Canada’s poverty rate continued to fall during the first year of COVID-19, according to a new Statistics Canada study, yet many experts say the numbers don’t tell the full story of the pandemic’s impact.
And they predict poverty rates will rise again with the end of many government support programs.
Earlier this month, the study said the poverty rate had fallen nationally from 14.5 per cent in 2015 to 8.1 per cent in 2020. Researchers attributed the decrease to government transfers “mostly by income from temporary pandemic-related benefits.” Census data released in July showed pandemic supports cushioned a loss in employment income for many low-wage earners during the start of the pandemic.
The poverty rate in the Ottawa-Gatineau region was lower than the national average in both years. It fell to 7.1 per cent in 2020, down from 12.7 per cent in 2015.
Programs like the Canada Recovery Sickness Benefit provided workers the opportunity to stay home with pay when sick with COVID-19.
“What this data does not show is that most of these benefits stopped in 2021, and many people are now being asked by the Canada Revenue Agency to pay back some of the benefit amounts,” said Emilly Renaud is the national coordinator for Canada Without Poverty, a charity aiming to eliminate poverty through education and public policy development.
In 2019, before the pandemic, 10.3 per cent of Canadians lived in poverty, according to the Canadian Income Survey.
“Our estimate is that the poverty trend will likely increase past the 2019 levels as we are now seeing even lower-middle class people struggling to manage the high costs of living,” said Renaud.
Walmart sales floor associate Denim Gunmlaugslm has watched prices rise dramatically over the last few months on her item scanner. Gunmlaugslm said she often hears customers complain about paying more at checkout. She understands the pain.
“Our paycheques aren't rising that much every year, only by a couple cents. But the products are rising, like, drastically,” she said. “Even just a pack of raspberries is, like, five or six bucks.”
According to the Consumer Price Index, the cost of food rose 10.1 per cent from October 2021 to 2022. For the 18-year-old worker, the cost of living means she finds it hard to eat healthy foods.
“Healthy foods are just so much more expensive than the instant meal I just got for like a couple dollars. But when you look at things that you have homemade, it's so much more expensive.”
Canadians won't have to wait until the next census to see changes in the poverty rate, according to Leila Sarangi, the national director for Campaign 2000, a network of more than 120 organizations working to end child and family poverty in Canada.
"Tax filer data, Canadian income survey data and probably labour force survey data will all start to tell us poverty rates are on the rise," Sarangi said. She listed "outrageous" inflation outpacing wage increases as one cause of rising poverty, alongside the loss of pandemic benefits and a decrease in disposable income for those on social assistance and the working poor. She also highlighted how pandemic benefits were counted as taxable income, limiting access to refundable tax credits for some workers.
Even with COVID-19 and other viruses circulating in the community, customer service workers like Caroline Gauthier find the cost of staying home when sick is too high. When she caught COVID-19 in January, Gauthier made the choice to stay home with her family.
“It didn’t impact me as bad since I lived with my dad, but it was still not great,” she said.
“He also had to take time off work because he caught it from me. And he lives paycheque to paycheque so that was difficult.”
Along with a cost of living and health-care crisis, many workers are struggling with their mental health. Gauthier said she struggled with anxiety even before the pandemic. She said her fears worsened when COVID-19 hit her community.
“I literally quit my job because my anxiety went crazy,” she said. Gauthier feared infecting other members of her family.
Campaign 2000 released its strategies for a recovery last year in its annual report card on child and family poverty with more than 60 recommendations. For immediate actions, however, Sarangi recommended the government enact a "CERB amnesty" — a pause on pandemic benefit repayments. She also recommended expanding access to the Canada Child Benefit to immigrants with precarious status and an increase in the amount of federal transfers to provinces for social services.
But Sarangi cautioned much of the damage done is long-term. "We've missed an opportunity to build back better," she said.
Renaud also proposed several policy solutions to address the poverty problem. She said governments must build more affordable housing, increasing income supports and forgiving student loans for people from low-income families.
"These are just some of the many measures we need to alleviate poverty and move towards ending poverty in Canada. "