family finance 2010

7/28/2019 Family Finance 2010

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f a m i l y f i n a n c e s

T Currn Saof CanadianFamily Financs2 0 1 0 R e R t

Roger Sauvopl arns Consuling


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About the InstituteT Vanir Insiu of h Family was sablishd in 1965 undr h paronag of Tir excllncis Govrnor Gn-ral Gorgs . Vanir and Madam aulin Vanir. I is a naional volunary organizaion ddicad o promoing hwll-bing of Canadas familis hrough rsarch, publicaions, public ducaion and advocacy. T Insiu rgularlyworks wih businsss, lgislaors, policy-makrs and program spcialiss, rsarchrs, ducaors, family srvic profs-sionals, h mdia and mmbrs of h gnral public.

Te Current State of Canadian Family Finances is an annual rpor which moniors rnds in family incom, xpndi-

urs, savings and db.

T opinions xprssd in his rpor ar hos of h auhor and do no ncssarily rc h viws of h VanirInsiu of h Family.

C rappor s disponibl n franais.

94 prom. Cnrpoin Driv awa, nario K2G 6B1

www.vfamly.ca


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T Currn Saof CanadianFamily Financs2 0 1 0 R e R t

Roger Sauvopl arns Consuling

f a m i l y f i n a n c e s


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TbLe O CONTeNTS

FReRD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7H I G H I G H t S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9teCHIC te. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

2010 ReRtInroducion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11Rcssion chnically ovr bu uncrainy ahad . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11Housholds concrnd abou conomy, jobs and prsonal nancs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11Raliy chck on h unmploymn ra . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12Hav many of h los jobs hav rurnd? I dpnds on h masur . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Job losss and gains vary sharply by ag and yp of work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14Youh ar big losrs in rcssion and gain lil in rcovry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14Many cor-ag workrs hav found jobs again... abou 142,000 hav no . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15T 55 and ovr group jus kp on working ... and working . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15riva scor mploymn sill down by ovr 100,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15Goods producing scor sill blow h prvious pak . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Hourly arnings incrasing in 2% rang . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17Houshold incoms rcovring. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18employmn insuranc (eI) cushiond h incom dclin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19Fwr of h unmployd now rciv bns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19Dual in coms on pahway o r i s in g houshold in coms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20Consumr spnding dippd during rcssion... bu no for long . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22Savings ra up bu sill low . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22Db pr houshold surpasss h $100,000 mark in 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23Mor warnings abou houshold db loads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23Rising houshold db placs on million familis in vulnrabl siuaion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24nohr look a morgag db. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25Housing prics likly o fall . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26ovry is on h ris . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26Tr is growing incom inqualiy in Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

SeCI FetRe tHe MIDDe CSSMiddl class incoms rcovr ar sagnaion hrough h 1990s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29Middl class ging smallr shar of oal incoms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30Middl class familis and middl class unaachd individuals show gains. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30T middl class houshold has changd ovr h las dcad. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32expndiurs on prsonal car, public ransporaion, halh car and uiion ros hrough las dcad . . . . . . . . . . . .34Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

ppndix vrag incoms of familis and unaachd individuals, and shar of incomsar ransfrs and incom axs (consan 2008$), 1990, 2000 and 2008 .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37ppndix B Ra of low incom (povry) among familis and unaachd individualsar ransfrs and incom axs, 1990, 2000 and 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38ppndix C Major componns of avrag n worh pr houshold basdon mark valu (consan 2008$), 1990, 2000 and hird quarr 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

eDteS D SRCeS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40


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LiST O CrTS Nd TbLeS

ChatsChat 1 nmploymn ra acual vs. wha i would hav bn if labour forc paricipaion ra

had rmaind a pr-rcssion pak (cobr 2008), January 2007 - Dcmbr 2010Chat 2 Rcn rnds in oal mploymn, using wo Saisics Canada masurs ( January 2007=100),

January 2007 - Dcmbr 2010Chat 3 vrag hourly arnings,* prcnag chang ovr prvious yar basd on a 3-monh movingavrag, January 2007 - Dcmbr 2010Chat 4 vrag disposabl incom* pr houshold, using wo masurs, in consan 2008$, 1990 - 2010Chat 5 toal employmn Insuranc (eI) bns,* sasonally adjusd 2007Q1 - 2010Q3Chat 6 rcn chang in avrag incoms* bwn 1990 and 2008, by sx and houshold ypChat 7 rcnag of coupl familis wih wo or mor arnrs, 1990 - 2008Chat 8 rsonal savings ra, 1990 - 2010

Chat 9 vrag db* pr houshold, in consan 2008$, 1990 - 2010Q3Chat 10 Morgag db pr houshold for housholds wih a morgag and for all housholds, inconsan 2008$, 1990 - 20103QChat 11 rcnag of prsons in low incom,* 1990 - 2010Chat 12 vrag incom ar incom axs and ransfrs of middl class* housholds, in consan 2008$,1990 - 2008Chat 13 Shar of ransfrs, ar-ax incoms and incom axs of middl class* housholds, 1990 - 2008Chat 14 vrag incom ar incom axs and ransfrs, and uppr and lowr incom limis, ofmiddl class* familis, in consan 2008$, 1990 - 2008Chat 15 vrag incom ar incom axs and ransfrs, and uppr and lowr incom limis of

middl class* unaachd individuals, in consan 2008$, 1990 - 2008

TalsTal 1 abour forc indicaors hrough rcssion and rcovry priods, by ag group and sxTal 2 rcnag shar and avrag ar-ax incom by houshold incom quinil, 1990, 2000 and 2008Tal 3 Slcd houshold characrisics, middl class housholds*, 1999 and 2008Tal 4 vrag xpndiurs, middl class housholds* (currn dollars**), 1990 o 2008

ppnx vrag incoms of familis and unaachd individuals, and shar of incoms arransfrs and incom axs (consan 2008$), 1990, 2000 and 2008

ppnx b Ra of low incom (povry) among familis and unaachd individuals ar ransfrsand incom axs, 1990, 2000 and 2008

ppnx C Major componns of avrag n worh pr houshold basd on mark valu (consan2008$), 1990, 2000 and 3rd uarr 2010


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Canadian familis ar nally in six gur rriory. nforunaly i is on h wrong sid of h ldgr. In is12h annual assssmn of h sa of Canadian family nancs, h Vanir Insiu of h Family rporsha avrag family db has now hi $100,000. o only ha, h db-o- incom raio, which masurs

houshold db agains incom, sands a a rcord 150%, maning ha for vry housand dollars in ar-ax incom, Canadian familis ow on housand v hundrd dollars.

T Insiu, Canadas formos auhoriy on family issus, has bn sounding h alarm for many yarsovr h issu of db srss facing Canadian housholds. T db-o-incom raio has bn sadily climb-ing for h pas 20 yars. In 1990, avrag family db sood a $56,800, wih a db-o-incom raio of93%. T $100,000 gur rprsns a ral incras of 78% ovr h pas wo dcads.

Jus as h db raio has climbd, h savings ra has slid downward. In 1990, Canadian familis managdo pu away $8,000, a savings ra of 13.0%. In 2010, ha savings ra was down o 4.2%, avraging $2,500

pr houshold.

T srss of db can b sn in many aras of family nancs. T numbr of housholds which hav fall-n bhind in hir morgag paymns by hr of or mor monhs climbd o 17,400 in h fall of 2010,up narly 50% sinc h rcssion bgan. Crdi card dlinquncy and bankrupcy ras also rmaindhighr han pr-rcssionary lvls.


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T rpor nos ha dspi rcn job gains, govrnmns a all lvls nd o b concrnd abou hprospc of rising unmploymn as workrs who droppd ou of h labour mark amp o jump back in and as hos who ar working par-im hours (ovr 900,000 workrs) coninu o sk full-im hours.

In paricular, familis wih youngr mmbrs prparing o nr h workforc fac rmndous prssur.

nly 5% of h nw jobs crad sinc mid 2009 wn o h 15-24 ag group.

yar ago, h Vanir Insiu cauiond ha for far oo many, hr is oo lil incom, oo much spnd-ing, oo lil saving and oo much db. s govrnmns a all lvls cra hir budgs for h coming yarand look a cuing programs o rduc hir dcis, hy nd o b mindful ha h sa of Canadianfamily nancs coninus o b fragil in many housholds.

T nw rpor from h fdral task Forc on Financial iracy rminds us ha h im for acion isnow ha shor-rm xs won b sucin. havr is nough o know and do oday will no bnough for omorrow. T task Forc is calling for a comprhnsiv sragy dsignd o srnghn h

knowldg, skills and condnc of Canadians o mak rsponsibl nancial dcisions as wll as craing annvironmn ha facilias good choics and aords nancial scuriy. look forward o working wihh govrnmn o mov hs imporan rcommndaions forward.

Tanks again o Rogr Sauv, rsidn of opl arns Consuling, who has workd wih us ovr manyyars o produc his imporan annual assssmn of family nancs in Canada.

awa, Fbruary 17, 2011


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Te recession is oer bu many Canadians ar sill worrid In chnical conomic rms, h rcs-sion is ovr. hil his may b ru for oal oupu, h pah o rcovry has l many popl bhind.

olls show ha many ar sill worrid abou h conomy, hir jobs and hir nancial siuaions.

Unemployment higher than reported If h ra of paricipaion in h labour forc had rmaind ah lvl aaind in cobr 2008, h unmploymn ra in Dcmbr 2010 would hav bn 8.9%rahr han h 7.6% ha has bn rpord. T rpord unmploymn ra may wll sar o risagain as hos who hav droppd ou of h labour forc, for whavr rason, sar sarching for jobsonc again.

Shocking job situation for youth Mal and fmal youh agd 15-24 rprsnd only 15% of all jobholdrs a h cobr 2008 mploymn pak bu xprincd ovr on-half of all h jobs los b-

wn h pak and July 2009. During h rcovry priod o Dcmbr 2010, youh capurd a mr5% of all h n nw jobs crad.

Household incomes recover recession losses Ral pr-houshold incoms fll by abou 0.5% in 2009.By h hird quarr 2010, avrag houshold incoms had rcovrd o a lvl ha was approximalyqual o 2008 avrag. Tis is much soonr han in prvious rcssions. Savings incrasd as wll burmain low.

Debt load reaches $100,000 per household For h rs im, h avrag oal accumulad db prCanadian houshold crp abov h $100,000 mark in la 2010. T avrag db load is now qual o

150% of avrag disposabl incom of housholds in Canada. his im, Canadas houshold db-o-incom raio is abou qual o ha in h nid Sas.

Women outpace men in income growth Bfor-ax incoms, whn masurd a h individual lvl,incrasd by 12% for mn bwn 1990 and 2008. T incras for womn was almos doubl a 23%ovr h priod, bu mn coninu o hav highr avrag incoms.

Te rich get richer but also pay more income taxes T richs 20% of housholds was h only groupo incras hir shar of oal ar-ax incoms bwn 1990 and 2008, incrasing hir shar from41.0% o 44.3% ovr his priod. T richs 20% of housholds ar also paying a biggr shar of allincom axs.

