Household income is a crucial economic indicator that provides insight into the financial well-being and standard of living of Canadian families. Understanding trends in average household income in Canada is essential to analyzing the prosperity gaps across the country’s diverse regional and demographic landscape.
This article will examine the most recent household income data from Statistics Canada, drawing primarily from the comprehensive 2020 income statistics. We will also incorporate key insights from the 2022 data on income for families and unattached individuals to analyze how income has shifted during and after the COVID-19 pandemic.
This report aims to provide a detailed overview of how household incomes are distributed across Canada by breaking down average and median income figures nationally, provincially, and by major cities. We will also explore factors such as income inequality, poverty rates, and the role of government transfers in temporarily stabilizing incomes, especially among lower-income households.
What is The Average Household Income in Canada?
The average household income in Canada provides an essential snapshot of the financial well-being of families nationwide. According to comprehensive data from the 2020 Census of Population conducted by Statistics Canada, Canadian households’ average income before tax was $106,300 for the year. ( Source )
After federal and provincial income taxes are accounted for, the average household income in 2020 dropped to $87,700. While helpful, this average income figure may not represent a typical Canadian household’s earnings.
That’s because averages can be disproportionately influenced by extremely high-income households at the top of the distribution. When a relatively small number of affluent households earn significantly more than the median, the average gets skewed upwards and may overstate the income of a typical middle-class home.
What is The Median Household Income in Canada?
Experts examine the median household income to get a more accurate sense of a typical household’s earnings. The median represents the midpoint of the income distribution, with half of households earning less than the median and half earning more.
In 2020, Canada’s median household income before tax was $84,000. After tax, the median dropped to $73,000 for the year. The $14,700 gap between the average ($87,700) and median ($73,000) household incomes demonstrates the impact of high-income inequality.
- Average total household income after tax in 2020: $87,700
- Median total household income after tax in 2020: $73,000
While Canada’s average after-tax household income paints a picture of widespread prosperity, the median income tells a different story. Half of Canadian households lived on less than $73,000 after tax in 2020. Tracking the average and the median over time provides a fuller understanding of how income is distributed and whether inequality is improving or worsening.
How Does Average Household Income Vary By Province?
There are significant regional income disparities between provinces and territories in Canada. The average household incomes after tax across all provinces and territories in 2020 were:
Province/Territory | Average Household Income After Tax |
---|---|
Northwest Territories | 121,700 |
Nunavut | 117,400 |
Yukon Territories | 101,400 |
Alberta | $98,800 |
Ontario | $95,300 |
British Columbia | $91,100 |
Canada | $87,700 |
Saskatchewan | $84,100 |
Manitoba | $80,400 |
Newfoundland and Labrador | $75,500 |
Quebec | $75,200 |
Prince Edward Island | $73,500 |
Nova Scotia | $72,500 |
New Brunswick | $72,200 |
Household incomes tend to be higher in provinces with economies centred on high-paying industries such as oil and gas, finance, manufacturing, and technology. Poorer provinces are often focused on lower-wage sectors like agriculture, fishing, mining, and forestry.
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How Does Median Household Income Differ By Province?
Much like the trend seen with average income, median household income also varied significantly across different parts of Canada in 2020:
Province/Territory | Median Household Income After Tax |
---|---|
Northwest Territories | $109,000 |
Nunavut | $104,000 |
Yukon Territories | $88,000 |
Alberta | $83,000 |
Ontario | $79,500 |
British Columbia | $76,000 |
Canada | $73,000 |
Saskatchewan | $72,500 |
Manitoba | $69,500 |
Prince Edward Island | $64,500 |
Quebec | $63,200 |
Newfoundland and Labrador | $63,200 |
Nova Scotia | $62,400 |
New Brunswick | $62,000 |
The median income figures reinforce some of the regional prosperity gaps, with resource-rich provinces like Alberta having much higher middle-class incomes compared to poorer Maritime provinces.
Urban-rural divides also exist, as median incomes tend to be higher in large metropolitan areas compared to smaller towns and rural communities. However, higher costs of living in cities can offset some of these income gains.
How is Household Income Distributed By Income Level in Canada?
Canada’s household income distribution can be categorized into low-, middle- and high-income groups based on income brackets:
- Low-income households: The bottom 19.38% of households earning less than $40,000 made up around 2.9 million households.
- Middle-income households: The middle 40.20% of households earning between $40,000 and less than $100,000 made up around 6 million households.
