According to Statistics Canada, the lowest-income Canadian households saw an even greater decline in their disposable money in the third quarter of 2023 compared to 2022, making them even poorer.
The disposable income of the poorest Canadians therefore fell by 1.2% between the two periods. Among various wealth groups, low-income households were the only ones to see a decline in their money, the federal agency said.
The 3% increase in average wages and salaries of the lowest income households will therefore not have been enough to offset the significant decline in net investment income, which was -43.4% in this area.
The increase in the interest rate would not be independent of the situation and also put downward pressure on the disposable income of these Canadians in the third quarter.
If the interest rate increase results in an increase in returns on savings and investment accounts, this is not reflected in this population group, Statistics Canada found.
“Lower-income households are more likely to have limited opportunities to benefit from these higher returns because, on average, they have fewer resources to save and invest,” it says.