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Earnings and Incomes of Canadians Over the Past Quarter Century, 2006 Census: Incomes of families
Low income
Census low income rates based on after-tax income for the first time
Statistics Canada's low income rate measures the percentage of families below the low income cut-off (LICO). The LICO is a statistical measure of the income threshold below which Canadians are estimated to devote at least one-fifth more of their income more than the average family to the necessities of food, shelter and clothing.
For the first time with the census data, the low income rates can be calculated based on after-tax income. This reflects a truer picture of what families have available to spend.
Census data showed that 11.4% of the total population, an estimated 3,484,625 people, lived in low income in 2005.
Of these people, an estimated 879,955 young people aged 17 and under were living in low income families in 2005.
Low income rates are highest among children and young people. In 2005, 14.5% of all children aged five and under were part of a low income family. The rate dropped to 13.0% for children aged six to 14, and to 11.4% for teens aged 15 to 17.
Table 22
Proportion of persons living below the before-tax low income cut-off and after-tax low income cut-off, by age groups and sex, Canada, 2005
Family type and family employment status, combined, reveal a great divide in child low income rates. Children in couple families with one or two full-time full-year workers experienced low income rates of 5.6% and 2.5% respectively. Similarly, only 5.9% of children in male lone-parent families had a low income, if that family had at least one full-time full-year worker.
In these two family types, if there was no full-time full-year earner, the children's low income rates were markedly higher: 29.9% in the case of male lone-parent families, and 22.9% for couple families.
Children in female lone-parent families experienced relatively higher low income rates, regardless of the mother's employment status, although there is still a big difference between families with at least one full-time full-year worker (9.9%) and those without (54.2%).
Table 23
Number of persons under 18 years of age in after-tax low income families by family type and family employment status, Canada, 2005
Among adults, the after-tax low income rate bumps up to 16.7% for 18 to 24 year-olds. This is the age group where low income rates for males and females begin to diverge and the increase is attributable to young women, whose rate in 2005 was 18.3%, compared with 15.1% for young men.
Above age 18 to 24, the rate generally declines with advancing age, with a substantial drop between ages 55 to 64 and 65 to 74, reflecting the impact of government transfers aimed at seniors.
