Canada’s poverty rate declined to a new low in 2018 as the number of low-income people has fallen by more than one million over a three-year period.
The percentage of Canadians in poverty was 8.7 per cent, down from 9.5 per cent in 2017 and the lowest under the current formula, which is soon to be replaced, Statistics Canada said Monday. In total, about 3.2 million people were below the low-income threshold, down from more than 4.2 million in 2015. The threshold ranges from $33,115 in smaller Quebec cities to $42,101 in the Toronto area.
Statscan pointed to gains in market income – that is, income from employment, private pensions and investments – with making an impact. The median market income increased 2.7 per cent in 2018 to $57,100, while for couples with children it rose by $4,400 to $108,700.
“That was a significant increase,” said John Nicoletta, chief at Statscan’s Canadian Income Survey. “That’s definitely playing a part in [the poverty rate] decline.”
Over the longer term, a government focus on child benefits – both at the federal and provincial levels – has also helped, said Ron Kneebone, a University of Calgary professor who researches poverty reduction.
“Anybody with kids, we’ve lifted a lot of them out of poverty,” Prof. Kneebone said. “What’s left are people who are not going to be positively impacted by increasing child benefits,” such as single people, he added.
Among those in economic families – that is, when two or more people live in the same dwelling and are somehow related – the poverty rate was 5.8 per cent in 2018, with nearly 1.8 million people in low income. Both figures are down substantially from a decade ago.
But for those not in economic families, the poverty rate was close to 25 per cent. While that was lower than in 2008, for instance, the number of those below the poverty line is roughly the same.
“Homeless shelters are full of single people,” Prof. Kneebone said. “We’ve got to start focusing more on single people and providing them with higher benefits than we currently do.”
Canada’s poverty line is based on a market basket measure (MBM) of goods and services from 2008. However, Statscan and Employment and Social Development Canada are working toward an update that would “better reflect contemporary costs of living.”
Under that model, the national poverty rate would be higher, at 11 per cent in 2018. Statscan noted that updates usually result in higher poverty rates, and that in this case, the increase was largely due to changes in how shelter costs are accounted for.
“It’s clear that they’ve been underestimating the cost of housing up to now,” according to Prof. Kneebone.
That said, the new model mirrors the outgoing one in showing progress, with more than one million people climbing out of poverty since 2015. Transition to the new MBM will take place in June.
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