The Impact of COVID-19 on Poverty in Canada
The COVID-19 pandemic brought hardship in many forms during the year 2020. Every country struggled to mitigate infection. However, the impact of COVID-19 on poverty in Canada is still prevalent over 15 months into the pandemic.
According to The Toronto Star, 10.1% of Canadians (3.7 million) were living in poverty in 2019. Data in the coming years may actually show a continuation of the recent trend of reduced poverty levels into 2020. However, there may be an imminent correction of sorts. The director of fiscal and provincial economics at Scotiabank, Rebekah Young, explained that government will likely contribute to the visibility of an “artificial drop in poverty” in 2020. Here is some information about the impact of COVID-19 on poverty in Canada.
Unemployment rates in Canada
At the beginning of the pandemic, unemployment rates rose due to COVID-19 restrictions. The unemployment rates during the first few months of lockdowns were as follows:
February 2020 – 5.9%
March 2020 – 8.4%
April 2020 – 13.5%
May 2020 – 13.8%
June 2020 – 12.3%
As UBC Canada pointed out, the pandemic has exacerbated the disparity between high and low-income families. When this occurs, the cost of living generally rises. According to the report, “people in poverty are more likely to work in front-line and service” industries that COVID-19 restrictions most affected.
This reality is especially troublesome for such workers in Canada. The New York Times reported that fully vaccinated Americans could begin to enter certain public areas without a mask on May 13, 2021. This development is a promising sign as some industries continue to struggle amid COVID-19 regulations. However, Canada’s vaccination progress lags significantly behind.
Canadian Government Support Programs
While government support programs allowed for incomes of various demographics to rise during the majority of 2020, many Canadians struggled to maintain financial stability. Spending on recreational activities and even necessities declined for low to middle-income families as a result. Middle- to high-income families avoided the costs of travel and recreation, further widening the disparity between the two segments.
Across Ontario, food banks witnessed a substantial increase in traffic leading up to the start of the pandemic. Nearly 20% of food banks in the province saw an increase of 54% through the first four months of COVID-19.
Feed Ontario reported that one of the main causes of this continued increase in foodbank use is “precarious employment.” As of November 2020, Ontario saw an 8% increase in employed adults visiting food banks.
The Impact of Unemployment During COVID-19
To put things in perspective, permitted activities for Canadian citizens as of May 20, 2021, essentially consisted of what the average U.S. citizen was limited to a year ago. Outside of shopping for essentials and going for a walk, routine actions became restricted in accordance with stay-at-home orders for many parts of the country.
United States industries including food service have begun to recover as states allow limited capacity in restaurants. Canada’s food service became limited exclusively to takeout. Other sectors such as the entertainment industry have initiated a quasi-revival as movie theaters begin to house limited capacity. Establishments in the entertainment industry are seemingly a long way from opening in Canada. The impact of COVID-19 on poverty in Canada will continue to prove much greater as a result of industries similar to entertainment being severely diminished or in some cases obsolete for a much longer period of time.
“Around half a billion people could be pushed into poverty globally,” according to UBC Canada. A bigger share of this number is realized as the longer service workers and those alike are unemployed while the socioeconomic disparities increase as a result of COVID-19.
A Look Ahead
A sense of employment is shining through in 2021. Canada’s unemployment rate recently decreased by 0.7% to 7.5%, marking the lowest rate since February 2020.
After initially delaying the administration of second doses of COVID-19 vaccines for up to 16 weeks, the Canadian government looks to expedite those second doses to a population that has more than half of its citizens partially vaccinated.
In the meantime, the Highly Affected Sectors Credit Availability Program grants businesses “guaranteed, low-interest loans” up to $1,000,000. Started in January 2021, the program aimed to help the travel and tourism industries along with other industries the COVID-19 pandemic immediately affected.
Now, while the nation has a way to go to inoculate a sufficient portion of its population, Canada is providing more doses of COVID-19 vaccines per capita each day than the United States.
– Paolo Giannandrea