wages in the province.

[2] The median is the exact half-way point in the distribution and can be thought of as the “typical” household.

[3] A household, as defined by Statistics Canada, contains at least one census family, that is, a married couple with or without children, or a couple living common-law with or without children, or a lone parent living with one or more children (lone-parent family).

[4] Couples include same-sex and opposite-sex couples.

[5] “Fairly equal” is defined by Statistics Canada as both partners earning between 40% and 60% of the couple’s total income.

[6] CANSIM Table 282-0008. Central Canada = average between Ontario manufacturing employment losses between 2005-2015 (total jobs lost: 318,400; 30% decline); Quebec manufacturing employment losses between 2005-2015 (total jobs lost: 127,000; 21% decline).

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