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The Market and Transfers: Sources of Personal Income in Canada Publication No.

2016-28-E 30 December 2016 Nathalie Pothier Economics, Resources and International Affairs Division Parliamentary Information and Research Service Papers in the Library of Parliament’s In Brief series are short briefings on current issues.

At times, they may serve as overviews, referring readers to more substantive sources published on the same topic.
They are prepared by the Parliamentary Information and Research Service, which carries out research for and provides information and analysis to parliamentarians and Senate and House of Commons committees and parliamentary associations in an objective, impartial manner.

© Library of Parliament, Ottawa, Canada, 2017 The Market and Transfers: Sources of Personal Income in Canada (In Brief) Publication No.

2016-28-E Ce document est également publié en français.
CONTENTS 1 2 INTRODUCTION ....................................................................................................... 1 TWO MAIN TYPES OF INCOME .............................................................................. 1 2.1 Market Income ....................................................................................................... 2 2.2 Government Transfers ........................................................................................... 2 3 DISTRIBUTION ......................................................................................................... 3 3.1 Distribution by Gender ........................................................................................... 3 3.2 Distribution by Province/Territory ........................................................................... 4 3.3 Distribution by Federal Electoral District ................................................................ 4 APPENDIX – SOURCES OF PERSONAL INCOME IN CANADA BY PROVINCE/TERRITORY AND FEDERAL ELECTORAL DISTRICT LIBRARY OF PARLIAMENT i PUBLICATION NO.
2016-28-E THE MARKET AND TRANSFERS: SOURCES OF PERSONAL INCOME IN CANADA 1 INTRODUCTION Canadians derive their income from various sources, namely market sources (earnings, investments, etc.)

and government transfers (Employment Insurance, child benefits, etc.).
This document summarizes the composition of the total income of individuals in Canada by gender, province/territory and federal electoral district.1 2 TWO MAIN TYPES OF INCOME In 2010, Canadians’ income was estimated to be over a trillion dollars, and it was derived from two sources: • market sources (87.6%); and • government transfers (12.4%).2 Figure 1 shows the proportion of income individuals derive from market sources and government transfers by province/territory and for the entire country.
Figure 1 – Sources of Personal Income by Province/Territory and, for Government Transfer Income, by Gender 2010 Source: Figure prepared by the author using data obtained from Statistics Canada, NHS Profile, 2011 [National Household Survey Profile, 2011], accessed 9 May 2016.

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2016-28-E THE MARKET AND TRANSFERS: SOURCES OF PERSONAL INCOME IN CANADA 2.1 MARKET INCOME In 2010, the total amount of income Canadians derived from market sources wasestimated at $922.9 billion, which represented 55.3% of the gross domestic product (GDP).3 The distribution of that income by gender is as follows: • $362 billion was earned by women; and • $561 billion was earned by men.
Market income was derived from various sources: • salaries and wages (80%); • retirement income and private pensions (8%); • self-employment income (5%); investment income (5%); and • • other income (2%).4 These percentages were almost identical for men and women.
2.2 GOVERNMENT TRANSFERS In 2010, the total amount of income Canadians derived from government transfers was $130.6 billion or 18.8% of Canada’s federal, provincial and municipal government spending.5 Often, the purpose of these transfers is to address income disparities arising from market deficiencies.6 The distribution of government transfers by gender is as follows: • $73.6 billion was disbursed to women; and • $56.8 billion was disbursed to men.
Government transfers were derived from various sources: • public pension plans (28.0%); • Old Age Security and Guaranteed Income Supplement benefits (24.8%); • social assistance, workers’ compensation and refundable tax credits7 (20.8%); • Employment Insurance benefits (14.4%); and • child benefits (12.0%).

These percentages were different for men and women (see Figure 2).

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2016-28-E THE MARKET AND TRANSFERS: SOURCES OF PERSONAL INCOME IN CANADA Figure 2 – Income from Government Transfers by Category and Gender, 2010 Source: Figure prepared by the author using data obtained from Statistics Canada, NHS Profile, 2011 [National Household Survey Profile, 2011] (geographic level: Canada), accessed 9 May 2016.
It is interesting to note that retirement pensions and Employment Insurance benefits – government transfer income that is accessible to individuals who were active in the labour market – represent nearly half of the transfers given to men (32.6% and 16.3% respectively) but only a little over one-third of the transfers given to women (24.4% and 12.5% respectively).
3 DISTRIBUTION 3.1 DISTRIBUTION BY GENDER In Canada as a whole, and in each province and territory, government transfers make up a larger share of women’s income than men’s, at the aggregate level.

This is also true in each of the 338 federal electoral districts.

