In 1995, the latest year for which detailed information is available, Statistics Canada's Survey of Consumer Finances reports that about 12 percent of Canada's people were 65 years of age or older. These seniors lived in households with an after tax income of just over $30,000. This is fully $8,000 lower than the average after tax income of households with no seniors. However, the average size of households with seniors was only 1.84 persons compared to 2.56 for households without seniors. The per capita incomes of senior households was, in fact, ten percent higher than that in non senior households.

However, per capita income comparisons are very deceiving because they ignore any consideration of economies of scale in living. Economists have long recognized that the costs of living, especially shelter costs, do not increase in proportion to the number of people in the household. Sharing housing, certain consumer durables such as televisions, furniture, automobiles, and dishwashers, etc., results in more efficient use of those items. Hence, five people living on an income of $40,000 would each very likely have a higher standard of living than one person living on $15,000. The larger the household, the less expensive it is for each person in the household to maintain a given standard of living. So, the higher per capita income in households with seniors would be offset, more or less, by the scale economies consideration.

Working in the other direction, however, is mortgage-free home ownership. About 60 percent of senior-headed households own their homes mortgage-free, compared with only 22 percent for households headed by a non-senior. This means that, in general, seniors are likely to have lower shelter costs. Indeed, the latest Family Expenditure Survey (1992) by Statistics Canada clearly shows that senior households have substantially lower shelter costs than non-senior households, even when family size is accounted for.

The situation of some single elderly people is frequently the subject of heart-wrenching media stories. Clearly, there are many single seniors who are lonely and have health problems. In addition, anyone living alone has higher per capita costs due to the failure to take advantage of scale economies. However, the typical senior has sufficient after tax income to live comfortably. In 1995, there were 262,855 single elderly men and 781,636 single elderly women living on their own. There was considerable "bunching" of their incomes, with 56 percent of the men and 60 percent of the women reporting incomes between $12,000 and $20,000. Most importantly, only 2.9 percent of the single men and 2.7 percent of the single women had after tax incomes below $10,000.

Of more importance is the poverty status of our elderly. Using the basic needs approach to defining poverty, the poverty rate of senior citizens has fallen dramatically over the past two decades. The poverty rate of Canada's seniors is now below 1 percent, compared with about 5 percent for the non-senior population. The accompanying graph shows the poverty rate comparison between senior and non-senior groups since 1973.