The Impact of COVID-19 on Poverty in Canada
One can assess the full impact of COVID-19 on poverty in Canada as provinces begin to lift pandemic mandates. Canada felt the impact of the COVID-19 pandemic economically, with the National Advisory Council on Poverty noting unforeseen yet already developing consequences on national poverty levels.
The latest Canadian Income Survey from 2019 revealed the poverty rate at 10.1%, which saw the federal government spend upward of $72-$84 billion annually in tackling it. The impact of COVID-19 since then has only exacerbated poverty in Canada, with the disruptions to supply chains, market prices and job security that the global pandemic has caused.
Impact on Employment
Employment rates have continued to fluctuate throughout the pandemic after initially seeing an unprecedented 3 million Canadians (9%) lose their jobs, all of whom had been below the national average income. Employment rates steadily recovered as transmission rates dropped and Canadian provinces gradually lifted mandated measures. However, youth unemployment rates gradually increased and remain behind pre-pandemic levels.
Employment rates returned to pre-pandemic levels by fall 2021 while continuing to be volatile. The omicron variant surge saw the loss of 200,000 jobs, mainly in service and public sectors, which shows the lasting and developing COVID-19 impact has on job security. Regarding job security, the impact on employment COVID-19 has disproportionately affected service and public sector jobs. In contrast, the scientific and technical sectors have seen a growth in employment rates in the same period. This disproportionate, developing impact on lower-income workers could potentially exacerbate poverty rates in the coming years.
In response to the income insecurity and fluctuating employment rates, the Canadian federal government rolled out multiple economic assistance programs in the wake of COVID-19. The pandemic expanded unemployment insurance and provided wage subsidies. The largest and most widely available was the Canadian Emergency Response Benefit (CERB). Backed with a $100 billion fund, CERB was the largest economic assistance package in Canadian history since World War II. CERB provided unemployed Canadians with a $2,000 monthly stipend, two-thirds of monthly employment income for the average Canadian. CERB ended in December 2021, mitigating much of the impact that COVID-19 could have had on poverty. In the wake of CERB’s success, the British Columbia Expert Panel on Basic Income report recommended the permanent expansion of public-funded services similar to CERB. Continued public assistance can counter developing poverty while employment rates fluctuate as the pandemic slowly ends.
Rising Food Prices & Cost of Living
Food prices drastically increased in Canada throughout the pandemic due to the supply chain shortages the global disruption COVID-19 is causing. As a result, grocery prices increased by 5.7% in 2021, the biggest annual gain since 2011. The 2022 Canada’s Food Price Report annual report from the Dalhousie University and the University of Guelph projects that 2022 will see “the highest increase [in food prices] that we’re predicting in 12 years, both in terms of dollars and percentage.” Here are some predictions for where food prices could go by 2022 according to Canada’s Food Price Report.
“ Type of Food Expected Price increase in 2022
Baked Goods 5-7%
How Increasing Food Prices is Impacting the Impoverished
The growing price of food has impacted lower-income populations in Canada, with the number of food bank visits increasing by more than 20% in the first four months of the pandemic. An Ottawa resident stated that “I can’t afford to go to the grocery store to buy fruit.” In addition, inflating food prices are growing, affecting middle-income populations. An Ontario resident told the CBC that “People that didn’t even talk about high food costs before are now struggling with it, too.” A recent survey response stated that Canadians have changed their food consumption habits, including relying on coupons, cutting out restaurants and switching to more affordable diets.
COVID-19’s impact on food prices in Canada will continue to develop from 2022 onwards and will disproportionately affect lower-income populations, potentially exacerbating poverty rates. In anticipation, the federal government established the Emergency Food Security Fund in April 2020 to “help improve access to food for people experiencing food insecurity in Canada due to the COVID-19 pandemic,” investing $100 million into Canadian food banks and other similar organizations. The government invested more money into the fund throughout the pandemic, adding a further $100 million in August 2021 and $30 million in December 2021. Matching investments into food banks and other similar programs to the rate of food prices’ inflation projected by the 2020 Canada Food Price Report will be key to countering the long-term impact of COVID-19 on poverty in Canada.
Tackling the Future
While COVID-19 has impacted job and food security for those living in poverty in Canada, the worst of its burnt has passed as provinces lift restrictions. The impact of the pandemic has seen valuable lessons gained in the present and future battle against systemic poverty. The 2021 report of the National Advisory Council on Poverty identified the root of COVID-19’s exacerbation of Canadian poverty lay in preexisting structural issues that discriminate against lower-income workers, Indigenous peoples, ethnic minorities and women. This recognition shows that the impact of COVID-19 on poverty has resulted in a new commitment to the inclusion of this holistic structural approach in tackling poverty post-pandemic, boding well for the future of Canadian public policy.
– Majeed Malhas