On average, women derive 16.9% of their income from government transfers, while that share is 9.2% for men, a difference of 7.7 percentage points (see Figure 1).
The difference varies by province/territory, from 2.4 percentage points in Yukon to 9.2 percentage points in Quebec.8 This is likely due to a number of different socio-economic factors that characterize the Canadian economy, including the fact that labour market participation has LIBRARY OF PARLIAMENT 3 PUBLICATION NO.
2016-28-E THE MARKET AND TRANSFERS: SOURCES OF PERSONAL INCOME IN CANADA followed a long-term downward trend that is liable to affect people differently depending on their age and gender,9 and that, overall, women have a lower level of personal income than do men.10 3.2 DISTRIBUTION BY PROVINCE/TERRITORY In Canada as a whole, government transfers represent a much lower share of Canadians’ total personal income than does market income.

This share varies by province and territory.


In 2010, the share of total personal income coming from market sources was the highest in Alberta and the Northwest Territories and tended to gradually decrease east of Alberta, going from 92.7% in that province to 80.7% in Newfoundland and Labrador.11 3.3 DISTRIBUTION BY FEDERAL ELECTORAL DISTRICT The share of total personal income coming from government transfers varies by federal electoral district, from 3.4% to 30.1% in 2010.
This share also varies by gender within the ridings, from 6.8% to 36.6% for women and from 1.6% to 27.9% for men.

Figure 3 shows the share of total personal income from government transfers in the different electoral districts.

This information is presented in more detail in the appendix, which sets out the figures for each riding.12 LIBRARY OF PARLIAMENT 4 PUBLICATION NO.
2016-28-E THE MARKET AND TRANSFERS: SOURCES OF PERSONAL INCOME IN CANADA Figure 3 – Government Transfer Payments to Individuals as a Percentage of Total Income, by Federal Electoral District, 2010 Source: Map produced by the Library of Parliament, Ottawa, 2016, using data obtained from Statistics Canada, NHS Profile, 2011 [National Household Survey Profile, 2011], accessed 19 April 2016; and Natural Resources Canada, GeoBase – Federal Electoral Districts – Canada 2015 (2013 representation order), 1 October 2015.
The following software was used: Esri, ArcGIS, version 10.3.1.

NOTES 1.

This information is taken from the 2011 National Household Survey (NHS), which was conducted at the same time as the 2011 census.

The NHS itemizes the revenue components for 2010 (before income tax but after transfers; see Statistics Canada, “Figure 3.1: Components of income in 2010”).

It is also adjusted to take into account the changes made in federal electoral boundaries in 2013.
More recent data are contained in the Canadian Income Survey, but they do not include geographic profiles of federal electoral districts and so are not included in this paper.

The composition of total personal income may well have been affected by the economic conditions resulting from the financial crisis that was still recent in 2010.
How the relationship between the share of individual income derived from the market and that derived from government transfers changes over time is a topic that could be the subject of another study.

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2016-28-E THE MARKET AND TRANSFERS: SOURCES OF PERSONAL INCOME IN CANADA 2.

3.

4.

5.

6.

7.

8.

Statistics Canada, “Table 1 – Income Composition in Canada, 2010,” in Income Composition in Canada, Analytical document, Catalogue no.

99-014-X2011001, 2013, p. 6.


Statistics Canada, “Table 380-0063: Gross domestic product, income-based, quarterly (dollars x 1 000 000),” CANSIM (database), accessed 30 December 2016.

“Other income” refers to cash income, such as spousal support payments, child support payments, non-refundable scholarships and bursaries, severance pay and royalties.

Overall, “income” includes income received by a resident of Canada or considered for income tax purposes in Canada.
Department of Finance Canada, “Table 34 – Total government expense,” in Fiscal Reference Tables – 2016: Part 6 of 9.

In the context of this summary and any similar analysis, it is important to remember that deficiencies in market income can vary from one person or one household to another within the same geographical, administrative or electoral subdivision.
See Dominique Fleury and James Gauthier, Income Inequality in Canada: Current Situation, HillNotes, Library of Parliament, Ottawa, 28 January 2016, for a discussion of public policy considerations connected with these issues.

Refundable tax credits help to lower the taxes that taxpayers have to pay, and the unused portion of the credit can even be reimbursed to the taxpayer if he or she does not owe any more taxes.
Refundable tax credits granted by the federal government include the GST/HST tax credit and the working income tax benefit.

Yukon, a territory that has been experiencing economic and demographic growth in recent years, has a labour force participation rate of 70%, with slightly higher participation by men than women.
In Quebec, where the demographic and economic context is much different, the labour force participation rate more closely resembles that of Canada as a whole, with a participation rate of close to 70% for men and just over 60% for women.

