Census 2001: Changes in Family Finances

The most recent release of 2001 census information has shed new light on the state of family finances over the past two decades, and the news is mixed.

The median income for all Canadian families remained virtually unchanged between 1990 and 2000. The median income in 2000 was $55,016, slightly higher than 1990’s figure of $54,560.

However, while families at the top end of the income scale showed substantial gains, the bottom half of all families show little or no improvement in the 1990’s. The 1990’s was a decade characterized by significant financial prosperity and a high-flying economy before coming to a thundering halt with the implosion of the high-tech sector, accounting scandals and general financial turmoil. While the economic boom may have benefited many at the top end, it left the bottom half of the scale largely unaffected.

The 2001 census found that Canada now has 8,371,020 families, comprised of married couples, couples living common-law, with or without children, or a lone parent with at least one child living in the same dwelling. Of those families, more than one million are living below the low-income cutoff rates established by Statistics Canada.

The census also found that nearly 1,245,700, or 18.4% of all children were living in low-income in 2000. These figures, both in quantity and percentage, were slightly less that in 1980, though the number of children in low-income increased by 3.5% over 1990. Of the 1.25 million children living in low income, one half were living in nuclear families with two parents. 39% of the children in low income came from lone-parent families, though they represented only 14% of all families.

Let’s examine a number of specific areas of the new information, and how different Canadian families were affected:

Top 10% vs. the Lowest 10%

One of the biggest stories from this data set is that the top 10% of families saw significant growth in income, while the bottom 10% of families showed only a slight increase. In 2000, the top 10% were families with incomes above $117,850; on average this group earned $185,070, up from $161,460 in 1990. The lowest 10% of families had incomes below $18,990, with an average of $10,341. This represented in increase of less that $100 over the 1990 average of $10,260. These numbers mean that for each $1 in income for an average family in the lowest 10%, an average family in the top 10% earned $17.90.

In 2000, the combined income of the 10% of Canadian families with the highest incomes accounted for 28% of total family income, up from 26% in 1990. The 10% of families with the lowest incomes made up less than 2% of all family income.

Lone-Parent Families

Lone-parent families fared reasonably well between 1990 and 2000, due to greater labour market activity and increased government transfers. In 2000, the median income of lone-parent families was $26,008, and increase of 19.3% over the $21,797 average in 1990. By comparison, the median income for couples with children increased by 5.9% to just under $66,000.

Another positive sign was that while the number of lone-parent families with children increased by 70% in the 80’s and 90’s, the number of these families in low income rose only 40% over the same period. However, lone-parent families with young children are still four times more likely to live in low income (46%) than two parent families with children. Without government transfer payments, the percentage of lone-parent families would have risen to 57%.

Income from Government Sources

In the past decade, the lowest 10% of families saw themselves increasingly reliant on government transfers as a percentage of income, though the actual amount increased only marginally. Between 1990 and 2000, the proportion of income from government sources increased from 58.4% to 62.2%, while the dollar amount increased from $5,552 to $5,776.

Over the past two decades, child benefits changed significantly amongst the highest and lowest earning groups. In 1980, the bottom 10% received an average of $1,276 in child benefits while the top 10% averaged $1,283. By 2000, the lowest 10% had increased to an average of $2,378 in child benefits, while the top 10% averaged only $26.

Immigrant Families

Low income among children with Canadian-born parents has been declining since 1980, but there has been growth in the number of children living in poverty with immigrant parents. In 2000, nearly 231,000 children with at least one immigrant parent who arrived in Canada during the 1990’s were living in low income. This figure represents 33% of all children with an immigrant parent, up from 27% in 1990 and 20% in 1980.

For families where both parents had immigrated in the 1990’s, the numbers were even higher, with 39% in 2000, 33% in 1990 and 22% in 1980. By comparison, the rates were declining among children with Canadian-born parents, with 16% in 2000 versus 17% in 1990 and 19% in 1980.

For more information and numbers from the 2001 Census, visit Statistics Canada’s Census website at http://www12.statcan.ca/english/census01/release/index.cfm

Note: Income includes wages and salaries, net income from self-employment, investment income, retirement pensions, other money income and all government transfer income. All incomes are adjusted for price inflation and expressed in constant 2000 dollars using the Consumer Price Index. According to this index, 46.2 cents in 1980 and 82.2 cents in 1990 were equivalent to one dollar in 2000.