- High-income households: The top 40.42% of households earning more than $100,000 made up around 6 million households.
(source: Statistics Canada. Table 98-10-0055-01)
In 2020, government support programs implemented during the pandemic had an equalizing effect on this income distribution. Low- and middle-income households received substantial temporary boosts in income through programs like the Canada Emergency Response Benefit (CERB).
This helped stabilize incomes among lower-income groups. However, in the absence of further government aid, income inequality widened again in 2021 and 2022 based on other economic indicators.
What is the Median Household Income in Major Canadian Cities?
Drilling down further, average household income differed significantly between major urban centers in 2020:
City | Median Total Household Income Before Tax 2020 (CAD) |
Wood Buffalo (AB) | 182,000 |
Yellowknife | 148,000 |
Whitehorse (YT) | 109,000 |
Oshawa (ON) | 102,000 |
Calgary (AB) | 100,000 |
Ottawa – Gatineau (ON/QC) | 98,000 |
Guelph (ON) | 97,000 |
Toronto (ON) | 97,000 |
Barrie (ON) | 97,000 |
Edmonton (AB) | 96,000 |
Kitchener – Cambridge – Waterloo (ON). | 92,000 |
Abbotsford – Mission (BC) | 91,000 |
Hamilton (ON) | 91,000 |
Regina (SK) | 90,000 |
Vancouver (BC) | 90,000 |
Saskatoon (SK) | 89,000 |
Kamloops (BC) | 87,000 |
Kelowna (BC) | 85,000 |
Victoria (BC) | 85,000 |
St. John’s (NL) | 85,000 |
Red Deer (AB) | 85,000 |
Brantford (ON) | 85,000 |
Canada | 84,000 |
Greater Sudbury (ON) | 84,000 |
Lethbridge (AB) | 84,000 |
Kingston (ON) | 83,000 |
Winnipeg (MB) | 83,000 |
Chilliwack (BC) | 82,000 |
Windsor (ON) | 82,000 |
Halifax (NS) | 81,000 |
Thunder Bay (ON) | 80,000 |
Medicine Hat (AB) | 80,000 |
London (ON) | 79,500 |
Peterborough (ON) | 79,000 |
Fredericton (NB) | 79,000 |
Prince Albert (SK) | 78,000 |
Belleville – Quinte West (ON) | 78,000 |
Nanaimo (BC) | 77,500 |
St. Catharines – Niagara (ON) | 77,000 |
Québec (QC) | 76,500 |
Charlottetown (PE) | 76,500 |
Montréal (QC) | 76,000 |
Moncton (NB) | 74,500 |
Saint John (NB) | 74,000 |
Saguenay (QC) | 70,000 |
Sherbrooke (QC) | 65,000 |
Drummondville (QC) | 64,000 |
Trois-Rivières (QC) | 62,400 |
Cape Breton (NS) | 62,000 |
In general, larger metropolitan areas with strength in high-paying sectors had higher average incomes. However, costs of living in cities like Toronto and Vancouver also tend to be much higher than in smaller towns and rural regions, reducing real income gains.
How Did Income for Families and Unattached Individuals Differ in 2022?
The above income data focused specifically on overall household incomes in Canada for 2020. More recent income statistics from 2022 provide insight into how incomes for economic families and unattached individuals have evolved:
- Median total income before tax for families and unattached individuals in 2022: $80,500
- Average total income before tax for families and unattached individuals in 2022: $106,800
- Median after-tax income for families and unattached individuals in 2022: $70,500
- Average after-tax income for families and unattached individuals in 2022: $87,700
Economic families, defined as two or more related people living together, typically had higher incomes than unattached individuals relying on a single income source.
Regionally, median after-tax family income of families and unattached individuals varied in 2022:
Geography | Median after-tax income (2022 constant dollars) |
Canada | 70,500 |
Newfoundland and Labrador | 63,100 |
Prince Edward Island | 63,300 |
Nova Scotia | 58,500 |
New Brunswick | 59,700 |
Quebec | 64,600 |
Ontario | 74,600 |
Manitoba | 66,900 |
Saskatchewan | 72,100 |
Alberta | 82,700 |
British Columbia | 70,600 |
A 3.4% decrease from 2021 to 2022 in Canada :
2019 | 2020 | 2021 | 2022 | |
---|---|---|---|---|
Median after-tax income | $68,800 | $73,700 | $73,000 | $70,500 |
Median market income | $63,600 | $61,400 | $65,900 | $65,100 |
Median government transfers | $9,100 | $18,100 | $14,200 | $10,100 |
Poverty rate, all persons | 10.3% | 6.4% | 7.4% | 9.9% |
This indicates that some provincial prosperity gaps persisted after the pandemic, with resource-rich Alberta continuing to have higher median incomes.
