Stats Canada reports lower after-tax income and rising poverty due to cuts in government aid and inflation
Statistics Canada reported a decline in the median after-tax income for Canadian families and unattached individuals, dropping to $70,500 in 2022 from $73,000 in 2021, a 3.4 percent decrease adjusted for inflation.
This decrease is attributed to lower government transfers after the discontinuation of COVID-19 pandemic benefits and changes to the Employment Insurance (EI) program. The annual inflation rate for 2022 stood at 6.8 percent, further impacting income levels.
With the full phase-out of pandemic-related benefits by mid-2022 and the reinstatement of pre-pandemic EI eligibility requirements, the median government transfers decreased by 28.9 percent to $10,100.
This contributed to the second consecutive year of declining government transfers since reaching a peak in 2020. Despite these reductions, the total income shares from government transfers reverted to its pre-pandemic level of 13 percent.
Median market income remained stable at $65,100, slightly above the pre-pandemic figure due to labour market recovery in 2021.
However, the overall median after-tax income decline was felt across most provinces, with Nova Scotia, New Brunswick, and Prince Edward Island seeing the most significant decreases.
The official poverty rate, according to the Market Basket Measure, increased to 9.9% in 2022 from 7.4% in 2021, nearing the pre-pandemic level of 10.3 percent.
This rise marks the second consecutive annual increase in poverty rates, affecting approximately 3.8 million Canadians. Children and seniors saw an increase in poverty rates, aligning closely with pre-pandemic figures.
Notably, unattached individuals experienced a significant disparity in poverty rates compared to those in families, with over a quarter living below the poverty line in 2022. Female-led one-parent families and racialized groups also reported higher poverty rates.
Indigenous populations continue to face higher poverty levels compared to non-Indigenous Canadians, with a noticeable gap widening over consecutive years.
Similarly, people with disabilities and recent immigrants also reported higher poverty rates, though the rates for recent immigrants remain lower than before the pandemic.
The increase in food insecurity was another concern, with 22.9 percent of the population in food-insecure households in 2022, an increase from the previous year. One-parent families and unattached non-seniors were particularly vulnerable, showing significantly higher rates of food insecurity.