9.

Office of the Parliamentary Budget Officer, Labour Market Assessment 2016, 27 October 2016, p. 5.

10.

House of Commons, Special Committee on Pay Equity, Evidence, 1st Session, 42nd Parliament, 21 March 2016.

11.
11.

Information about individual communities can also be found, for example, at Indigenous and Northern Affairs Canada, Welcome to the First Nation Profiles Interactive Map (census and National Household Survey Profile data for each community); or Statistics Canada, NHS Focus on Geography Series (choose the desired geographic region – for example, select “Provinces and territories,” then a province or territory – then the “Labour” and “Income” tabs).

12.
12.

The data on the composition of individual income does not take into account the number of people living in a household.

The Canadian Income Survey and similar precursor surveys make it possible to collect details on income according to family type.

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2016-28-E APPENDIX – SOURCES OF PERSONAL INCOME IN CANADA BY PROVINCE/TERRITORY AND FEDERAL ELECTORAL DISTRICT Table 1 – Sources of Personal Income in Canada by Province/Territory and Electoral District, 2010 Province/Territory and Electoral District Market Income CANADA Newfoundland and Labrador Avalon Bonavista — Burin — Trinity Coast of Bays — Central — Notre Dame Labrador Long Range Mountains St. John’s East St. John’s South — Mount Pearl Prince Edward Island Cardigan Charlottetown Egmont Malpeque Nova Scotia Cape Breton — Canso Central Nova Cumberland — Colchester Dartmouth — Cole Harbour Halifax Halifax West Kings — Hants Sackville — Preston — Chezzetcook South Shore — St. Margarets Sydney — Victoria West Nova New Brunswick Acadie — Bathurst Beauséjour Fredericton Fundy Royal Madawaska — Restigouche Miramichi — Grand Lake Moncton — Riverview — Dieppe New Brunswick Southwest Saint John — Rothesay Tobique — Mactaquac Percentage of Total Income Income from Government Transfers Men Women Overall 22.0
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2016-28-E THE MARKET AND TRANSFERS: SOURCES OF PERSONAL INCOME IN CANADA Province/Territory and Electoral District Market Income Quebec Abitibi — Baie-James — Nunavik — Eeyou Abitibi — Témiscamingue Ahuntsic-Cartierville Alfred-Pellan Argenteuil — La Petite-Nation Avignon — La Mitis — Matane — Matapédia Beauce Beauport — Côte-de-Beaupré — Île d’Orléans — Charlevoix Beauport — Limoilou Bécancour — Nicolet — Saurel Bellechasse — Les Etchemins — Lévis Beloeil — Chambly Berthier — Maskinongé Bourassa Brome — Missisquoi Brossard — Saint-Lambert Charlesbourg — Haute-Saint-Charles Châteauguay — Lacolle Chicoutimi — Le Fjord Compton — Stanstead Dorval — Lachine — LaSalle Drummond Gaspésie — Les Îles-de-la-Madeleine Gatineau Hochelaga Honoré-Mercier Hull — Aylmer Joliette Jonquière Lac-Saint-Jean Lac-Saint-Louis La Pointe-de-l’Île La Prairie LaSalle — Émard — Verdun Laurentides — Labelle Laurier — Sainte-Marie Laval — Les Îles Lévis — Lotbinière Longueuil — Charles-LeMoyne Longueuil — Saint-Hubert Louis-Hébert Louis-Saint-Laurent Manicouagan Marc-Aurèle-Fortin Mégantic — L’Érable Mirabel Percentage of Total Income Income from Government Transfers Men 11.1 Women 20.3 Overall 15.0 15.8 17.4 15.0 13.1 18.4 25.9 17.8 15.8 17.5 18.9 15.5 11.2 20.6 26.1 17.4 10.9 14.1 15.8 16.4 15.8 17.1 19.6