Special feature on the middle class T 1990s wr a los dcad for middl class houshold in-coms. r-ax incoms sagnad hrough h rs fw yars of h 2000s, and hn xprincd asrong upurn from 2004 o 2008. Tr ar mor convnincs in odays middl class homs han jusa dcad arlir. Crain xpndiurs, noably on prsonal car, public ransporaion, halh car anduiion, hav incrasd rapidly ovr h las dcad.


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TeCNiCL NOTe

Familis ar h main focus of his rpor bu h las daild Saisics Canada family incomindicaors only go o h yar 2008. (S appndix abls and B.) Mor imly informaion isavailabl for h oal prsonal scor and is usd o provid many of h simas for all housholdsup o h yar 2010. Housholds includ boh familis and unaachd individuals. bou wo-hirds of housholds ar family housholds and hus h rcn rnds for housholds provid a gooddircional guid o wha is happning for familis.

For as of undrsanding and o mak h rsuls mor rlvan, mos masurs hav bn convrd o

a pr-houshold or pr-family basis. Houshold numbrs for h yars 1990 o 2008 ar akn dirclyfrom Saisics Canada, Income in Canada. Houshold numbrs for 2009 and 2010 ar assumd o growa h sam prcnag ra as in 2008.

In his rpor, mos dollar simas ar in 2008 dollars and hus variaions ovr svral yars rprsnchangs in ral purchasing powr ar inaion. T rm ral indicas wha would hav happndif hr had bn no inaion. Inaion is masurd using h consumr pric indx. ll masursincorpora updas and any rcn rvisions by Saisics Canada.

Much of h analysis rlas o h priod 1990 o 2010 including h las yar availabl. T yar1990, h yar bfor h ons of h 1991-92 rcssion, was chosn as h bginning yar in ordr ohighligh longr rm changs.

lmos all of h background daa coms from Saisics Canada1. T auhor did many addiionalcalculaions. ny opinions, rrors and omissions ar h rsponsibiliy of h auhor.

Rogr Sauv, opl arns Consuling, can b rachd a 613-931-2476 [email protected], or a his wbsi www.poplparnsconsuling.com.


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2010 rePOrT

IntroductionT ask of summarizing h currn sa of Canadian family nancs is always a challng. T chal-lng is o provid a imly, objciv, informaiv and radabl documn covring incoms, spnding,

savings, db and ohr opics of signicanc o familis and housholds. Tis has o b don in hconx of changing conomic, social and dmographic nvironmns.

rhaps h mos dicul challng is o convy a sns of h dirn xprincs of Canadian familisfrom saisical rnds ha rack h naional avrag. If hr is on mssag from h 2010 Rpor isha i is imporan o look bhind h gnral rnds. nd ha h Canadian conomy did improvhroughou 2010, noably in h rs half. Bu many familis ar sill sruggling conomically.

T 12h rpor on Canadian family nancs xamins incoms, spnding, savings, db and n worhacross family and houshold yps. I also aks a closr look a housholds in h middl of h incom

spcrum: who hy ar and how hy hav bn faring ovr h pas wo dcads.

Recession technically oer but uncertainty aheadas yar, his rpor sad ha []h rcssion cam and a rcovry now sms o b undrway.T rcovry did indd coninu hrough mos of 2010. In aggrga rms, as masurd by GD,h rcovry has brough h conomy all h way back o whr i was bfor h rcssion. Similarly,h conomy has rcoupd mos, bu no all, h job losss xprincd hrough h rcssion.

Bu h mos rcn daa hins ha h upward rnd may b slowing for boh masurs. hil oaloupu in h conomy has jus surpassd is pr-rcssion lvl, h pac of growh slowd in h las

quarr of 2010. Similarly, whil oal mploymn, as masurd by h abour Forc Survy, is nar-ing is pr-rcssion lvl, h advanc has also slowd in rcn monhs. s will b shown lar in hisrpor, h mploymn rcovry has bn vry unvn. nohr Saisics Canada survy suggss hamploymn has much furhr o go o rurn o pr-rcssion lvls.

Households concerned about economy, jobs and personal nanceshil h rcssion may hav ndd according o chnical indicaors of oupu and oal mploymn,many housholds in Canada don fl condn abou h conomy, ar anxious abou hir job scu-riy, and fl ha hir houshold nancs ar in poor shap.

survy by Harris-Dcima indicad ha consumr condnc hi a pos-rcssion high of 89 inFbruary (2010), bu fll for wo quarrs. Consumr condnc was lil changd in ovmbr.2

T Dcmbr Indx of Consumr Condnc from h Confrnc Board of Canada droppd 2.6poins in Dcmbr o 81 ar wo sraigh incrass. Condnc lvls hav slid in svn monhsof 2010.3

ccording o a ollara oll only 38% of Canadians survyd fl h Canadian conomy will im-


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prov in h nx wlv monhs compard o 54% who fl ha way in Dcmbr 2009. n in vCanadians fl h Canadian conomy will acually worsn in 2011, compard o 14% who fl ha

way on yar ago.4

anos Rpor akn in arly cobr found ha 32% of rspondns wr no a all scur or

somwha no scur abou hir jobs.5

n ngus Rid survy akn in la cobr 2010 found ha 53% of rspondns fl ha hir pr-sonal nancs wr in good or vry good shap whil 44% said ha hir nancs wr in pooror vry poor shap. signican 12% claimd ha hir nancs wr in vry poor shap. bou11% worrid frqunly abou bing abl o pay hir morgag or rn.6

Reality check on the unemployment rateT ocial unmploymn ra pakd a 8.7% in ugus 2009 and hn fll slowly o 7.6% in Dcm-br 2010. Tis good nws is mprd by h fac ha h unmploymn ra rmains much highr

han h 6.1% rcordd bfor h rcssion. T numbr of unmployd now sands a ovr 1.4 million,up by 298,700 from wo yars arlir, or by 27%.

T growh in job numbrs is on rason for h dclin of h unmploymn ra. I is also ru hamany popl hav droppd ou of h labour forc aloghr and his is pushing unmploymn downas wll. Tis group includs discouragd workrs who hav givn up h job sarch and ar no longr of-cially cound as bing unmployd. I also includs hos who hav droppd ou for family rasons as

wll as hos who hav gon back o school on a full-im basis.

If h ra of paricipaion in h labour forc (mployd plus hos looking for a job) had rmaind a

h lvl aaind in cobr 2008, h unmploymn ra in Dcmbr 2010 would hav bn 8.9%.Tis rprsns an addiional 261,000 Canadians who would hav bn cound as unmployd.7

Tis calculaion dos no ak ino accoun h numbr of par-im workrs who ar only working par-im bcaus hy can nd full-im work. Involunary par-im workrs ar anohr ky sourc ofhiddn unmploymn. Bwn 2008 and 2010, h numbr of par-im workrs working par-imbcaus hy could no nd full-im work ros by almos 210,000 from 711,200 in 2008 o 920,000in 2010. T ra of involunary par-im work involunary par-im work as a shar of all par-im

work grw from 22.4% o 27.8% ovr his priod.

T unmploymn ra may wll sar o ris again as hos who droppd ou, for whavr rason,amp o rjoin h job mark. T job mark will also hav o nd mploymn for h 150,000 o175,000 popl who will nr h labour mark ach yar ovr h nx svral yars.


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CHART 1 Unemployment rate - actual vs. what it would have been if labour force participation rate hadremained at pre-recession peak (October 2008), January 2007 - December 2010

5

6

7

8

9

10

11

J F M A M J

2007 2008 2009 2010

J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D

Source: Statistics Canada, Labour Force Survey, Catalogue no. 71-001-X. Calculations by People Patterns Consulting

8.9%

7.6%

Unemployment rate if the labour force participation rate

had remained at October 2008 level to December 2010

6.1%

Actual unemployment rate

%

Hae many of the lost jobs hae returned? It depends on the measureTr ar wo major Saisics Canada survys ha sima h lvl of mploymn on a monhly basis.T bs known is h abour Forc Survy, which asks housholds how hy ar doing in h job mark.I is h only sourc for h monhly unmploymn ra.

ccording o h abour Forc Survy, oal mploymn pakd in cobr 2008 and hn droppdby 427,900 o July 2009 as h rcssion hi hard and fas. Sinc ha low poin o Dcmbr 2010, hconomy has crad 398,100 n nw jobs. T bad nws is ha h growh in mploymn has a-

nd ou sinc mid-summr wih vry lil growh in h las svral monhs.

T scond major survy of all mployrs in Canada, h Survy of employmn, ayrolls and Hours(SeH), pains a lss opimisic picur.8 T numbr of jobs in ovmbr 2010 was 84,000 blow hcobr 2008 lvl. T ra of mploymn growh has also slowd according o his survy.


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CHART 2 Recent trends in total employment, using two Statistics Canada measures (January 2007=100),January 2007 - December 2010

Employment based onsurvey of households

Employment based onsurvey of firms

99

100

101

102

103

104

J J J JF M A M J J A S O N D F M A M J J A S O N D F M A M J J A S O N D F M A M J J A S O N D

Source: Statistics Canada, Labour Force Survey, Catalogue no. 71-001-X, Employment, Earnings and Hours, Catalogue no. 72-002-X. Calculations by People Patterns Consulting

2007 2008 2009 2010

Job losses and gains ary sharply by age and type of workhhr you fl ha h rcssion is ovr or no, or ha h rcovry has akn hold or no, dpndson who you ar and on h yp of work ha you do. tabl 1 provids som insighs ino how variousgroups hav bn impacd by h rcssion and h rcovry. Ts numbrs ar basd on h monhlyabour Forc Survy.

Youth are big losers in recession and gain little in the recoveryMal youh bwn h ags of 15 and 24 los 149,900 jobs during h cobr 2008 o July 2009 p-

riod and hav rcovrd only 19,800 jobs sinc hn. Basd on h las daa, only 13.2% of h los jobshav rurnd. Fmal youh agd 15-24 hav no bn spard. Ty los 74,400 jobs during h down-urn and hav rgaind only 1,900 posiions or 2.6% of all jobs los sinc hn.

Mal and fmal youh agd 15-24 rprsnd only 15% of all job holdrs a h cobr 2008 mploy-mn pak bu xprincd ovr on-half of all h jobs los bwn h pak and July 2009. During hrcovry priod o Dcmbr 2010, youh capurd a mr 5% of all h n nw jobs crad.

