Most provincial governments across Canada are failing to support low-income residents as inflation surges, according to a new University of Calgary study that warns homelessness rates will increase if more isn’t done.
The report, from authors Ron Kneebone and Margarita Wilkins of the university’s School of Public Policy, details how Canadians – and especially single adults – reliant on government-provided income assistance will see risks to their health, food security and housing intensify as the cost of living soars. The study is set to be released Thursday.
A recent Statistics Canada report showed the consumer price index reach 8.1 per cent year-over-year in June, after a 7.7-per-cent gain in May. This was the largest yearly change since January, 1983. The study suggests rates of inflation won’t cool down for at least another two years because of the war in Ukraine, COVID-19 spending and Bank of Canada interest rates.
Dr. Kneebone said the index is helpful to understand the strain on middle-income households but it is a “terrible” measurement to understand the impact to lower-income households, which spend a significantly larger portion of their budget on shelter and food.
At a bare minimum, he said indexing social assistance programs to the index would go a long way but it still wouldn’t be far enough as current programs already uphold a low standard of living.
Federal government contributions to income support by way of the Canada child benefit and the GST rebate are indexed for inflation but largely support people with children, leaving single adults in the lurch. Provincially, adjustments to inflation vary greatly. Only Quebec – and less so Manitoba and New Brunswick – shield all recipients from the effects of inflation, the study says.
In Alberta, for example, 32 per cent of social assistance for a lone parent and 3 per cent for a single person are indexed for inflation, which is marginally the lowest among the 10 provinces. In Quebec, the percentages are 96 and 100 per cent, respectively.
“The differences across provinces was revealing to me and also the extent to which provincial governments have seemingly chosen to simply ignore the plight of people with low income,” Dr. Kneebone said. “One of my former assistants cynically said to me one time – and I think she was right – that poor people don’t vote and so they don’t get the attention they deserve.”
A look at the budget of a lone parent with one child in Toronto, who rents a low-quality one-bedroom apartment and relies on social-assistance income, paints a bleak picture.
Using calculations from 2019, the report’s authors show this parent would have roughly $360 leftover each month after paying for food and rent. In some high-rent communities, such as Toronto or Vancouver, about 85 per cent of incomes are dedicated to those two necessities.
That number dips to $270 in three years time taking into account rising costs, leaving very little for other basic needs, such as clothing and transportation. For single adults sharing a one bedroom, the same calculations put them in the negative after paying for food and rent.
“What that tells you is that there are a lot of people out there that are on the cusp of homelessness,” Dr. Kneebone said. He said households with limited income are likely to squeeze their budget by downsizing or having additional roommates and by adopting a less healthy diet to save money and relying more heavily on food banks.
“But eventually, you’re done. You can’t do that any more and the choice becomes whether to eat or have shelter,” he said. The authors pointed to one of their earlier studies that concluded that for every 1-per-cent increase in rent relative to income, there will be a 2-per-cent increase in the prevalence of homelessness.
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