Canadian incomes jump, Ontario residents hit by manufacturing downturn: Statistics Canada

Ontario bucks national trend with sluggish income growth and more low-income households, but census data doesn't reflect province's recent economic growth, Statistics Canada notes.

Thestar.com
Sept. 13, 2017
By Laurie Monsebraaten

After growing up in a middle-class home in Edmonton, Patricia Huculak moved to Toronto 11 years ago to escape a violent spouse and has struggled with poverty and homelessness ever since.

But things are finally looking up for the 47-year-old single mother. In July, Huculak began receiving a $500 monthly housing allowance through a recently beefed-up federal-provincial homelessness prevention program that has allowed her to rent a one-bedroom apartment close to public transit.

Next week, she will graduate from a 12-week advocacy program that has given her the confidence to apply for a well-paying job with the city of Toronto as a street outreach worker where she hopes to put her life experience to work helping others.

And her daughter Alicha, 13, a budding track star, is trying out for a girls basketball team that plays competitively throughout southern Ontario.

"It used to be every day getting up and asking where am I going to get the next meal and how am I going to get shoes for my daughter?" says Huculak. "But I'm breathing a little easier. For the first time in a long time I have hope."

Canadian incomes have risen by more than 10 per cent over the last decade, fuelled by a booming resource sector, while the number living on low incomes is rising in Ontario where growth has been sluggish, Statistics Canada says.

However, the agency cautions that census results do not account for the sharp drop-off in oil prices that hit the economy and stalled the resource sector in 2015 and 2016. As well, the Ontario economy has started to rebound, showing strong growth in the first quarter and low unemployment.

New data from the 2016 census reveals that the median income of Canadian households rose to $70,336 in 2015, up 10.8 per cent from $63,457 in 2005.

The jump is attributed to high resource prices that attracted investment and workers to Alberta, Saskatchewan and Newfoundland, pumped up the construction sector and saw wealth filter through the economy, Statistics Canada said Wednesday.

The picture wasn't so rosy in Ontario, where the downturn in the manufacturing sector slowed income growth and the proportion of low-income residents has been on the rise.

The median income in Ontario was $74,287 in 2015, up just 3.8 per cent over the last decade, the slowest growth of any province or territory during that time.

That's attributed to the gutting of the manufacturing sector and the loss of 318,000 jobs, down 30 per cent since 2005.

From 2005 to 2015, almost every metropolitan centre in Ontario saw below average income growth, compared to the booming Prairies, where incomes rose above average. The Greater Toronto Area had a median income of $78,373 in 2015, up 3.3 per cent. In the GTA, Oakville had the highest median income at $113,666. The City of Toronto had the lowest at $65,829.

The last decade has also seen a rise in low-income rates in Ontario's urban centres, led by London (17 per cent, up from 13 per cent) and Windsor (17.5 per cent, up from 14 per cent). The Toronto region's low-income rate rose to 15.6 per cent from 14.1 per cent a decade ago.

Across Ontario, 14.4 per cent of residents - some 1.9 million people - were low income in 2015, an increase from 12.9 per cent in 2005.

Nationwide, the low-income rate edged up slightly over the decade to 14.2 per cent in 2015, from 14 per cent. For children, the low-income rate was also stable but higher at 17.1 per cent, up slightly from 17 per cent in 2005.

"We see a relative stability in low income. That means in this period of growth, people aren't falling further behind. But they aren't necessarily catching up either," Andrew Heisz, assistant director of income statistics division at Statistics Canada, said in an interview.

"A decline in the low-income rate is possible if incomes of lower-income persons are rising faster than the median. But that hasn't been the case here," he said.

(Statistics Canada defines a low-income household as one having less than half of the median income of all households. For a one-person household, the after-tax low income measure was $22,133 in 2015. For a family of four it was $44,266.)

That means 4.8 million Canadians were living in low-income in 2015, some 1.2 million of them children, including almost 490,000 in Ontario.

Lone-parent families such as Huculak's and those with more than one child are more likely to be low-income, according to Statistics Canada.

However, Statistics Canada says that the proportion of low-income children has been dropping since the mid-1990s, thanks in part to government programs. The average child benefit received by families has nearly doubled since the mid-1990s, the agency says.

"We know from other research that government transfers are important for reducing people in low income. More progressive transfers, such as child benefits, play an important role in reducing the low income rate among families with children," Heisz said.

At the other end of the age scale, a larger proportion of Canadians 65 years and older were low income, rising to 14.5 per cent in 2015 from 12 per cent in 2005, according to Statistics Canada.

Peter Milczyn, Ontario's minister responsible for poverty reduction efforts, said while the province's economy is strong "we know it's not growing equally for everybody.

He noted the government's efforts "to help people at the lower end of the income spectrum to be able to afford a lot of the important things in their lives," such as more rental housing, affordable housing, a coming boost to the minimum wage, free tuition grants for post-secondary students, as well as pharmacare for youth.

"There's also the basic income pilot that we are testing out in three communities as another measure to look at how we can support lower-income Ontarians," he said. "But we also know that our economy is growing - we have job growth."

He said the fact that one-third of new college and university students are receiving the full tuition grants "are a strong signal that we are providing the tools to people to increase their skills so they can better participate in our economy."

But provincial opposition parties used the census results to blast the Ontario Liberal government's 13-year record.

"This report shows what families already know - they're being squeezed," said NDP economic development critic Catherine Fife. "Household costs have gone up under Kathleen Wynne, but wages are being held back."

Jean-Yves Duclos, the federal minister of families, children and social development, said the census showed the needs across Canada "to work toward more resilient economies."

Duclos touted the Liberals' Canada Child Benefit for helping ease child poverty. He also cited initiatives on affordable housing, early learning and child care investments, "which are going to benefit all families ... but, particularly, lower-income families."

Pedro Barata of United Way Toronto and York Region said Huculuk's experience with a housing allowance shows how government policies can fight poverty.

"What low-income Canadians need is support to close the gap between the rising cost of rent and the fact that their incomes are stuck," said Barata, a member of a national alliance advocating for a national portable housing benefit.

"We need significant investment in real measures that will tangibly create better outcomes for Canadians and a portable housing benefit is a piece that gets right at the heart of that challenge and would really move us forward," he said.

Current consultations on a national anti-poverty strategy should result in clear goals, timelines and public investments, added Anita Khanna of Campaign 2000, a national coalition of organizations working to end child poverty. Indexing the Canada Child Benefit is key to ensuring progress isn't lost to inflation, she added.