Tis dos no bod wll for unmployd youh or for nw young labour forc nrans. I will crainly x-acrba h problms young popl xprinc in nancing pos-scondary ducaion. Tis will forc morsudns o incras hir alrady high db loads and pu mor prssur on familis for nancial suppor.

rcn Saisics Canada sudy found ha many sudns wr highly indbd as mor sudnsar rlying on sudn loans o hlp nanc hir posscondary ducaion. Bwn 1995 and 2005,h sudn borrowing ra among graduas incrasd from 49% o 57%, as did h avrag db fromsudn loans ($15,200 and $18,800). small bu growing proporion of borrowrs ar graduaing wihdb loads of $25,000 or mor.9


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Many core-age workers hae found jobs again about 142,000 hae notJobs hld by mn agd 25-54 plummd by 192,000 from cobr 2008 o July 2009 bu hav gaindback 118,400 sinc hn. Tis rprsns a n loss of 73,600 ovr h nir priod o Dcmbr 2010.

omn agd 25-54 los abou half as many jobs as mn did (-97,900) in h downurn bu hav gaindback only on-quarr as many (+29,700) during h rcovry priod. In Dcmbr 2010, hr wr68,200 fwr womn agd 25-54 wih jobs han in cobr 2008.

By h nd of 2010, job losss among cor-agd workrs sill numbrd abou 141,800 lss han hmploymn pak in cobr 2008.

T prcnag of familis wih wo incoms dippd during h rcssion du o job losss among cor-agd workrs. s a rsul, a growing numbr of familis wr likly living a dual-incom lifsyl andsupporing a dual-incom db load, bu wih only on incom.

Te 55 and oer group just kept on working and workingBoh mn and womn agd 55 and up coninud o xprinc job incrass during h rcssion, albia a rducd ra. Job growh pickd up pac during h rcovry priod (July 2009 o Dcmbr 2010).T 55+ group comprisd only 16% of all job holdrs in cobr 2008, had no n job losss during hdownurn, and sill capurd 57% of h jobs crad during h rcovry priod up unil Dcmbr 2010.

T incras in mploymn among oldr workrs poins o signican anxiy concrning hir radi-nss for rirmn wihin h nar o mdium-rm fuur. poll conducd for Invsors Group foundha 30% of baby boomrs bliv hy won hav nough mony o pay for hir basicliving xpnss

onc hy rir.10

Priate sector employment still down by oer 100,000Govrnmn scor mploys did los jobs during h downurn (-36,800) bu hn mor han madup for hs job losss during h rcovry priod (+132,700) for a n gain of 95,900 ovr h nir

priod. I is good o rmmbr ha hos who los hir jobs during h downurn may no b h onsha wr hird in h rcovry priod.

By conras, priva scor companis sill had 108,700 fwr mploys in Dcmbr 2010 han a hmploymn pak in cobr 2008. riva scor mploymn growh has pickd up rcnly. Tis isgood nws as h dadlin for h wind down of govrnmn simulus programs approachs in March2011. Tr ar sill concrns hough ha priva scor job craion won ll h gap, and job losssmay ris onc again.

Slf mploymn ypically incrass during rcssions,11 vn as h oal numbr of jobs falls, and hiswas crainly ru ovr h 2008-09 rcssion. economic ncssiy compls many laid-o workrs o ryslf-mploymn in ordr o mak nds m. s xpcd, slf-mploymn has falln mor rcnly.


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Similarly, h avrag numbr of hours workd pr wk dippd during h rcssion and hn rcov-rd. In Dcmbr 2010, avrag hours workd had rurnd o pr-rcssion lvls.

TABLE 1 Labour force indicators through recession and recovery periods, by age group and sex

Labour force indicators December2010 October 2008to July 2009 July 2009 toDecember 2010

October 2008to December

2010

Percentage Point Change

Unemployment rate (%) 7.6% +2.5 pp -1.0 pp +1.4 pp

Change in Thousands

Total labour force (15+) 18,557,800 33,500 235,300 268,800

Unemployed (15+) 1,412,500 461,600 -162,900 298,700

Employed (15+) 17,145,300 -427,900 398,100 -29,800

Full-time (15+) 13,835,800 -446,100 337,200 -108,900

Part-time (15+) 3,309,600 18,200 61,000 79,200

Employed (15+)

Males (15+) 9,006,500 -319,000 265,800 -53,200

Females (15+) 8,138,800 -108,900 132,300 23,400

Males (15-24) 1,225,400 -149,900 19,800 -130,100

Females (15-24) 1,231,200 -74,400 1,900 -72,500

Males (25-54) 6,130,400 -192,000 118,400 -73,600

Females (25-54) 5,548,000 -97,900 29,700 -68,200

Males (55+) 1,650,800 22,800 127,700 150,500

Females (55+) 1,359,600 63,300 100,700 164,000

Employed (15+)

Goods producing 3,788,800 -358,300 131,200 -227,100

Service producing 13,356,600 -69,600 267,000 197,400

Employed (15+)

Self-employed 2,620,200 69,400 -86,400 -17,000

Public sector employees 3,554,500 -36,800 132,700 95,900

Private sector employees 10,970,600 -460,600 351,900 -108,700

Note: Shaded cells indicate a deterioration for indicator between periods shown.Source: Statistics Canada, Labour Force Survey, Catalogue no. 71-001-X. Calculations by People Patterns Consulting.


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Goods producing sector still below the preious peakCovring h nir priod, a loss of 227,100 jobs in h goods producing scor was almos os bya gain of 197,400 jobs in h srvic scor. vr h priod, h biggs job losss in h goods scor

wr in manufacuring (-175,300), whil h biggs gains in h srvic scor wr in halh and social

assisanc (+131,000).

Hourly earnings increasing in 2% rangeT pr-rcssion priod was markd by labour shorags in many indusris and occupaions in 2007and par of 2008. Tis rsuld in srong advancs in avrag hourly arnings during 2007. Ts in-crass bgan o slow during h scond half of 2008 and coninud o shrink unil h nd of 2009.Sinc hn, avrag arnings hav sabilizd wih annual incrass of abou 2.2% compard o h sammonh of h prvious yar.

Inaion, as masurd by h Consumr ric Indx, has advancd by abou 2% ovr h cours of 2010.

s such, hourly arnings hav rgisrd a vry sligh improvmn in ral rms.

Fuur wag incrass ar likly o coninu o b rsraind as major ngoiad wag slmns havalso avragd nar h 2% lvl during ach of h rs hr quarrs of 2010.12

ccording o a Bank of Canada survy covring h fourh quarr 2010, only 16% of rms indica hahy ar xprincing labour shorags ha rsrics hir abiliy o m dmand. Tis sood a 40%bfor h rcssion hi.13

CHART 3 Average hourly earnings*

% change over previous year based on a 3-month moving average, January 2007 - December 2010

Source: Statistics Canada, Labour Force Survey, Catalogue no. 71-001-X. Calculations by People Patterns Consulting.*Figures not adjusted for inflation

0.0

1.0

2.0

3.0

4.0

5.0

6.0

J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D

+2.2%

+4.9%

2007

%

2008 2009 2010


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Household incomes recoveringTis rpor xamins houshold incoms using wo dirn masurs. T mos up-o-da masur ofavrag incom pr houshold is basd on Saisics Canadas aional Incom and expndiur c-couns. n sima of avrag houshold incom o h hird quarr 2010 is shown in Char 4.

T scond masur of avrag houshold incom is akn from Saisics Canadas Income in Canada,2008saisical abls, basd on h Survy of abour and Incom Dynamics. Ts daild abls arcomprhnsiv, bu only provid informaion up o h yar 2008, and hrfor do no rcord h fullimpac of h rcssion. S ppndix tabl for mor daild rnds by yp of houshold ovr h1990 o 2008 priod.

s shown in Char 4, boh masurs hav movd in a similar dircion ovr h las wo dcads andboh ll vry similar soris.

From h sandpoin of incom gains, h 1990s migh bs b dscribd as a lost decade. vrag dis-

posabl houshold incoms fll in h rs half of h 1990s, during and ar h rcssion, and did norurn o 1990 lvls unil h nd of h dcad. Tis was followd by svral yars of sluggish growh.

Bginning in 2004, h conomy nrd a srong xpansionary phas ill mid-2008. Tn h rcssionhi. earlis indicaions, basd on aional Incom and expndiur ccouns daa, suggs ha raldisposabl incoms pr houshold fll by abou 0.5% in 2009, rgisring h rs dclin sinc arly inh dcad. T dclin would hav bn largr if consumr prics had no sagnad in 2009.

By h hird quarr 2010, avrag disposabl incoms had rcovrd o a lvl ha was approximaly qualo h 2008 avrag. vrag incoms hav rboundd much mor quickly han during pas rcssions.

CHART 4 Average disposable income* per household, using two measures, in constant 2008$, 1990 - 2010

Source: Statistics Canada, National Income and Expenditure Accounts, Catalogue no. 13-019-XWE, Income in Canada, Catalogue no. 13-F0022XIE,Consumer Price Index, Catalogue no. 62-001-X. Calculations by People Patterns Consulting* Disposable income is total income, which includes government transfers, less income tax.

$40,000

$45,000

$50,000

$55,000

$60,000

$65,000

$70,000

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010Q3

Reported by Statistics Canada(See appendix A for more detailed information)

Calculations based onNational Accounts

Lost decade

RecoveryFlat period

Strong expansion

Recession

Projectedto 2010Q3


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Employment insurance (EI) cushioned the income declineT employmn Insuranc (eI) program rsponds auomaically o changs in unmploymn ras

providing hlp o housholds hrough dicul ransiions. Tis is spcially so in ims of high and ris-ing unmploymn. evn so, h nx scion shows ha h currn eI program has bcom lss rspon-siv han i was in h pas.

Bfor h ons of h rcn rcssion, h eI program paid ou abou $13 billion ach quarr (asmasurd in currn dollars on an annual basis). Tis ros sharply o $20.4 billion by h nd of hfourh quarr of 2009, wih paymns rmaining rlaivly high o la 2010.

Jus bfor h rcssion, eI bns rprsnd abou 1.6% of all wags and salaris arnd in hconomy. Tis ros o 2.5% of all wags and salaris a h pak during h fourh quarr of 2009, orup by 55% in dollars rms. Tis providd hlp o hos ha wr unmployd and qualid for eIbns and o h conomy as a whol.

CHART 5 Total Employment Insurance (EI) benefits,* seasonally adjusted, 2007Q1 - 2010Q3

Source: Statistics Canada, National Income and Expenditure Accounts, Catalogue no.13-010-X. * Billions of dollars at annual rates.

