Percentage of low income individuals

In 2025, the proportion of low-income individuals in Canada stands at 11.6%, reflecting a decline of nearly 2.0% from the prior year. This drop is tied to targeted income policies, including the introduction of a federal minimum wage of $17.75 in April and heightened union activity that has resulted in wage improvements for workers in vulnerable sectors. Stricter immigration policies have also reduced the entry of economic migrants, lowering the number of newcomers who might require financial assistance. These combined efforts have had a direct impact on reducing the low-income segment, supporting modest improvements in income security across working-age Canadians.

The five-year period from 2020 to 2025 has been characterized by considerable movement in low-income rates. Early pandemic measures rolled out in 2020 temporarily reduced the poverty rate to 9.3%, the lowest level in decades, as comprehensive federal support programs elevated the financial standing of many lower-income households. These gains were short-lived as pandemic relief was gradually withdrawn and inflation became entrenched from 2021 to 2023. Price increases, stemming from persistent supply chain disruptions and energy volatility, cut into disposable incomes. Higher interest rates added to household financial burdens by elevating debt costs. Compounding these factors was an extended downturn in commodity markets, stunting economic growth and decreasing job availability, most notably in the resource-heavy provinces. The combination of weak real wage growth and rising housing costs further tightened constraints on upward mobility for many, undoing much of the earlier progress. A growing share of Canadians faced higher living expenses and increased reliance on credit. Each year after 2020 saw the low-income rate rise, reversing earlier improvements and underscoring the sector's sensitivity to shifts in fiscal policy and economic climate.

From 2020 through 2025, the overall shape of Canada's low-income environment was defined by persistent cost-of-living increases, modest wage growth, and the lingering effects of pandemic policy rollbacks. These patterns were magnified by subdued commodity sector performance in key regions and by elevated rates of household indebtedness, which amplified financial stress across demographics. The combination of these trends meant that the gains realized in 2020 proved difficult to sustain, as inflation and stagnant wages limited the ability of policy interventions to affect lasting change. Broader macro forces, including accelerating housing costs and a shift to higher everyday living expenses, exposed more Canadians to financial risks, ultimately driving the number of low-income individuals up at a CAGR of 4.5% over the five-year period to 2025.