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The Impact of COVID-19 on Poverty in Canada

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

Restaurants        6-8%

Dairy                       6-8%

Baked Goods      5-7%

Vegetables          5-7%

Fruits                     3-5%

Other                     2-4%

Seafood                0-2%”

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
Photo: Flickr

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Innovations in Poverty Eradication in Canada

Poverty Eradication in CanadaThough a proportionally wealthy country, Canada struggles with a large amount of poverty. In 2018, the Government of Canada released Opportunity for All: Canada’s First Poverty Reduction Strategy. The report introduces strategies and tactics that the country intends to employ until 2030 to reach its goals. Concrete poverty reduction targets is one of the goals that includes a 20% reduction in poverty by 2020 and a 50% reduction in poverty by 2030. Canada’s Official Poverty Line is another goal set out to measure poverty and track progress towards the targets. It also plans on introducing a National Advisory Council on Poverty. All of these innovations would go towards poverty eradication in Canada.

The Council

The National Advisory Council on Poverty has helped the government move forward with their plan. The group has 10 members. Some of them actually confronted poverty in the nation themselves. In addition to those with lived experience, the council also holds members with expertise in community outreach, academia and prominent leadership. Annually, these members produce a report that helps the government understand the progress that has been made and what can still improve.

The Strategy

Beyond the council, the strategy also involved defining a poverty line for Canadians. Statistics Canada and Employment and Social Development Canada continuously review Canada’s Official Poverty Line. By using the Market Basket Measure, they are able to keep the measure accurate. Their various reports from 2018 to the present summarize government consultations on the matter. They also propose changes as to how to calculate the Market Basket Measure.

Canada’s Poverty Reduction Strategy also introduced 12 indicators of progress concerning its reduction. Some of the most notable include food insecurity, core housing needs and the share of youth engaged in employment, education or training at a given time. In order to ensure transparency on the progress the strategy is making, the government provides a website or “dashboard.” Citizens can use it to track all 12 of the Opportunity for All indicators as well as the poverty line itself. The site also lists future goals that Canadians can stay up-to-date on.

Government Programs

The Opportunity for All Strategy also connotes the bettering of government programs and investments that existed before 2015. Some of the most notable pre-existing involvement that the strategy emphasizes include Canada Child Benefit. This is a monthly, tax-free payment that assists low and middle-income families in raising children affordable. Another one is Canada Workers Benefit, a refundable tax credit with the purpose of supplementing the wages of low-income workers. Increase to the Guaranteed Income Supplement Top-Up Benefit is an initiative that helps improve the financial security of just under one million senior citizens. Additionally, Canada’s First National Housing Strategy is a plan spanning 10 years. Its goal is to provide more Canadians with suitable housing.

Charity and Aid

In addition to government efforts, many others are working on innovations in poverty eradication in Canada. One of the most successful charities working toward these goals is Pathways to Education, which provides financial support, social stimulation and academic rigor to youth in need. It has improved graduation rates by 85% in communities where its program has been offered. Canada Without Poverty is another charity that educates Canadians about the humanitarian and financial implications of living in poverty. It also identifies solutions regarding public policy and communication. Canadian citizens that broke out of poverty themselves run the organization, so they are well equipped to educate the public and connect with those in need. Furthermore, True North Aid is a charity that looks to close the poverty gap faced by Northern Indigenous communities in Canada. It does this by launching projects with initiatives in improving water supply, education, housing and the like.

 

Overall, innovations in poverty eradication in Canada are highly successful. With government planning along with cooperation from and communication with the Canadian public, a decline in the poverty rate has already taken place and seems as if it will continue in the coming years.

– Ava Roberts
Photo: Flickr