10

12

14

16

18

20

22

2007Q1 Q2 Q3 Q4 2008Q1 Q2 Q3 Q4 2009Q1 Q2 Q3 Q4 2010Q1 Q2 Q3

$13.2 B

$18.1 B

$12.4 B

$13.2 B

$20.4 B

$18.1 B

$12.4 B

$13.2 B

Billions $

$12.4 B

Fewer of the unemployed now receie benetsIn 2009, abou 42% of h unmployd rcivd eI bns compard o 40% in 2008 and 45% in2003.14 Many of h unmployd did no rciv eI bns bcaus hy did no conribu o h pro-gram (slf-mployd), conribud bu had insucin hours of work o qualify, or wr dmd o havl a job volunarily and hus did no qualify.

longr rm rnd rvals ha hr is now rducd accss o h eI program. T Mowa Cnr forolicy Innovaion found ha in 2008-09, only 46% of unmployd Canadians rcivd eI bns,compard wih 71% and 76% in h rcssions of 1981-82 and 1990-91.15

In h 2008/2009 scal yar, abou wo-hirds of h dollar valu of h eI bns was paid o h unmployd.hr paymns wr for sicknss, marniy, parnal, compassiona car, shing bns and work sharing.16


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Dual incomes one pathway to rising household incomesIncoms can b xamind from h prspciv of h individual. Incoms can also b xamind fromh houshold vanag poin.17 Tis scion amps o show how hs wo masurmns ar linkd.

hn masurd a h individual lvl, h avrag bfor-ax incom18 of mn incrasd by 12% ovrh priod from 1990 o 2008. T incras for womn was almos doubl a 23%, bu mn coninudo hav highr avrag incoms. h individual lvl, boh mn and womn rgisrd rcord highavrag incoms in 2008.

T rising lvl of individual incoms for boh sxs, combind wih mor dual-incom coupl familis,faciliad h incras of avrag ar-ax incoms of coupl familis bwn 1990 and 2008, by 26%.

In 1990, womns incoms accound for 36% of oal incom gnrad in Canada. Tis incrasd o40% in 2008, bu was sill lss han womns 48% shar of mploymn in ha yar. Tis rcs con-

inuing wag inqualiy bwn h sxs. Basd on incoms from all sourcs, womn in 2008 rcivdonly 64% of h avrag incoms ha mn did.19

ar of h dirnc in womns and mns incom is rlad o arnings and hours workd: vn amongfull-im workrs, womn work fwr hours han hir mal counrpars. Tr is vidnc ha h

wag gap is closing, hough, noably among youngr workrs. Young womn ar mor likly o hav highlvls of ducaion, work full-im, and b mployd in dirn yps of jobs han hir oldr fmalcounrpars. s wll, h conomic foruns of som groups of mn hav falln, as sourcs of mploy-mn in wll-paid manufacuring, for xampl, hav disappard.

CHART 6 Percentage change in average incomes* between 1990 and 2008, by sex and household type

Source: Statistics Canada, Income in Canada, Catalogue no. 13-F0022XIE. * Income figures adjusted for inflation.

0

5

10

15

20

25

30

35

40

45

50

%

All males All females Couple families Female lone-parent

families

Male lone-parent

families

All unattached

individuals

+12%

+23%

+26%

+43%

+22%+19%

Individual income

before income taxes

Household income

after income taxes


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h lvl of housholds and familis, incom gains hav bn suppord by having mulipl arnrswihin h family. In 1990, abou 80% of coupls wih childrn had wo or mor arnrs, whil 83% didso in 2008, down a bi from h pak in 2007. Coupls wihou childrn followd a similar parn wih67% having dual incoms in 1990 and 71% in 2008.

o only ar hr mor dual-incom coupls bu a growing prcnag of womn ar arning morhan hir spouss. In 1990, abou 20% of wivs arnd mor han hir husbands and his incrasd o29% in 2008. Tis rnd has numrous implicaions for family dynamics, including h growh in mns

paricipaion in child car and domsic labour.20

T conomic foruns of fmal lon parns hav also improvd. Fmal lon-parns incrasd hirlabour forc paricipaion from 73% o 84% bwn 1990 and 2008. Rising incoms for womn com-bind wih highr paricipaion in h paid work forc producd a 43% incras in h avrag ar-axincoms of fmal lon parns ovr his priod. T incras for mal lon-parn familis was 22%.

Incoms of unaachd individuals of ihr sx incrasd h las ovr h 1990-2008 priod (+19%).naachd individuals, spcially hos undr 65 yars of ag, hav sn h smalls gains in incomsand h smalls improvmn in ras of low incom (povry). Indd, h conomic wll-bing ofmany groups of unaachd individuals, such as young mn from nwcomr communiis, has drio-rad. S ppndix and B for mor dails.

CHART 7 Percentage of couple families with two or more earners, 1990 - 2008

Source: Statistics Canada, Income in Canada, Catalogue no. 13-F0022XIE. Calculations by People Patterns

60

65

70

75

80

85

90

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

% of couple families with children

with 2 or more earners

% of couple families without childrenwith 2 income earners

%

80%

83%

67%

71%

63%

77%


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Consumer spending dipped during the recession but not for ery longHousholds cu back on spnding as h rcssion hi. Basd on h aional Incom and expndiurccouns, oal xpndiurs pr houshold (adjusd for inaion) fll by abou 1% in 2009. T dip

was shor-livd such ha by h hird quarr of 2010, oal xpndiurs had rurnd o h avrag

lvl of spnding rcordd in 2008. Rail sals, a narrowr monhly masur of spnding in rail ou-ls, followd a similar pah.21 Tis was a much fasr rcovry han in prvious rcssions.

Spnding was suppord by incrasing db loads during boh h downurn and rcovry priods.

Saings rate up but still lowCanadian housholds incrasd hir savings ra during h rcssion, rising from 2.8% of disposabl in-coms in 2007 o 6.1% in 2009. T savings ra avragd 4.2% during h rs hr quarrs of 2010. nimprovmn in savings is ypical in rcssionary priods as individuals bcom anxious abou hir fuurs.

Dspi h rcn improvmn, h savings ra rmains signicanly lowr han h 13% ra aaindduring h rcssion of h arly 1990s and h 20% ra aaind during h 1980s rcssion.

CHART 8 Personal savings rate, 1990 - 2010(Savings as % of disposable income)

Source: Statistics Canada, National Income and Expenditure Accounts, Catalogue no. 13-019XWE. Calculations by People Patterns Consulting

0

2

4

6

8

10

12

14

16

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010Q3

4.2%

(average of first3 quarters 2010)

13.0%

%

angibl masur of h diculy of saving is rcd in h prcnag of ax lrs who mak aconribuion o Rgisrd Rirmn Saving lans (RRSs). In 2009, abou 24% of ax lrs mad aconribuion, h lows sinc a pak of 30% in 1997. For hos who conribud, h mdian conribu-ion rmaind nar h $2,600 mark ovr h nir priod.22


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Canadians ar also lss likly o giv o chariabl causs han in h pas. In 2009, abou 23% of ax lrsclaimd a chariabl donaion on hir incom ax forms compard o 26% in 1997, and 30% in 1990.Howvr, hos ha do dona now giv a largr amoun, as h mdian donaion mor han doubldbwn 1990 and 2009, from $120 o $250 (in consan dollars).23

Debt per household surpasses the $100,000 mark in 2010T six-digi db numbr has arrivd. T avrag oal accumulad db pr Canadian housholdcrp abov h $100,000 mark in la 2010. Tis rprsns a 78% advanc in ral rms sinc 1990 anda 46% hik sinc 2000. (S ppndix tabl C for dails on h asss, db and n worh of Canadianhousholds.)

o only is $100,000 an imporan symbolic hrshold bu h avrag db load is now qual o 150%of h disposabl incom of housholds in Canada. his im, Canadas db-o-incom raio is abouqual o ha in h nid Sas. vr h las fw yars, h Canadian raio coninud o incras

whil h .S. raio has bn falling and is sill doing so. ndr currn rnds, h Canadian raio could

asily rach 160% wihin h nx wo yars.

More warnings about household debt loadsTis rpor has warnd abou h dangrs of xcssiv db for h las fw yars. hr voics ar nowcalling for incrasd cauion.

T Bank of Canada is warning Canadians o b carful. T Banks advic o Canadians has bnconsisn. hav wahrd a svr crisis on ha rquird xraordinary scal and monarymasurs. exraordinary masurs ar only a mans o an nd. rdinary ims will vnually rurn and,

wih hm, mor normal inrs ras and coss of borrowing. I is h rsponsibiliy of housholds o

nsur ha in h fuur, hy can srvic h dbs hy ak on oday.24

T Crid Gnral ccounans ssociaion of Canada (CG) is vry blun in hir assssmn: Trapidly drioraing siuaion of h houshold scors balanc sh should b viwd as alarming. 25

T c of h Suprinndan of Bankrupcy Canada issud a spcial no in arly 2011. Is impor-an for Canadians o b awar of h risks and possibl consquncs of aking on a larg amoun ofdb. Signican vns, such as a chang in mploymn or incom, a chang in family saus or a sriousillnss, can caus a hug drain on nancs. T combinaion of a larg amoun of db and h suddnoccurrnc of a major lif vn could lad o h harsh raliis of insolvncy. 26


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24 |

CHART 9 Average debt* per household, in constant 2008$, 1990 - 2010Q3

Source: Statistics Canada, National Balance Sheet Accounts, Catalogue no. 13-022-XWE, Income in Canada, Catalogue no. 13-F0022XIE,Consumer Price Index, Catalogue no. 62-001-X. Calculations by People Patterns Consulting. * Average includes households with debt and those without debt.

$50,000

$60,000

$70,000

$80,000

$90,000

$100,000

$110,000

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010Q3

$56,800

$100,900

Total household debt(consumer credit, loans and mortgage debt and "other")

Consumer credit, loans and mortgage debt only

Rising household debt places one million families in ulnerable situationMuch of h xpansion in crdi growh has bn du o rcord low inrs ras. Housholds hav bnabl o ak on highr lvls of db sinc h cos of borrowing has bn, and rmains, rlaivly low.

T las row in ppndix tabl C indicas ha inrs paymns on all ousanding db wr qual oonly 7% of disposabl incoms in h hird quarr 2010. ow inrs ras hav savd many hous-holds from svr disrss bu ld many mor ino furhr db. Ts low ras will no coninu in-dnily. Ras will ris in h nar fuur and caus furhr srss whn hy do. Tis 7% raio xcluds

paymns rquird o rpay h db islf.

hil hr has bn som improvmn laly, currn masurs of srss ar all up signicanly fromh pr-rcssion priod. For xampl:

In cobr 2010, som 17,400 morgags wr in arrars by hr or mor monhs. Tis comparso 11,500 bfor h rcssion bgan.27 Tis is an incras of 50%.

T 90-day dlinquncy ra on crdi cards incrasd from 0.88% bfor h rcssion o a pak of1.34% in arly 2010, or ovr 50% highr. T ra fll o 1.13% in July 2010, sill 28% highr hanh pr-rcssionary lvl.28

bou 32,300 Canadians bcam insolvn in h hird quarr 2010. Tis is an improvmn fromarlir in 2010 bu sill 12% highr han pr-rcssion lvls.29

ccording o h Bank of Canada, abou 6.5% of housholds currnly hav a high db srvic raio(DSR) of 40% or mor rlaiv o hir disposabl incoms (db hr includs inrs as wll as pay-mns on h principal loan). T 10-yar avrag is 6.1%.30 Ts high DSR housholds ar in a vry


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2 0 1 1

vulnrabl posiion; h Bank of Canada modl assums ha on ou of four housholds in his siua-ion is likly o dfaul.

