After 10 straight years of growth, the median after-tax income for Canadian families fell to $59,300 in 2021, down $1,730 from 2020, or 2.8%.
However, analyzing the Statistics Canada data, I found that “only” the poorest families are affected by this decline, namely the 8.7 million Canadian families whose after-tax income is below the median (which includes the 17.4 million Canadian shares). families into two equal parts).
For these low-income Canadian families, after-tax family income fell by US$2,307 (-6.9%) in 2021, from a median income of US$33,516 (2020) to just US$31,209 (2021).
Meanwhile, Canada’s 8.7 million families with above-average after-tax incomes will have almost the same family income in 2021 as they did in 2020, a median income of $122,572.
federal cups
Is it so surprising that less affluent families will have to suffer such a drop in their average after-tax income in 2021? Absolutely not!
For what? Because in 2021, the Justin Trudeau administration drastically cut very generous financial aid programs designed to help Canadians financially during the paralysis of Canada’s economy during the COVID-19 pandemic in 2020. I am referring specifically to the CERB (Canadian Emergency Response Benefit). ), CESB (Canadian Emergency Student Benefit), PCRE (Canadian Economic Recovery Benefit), etc.
The reduction in these federal financial assistance programs related to COVID-19 is estimated at approximately $50 billion.
In 2020, families in the below-average income bracket received an average of $17,303 per household in federal transfers. In 2021, those transfers have fallen to $14,797 per household, a $2,506 reduction. This reduction could only be partially offset by an increase in labor income.
For their part, families with above-median incomes averaged $18,271 per household in government benefits in 2020, which incidentally is nearly $1,000 more than the less affluent group. In 2021, these higher-income families saw federal benefits drop from $3,891 per household to $14,380. However, this cut was offset by an increase in labor income.
Quebec?
No province was spared. 2021 saw declines in median after-tax family income from coast to coast.
Here in Quebec, the decline was weakest at around 1.3%. Our median after-tax family income has thus decreased by $710, from $55,410 in 2020 to $54,700 in 2021.
The largest decreases were in Ontario (-$2,380/-3.8%), Manitoba (-$2,860/-4.9%), Saskatchewan (-$2,830/-4.4%), Alberta (-$2,350/- 3.3%).
Of course, we understood that, as in Canada as a whole, it is the less affluent families in each province that are bearing the brunt of the decline.
However, for a direct comparison, Statistics Canada’s calculations of average after-tax income are based on constant 2021 US dollars for each of the 11 years from 2010 to 2021.
The extraordinary year 2020
With his plethora of financial assistance programs during the pandemic, Justin Trudeau has artificially inflated household incomes in 2020 against his will.
In fact, the damn year of the COVID-19 pandemic was particularly notable for a sharp increase in median family income compared to 2019.
The range of allowances and benefits offered by the Trudeau administration in 2020 to help address the economic crisis during the COVID-19 pandemic proved so generous that it had a tangible impact, raising median after-tax family income by about $4,130. Dollar increased 7.3%.
In Quebec, our median after-tax family income increased 6.6% in 2020, from $3,430 to $55,410.
Ontario was ahead of us, up $4,610, or even 7.9%. Their median family income reached $63,330 in 2020.
In 2020, at that level, Quebec residents saw a 12.5% decline from Ontario residents, with the gap in said median after-tax income being $7,920.
As a consolation, the gap in question narrowed to $6,250 (10.3%) in 2021, as the decline in median earnings in Quebec was less pronounced than in Ontario.
