In 2022, the median family after-tax income for Canadians stood at $60,800, marking a 2.5% increase from the previous year. However, after adjusting for an annual inflation rate of 6.8%, this figure represents a 4.0% decline in real terms compared to 2021, according to new data from Statistics Canada’s T1 Family File.
The impact of inflation was felt nationwide, with every province and territory reporting a drop in median inflation-adjusted family after-tax income. The most significant decreases occurred in Nunavut (-8.4%), the Northwest Territories (-7.2%), and Nova Scotia (-5.6%).
Young families bear the brunt of income decline
The data highlights that younger families were particularly affected by the income drop. Lone-parent families with a parent under the age of 25 experienced the steepest decline, with their median after-tax income falling by 15.1% to $24,690 in 2022. This group was followed by individuals not in census families under 25, whose median income fell by 12.9% to $17,650, the lowest among all family types. Couple families in the same age bracket saw a 9.0% decrease, bringing their median income to $45,070.
In contrast, senior families, where the oldest adult is 65 or older, were among the least affected. Their median after-tax income fell by just 1.8% to $49,820. Senior couples saw a slightly smaller decrease of 1.4% to $74,200, while senior lone parents’ income declined by the same percentage to $69,880.
Low-income rates rise for younger families
The divide between younger and older families is also evident in low-income rates. Senior families were the only group to see a reduction in the proportion of individuals living in low-income, which fell by 1.4 percentage points to 14.8% in 2022. In contrast, the proportion of individuals living in low-income within the youngest families, where the oldest adult is under 25, rose by 3.3 percentage points to 60.8%.
This upward trend was also seen among families headed by individuals aged 25 to 34, where the low-income rate increased by 3.3 percentage points to 23.5%. Notably, 82.2% of individuals in lone-parent families with a parent under 25 were living in low-income conditions, the highest proportion among all family types.
Income disparities post-pandemic
Comparing 2022 income levels to those before the COVID-19 pandemic reveals further disparities. While the overall median family after-tax income of $60,800 in 2022 was nearly unchanged from 2019 (+0.1%), regional differences were stark. Quebec, Yukon, and British Columbia saw increases in their median family income over this period, with Quebec leading at a 5.0% rise. On the other hand, Nunavut, Alberta, and Ontario experienced the largest declines, at -6.4%, -4.1%, and -1.9%, respectively.
Lone-parent families with a parent younger than 25 years were the only group to see their median income fall below pre-pandemic levels in 2022, declining by 1.0% compared to 2019. Despite an overall 5.3% increase in median income for the under-25 age group across all family units, their earnings remained less than half the Canadian median.
These findings underline the continuing economic challenges faced by younger Canadians, especially in the context of rising living costs and a post-pandemic recovery that has not been evenly distributed across age groups or regions.