In h vn of an conomic downurn, h numbr of vulnrabl housholds would grow. T Bankof Canada has simad ha h proporion of housholds wih high DSRs would ris o 7.8% in h

vn of a signican ris in unmploymn in h nx fw yars. Tis would rprsn 1.2 million o 1.4million high-db housholds by 2012, compard o 950,000 currnly.31

Another look at mortgage debtT avrag morgag db pr houshold currnly sands a abou $63,000. Tis gur includs hous-holds ha hold morgags and hos ha do no. Jus ovr on-half of Canadian homownrs (55%)hav a morgag. (S ppndix tabl C for informaion on h avrag amoun of morgag dbamong all housholds.)

T avrag morgag db of housholds wih morgags was abou $172,000 in la 2010 (in consan

2008 dollars).

ccording o h 2005 Survy of Financial Scuriy, young homownrs ar mor likly o hold mor-gags han oldr homownrs. bou 90% of homownrs undr h ag of 35 had a rsidnial mor-gag in 2005. Tis falls o 81% for hos agd 35-44, o 60% for hos agd 45-54, down furhr o 38%for hos agd 55-64, and hn down o only 12% for hos agd 65 and ovr.32

evidnc suggss ha h prcnag of homownrs wih a morgag incrasd during h 1990s andh arly 2000s and hn sabilizd. T avrag siz of morgags also grw in ral rms, slowly in h1990s and hrough h rs half of h 2000s, and hn much mor sply bwn 2005 and 2009,

slowing somwha in 2010. f h oal prcnag incras in siz of avrag morgags (+45%) ovrh nir wo dcads, abou hr-quarrs (+33%) occurrd during h 2005 o 2010 priod.

CHART 10 Mortgage debt per household for households with a mortgage and for all households,in constant 2008$, 1990 - 2010Q3

Source: Statistics Canada, National Balance Sheet Accounts, Catalogue no.13-022-XWE, Income in Canada, Catalogue no. 13-F0022XIE,Consumer Price Index, Catalogue no. 2-001-X. Calculations by People Patterns Consulting

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

$160,000

$180,000

$200,000

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010Q3

Average amount of mortgage outstandingincluding those with a mortgage and those without a mortgage

Average amount of mortgage outstandingby those who have a mortgage

$172,000

$63,200


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Housing prices likely to fallIn ovmbr 2010, h Mulipl ising Srvic (MS) avrag rsidnial slling pric was $344,000,qual o 5.1 ims h avrag houshold disposabl incom. Tis compars o an avrag of 3.7 imsovr h las wo dcads, and only 3.9 ims as rcnly as 2004.

T incras in housing prics was mosly du o rcord low inrs ras, lowr down paymn rquir-mns, and longr amorizaion priods ovr which o pay back h morgag. Tis crad incrasddmand for homs among consumrs and has conribud o h makings of a housing pric bubbl.

s suggsd in las yars rpor, h condiions ar sill in plac for a corrcion in hous prics; whnand by how much is h dicul qusion. T whn sms o b ging closr and closr or may havalrady arrivd. vr im, h pric dclin could asily b in h doubl digi rang. I is wll o rmmbrha .S. hous prics hav falln by mor han on-quarr sinc 2006. Falling hous prics may b goodnws for nw hom buyrs bu will rod h asss and balanc shs of many Canadian homownrs.

Poverty is on the riseCanada dos no hav an ocial povry ra. T mos commonly usd masur is Saisics Canadasr-ax ow Incom Cu-o (mor dails providd in ppndix B). sing his masur, h ra oflow incom dclind from 12.5% in 2000 o 9.4% in 2008. T numbr of prsons living in povrydclind from 3.7 million o 3.1 million ovr his priod.

Bu wha happnd in 2009 and 2010? Saisics Canada won hav an sima for 2009 unil Jun2011 and won hav an sima for 2010 unil Jun 2012.

THunger Countsurvy by Food Banks Canada provids on way o sima povry ras ovr h

2008-2010 priod. each March, Food Bank Canada lds a survy of food bank usrs. ccording ohir 2010 rpor,Hunger Count 2010, in March 2010, 867,948 spara individuals wr assisd bya food bank in Canada. Tis is an incras of 9.2% ovr March 2009 and follows an 18% jump in usagbwn 2008 and 2009.33 (Tr is no doubl couning sinc ach prson is only cound onc for hmonh vn if hy may hav usd h food bank mor han onc.)

ik unmploymn, food bank us nds o rack h ra of low incom. pplying h sam ra ofgrowh in food bank usag o h incidnc of low incom, i is rasonabl o assum ha h povryra ros by hr prcnag poins bwn 2008 and 2010 o 12.5% in 2010 or back o whr i

was in h yar 2000. T 2010 sima rprsns roughly 4.2 million childrn and aduls.


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CHART 11 Percentage of persons in low income,* 1990 - 2010

Source: Statistics Canada, Income in Canada, Catalogue no. 13-F0022XIE. Projections by People Patterns Consulting based on Canada Food B anks, Hunger Count 2010.Poverty measure: Percentage of persons with after-tax incomes below Statistics C anada's Low Income Cut-off.

8

9

10

11

12

13

14

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Projected low income ratebased on trends infood bank usage

9.4%

12.5% 12.5%?

After-tax Low Income Cut-off (LICO-IAT)

(See appendix B for more detailed information)

%

Tere is growing inequality in Canadaovry rnds prsn a picur of h conomic sruggls of housholds a h boom of h incomladdr. h sam im, i is imporan o considr h incom rnds of housholds across h incomspcrum and h siz of h gap bwn dirn groups of Canadian familis.

evn as avrag houshold incoms improvd hrough much of h las dcad, tabl 2 rvals haincom inqualiy was growing. T shar of oal ar-ax incoms shrank for h boom four hs (orquinils) of housholds. T op 20% of housholds was h only incom group o rciv a largr shar

of h oal incom pi (from 41.0% in 1990 o 44.3% in 2008) ovr h priod.

s nod, all incom groups xprincd ral growh in ar-ax incoms bwn 1990 and 2008. Tais whr h good nws nds. T prcnag incrass in incoms was smalls for h poors h ofhousholds (+8%), whil h richs 20% had h largs incrass (+31%) ovr h priod.

In 1990, h richs 20% ook in 7.5 ims mor incom han did h poors 20%. By 2008, h richs ookin 9.1 ims mor incom han h poors 20%. In dollar rms, h incras in incoms of h richs 20%(+$31,300) was much largr han h incrass for all of h ohr incom groups combind (+$20,700).

In addiion, h additionalincom rcivd by h richs 20% (+$31,300) from 1990 o 2008 wasalmos qual o h 2008 avrag annual ar-ax incom of h lowr middl h incom quinil($31,500).

nd i was h vry walhis Canadians ha xprincd h gras incom gains. nw rpor byrmin Yalnizyan of h Canadian Cnr for olicy lrnaivs usd Rvnu Canada ax saisics ah individual lvl o show ha h op 1% of ax lrs ook in 15.7% of oal ar-ax incoms in 2007compard o abou 10% in 1990.34


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TABLE 2 Percentage share and average after-tax income by household income quintile, 1990, 2000 and 2008

Households by quintiles* % share of after-tax income Average after-tax income

1990 2008%

change1990 2008

%change

Dollarchange

Poorest fth 5.5% 4.9% -0.6pp $13,400 $14,500 +8% +$1,100Lower middle fth 11.4 10.6 -0.8pp $27,900 $31,500 +13% +$3,600

Middle fth 17.5 16.3 -1.2pp $43,000 $48,500 +13% +$5,500

Upper middle fth 24.7 23.9 -0.8pp $60,700 $71,200 +17% +$10,500

Richest fth 41.0 44.3 +3.3pp $100,600 $131,900 +31% +$31,300* each group has 20% of all householdsSource: Statistics Canada, Income in Canada, Catalogue no. 13-F0022XIE. Calculations by People Patterns Consulting.

hil h richs 20% of housholds ar ging a biggr pic of h incom pi, hy ar also paying a

largr shar of h incom axs. In 1990, h richs 20% paid 54.2% of all h incom axs collcd.By 2008, hy paid 61.5% of all h incom axs collcd. T shar of h ax bill dclind for ach ofh ohr four incom quinils.

Canada has a progrssiv incom ax sysm h ra of axaion of incom riss as incoms ris. Sa-isics Canada uss wha is calld h implici incom ax ra o sima how ach houshold incomgroup is impacd by incom axs. T masur is calculad as h avrag incom ax paid xprssd asa prcnag of avrag oal incom. In 2008, h poors h of housholds paid incom axs qual oabou 4% of hir oal incoms. Tis incrasd o 8% for h lowr middl h, o 12% for h middlh, o 15% for uppr middl h, and o 22% for h richs h of housholds. T implici incom

ax ra for ach incom group is lowr han i was in 1990, wih h biggs dclins occurring in 2001.

Tis gnral ovrviw of h disribuion of incoms clarly shows ha inqualiy is growing in Canada.T spcial faur, which follows, aks a closr a how h middl class is doing.


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SPeCiL eTure ON Te MiddLe CLSS

Concrn abou rising lvls of db and high lvls of unmploymn ovr h pas wo yars has high-lighd h conomic sruggls of Canadian housholds. olling daa show ha familis coninu o b

vry anxious abou hir nancial prospcs. Ts concrns ar no connd o low incom housholds.Middl incom housholds ar also worrid abou hir conomic foruns in 2011.

Tis spcial faur ofTe Current State of Canadian Family Finances looks a middl class housholdso br undrsand h xprincs of his ky group. r middl class housholds ging smallr orbiggr? r ims ging br or wors in rms of incom? r hr mor arnrs pr houshold?

ha ar middl class housholds spnding hir hard arnd dollars on? ha kind of spnding prs-surs ar hy facing?

Te Current State of Canadian Family Finances 2005 Report lookd a h middl class as wll.35

ha im, w nod ha hr was no gnrally accpd way of dning h middl class. gain, as inh prvious rpor, w simply dn h middl class as ha group ha compriss h middl 20%of housholds in rms of incom. s such, 40% hav lss incom han his middl class and 40% havmor incom han his group.

Middle class incomes recover aer stagnation through the 1990sChar 12 shows ha h 1990s wr a los dcad for middl class housholds. T rcssion of h arly1990s rsuld in a signican drop in avrag ar-ax incoms, dropping from $43,000 in 1990 o$39,700 in 1997. Incoms did no rurn o 1990 lvls unil 2001 or mor han a dcad lar. Tis

was followd by a priod of sagnaion and hn srong incom growh from 2004 o 2008. ( daild

picur of houshold incom hrough h rcssion isn availabl y.)

