Growth In Real Household Income In Canada: 1984-2024

Canadians have just entered a decade during which their real disposable income will tend to grow at a much slower pace than in the past. Since 2007, Canadian households have pretty well maintained the same average pace of growth in their real disposable income (per capita) as in the preceding quarter of a century, in spite of a recession and a sluggish recovery. This is set to change in the next decade as adverse demographics will depress real income growth per capita. There is little likelihood that faster productivity growth, increased labour force participation or gains in the terms of trade provide more than a very partial offset to adverse demographics. This means that on average the purchasing power (and saving power) of Canadian households is set to progress much more slowly than in the past. In such a context of slow growth in average household income, issues with respect to income distribution among households are likely to become more acute.