Regardless of our income, we all have the concrete impression that we have become poorer in recent years due to runaway inflation. I remind you that inflation in Quebec increased by 3.8% in 2021, 6.7% in 2022 and about 4.0% in 2023.
Warning: As Captain Bonhomme said, skeptics will be confused.
But have Quebec households really become poorer in 2023, given the billions in one-time aid that the Trudeau and Legault governments have given us since 2020 to offset the rise in the cost of living?
Two contradictory answers. Yes, they have become poorer if we refer to 2021. No, that is not the case if we refer to the year 2019, which is the “normal” year that preceded the triggering of the virulent pandemic in 2020.
This, in my opinion, is the most important observation that emerges from the study “Development of Household Purchasing Power in Quebec”: What do the numbers and comparisons say? which have just been published by researchers Suzie St-Cerny, Frédérick Hallé-Rochon and Luc Godbout from the Research Chair in Taxation and Public Finance at the University of Sherbrooke.
To compare apples to apples, the study authors tracked the evolution of purchasing power by measuring it based on the disposable income of different household types at three income levels: low (around 25th percentile); average (around 50th percentile); high (75th percentile). Disposable income represents the sum of all income less taxes paid to the governments of Ottawa and Quebec and less social security contributions and drug insurance contributions. For the purposes of the study, disposable income calculations were made in constant 2019 dollars, a simple matter designed to eliminate fluctuations associated with inflation across the years in question.
Here you will find the results of purchasing power losses or gains according to our household profile.
2023 VERSUS 2021
Households whose disposable income decreased in 2023 compared to 2021 are:
- Couples without children (-$1675 to -$3660)
- Couples with children (-$1300 to -$1600)
- Single parent families (-$235 to -$950)
- Single people (-$520 to -$2130)
When it comes to senior households, however, the picture looks different.
For most single seniors, purchasing power increased from $900 to $1,550. Couples aged 70 and over will share increases of $1,850 to $2,300.
For older couples aged 65 to 69, there was little change in disposable income, ranging from slight decreases to slight increases.
2023 VERSUS 2019
Households whose purchasing power has increased since 2019 are:
- Single people (+$1600 to +$2950)
- Couples without children (+$2600 to $5550)
- Couples with children (+$480 to +$3200)
- Single seniors aged 70 and over (+$1,400 to $1,600)
- Senior couples aged 65 to 69 (+$100 to $2700)
- Senior couples aged 70 and over ($2,000 to $2,700)
Who do we find among the losers? Among single seniors ages 65 to 69, those with low incomes (around the 25th percentile) experienced a loss in purchasing power, while those with average incomes and students experienced an improvement of $400 to $500.
Among single-parent families, purchasing power fell among those with low incomes (-$150) and those with middle incomes (-$540). Only single parents with higher incomes have been able to increase their purchasing power by around $780 since 2019.