5. Discussion

This section will summarize the above findings by answering three key questions:

  1. Overall, what changes have been observed in the income of lone-parent families between 2001 and 2021?
  2. How has the introduction of child tax benefits and other government transfers impacted the financial stability of lone-parent families?
  3. What are the financial experiences of lone parents based on Indigenous identity, age, immigration status and disability status?

5.1 Overall, what changes have been observed in the income of lone-parent families between 2001 and 2021?

Between 2001 and 2021, the economic landscape for Canadian lone-parent families began to change, marked by considerable shifts in income sources. The after-tax median family income and the government transfer income for lone-parent families increased during this time period. Their median market income also increased at a higher proportion than couples with children and persons not in an economic family. At the same time, the proportion of lone-parent families living in low income decreased.

Changes in income are the result of numerous contributing factors that are often complex.Footnote 61 For instance, across all age groups, lone parents in Canada experienced significant increases in the median total income from 2001 to 2021, and this may have impacted the increase in median income and decrease in low-income status for these families.Footnote 62 Another contributing factor to the increase in the median income and decrease in the proportion of lone-parent families living in low income was their government transfer income, which when aggregated accounted for approximately 27% of the total income for lone parents 65 years and younger in 2021.Footnote 63 Not only did their median government transfer income increase between 2001 and 2021, but lone-parent families also consistently reported the highest median government transfer income compared to other economic family types. For more information on the impact of government transfers, see subsection 4.2 above.

While many positive shifts in income occurred in the 21-year period for lone-parent families, it is also important to consider the ongoing financial realities these families experience. Although their median after-tax family income may have increased, lone-parent families continued to have a median after-tax family income almost half that of couple families (with or without children) in 2021.Footnote 64 Similarly, female and male lone-parent families had lower median market incomes in 2021, which were $84,700 and $44,900 lower than the median market income for couples with children.Footnote 65 While the number of lone-parent families living in low income decreased between 2001 and 2021, lone-parent families continued to be the family type most likely to be living in low income, with a proportion almost four times higher than that of all couple families with or without children.Footnote 66 As such, despite the increase in median income and decrease in the number and proportion of low-income status among lone-parent families in the 21-year period, lone-parent families continued to have a lower median family income and to be disproportionately represented in low-income situations. In addition, analysis of yearly spousal and child support payments showed that there were no changes in the median amount paid, in constant dollars, to lone-parent families between 2012 and 2022.

5.2 How has the introduction of child tax benefits and other government transfers impacted the financial well-being of lone-parent families?

While market income continued to be the main source of income for all economic families between 2001 and 2021, including lone-parent families and couples with children, the findings section showed that government transfers also contributed to their total income. In this subsection, the analysis will look at four periods where there were key changes in government benefits that likely contributed to a financial improvement for lone-parent families.

In 2006, the Government of Canada introduced the Universal Child Care Benefit (UCCB), a government transfer amount that provided up to $1,200 per year for each child under the age of 16.Footnote 67 This benefit was one contributing factor that led to an increase in median government transfer income for lone-parent families (+11%) and couples with children (+28%) in 2006.Footnote 68 At the same time, the median after-tax income of lone-parent families increased, along with a decrease in their low-income status. While the median after-tax income of couples with or without children also increased in 2006, there was no observed decline in their low-income status, meaning that the introduction of the UCCB potentially had a larger impact on lone-parent families.

The UCCB was reformed in 2015 to enhance the benefit provided to families with children.Footnote 69 In 2016, this benefit was subsequently replaced with the Canada Child Benefit (CCB) that provides a monthly tax-free payment to families with children under the age of 18 based on the number of children in their care and their family net income.Footnote 70 Between 2014 and 2015 as well as 2015 and 2016, there were notable increases in the median government transfer income to lone-parent families and couples with children, corresponding with the monetary increases under the reformed UCCB and the new CCB. In the same time period, there were decreases in the proportion of lone-parent families and couples with or without children living in low income. Between 2015 and 2020, fewer lone-parent families and couples with or without children were living in low income. This is likely due to changes under the CCB which, unlike the UCCB, considers the family income. Since lone-parent families had a lower median after-tax income than couples with or without children, this likely explains why more lone-parent families were able to surpass the census family low-income measure threshold.

