Income gap between Canadian households increases at record speed: Statistics Canada
, BNN Bloomberg
The share of disposable income between Canada’s highest and lowest households widened in the first quarter of 2023, according to data released by Statistics Canada.
The gap between the top 40 per cent and bottom 40 per cent of household incomes reached 44.7 per cent, marking a 0.2 per cent rise from the same time last year, the findings released on Tuesday showed. The figure was still lower than pre-pandemic levels, which averaged 45.1 per cent from 2010 to 2019, the data revealed.
In terms of overall net worth, the gap between the rich and poor increased at record speed in the first quarter of this year with a 1.1 percentage point rise from the same period in 2022, the report said.
The highest 20 per cent of income earners increased their disposable income in Q1 of 2023 faster than they did last year, fuelled by investment earnings such as dividends and bank deposits, which nearly doubled to 22.7 per cent from 13.4 per cent for all households within the time period, according to the findings.
In comparison, the lowest income earners also made financial gains but at a slower pace, the report showed.
Average salary gains for the bottom 20 per cent of low-income earners grew 1.0 per cent in Q1, versus 4.0 per cent for all households while self-employment income decreased 6.7 per cent. The group gained from retirement benefits, and, 38.8 per cent within this category claimed government support as a main source of income, up from 34.2 per cent in 2022.
Low-income households also suffered a reduction in average net investment income as increased interest rates for loans and mortgages accounted for 84.4 per cent of the reduction in net investment income, the data showed.
Every household, expect the highest income earners, reported a drop in savings for the first few months of 2023 that fell below levels recorded three years ago — at the beginning of the pandemic.
Almost all Canadian households who experienced a reduction in their net worth cited it was directly tied to real estate (92.1 per cent), the figures showed. The average real estate value held by households declined by 8.6 per cent in the first quarter of this year compared to the same quarter a year earlier, the data revealed.
Younger age groups are at the highest financial risk due to debt-to-income ratios reaching record highs, the report warned.
Debt-to-income ratios for young Canadians and core working age Canadians hit record highs in Q1 of 2023, the data showed.
Despite income gains, high inflation and interest rates continue to weigh on these households, the report said.
The gap between the top 40 per cent and bottom 40 per cent of household incomes reached 44.7 per cent, marking a 0.2 per cent rise from the same time last year, the findings released on Tuesday showed. The figure was still lower than pre-pandemic levels, which averaged 45.1 per cent from 2010 to 2019, the data revealed.
In terms of overall net worth, the gap between the rich and poor increased at record speed in the first quarter of this year with a 1.1 percentage point rise from the same period in 2022, the report said.
The highest 20 per cent of income earners increased their disposable income in Q1 of 2023 faster than they did last year, fuelled by investment earnings such as dividends and bank deposits, which nearly doubled to 22.7 per cent from 13.4 per cent for all households within the time period, according to the findings.
In comparison, the lowest income earners also made financial gains but at a slower pace, the report showed.
Average salary gains for the bottom 20 per cent of low-income earners grew 1.0 per cent in Q1, versus 4.0 per cent for all households while self-employment income decreased 6.7 per cent. The group gained from retirement benefits, and, 38.8 per cent within this category claimed government support as a main source of income, up from 34.2 per cent in 2022.
Low-income households also suffered a reduction in average net investment income as increased interest rates for loans and mortgages accounted for 84.4 per cent of the reduction in net investment income, the data showed.
Every household, expect the highest income earners, reported a drop in savings for the first few months of 2023 that fell below levels recorded three years ago — at the beginning of the pandemic.
Almost all Canadian households who experienced a reduction in their net worth cited it was directly tied to real estate (92.1 per cent), the figures showed. The average real estate value held by households declined by 8.6 per cent in the first quarter of this year compared to the same quarter a year earlier, the data revealed.
Younger age groups are at the highest financial risk due to debt-to-income ratios reaching record highs, the report warned.
Debt-to-income ratios for young Canadians and core working age Canadians hit record highs in Q1 of 2023, the data showed.
Despite income gains, high inflation and interest rates continue to weigh on these households, the report said.
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