CHART 12 Average income after income taxes and transfers of middle class* households, in constant 2008$, 1990 - 2008

Source: Statistics Canada, Income in Canada, Catalogue no. 13-F0022XIE

$38,000

$39,000

$40,000

$41,000

$42,000

$43,000

$44,000

$45,000

$46,000

$47,000

$48,000

$49,000

$50,000

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

$43,000

$48,500

$42,400

Lost decade

* refers to the middle 20% of households by income,

households include families of two or more and unattached individuals


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Middle class getting smaller share of total incomess nod arlir, h middl class has sn is shar of ar-ax incoms drop, from 17.5% in 1990 o16.3% in 2008. Tis is lss han hir 20% shar of all housholds. (Chck tabl 2 for h shars of hohr incom groups in 1990 and 2008.)

T middl class shar of govrnmn ransfrs incrasd slighly from 20.2% in 1990 o 21.4% in 2008.In 1990, h middl class rcivd an avrag of abou $7,500 in govrnmn ransfrs and $8,700 in2008 (in consan 2008 dollars).

In conras, h middl class has conribud a dclining shar of all h incom axs collcd ovr hpriod, falling from 14.0% in 1990 o 11.3% in 2008. o only did h middl class pay a smallr sharof incom axs bu h acual dollar amoun also dcrasd as wll, from an avrag of $8,400 in 1990o $6,700 in 2008 (in consan 2008 dollars). T mor favourabl ax siuaion sard in h scondhalf of h 1990s.

In 1990, h middl class paid abou $900 mor in incom axs han i rcivd in govrnmn rans-frs. By 2008, h middl class rcivd abou $2,000 mor in ransfrs han i paid ou in incom axs.Govrnmn policis hav had som posiiv cs on lowring h n burdn on middl class hous-holds. Changs in ohr yps of axs and usr fs ar no includd in his analysis.

CHART 13 Share of transfers, after-tax incomes and income taxes of middle class* households, 1990 - 2008


10

12

14

16

18

20

22

24

26

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

17.5%16.3%

%

Share of after-tax incomes

Share of government transfers

Share of income taxes paid

20.2%21.4%

14.0%

11.3%

* refers to the middle 20% of households by income,

households include families of two or more and unattached individuals

Middle class families and middle class unattached indiiduals show gainsI is inrsing o look a familis of wo or mor sparaly from prsons who ar unaachd. Char 14and 15 show h incom rnds for boh groups ovr h pas wo dcads. T avrag ar-ax incoms offamilis of wo or mor ros from $54,100 in 1990 o $64,200 in 2008, or an incras of 19%, h bulk ofh incras coming in h las fw yars. By 2008, h uppr rang for his middl class group was $74,100

whil h lowr rang was $55,200.


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CHART 14 Average income after income taxes and transfers, and upper and lower income limits,of middle class* families, in constant 2008$, 1990 - 2008

Source: Statistics Canada, Income in Canada, Catalogue no. 13-F0022XIE * refers to the middle 20% of families by income

$35,000

$40,000

$45,000

$50,000

$55,000

$60,000

$65,000

$70,000

$75,000

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Upper income limit - no familyhas more income than this amount

Lower income limit - no family has less income than this amount

Average income$54,100

$64,200$61,500

$74,100

$47,100

$55,200

T avrag ar-ax incoms of unaachd individuals (prsons living alon or wih somon wihwhom hy ar no rlad) advancd from $21,400 in 1990 o $25,300 in 2008, an incras of 18%. By2008, h uppr rang for his middl class group was $30,600 whil h lowr rang was $20,800.

CHART 15 Average income after income taxes and transfers, and upper and lower income limits of middle class*unattached individuals, in constant 2008$, 1990 - 2008


$14,000

$16,000

$18,000

$20,000

$22,000

$24,000

$26,000

$28,000

$30,000

$32,000

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

$21,400

$25,300$25,400

$30,600

$20,800

$18,000

Upper income limit - no unattached individualhas more income than this amount

Lower income limit - no unattached individual has less income than this amount

Average income


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Te middle class household has changed oer the last decadetabl 3 prsns slcd characrisics of housholds ha mak up h middl incom class. Som ofh characrisics hav changd a lo ovr h las dcad whil ohrs hav no. T shadd clls in habl highligh hos characrisics ha hav changd h mos. T changs ar classid in h las

column using a simpl ranking sysm focusing on h gnral dircion of chang (1) up a lot, (2) up abit, (3) no change, (4) down a bitand (5) down a lot as drmind by h auhor.

T avrag ag of h had of h houshold was up a bitfrom 47 yars in 1999 o 49 yars in 2008.

T avrag siz of h middl class houshold was down a bit, from 2.6 prsons pr houshold in 1999o 2.5 prsons in 2008.

T ag composiion of hos rsiding in middl class housholds has changd mor signicanly. Tnumbr of childrn agd lss han 15 yars old was down a lotovr h dcad as was h numbr of

aduls agd 25 o 64.

T makup of housholds mirrors som of h changs in sociy as a whol. T prcnag of hous-holds comprisd of on-prson housholds movd up a lo from 18% of all middl class housholds in1999 o 23% in 2008 whil h prcnag of coupl housholds and lon-parn familis was down a bit.

T arning srucur of h middl class has also gon hrough som signican changs ovr h lasdcad. T prcnag of housholds wih only on full-im arnr wn down a lotfrom 1999 (56%)o 2008 (49%). Tis was os by many mor wo full-im arnr housholds (from 12% o 16%) andan incras in housholds wih no full-im arnrs a all. Mor womn in coupl familis wr working

full-im whil fwr mn in hs sam familis wr doing so.

T ownrship srucur hardly changd a all during h dcad. T prcnag who ownd hir homs(69%) was unchangd, as was h prcnag of hs ownrs who had a morgag on hir homs (55%).

Tr wr a fw mor singl dachd homs, mor of h homs had svn or mor rooms, and hrwr a fw mor microwavs ovns. Microwavs wr alrady nar hir sauraion poin in 1999 asalmos vryon alrady had on.

Many ohr yps of quipmn bcam signicanly mor common in middl class housholds. Tiswas so spcially so for dishwashrs, air condiionrs, cll phons, hom compurs, and inrn usfrom h hom. Cll phons and inrn us from h hom mad h biggs advancs soaring fromabou 30% in 1999 o abou 80% in 2008.

wnd and lasd vhicls wr rlaivly a whil h proporion of wo-vhicl housholds movd up.


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TABLE 3 Selected household characteristics, middle class households*, 1999 and 2008

Household characteristics1999 2008

Direction ofchange

(1999 to 2008)

Average age

Age of reference person (head) 47 49 Up a bit

Average household size

Household size 2.6 persons 2.5 persons Down a bit

Average age structure

Number of children aged less than 15 0.54 persons 0.46 persons Down a lot

Number of youths aged 15 to 24 0.28 0.29 Up a bit

Number of adults aged 25 to 64 years 1.51 1.43 Down a lot

Number of seniors aged 65+ 0.29 0.33 Up a bit

Household types (%)

One-person households 18% 23% Up a lotCouple households 66 63 Down a bit

Lone-parent households 9 7 Down a bit

Other households 7 7 No change

Earner characteristics (%)

With no full-time earner 31% 35% Up a lot

With one full-time earner 56 49 Down a lot

With two or more full-time earners 12 16 Up a lot

With wife employed full time 16 18 Up a bit

With husband employed full time 35 33 Down a bitFacilities and equipment characteristics, percentage of households (%)

Homeowner on December 31 69% 69% No change

Owners with a mortgage 55 55 No change

Rented 31 31 No change

Single detached 56 59 Up a bit

7 or more rooms 37 40 Up a bit

Microwave oven 92 96 Up a bit

Dishwasher 50 63 Up a lot

Air conditioner 35 50 Up a lot

Cellular telephone 31 78 Up a lot

Home computer 51 86 Up a lot

Internet use from home 30 79 Up a lot

Owned vehicles (autos, trucks, vans) 85 84 Down a bit

2 or more owned vehicles 35 37 Up a bit

Leased vehicles 9 9 No change

*refers to the middle 20% of households by incomeNote: Shaded cells indicate the most signicant changes during the decadeSource: Statistics Canada, Survey of Household Spending, 1999, Catalogue no. 62F0042XDB and Survey of Household Spending, 2008, Catalogue no. 62FPY0042XDB.Calculations by People Patterns Consulting .


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Expenditures on personal care, public transportation, health care and tuition rose through last decadetabl 4 xamins h growh in avrag xpndiurs by middl class housholds by major cagorisovr h dcad. s a guid, h shadd clls highligh hos ims ha grw by a las 40% ovr hdcad, much fasr han h 28% incras for all xpndiurs. ll xpndiurs ar in currn dollarsand hus ar no adjusd for inaion.36

T biggs incras (+69%) during h dcad was for ims classid as prsonal car. ihin his ca-gory, spnding on lcric hair-syling and prsonal car appliancs and prsonal car prparaions (noshown) boh incrasd by mor han 125%.

expndiurs on public ransporaion incrasd by 58% ovr h dcad or almos doubl h ra ofincras for priva ransporaion (+32%).

u of pock halh car xpnss paid by middl class housholds jumpd by 43% during h dcad.Dirc coss incrasd by 38% whil halh insuranc prmiums soard by 53%.

tuiion fs paid incrasd by 43% from 1999 o 2008.

lcoholic bvrags, which accoun for 1.4% of all xpndiurs, incrasd by 41% wih purchass fromsors (+54%) up by mor han doubl h growh of xpndiurs in licnsd prmiss (+25%).

By conras, rading marials rgisrd h biggs dclin (-10%) among h major xpndiur cagoris.

rsonal incom axs paid incrasd by 14% ovr h dcad. (T incom ax sima for 2008 in tabl 4($8,943) is largr han h $6,700 numbr rpord in Char 13. Ts wo simas ar drivd from

dirn survys, mploying dirn mhodologis and arging dirn sampls of h populaion.)


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TABLE 4 Average expenditures, middle class households*, 1990 to 2008 (current dollars**)

(expenditures include households with the expenditure and those without)

Major categories Averageexpenditure

per household

2008

Percentage oftotal expenditures

2008

% change inexpenditures

(current dollars)

1999 to 2008

dollars % %

Total expenditure $60,187 100.0% 28%

Food 7,225 12.0 23

Shelter 12,943 21.5 33

Household operation 3,022 5.0 36

Household furnishings and equipment 1,667 2.8 25

Clothing 2,556 4.2 30

Transportation 8,782 14.6 34

Private transportation 7,910 13.1 32Public transportation 873 1.5 58

Health care paid by the household 1,890 3.1 43

Direct costs to household 1,296 2.2 38

Health insurance premiums 594 1.0 53

Personal care 1,129 1.9 69

Recreation 3,351 5.6 25

Reading materials/printed matter(excluding school related)

232 0.4 -10

Education 776 1.3 32

Tuition fees 597 1.0 43

Tobacco products 662 1.1 7

Alcoholic beverages 868 1.4 41

Personal income taxes 8,943 14.9 14

Personal insurance payments & pensioncontributions

3,295 5.5 26

*refers to the middle 20% of households by income; ** not adjusted for inationNote: Shaded cells indicate expenditure that increased by more than 40%Source: Statistics Canada, Survey of Household Spending, 1999, Catalogue no. 62F0042XDB and Survey of Household Spending, 2008, Catalogue no. 62FPY0042XDB.Calculations by People Patterns Consulting .