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2016-28-E THE MARKET AND TRANSFERS: SOURCES OF PERSONAL INCOME IN CANADA Province/Territory and Electoral District Market Income Montarville Montcalm Montmagny — L’Islet — Kamouraska — Rivière-du-Loup Mont-Royal Notre-Dame-de-Grâce — Westmount Outremont Papineau Pierre-Boucher — Les Patriotes — Verchères Pierrefonds — Dollard Pontiac Portneuf — Jacques-Cartier Québec Repentigny Richmond — Arthabaska Rimouski-Neigette — Témiscouata — Les Basques Rivière-des-Mille-Îles Rivière-du-Nord Rosemont — La Petite-Patrie Saint-Hyacinthe — Bagot Saint-Jean Saint-Laurent Saint-Léonard — Saint-Michel Saint-Maurice — Champlain Salaberry — Suroît Shefford Sherbrooke Terrebonne Thérèse-De Blainville Trois-Rivières Vaudreuil — Soulanges Ville-Marie — Le Sud-Ouest — Île-des-Soeurs Vimy Percentage of Total Income Income from Government Transfers Men 5.8 12.2 Women 13.0 22.2 Overall LIBRARY OF PARLIAMENT iii PUBLICATION NO.
2016-28-E THE MARKET AND TRANSFERS: SOURCES OF PERSONAL INCOME IN CANADA Province/Territory and Electoral District Market Income Ontario Ajax Algoma — Manitoulin — Kapuskasing Aurora — Oak Ridges — Richmond Hill Barrie — Innisfil Barrie — Springwater — Oro-Medonte Bay of Quinte Beaches — East York Brampton Centre Brampton East Brampton North Brampton South Brampton West Brantford — Brant Bruce — Grey — Owen Sound Burlington Cambridge Carleton Chatham-Kent — Leamington Davenport Don Valley East Don Valley North Don Valley West Dufferin — Caledon Durham Eglinton — Lawrence Elgin — Middlesex — London Essex Etobicoke Centre Etobicoke — Lakeshore Etobicoke North Flamborough — Glanbrook Glengarry — Prescott — Russell Guelph Haldimand — Norfolk Haliburton — Kawartha Lakes — Brock Hamilton Centre Hamilton East — Stoney Creek Hamilton Mountain Hamilton West — Ancaster — Dundas Hastings — Lennox and Addington Humber River — Black Creek Huron — Bruce Kanata — Carleton Kenora King — Vaughan Kingston and the Islands Percentage of Total Income Income from Government Transfers Men 9.4 6.9 Women 16.3 12.8 Overall 17.1
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2016-28-E THE MARKET AND TRANSFERS: SOURCES OF PERSONAL INCOME IN CANADA Province/Territory and Electoral District Market Income Kitchener Centre Kitchener — Conestoga Kitchener South — Hespeler Lambton — Kent — Middlesex Lanark — Frontenac — Kingston Leeds — Grenville — Thousand Islands and Rideau Lakes London — Fanshawe London North Centre London West Markham — Stouffville Markham — Thornhill Markham — Unionville Milton Mississauga Centre Mississauga East — Cooksville Mississauga — Erin Mills Mississauga — Lakeshore Mississauga — Malton Mississauga — Streetsville Nepean Newmarket — Aurora Niagara Centre Niagara Falls Niagara West Nickel Belt Nipissing — Timiskaming Northumberland — Peterborough South Oakville Oakville North — Burlington Orléans Oshawa Ottawa Centre Ottawa South Ottawa — Vanier Ottawa West — Nepean Oxford Parkdale — High Park Parry Sound — Muskoka Perth — Wellington Peterborough — Kawartha Pickering — Uxbridge Renfrew — Nipissing — Pembroke Richmond Hill St. Catharines Sarnia — Lambton Sault Ste.
Marie Scarborough — Agincourt Scarborough Centre Scarborough — Guildwood Scarborough North Percentage of Total Income Income from Government Transfers Men 11.8 6.6 7.7 12.6 12.3 Women 19.9 13.4 15.0 20.6 16.8 Overall LIBRARY OF PARLIAMENT v PUBLICATION NO.
2016-28-E THE MARKET AND TRANSFERS: SOURCES OF PERSONAL INCOME IN CANADA Province/Territory and Electoral District Market Income Scarborough — Rouge Park Scarborough Southwest Simcoe — Grey Simcoe North Spadina — Fort York Stormont — Dundas — South Glengarry Sudbury Thornhill Thunder Bay — Rainy River Thunder Bay — Superior North Timmins — James Bay Toronto Centre Toronto — Danforth Toronto — St. Paul’s University — Rosedale Vaughan — Woodbridge Waterloo Wellington — Halton Hills Whitby Willowdale Windsor — Tecumseh Windsor West York Centre York — Simcoe York South — Weston 86.6 84.1 86.0 82.2 95.0 81.7 84.3 91.2 83.2 83.5 83.5 90.1 89.6 93.8 94.6 88.8 91.8 91.1 91.7 90.3 82.8 80.9 83.6 88.7 79.6 Percentage of Total Income Income from Government Transfers Men 10.4 12.5 11.1 14.6 3.7 Women 16.7 19.7 18.1 21.7 7.0 Overall LIBRARY OF PARLIAMENT vi PUBLICATION NO.
