Household disposable income rises in Q4 on government transfers: Economists

Canada’s economic slowdown in the fourth quarter of 2022 was also marked by rises in household disposable income, driven in part by government support.

Household disposable income rose three per cent in the fourth quarter of last year, nearly double the rate of gains in nominal household spending, according to a release from Statistics Canada on Tuesday. 

Statistics Canada said the rise in disposable income is due in part to increases in government benefits, including a 10 per cent increase in Old Age Security (OAS) payments and a one-time top-up Goods and Services Tax (GST) credit. 

“Disposable incomes got a shot in the arm by a GST credit top-up and a boost to OAS, and this will probably get spent over time, not all in one quarter. Spending is calming down a bit, but it’s not falling off the table by any means,” Douglas Porter, the chief economist at BMO, said in an email to BNN Bloomberg Tuesday.