Finally, it is important to consider the COVID-19 support benefits, which were intended to offset losses in market income, such as the Canada Emergency Response Benefit, the Canada Recovery Benefit, and the Canada Emergency Student Benefit. While the UCCB and the CCB likely led to changes in income patterns, the year that the COVID-19 support benefits were introduced saw the most profound impact on families over the course of the 21-year period. The median COVID-19 support payments paid to lone-parent families was $8,000 in 2020, $9,200 for couples with children and $8,000 for persons not in a census family.Footnote 71 Since the COVID-19 support payments did not exist prior to 2020, these benefits helped contribute to an increase in the government transfer income received by all non-senior family types. More specifically, total government transfer income received by persons not in an economic family doubled from 2019 to 2020, and it nearly doubled for couples with children and for lone parents. In 2020, COVID-19 benefits accounted for 44% of the total government transfer income received by persons not in a census family, as well as 35% of total government transfer income received by couples with children and almost one-quarter (23%) received by lone parents.Footnote 72 When COVID-19 benefits decreased in 2021, each family type had a decrease in their total government transfer income (total government transfers decreased by 33% for persons not in an economic family, by 18% for lone parents and by 12% for couples with children). While the market income of all economic families, including lone-parent families, decreased during the COVID-19 pandemic, the support payments likely contributed to the increase in the median after-tax income of lone-parent families and the decrease in the proportion of lone parents living in low income. In 2021, as the market income for lone-parent families increased, returning to pre-pandemic levels, the median after-tax family income of lone-parent families also declined, while that of couple families with or without children increased. These shifts correspond with a decrease in available COVID-19 benefits, and differences between both census family types may indicate that couple families’ employment income recovered at a faster rate than lone-parent families. Future analysis looking at the difference in the income of lone-parent families during the COVID-19 support payment period and their income post-COVID-19 benefits would help to better understand the impact that these benefits have had on the income of lone-parent families.

Based on the analysis above, it is evident that the introduction of government transfer benefits had a considerable impact on the income of lone-parent families. This is also supported by Harding’s (2018) analysis, which revealed a strong connection between government transfers and reduced low-income rates, particularly for female lone-parent families.Footnote 73 Harding found that, in 2016, the proportion of low-income female lone-parent families would have been at 62% had they received no government transfer income. With government transfer income, 40% of these families were classified as living in low income, a reduction of 22 percentage points. In comparison, government transfers had the effect of reducing low-income rates by about 20 percentage points for male lone-parent families and close to 13 percentage points for couples with children.

Overall, lone-parent families received the highest median amount of government transfer income between 2001 and 2021, and this is likely because they had a lower median after-tax income and were more likely to be living in low income compared to couple families with or without children. During this time period, persons not in a census family also reported a lower median after-tax income and had higher proportions living in low income.  These individuals, however, received lower median government transfer income, and this is likely because government transfers include federal child benefits and persons not in an economic family would not be entitled to receive these benefits. The difference in median government transfer income received by lone-parent families and persons not in an economic family is likely one contributing factor as to why the proportion of persons not in a census family living in low income surpassed that of lone-parent families as of 2020. Future analyses will be able to comment on whether this trend continued past 2021.

5.3 What are the financial experiences of lone parents based on Indigenous identity, immigration status, disability status and gender?

While data on income and economic well-being by population group exist, there are limited disaggregated data on lone-parent families. What data are available show that higher proportions of Indigenous lone-parent families (in 2016) and lone parents with a disability (in 2015 and 2020) lived in poverty compared to their non-Indigenous and non-disabled counterparts. For both of these population groups, this difference was more pronounced among Indigenous female lone parents and female lone parents with a disability. There are no data on the experiences of Black and racialized lone-parent families; however, 2021 data on the racialized identity of immigrant lone-parent families showed that Arab, Black, Chinese and Latin American immigrant lone parents were more likely to be living in low income compared to non-racialized immigrant lone-parent families. Not only has previous research identified that lone-parent families are more likely to be economically disadvantaged, but these population groups are also more likely to experience discrimination and social exclusion, leading to unequal access to economic resources.Footnote 74 These intersecting forms of financial disadvantage, when combining the experiences of lone-parent families and their experiences as Indigenous people, persons with disabilities and racialized immigrants, likely contributed to the higher proportion of these families living in low income.

When looking at gender differences, most lone-parent families were headed by a woman. Despite the increase in the number of male lone-parent families over the 21-year period, the proportion of female lone-parent families was 3.5 times higher than the proportion of male lone-parent families in 2021.Footnote 75 While the median after-tax income of female lone-parent families increased between 2001 and 2021, including at a higher proportion than their male counterparts, female lone-parent families continued to have lower median incomes. This finding is consistent with data showing a significant nation-wide wage gap between men and women, with women between 25 and 54 years earning on average 11% less than men in 2021.Footnote 76 At the same time, female lone-parent families also saw the highest median government transfers compared to their male counterparts. However, this also points to an overreliance from these mothers in receiving government and support payments. As Harding (2018) found, government transfers had the largest effect on reducing the low-income status of female lone-parent families, pointing to the precarious nature of their financial status.Footnote 77

As mentioned above, where disaggregated data on the economic well-being of lone-parent families exist, it is clear that not all lone-parent families have benefited equally from the shifts in income between 2001 and 2021. Higher proportions of Indigenous lone-parent families, lone parents with disabilities, and certain racialized immigrant lone-parent families were living in low income, and female lone-parent families continued to report lower median incomes and relied more heavily on government benefit and support payments to make ends meet. Additional disaggregated data on the experiences of lone-parent families would be helpful to gain a fuller picture of the financial challenges that these families face as well as any positive shifts in their economic well-being.