2016-28-E THE MARKET AND TRANSFERS: SOURCES OF PERSONAL INCOME IN CANADA Province/Territory and Electoral District Market Income Manitoba Brandon — Souris Charleswood — St. James — Assiniboia — Headingley Churchill — Keewatinook Aski Dauphin — Swan River — Neepawa Elmwood — Transcona Kildonan — St. Paul Portage — Lisgar Provencher Saint-Boniface — Saint-Vital Selkirk — Interlake — Eastman Winnipeg Centre Winnipeg North Winnipeg South Winnipeg South Centre Saskatchewan Battlefords — Lloydminster Carlton Trail — Eagle Creek Cypress Hills — Grasslands Desnethé — Missinippi — Churchill River Moose Jaw — Lake Centre — Lanigan Prince Albert Regina — Lewvan Regina — Qu’Appelle Regina — Wascana Saskatoon — Grasswood Saskatoon — University Saskatoon West Souris — Moose Mountain Yorkton — Melville Percentage of Total Income Income from Government Transfers Men 8.9 8.5 Women 17.3 16.9 Overall LIBRARY OF PARLIAMENT vii PUBLICATION NO.
2016-28-E THE MARKET AND TRANSFERS: SOURCES OF PERSONAL INCOME IN CANADA Province/Territory and Electoral District Market Income Alberta Banff — Airdrie Battle River — Crowfoot Bow River Calgary Centre Calgary Confederation Calgary Forest Lawn Calgary Heritage Calgary Midnapore Calgary Nose Hill Calgary Rocky Ridge Calgary Shepard Calgary Signal Hill Calgary Skyview Edmonton Centre Edmonton Griesbach Edmonton Manning Edmonton Mill Woods Edmonton Riverbend Edmonton Strathcona Edmonton West Edmonton — Wetaskiwin Foothills Fort McMurray — Cold Lake Grande Prairie — Mackenzie Lakeland Lethbridge Medicine Hat — Cardston — Warner Peace River — Westlock Red Deer — Mountain View Red Deer — Lacombe St. Albert — Edmonton Sherwood Park — Fort Saskatchewan Sturgeon River — Parkland Yellowhead British Columbia Abbotsford Burnaby North — Seymour Burnaby South Cariboo — Prince George Central Okanagan — Similkameen — Nicola Chilliwack — Hope Cloverdale — Langley City Coquitlam — Port Coquitlam Courtenay — Alberni Cowichan — Malahat — Langford Delta Esquimalt — Saanich — Sooke Percentage of Total Income Income from Government Transfers Men 4.7 2.9 7.6 5.4 2.6 4.0 9.8 3.8 3.7 4.1 2.6 3.2 2.9 5.7 6.0 10.3 6.0 5.8 3.6 5.7 4.9 4.5 4.0 1.6 4.1 6.7 8.0 Women 11.9 9.2 15.8 14.1 6.8 8.9 18.7 9.3 10.2
 9.7 8.2 9.0 8.5 14.1 12.0 21.5 13.7 13.2 9.0 10.7 11.6 12.3 11.7 8.0 13.6 16.6 15.1 Overall LIBRARY OF PARLIAMENT viii PUBLICATION NO.
2016-28-E THE MARKET AND TRANSFERS: SOURCES OF PERSONAL INCOME IN CANADA Province/Territory and Electoral District Fleetwood — Port Kells Kamloops — Thompson — Cariboo Kelowna — Lake Country Kootenay — Columbia Langley — Aldergrove Mission — Matsqui — Fraser Canyon Nanaimo — Ladysmith New Westminster — Burnaby North Island — Powell River North Okanagan — Shuswap North Vancouver Pitt Meadows — Maple Ridge Port Moody — Coquitlam Prince George — Peace River — Northern Rockies Richmond Centre Saanich — Gulf Islands Skeena — Bulkley Valley South Okanagan — West Kootenay South Surrey — White Rock Steveston — Richmond East Surrey Centre Surrey — Newton Vancouver Centre Vancouver East Vancouver Granville Vancouver Kingsway Vancouver Quadra Vancouver South Victoria West Vancouver — Sunshine Coast — Sea to Sky Country Yukon Northwest Territories Nunavut Market Income Percentage of Total Income Income from Government Transfers Men 8.4 Women 15.7 Overall 8.6
15.3 19.3 22.9 14.1 14.2 22.5 20.9 7.6 14.9 8.6 16.5 8.1 17.6 13.3 12.6 10.5 9.9 16.4 Source: Table prepared by the Library of Parliament using data obtained from Statistics Canada, NHS Profile, 2011 [National Household Survey Profile, 2011], accessed 9 May 2016.
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