In late October, Statistics Canada released data on household income in Canada, and I figured I’d go through the Alberta data.
Household income in Alberta in 2020 was at $176,815. That’s the highest point since 1999.
Incomes were hit hard during the 2015–2016 recession, and it’s taken all this time to recover. Prior to the recession, household disposable income had been increasing at an average of 7.1% every year. Had there not been a recession, it would’ve been at about $242,000 in 2020.
So, even though household disposable income is at its highest level every, it’s still $65,000 less than where it should be. Instead of increasing by $70,250 over the last 5 years, it’s increased by only $5,100.
Here’s how Alberta’s 2020 household disposable income compares to the other provinces:
Alberta had the fourth highest household disposable income of all the provinces, coming in behind Ontario ($554,454), Québec ($288,410), and BC ($203,848).
And let’s compare the 2015 levels of the provinces, right before the recession.
Looks as though Alberta went from having the third highest household disposable income to the fourth highest.
Not only that, but check out what it looks like when we compare how much the household disposable income changed for each province in those 5 years.
Alberta had the smallest increase of all the provinces, at only 2.97%.
The next lowest was Newfoundland and Labrador, at 8.86%. No other province had less than a 10% increase, and only one other province (Saskatchewan: 13.26%) saw an increase under 20%.
Here’s how growth looked like for disposable household income in Alberta between 2015 and 2020
As you can see, there was a massive decline in 2016. Followed by significant increases in 207 and 2020 (5.31% and 5.32%, respectively) and minor increases in 2018 and 2019 (1.42% and 0.88%). That’s an average of 0.73% a year, 3.23% if we leave out the recession data.
The 5-year average in household disposable income prior to the recession was 5.28%.
Let’s breakdown the household disposable income a little more.
Statistics Canada breaks disposable income into 4 areas:
- Compensation of employees
- Net mixed income
- Property income received
- Current transfers received
For this next section, I’m focusing on employee compensation.
Last year, employee compensation per household in Alberta was $153,915, which accounted for 87.05% of all household disposable income. That’s the highest proportion of disposable income of any of the 10 Canadian provinces, as seen in the chart below.
Québec and Ontario are in second and third place, respectively, for employee compensation as a percentage of household disposable income, at 85.23% and 83.97%.
Now let’s review how income looks based on quintiles. In other words, Albertans are split into 5 groups (quintiles), based on their income level:
- Lowest
- Second
- Third
- Fourth
- Highest
Those in the lowest quintile are basically those who fall within the lowest 20% of income levels, the highest are those in the highest 20%, and the others are in the three remaining 20% segments.
Here’s how each quintile breaks down in disposable income. Unfortunately, Statistics Canada doesn’t break down employee compensation for the different quintiles:
| Disposable income | % of total | |
|---|---|---|
| Lowest quintile | $9,452 | 5.35% |
| Second quintile | $19,487 | 11.02% |
| Third quintile | $25,276 | 14.30% |
| Fourth quintile | $36,265 | 20.51% |
| Highest quintile | $86,336 | 48.83% |
What’s interesting is that even though Alberta shows an average household disposable income of $176,815, nearly half of that is made up of those whose incomes are in the top 20%. The other 80% of incomes make up the other half.
Statistics Canada doesn’t break down the range of incomes for each quintile, but we see that the average of the top 20% is just over $83,000 and the bottom 20% average is less than $9,500.
Here’s how disposable income compares across provinces for 2020:
| NL | PE | NS | NB | QC | ON | MB | SK | AB | BC | |
|---|---|---|---|---|---|---|---|---|---|---|
| Lowest | $1,033 | $440 | $2,884 | $1,499 | $26,899 | $37,855 | $3,273 | $2,206 | $9,452 | $10,235 |
| Second | $3,335 | $1,081 | $6,311 | $5,207 | $49,297 | $66,943 | $6,761 | $5,567 | $19,487 | $20,800 |
| Third | $3,943 | $1,354 | $7,191 | $5,986 | $69,354 | $86,801 | $9,288 | $7,199 | $25,276 | $32,046 |
| Fourth | $4,601 | $1,255 | $7,302 | $7,674 | $68,872 | $126,418 | $11,950 | $11,223 | $36,265 | $44,027 |
| Highest | $5,581 | $1,274 | $9,952 | $6,266 | $73,987 | $236,435 | $15,166 | $16,687 | $86,336 | $96,740 |
And as a percentage of total disposable income:
| NL | PE | NS | NB | QC | ON | MB | SK | AB | BC | |
|---|---|---|---|---|---|---|---|---|---|---|
| Lowest | 5.59% | 8.14% | 8.57% | 5.63% | 9.33% | 6.83% | 7.05% | 5.14% | 5.35% | 5.02% |
| Second | 18.04% | 20.00% | 18.76% | 19.55% | 17.09% | 12.07% | 14.56% | 12.98% | 11.02% | 10.20% |
| Third | 21.32% | 25.06% | 21.38% | 22.48% | 24.05% | 15.66% | 20.00% | 16.79% | 14.30% | 15.72% |
| Fourth | 24.88% | 23.22% | 21.71% | 28.81% | 23.88% | 22.80% | 25.73% | 26.17% | 20.51% | 21.60% |
| Highest | 30.18% | 23.58% | 29.58% | 23.53% | 25.65% | 42.64% | 32.66% | 38.91% | 48.83% | 47.46% |
What we see is that Alberta households in the lowest quintile have the fourth lowest income in the country, coming behind Ontario, Quebec, and BC. Alberta’s lowest quintile is fairly close to BC, being less than a $1,000 different, but the gap between those in Ontario and Québec is far more pronounced, with Ontario households in the lowest quintile having nearly $30,000 more than their Alberta counterparts.
As far as a percentage of disposable income, Alberta comes in third lowest—ahead of BC and Saskatchewan. That means incomes in these three provinces for the lowest quintiles is lowest, relative to the total disposable income for all income groups.
It’s better news if you’re in the highest income bracket in Alberta, however. Albertans in the highest quintile have the third highest disposable incomes in the country. However, they have the highest income if your compare it to the total disposable income in the province.
In Alberta, the average disposable income in households from the highest quintile is nearly 49% of the total disposable income in the province. The next highest province is BC, at 47.46%.