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ConclusionTis shor rpor rvals ha h conomic foruns of middl class housholds hav waxd and

wand ovr h pas wo dcad. T 2004 o 2008 was a vry good priod, following a dcad of slowrcovry from h rcssion of h arly 1990s. vrall, h middl class shar of oal ar-ax incomsshrank bwn 1990 and 2008, as h conomic gains of h op 20% of housholds ousrippd hos

of all ohr incom groups, including middl class housholds. Middl class housholds hav changd inboh hir makup and how hir budgs ar allocad. Tr ar mor convnincs in odays middlclass homs han jus a dcad arlir. Crain xpndiurs, noably on prsonal car, public ranspora-ion, halh car and uiion, hav incrasd rapidly ovr h las dcad.


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Appendix A - Average incomes of families and unattached individuals, and share of incomes aftertransfers and income taxes (constant 2008$), 1990, 2000 and 2008

constant 2008$

% change over selected periods

Entire period Since 2000 Latest yearavailable

1990 2000 2008 2008 / 1990 2008 / 2000 2008 / 2007

All households $49,100 $51,900 $59,500 21.2% 14.6% 1.4%

All families of 2 persons or more 59,400 64,500 74,600 25.6 15.7 1.5

Senior families of 2 persons or more (65 and over)

Senior couples 43,900 45,000 53,500 21.9 18.9 -1.3

Other senior families 58,000 51,400 65,300 12.6 27.0 7.0

Core Working-age families of 2 persons or more (under 65)

Couples without children 56,300 61,300 71,700 27.4 17.0 0.1

one earner 48,000 49,700 56,600 17.9 13.9 -1.6

two earners 62,800 69,400 80,500 28.2 16.0 1.5

Couples with children 65,100 72,800 84,900 30.4 16.6 1.2

one earner 47,600 53,200 61,200 28.6 15.0 2.0

two earners 64,600 73,900 84,800 31.3 14.7 1.8 Female lone-parent 28,900 33,600 41,300 42.9 22.9 2.2

Male lone-parent 44,500 48,100 54,200 21.8 12.7 1.7

All families of 2 persons or more by province

Newfoundland 48,700 50,500 63,000 29.4 24.8 3.4

Prince Edward Island 50,500 52,800 61,700 22.2 16.9 3.4

Nova Scotia 52,800 55,400 61,800 17 11.6 -1.0

New Brunswick 50,200 54,200 59,100 17.7 9.0 0.0

Quebec 53,000 56,500 64,100 20.9 13.5 1.4

Ontario 66,300 73,300 78,700 18.7 7.4 0.4

Manitoba 54,800 57,200 69,500 26.8 21.5 1.2

Saskatchewan 51,800 55,400 73,500 41.9 32.7 6.2 Alberta 61,000 68,700 90,800 48.9 32.2 2.5

British Columbia 60,600 60,900 77,900 28.5 27.9 3.2

Unattached individuals (living alone or with someone who is not related)

Total 26,100 26,200 31,000 18.8 18.3 1.6

Senior males (65 and over) 25,000 25,700 32,900 31.6 28 3.5

Senior females (65 and over) 21,900 23,000 26,800 22.4 16.5 1.9

Non-senior males (under 65) 29,600 29,400 34,400 16.2 17 2.7

Non-senior females (under 65) 24,800 23,900 28,300 14.1 18.4 -0.4

% share of after tax and transfer incomes - all families of 2 persons or more by income groups(percentage point change (pp))

Poorest fth of families 7.5% 6.9% 7.1% -0.4 pp 0.2 pp -0.2 pp

Lower-middle fth of families 13.4% 12.6% 12.4% -1.0 pp -0.2 pp -0.2 pp

Middle fth of families 18.2% 17.4% 17.2% -1.0 pp -0.2 pp -0.1 pp

Upper-middle fth of families 23.8% 23.3% 23.1% -0.7 pp -0.2 pp 0.0 pp

Richest fth of families 37.1% 39.8% 40.2% +3.1 pp 0.4 pp 0.5 pp

Source: Statistics Canada, Income in Canada, Catalogue no. 13-F0022-XIE. Calculations by People Patterns Consulting.


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APPENDIX B - Rate of low income (poverty) among families and unattached individuals after transfersand income taxes, 1990, 2000 and 2008

% with low-incomes (poverty)percentage point change

Entire period Since 2000 Latest yearavailable

1990 2000 2008 2008 / 1990 2008 / 2000 2008 / 2007

All households 11.8% 12.5% 9.4% -2.4pp -3.1 pp +0.2 pp All families of 2 persons or more 9.0 9.3 6.3 -2.7 -3.0 0.3

All unattached individuals 31.3 32.9 27.2 -4.1 -5.7 -0.3

Senior families (65 and over)

All senior families 2.8 3.5 2.6 -0.2 -0.9 0.8

Senior couples 2.7 1.2 0.9 -1.8 -0.3 -0.1

Core Working-age families (under 65)

Couples without children 6.7 6.9 5.5 -1.2 -1.4 0.7

one earner 9.5 10.2 7.4 -2.1 -2.8 1.1

two earners 2.7 2.2 2.0 -0.7 -0.2 -0.3

Couples with children 7.5 8.7 6.0 -1.5 -2.7 0.4 one earner 17.1 23.1 17.8 0.7 -5.3 -3.2

two earners 4.9 4.6 3.2 -1.7 -1.4 0.5

Female lone-parent 48.2 36.2 20.9 -27.3 -15.3 -3.1

Male lone-parent 18.4 12.3 7.0 -11.4 -5.3 -2.2

All households by age of major income earner

Under 25 42.2 39.4 35.0 -7.2 -4.4 2.7

25-34 13.8 16.0 10.8 -3.0 -5.2 -0.8

35-44 10.4 10.5 8.4 -2.0 -2.1 -0.3

45-54 6.7 9.1 5.7 -1.0 -3.4 -0.7

55-64 11.2 13.8 11.4 0.2 -2.4 2.4

65 and over 10.0 8.5 6.5 -3.5 -2.0 1.2 Children 0-17 by province

Canada 14.0 13.9 9.1 -4.9 -4.8 -0.5

Newfoundland 18.1 17.9 9.1 -9.0 -8.8 2.9

Prince Edward Island 6.7 7.7 4.5 -2.2 -3.2 -0.2

Nova Scotia 11.7 12.6 7.9 -3.8 -4.7 -0.5

New Brunswick 13.7 10.8 5.4 -8.3 -5.4 -4.3

Quebec 14.6 16.1 10.2 -4.4 -5.9 0.8

Ontario 12.0 13.0 9.1 -2.9 -3.9 -0.4

Manitoba 19.4 16.9 8.8 -10.6 -8.1 -2.9

Saskatchewan 17.2 13.2 9.1 -8.1 -4.1 -1.6

Alberta 15.3 12.5 6.8 -8.5 -5.7 0.5

British Columbia 14.9 14.2 10.4 -4.5 -3.8 -2.6

Unattached individuals

Senior males (65 and over) 20.7 17.6 12.1 -8.6 -5.5 -1.0

Senior females (65 and over) 30.5 21.7 17.1 -13.4 -4.6 2.6

Non-senior males (under 65) 29.4 32.1 27.9 -1.5 -4.2 -1.9

Non-senior females (under 65) 36.8 44.3 36.3 -0.5 -8.0 1.3

Note: A 4-person family living in a city of 500,000 or more with less than $34,738 ($8,684 per person) and a 4-person rural family with less than $22,724 ($5,681per person) annually are classied as being low-income.Source: Statistics Canada, Income in Canada, Catalogue no. 13-F0022-XIE. Calculations by People Patterns Consulting.


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APPENDIX C - Major components of average net worth per household based on market value (constant 2008$),1990, 2000 and 3rd Quarter 2010

Average Value in 2008$

Percentage change over selected periods

Entire period Since 2000 Latest yearavailable*

1990 2000 2010(Q3)2010(Q3) /

19902010(Q3) /

20002010(Q3) /

2009

Total assets $311,860 $424,520 $510,695 62.8% 20.3% 0.2%

Financial assets 166,690 263,710 282,597 69.5 7.2 0.0

shares 27,570 90,310 97,932 255.2 8.4 0.5

life insurance/pensions 54,620 94,450 102,396 87.5 8.4 0.0

all other ** 84,500 78,950 82,270 -2.6 4.2 -0.7

Non-nancial assets 145,170 160,800 228,098 57.1 41.8 0.4

real estate 114,220 129,480 197,852 73.2 51.8 0.8

consumer durables 27,740 28,070 28,181 1.6 0.4 -1.8

all other *** 3,210 3,250 2,065 -35.6 -36.5 -7.2

Total debt outstanding 56,780 69,110 100,879 77.7 46.0 1.2

consumer credit/loans 19,346 25,306 36,346 87.9 43.6 0.1

mortgages 36,150 42,720 63,126 74.6 47.8 1.8

(mortgage by mortgage holders) 118,520 126,400 171,500 44.7 35.7 1.8

other debt**** 1,285 1,087 1,408 9.6 29.6 2.4

Net worth 255,080 355,400 409,816 60.7 15.3 -0.1

Selected ratios (percentage point change (pp))

Total debt as % of disposable income 93% 113% 150% +57 pp +37 pp +2 pp

Consumer credit/loan and mortgagedebt as % of disposable income

91% 111% 148% +57 pp +40 pp +2 pp

Consumer credit as % consumer durables 47% 59% 102% +55 pp +43 pp +2 pp

Total debt as % of total assets 18% 16% 20% +2 pp +4 pp +0 pp

Total debt as % of net worth 22% 19% 25% +3 pp +6 pp +1 pp

Real estate as % of net worth 45% 36% 48% +3 pp +13 pp +0 pp

Interest payments as % of disposable income 10.5% 8.0% 7.0% -3.5 pp -1.0 pp -0.4 pp

* The changes for the latest period (3Q-2010) are from the end of year for 2009.** Bonds, cash, loans to others, etc.*** Machinery and equipment of unincorporated small business owners, etc.**** Mortgages on non-residential buildings, small business lines of credit, etc.Source: Statistics Canada, National Balance Sheet Accounts, Catalogue no. 13-022-XWE, Income in Canada, Catalogue no.13-F0022-XIE,

Consumer Price Index, Catalogue no. 62-001-X. Calculations by People Patterns Consulting.