How Did Poverty Rates and Income Inequality Change in 2022?
According to Statistics Canada, the national poverty rate climbed to 9.9% in 2022, up from 7.4% in 2021. This means nearly 1 in 10 Canadians were living below the poverty threshold, reversing progress made during pandemic support programs in 2020.
Poverty rates also increased across most age groups:
- Children under 18: 9.9%, up from 6.4% in 2021
- Working-age adults (18-64): 11.1%, up from 8.2% in 2021
- Seniors over 65: 6.0%, up slightly from 5.6% in 2021
Additionally, income inequality indicators like the Gini coefficient rose, pointing to a growing prosperity gap between high- and low-income Canadians.
What Factors Influenced Changing Household Incomes Between 2020-2022?
3 economic factors contributed to fluctuating household incomes between 2020-2022:
- The COVID-19 pandemic caused unprecedented job losses in 2020 before recovery resumed. Government income support also had a temporary equalizing effect.
- High inflation in 2022 eroded real wage gains even as nominal incomes rose slightly. Canada’s annual inflation rate hit 6.8% in 2022.
- Certain sectors, such as technology, finance, and manufacturing, saw strong wage growth from 2020 to 2022. Meanwhile, wages stagnated in lower-paying jobs like retail and hospitality.
Changing demographics and social trends also impacted incomes:
- Dual-income families tended to have higher household earnings compared to single-earner households.
- Education played a role, with university-educated households earning significantly more than high school-educated households.
- Lone-parent families were more vulnerable to low incomes compared to two-parent households.
Conclusion
In reviewing the detailed income statistics from 2020 and 2022, several insightful trends emerge around average and median incomes regionally, provincially, and demographically. While higher-income provinces like Alberta and Ontario continue to prosper, lower-earning regions grapple with growing inequality and poverty rates.
Demographic factors like education, family structure, and dual-income versus single-earner households significantly impact household earnings. With high inflation persisting, tracking how real incomes will evolve in 2023 and whether further government interventions are required to support Canada’s most vulnerable groups will be necessary.government interventions are required to support Canada’s most vulnerable groups.
FAQs related to average household income in Canada :
What was the average household income in Canada in 2020?
The average household income in Canada in 2020 was $106,300 before tax and $87,700 after tax.
What was the median household income in Canada in 2020?
The median household income in Canada in 2020 was $84,000 before tax and $73,000 after tax.
How did average household income differ by province in 2020?
Average household income varied significantly by province in 2020, with Alberta ($98,800) and Ontario ($95,300) having the highest averages. The lowest were in Nova Scotia ($72,500) and New Brunswick ($72,200).
What major cities had the highest average household incomes in 2020?
The cities with the highest average household incomes in 2020 were Wood Buffalo (AB) ($182,000), Yellowknife (NT) ($148,000), Whitehorse (YT) ($109,000), Oshawa (ON) ($102,000) and Calgary (AB) ($100,000).
What percentage of households were considered low income in 2020?
In 2020, the bottom 19.38% of households earning less than $40,000 were considered low income, making up around 2.9 million households.
How did government transfers impact income distribution in 2020?
Government transfers like CERB had an equalizing effect in 2020, temporarily boosting incomes for lower- and middle-income households.
What was Canada's poverty rate in 2022?
Canada's poverty rate climbed to 9.9% in 2022, up from 7.4% in 2021, meaning nearly 1 in 10 Canadians lived below the poverty line.
What industries saw strong wage growth from 2020-2022?
Sectors like technology, finance, and manufacturing experienced strong wage growth, while retail and hospitality wages were stagnant.
How does household income correlate with education levels?
Households with university-educated members tend to earn significantly higher incomes compared to households with only a high school education.
Source:
- Household income statistics – 150.statcan.gc.ca
- Household total income group by household characteristics – 150.statcan.gc.ca
- Canada Household Income – Average and Median – 03.cmhc-schl.gc.ca
- What is The Average Household Income in Canada – insurdinary.ca
- Canadian Income Survey, 2022 – 150.statcan.gc.ca
- What Is The Average Household Income In Canada – zeodigital.com