A report released Wednesday highlights the deepening levels of poverty in Canada, made worse by the recession. The report urges the federal government to end poverty in the nation.
The recession is over for the real estate market, while Canadian bankers fared well after receiving some help from the government in 2008, some banks netting the biggest profits ever earned in 2009. But for too many people, particularly families with young children, the recession has had a heavy toll, reports Citizens for Public Justice. Author Chandra Pasma wrote Bearing the Brunt: How the 2008-2009 Recession Created Poverty for Canadian Families. Released Wednesday, the report "... reveals the deep impact of the recession by examining key economic trends, comparing them to the baseline of 2007 – the last year for which we have poverty measures available. This trend analysis projects that the poverty rate in Canada rose to 11.7% in 2009, an increase of over 900,000 Canadians compared to 2007. The child poverty rate has likely risen to at least 12%, an increase of 160,000 children compared to 2007."
The Ottawa-based faith organization has a mission"...to promote public justice in Canada by shaping key public policy debates through research and analysis, publishing and public dialogue." Funded by World Vision, the research report underlines a harsh reality for millions of Canadians -- the economic stimulus set into motion by the Conservative government did not go far enough, and the number of people living in poverty in Canada has increased by nearly 1 million.
Pasma credits the limitations of Canadian Employment Insurance as being a major contributor to the increased level of poverty in Canada. "... Employment Insurance (EI) failed to adequately support the unemployed, as nearly half of the unemployed did not receive benefits and those who did received a poverty income. As a result of the gap created by EI, social assistance caseloads increased across the country. Low income Canadians were also hit with a rise in the cost of living, as food prices and rent increased more than inflation. As a result, debt loads grew, bankruptcies increased and food bank use skyrocketed ...
... EI was an utter failure in responding to the ravages of the recession. While EI coverage rose throughout the course of the recession, it only reached 51% in October 2009. In other words, nearly half of the unemployed were not receiving benefits. In October 2009, this meant 777,400 unemployed Canadians were not receiving benefits."
Pasma found, as might be expected, that welfare caseloads rose in response to people's needs. The largest growth to welfare caseloads have been seen in the provinces hardest-hit by the recession: Ontario, Alberta and British Columbia.
A young man begging for food money in Guelph, Ontario, February 2010.
The impacts, say Pasma in the report, have been immediate and highly visible. The increase in personal debt and in the use of food banks are the two most noticeable impacts.
Pasma warns the deeper levels of poverty may persist for at least another 8 or so years, noting that in the past this was the time it took for employment levels to increase after recovery from the recession.
Citizens for Social Justice have launched a campaign to ask the federal government to create a plan to eliminate poverty in Canada. Dignity for All, the campaign for a poverty-free Canada "... calls for vigorous and sustained action by the federal government to combat the structural causes of poverty in Canada. We want:
•A federal plan for poverty elimination that complements provincial and territorial plans.
•A federal anti-poverty Act that ensures enduring federal commitment and accountability for results.
•Sufficient federal investment in social security for all Canadians.
Pasma's research reinforces a growing body of research on poverty in Canada. Single women are among the poorest people in Canada. When the recession sunk its teeth into the Canadian economy, the Canadian Centre for Policy Alternatives warned the number of people experiencing poverty would increase -- particularly women.
The International Labour Organization (ILO) recently released a paper titled Promoting employment recovery while meeting fiscal goals. In the collaborative brief, the authors urge that governments not abandon fiscal stimulus spending too soon, saying such a strategy will endanger job creation. The report said "job-centered measures" stimulus spending was a good way to address both unemployment and the economy. Globally, unemployment increased by 2% between 2007 and 2009.
The ILO warns "... there is a risk that unless further action is taken quickly, many unemployed and underemployed workers will either endure sustained periods out of work or drop out of the labour market entirely, leading to permanent skills erosion. In the aftermath of the recession that hit EU countries in the 1990s, the incidence of long-term unemployment increased by over 5 percentage points while at the same time participation rates declined significantly.
Labour market exclusion has started already. In most developed countries, participation rates dropped in 2009 (Figure 2). Certain groups are disproportionately affected by labour market exclusion, notably disadvantaged youth, young mothers, migrants and older workers.
The fall in the labour force, therefore, does not bode well for the sustainability of the ongoing recovery and may further limit the possibilities for countries to return to previous employment levels quickly."
Canada consistently receives a grade of "C" for its lackluster efforts in reducing poverty from the Conference Board of Canada.