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eNdNOTeS Nd SOurCeS

1 Ky Saisics Canada daa sourcs usd in h rpor. Employment, Earnings and Hours, monhly publicaion, Caalogu no. 72-002-X

hp://www.sacan.gc.ca/bsolc/olc-cl/olc-cl?cano=72-002-Xe&lang=ng

Labour Force Sureyhp://www.sacan.gc.ca/cgi-bin/imdb/p2SV.pl?Funcion=gSurvy&SDDS=3701&lang=n&db=imdb&adm=8&dis=2(Labour Force Information, monhly publicaion, Caalogu no. 71-001-X.hp://www.sacan.gc.ca/bsolc/olc-cl/olc-cl?cano=71-001-XIe&lang=ng#formadisp )

Consumer Price Indexhp://www.sacan.gc.ca/cgi-bin/imdb/p2SV.pl?Funcion=gSurvy&SDDS=2301&lang=n&db=imdb&adm=8&dis=2(Consumer Price Index, monhly publicaion, Caalogu no. 62-001-X.hp://www.sacan.gc.ca/bsolc/olc-cl/olc-cl?cano=62-001-Xe&lang=ng )

Surey of Labour and Income Dynamics

hp://www.sacan.gc.ca/cgi-bin/imdb/p2SV.pl?Funcion=gSurvy&SDDS=3889&lang=n&db=imdb&adm=8&dis=2(Income rends in Canada, annual publicaion, Caalogu no. 13F0022XIehp://www.sacan.gc.ca/bsolc/olc-cl/olc-cl?cano=13F0022XIe&lang=ng)

Surey of Household Spendinghp://www.sacan.gc.ca/cgi-bin/imdb/p2SV.pl?Funcion=gSurvy&SDDS=3508&lang=n&db=imdb&adm=8&dis=2(Spending Patterns in Canada, annual publicaion, Caalogu no. 62-202-Xehp://www.sacan.gc.ca/bsolc/olc-cl/olc-cl?cano=62-202-Xe&lang=ng)

Surey of Financial Security

hp://www.sacan.gc.ca/cgi-bin/imdb/p2SV.pl?Funcion=gSurvy&SDDS=2620&lang=n&db=imdb&adm=8&dis=2 National Income and Expenditure Accounts

hp://www.sacan.gc.ca/cgi-bin/imdb/p2SV.pl?Funcion=gSurvy&SDDS=1901&lang=n&db=imdb&adm=8&dis=2(National Income and Expenditure Accounts: Data ables, quarrly publicaion,Caalogu no. 13-019-Xehp://www.sacan.gc.ca/bsolc/olc-cl/olc-cl?cano=13-019-X&lang=ng)

National Balance Sheet Accountshp://www.sacan.gc.ca/cgi-bin/imdb/p2SV.pl?Funcion=gSurvy&SDDS=1806&lang=n&db=imdb&adm=8&dis=2(National Balance Sheet Accounts: Data ables, quarrly publicaion, Caalogu no. 13-022-Xehp://www.sacan.gc.ca/bsolc/olc-cl/olc-cl?cano=13-022-x&lang=ng)

Various lcronic sourcs and CANSIMabls


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2 Canadian rss (2010), Consumr condnc mor subdud, Te Globe and Mail. Dcmbr29, 2010. hp://www.hglobandmail.com/rpor-on-businss/conomy/consumr-condnc-mor-subdud/aricl1851817/

3 Kim Covr (2010), Confrnc Board: Consumrs no mor condn han during rcssion,Te Financial Post, Dcmbr 21, 2010. hp://www.vancouvrsun.com/sory_prin.

hml?id=4008266&sponsor=4 Canada ws ir (2011), Canadians mor condn, bu rsrvd on conomy, shows

economic Club of Canada/ollara poll, January 6, 2011. hp://www.cnw.ca/n/rlass/archiv/January2011/06/c8723.hml

5 anos Rsarch (2010), Canadas economic Mood pimism dclins for hird succssivquarr,Nanos Report, cobr 21, 2010. hp://ba.imags.hglobandmail.com/archiv/00957/Canada_s_economic_M_957423a.pdf

6 ngus Rid ublic pinion (2010), Canadians Split on the Economy as rust in Harper FallsSharply, cobr 26, 2010. hp://www.angus-rid.com/polls/43423/canadians-spli-on-h-conomy-as-rus-in-harpr-falls-sharply/

7 T abour Forc Survy provids a monhly sima of h numbr of prsons agd 15 andovr in Canada. In cobr 2008, abou 67.7% of his populaion agd 15 and ovr wrparicipaing (dnd as hos working plus hos looking for work) in h labour forc. Trpord paricipaion ra, xprssd as a prcnag of h populaion agd 15 and ovr, dclindgradually o 66.7% in Dcmbr 2010. If h prcnag of h populaion agd 15 and ovr(27,814,800) in h labour forc in Dcmbr 2010 had rmaind a h sam lvl as in cobr2008 (67.7%), h labour forc would hav bn qual o 18,830,600 rahr han h 18,557,800rpord (s tabl 1) a dirnc of 272,800. If hs addiional workrs had bn cound asunmployd, h unmploymn ra would hav bn 8.9% in Dcmbr 2010 rahr han h7.6% rpord. ll h ohr monhs hav bn calculad in h sam way.

8 T Survy of employmn, ayrolls and Hours xcluds mployrs primarily involvd inagriculur, shing and rapping, priva houshold srvics, rligious organizaions, and miliaryprsonnl of dfns srvics.

9 May uong, (2010), T nancial impac of sudn loans,Perspecties on Labour and Income,Saisics Canada, Caalogu no. 75-001-X, p. 14. hp://www.sacan.gc.ca/pub/75-001-x/2010101/pdf/11073-ng.pdf

10 orn Rasbach, (2010), Good nws, boomrs (and som bad), Te Globe and Mail, ovmbr24, 2010. hp://www.hglobandmail.com/glob-invsor/prsonal-nanc/hom-cns/good-nws-boomrs-and-som-bad/aricl1811172/

11 Sbasin aRochll-C (2010), Slf mploymn in h downurn,Perspecties on Labourand Income, Saisics Canada, Caalogu no. 75-001-X. hp://www.sacan.gc.ca/pub/75-001-x/2010103/pdf/11138-ng.pdf

12 Human Rsourcs and Skills Dvlopmn Canada (2010),Aerage Annual Percentage WageAdjustments. hp://www.hrsdc.gc.ca/ng/labour/labour_rlaions/info_analysis/wags/adjusmns/2010/09/quarrly.shml

13 Bank of Canada (2011),Business Outlook Surey, Vol 7.4, January 10, 2011.hp://www.bankofcanada.ca/n/bos/2011/winr/bos0111.pdf


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14 Saisics Canada (2010), employmn Insuranc Covrag Survy, Te Daily, Jun 21, 2010.hp://www.sacan.gc.ca/daily-quoidin/100621/dq100621b-ng.hm

15 Knyan allac (2010), eI favours as coas, sudy nds, National Post, Spmbr 9, 2010.S Mahw Mndlsohn and Jon Mdow (2010),Help Wanted: How Well did the EI Program

Respond during Recent Recessions, nivrsiy of torono: Mowa Cnr for olicy Innovaion.

hp://www.mowacnr.ca/pdfs/mowaRsarch/22.pdf . Tis rpor uss an eI Bn Ra orack h xn o which h eI sysm is providing covrag for hos who ar unmployd. I iscalculad by dividing h numbr of rgular eI rcipins by h numbr of unmployd prsons.

16 Canada employmn Insuranc Commission (2010),Monitoring and Assessment Report2009, employmn Insuranc, Caalogu no. HS1-2/2009e. hp://www.hrsdc.gc.ca/ng/mploymn/i/rpors/imar_2009/DF/eIMR_2009.pdf

17 Housholds includ boh singl individuals and familis comprisd of wo or mor.18 Daa on individual lvl incoms ar no availabl on an ar incom ax basis in h publishd simas.19 Cara illiams (2010) economic ll-bing, Women in Canada: A Gender-based Statistical

Report, Caalogu no. 89-503-X, p. 8. hp://www.sacan.gc.ca/pub/89-503-x/2010001/

aricl/11388-ng.pdf20 Vanir Insiu of h Family (2010),Families Count: Proling Canadas Families IV. awa.hp://www.vifamily.ca/nod/371

21 Saisics Canada (2010),Retail rade, Caalogu no. 63-005-X. hp://www.sacan.gc.ca/pub/63-005-x/63-005-x2010010-ng.hm

22 Saisics Canada (2010), Rgisrd rirmn savings plan conribuions, Te Daily,ovmbr 22, 2010. hp://www.sacan.gc.ca/daily-quoidin/101122/dq101122-ng.hm

23 Saisics Canada, Chariabl donaions, Te Daily, ovmbr 23, 2010, hp://www40.sacan.gc.ca/l01/cs01/famil90-ng.hm

24 Mark Carny, Govrnor of h Bank of Canada, (2010),Liing with Low for Long. Dcmbr 13, 2010

hp://www.bankofcanada.ca/n/spchs/2010/sp131210.hml25 Crid Gnral ccounans ssociaion of Canada (2010), Where is the Money Now: Te Stateof Canadian Household Debt as Conditions for Economic Recovery Emerge, May 11, 2010, p. 12.hp://my.xriy.com/cgarsarchrpors/db2010#pg1

26 Jams Callon, Suprinndn of Bankrupcy, c of h Suprinndn of Bankrupcy Canada(2011),A Message om the Superintendent, January 7, 2011. hp://www.ic.gc.ca/ic/si/bsf-osb.nsf/ng/br02524.hml

27 Canadian Bankrs ssociaion (2010), Statistics, Dcmbr, 2010. hp://www.cba.ca/conns/ls/saisics/sa_morgag_db050_n.pdf

28 Canadian Bankrs ssociaion (2010), Statistics, cobr, 2010. hp://www.cba.ca/conns/ls/saisics/sa_crdicarddlinquncy_n.pdf

29 T c of h Suprinndn of Bankrupcy (2011),Insolvency Statistics, January 7, 2011.hp://www.ic.gc.ca/ic/si/bsf-osb.nsf/ng/br02524.hml

30 Bank of Canada (2010)Financial System Reiew, Dcmbr 2010. hp://www.bankofcanada.ca/n/fsr/2010/fsr_1210.pdf

31 Ibid.


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32 Saisics Canada (2006), Te Wealth of Canadians: An Oeriew of the Results of the Surey ofFinancial Security, 2005, Caalogu no. 13F0026MIe o. 001. hp://www.sacan.gc.ca/pub/13f0026m/13f0026m2006001-ng.pdf

33 Food Banks Canada (2010),Hunger Count 2010, p. 5. hp://www.foodbankscanada.ca/documns/HungrCoun2010_wb.pdf

34 rmin Yalnizyan (2010), Te Rise of Canadas Richest 1%, Canadian Cnr for olicylrnaivs, Dcmbr 2010. hp://www.policyalrnaivs.ca/sis/dfaul/ls/uploads/

publicaions/aional%20c/2010/12/Richs%201%20rcn.pdf35 Rogr Sauv (2006), Te Current State of Canadian Family Finances 2005 Report,

Vanir Insiu of h Family. hp://www.vifamily.ca/nod/41936 Currn dollars ar usd givn ha i is dicul o adjus ach xpndiur cagory sparaly and

i is impossibl o do so for insuranc paymns and pnsion conribuions.


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