Seniors are only a small part of the explanation. The study has a detailed table in it that shows that seniors in City #3 increased from 5% to 13%. In City #2, they increased from 8% to 15% but income went down much less in City #2 then City #3. City #1, where income went way up, seniors were high to start with at 13% and increased slightly to 14%.
There are a lot of things that have happened over the last 30 years that contribute to this growing divide in Toronto:
1) Massive immigration of a mostly non-white, non-english speaking population who faces many barriers in their adaptation to Canadian life. For instance, we have thousands of talented but under-utilized immigrants because Canadian employers do not recognize their foreign credentials/experience.
2) Radical economic change from a production economy to a service and information/knowledge based one. Many middle-income manufacturing jobs have left for countries with cheaper wages. Then we have the rise in temporary/contract/insecure jobs and out-dated rules for Unemployment Insurance which most people cannot qualify for when they need it.
3) Radid technological change with an aging population means some jobs have become obsolete and some of the workers aged 50-64 who lose their jobs face age discrimination. They must either take lower paying jobs or take an early pension for example to get by.
4) Resistence to wage increases for people making minium wage, retrenchment of the welfare state, falling labour unionization rates over time, ease of CEO's, politicans and other high-income people to gain obscene wage increases.
5) End of good, rapid public transit expansion in Toronto since the YUS and BD subway lines were built. The Sheppard line and RT lines are inadequate planning disasters. Neighbourhoods far from the subway line and downtown, such as Malvern in the north east and Jamestown/Jane-Finch in the northwest are less accessible, less desirable, car-oriented places to live. Malvern is 1.5 hours away from downtown for example on the TTC and when the outdoor sections of the BD subway and RT line have snow/ice problems like recently, that has gone up to about 2 hours travel time one way.
6) Crime (shootings, grow-ops, drug labs, etc.) in the inner suburbs is driving relatively higher income people away (who earn enough to choose a different neighbourhood to live in) who then get replaced by lower income people who have fewer location choices.