Recession stalls progress on poverty; almost one in 10 Canadians poor

The recession stopped progress on poverty in its tracks and took a bite out of incomes in Ontario, British Columbia and Alberta, new numbers from Statistics Canada show.

OTTAWA — The recession stopped progress on poverty in its tracks and took a bite out of incomes in Ontario, British Columbia and Alberta, new numbers from Statistics Canada show.

In its first detailed, national picture of what happened to income in Canada during the recession, the agency says the low-income rate edged up in 2009 to 9.6 per cent — the second straight year that poverty increased after more than a decade of steady declines.

“It’s not very encouraging,” said Rob Rainer, executive director of Canada Without Poverty.

He points out that most provincial governments now have anti-poverty strategies that are well-entrenched, and he had been hoping to see some positive results despite the recession.

Instead, the percentage of people living below the low-income cutoff has climbed slowly, from 9.2 per cent in 2007, to 9.4 per cent in 2008 — the first year of the recession — and now to 9.6 per cent.

“Our overall income and wealth redistribution system is not up to the task,” Rainer commented.

About 3.2 million people now live on low incomes, including 634,000 children, StatsCan said.

Indeed, children were vulnerable during the recession, with their low-income rate rising to 9.5 per cent in 2009 from 9.0 per cent a year earlier.

But the picture of the recession is one of stagnation rather than complete catastrophe. The median after-tax income for Canadian families was $63,800 in 2009 — about the same as a year earlier.

In the past, recessions have deepened poverty in Canada for years, and exacerbated the gap between rich and poor. Many analysts feared the pattern was repeating itself.

So far, that doesn’t seem to be the case.

“I thought the poverty rate would be much steeper,” said social scientist John Stapleton, who closely tracks social assistance numbers and saw a large increase during the recession.

Statistics Canada officials and researchers alike recognize there are deep problems with accurately measuring poverty in Canada.

The agency uses three different measures of low income, but does not have an official “poverty line” like in other countries

The most well-known measure is the low-income cutoff rate, but some provincial governments prefer other measures.

Nationally, the low-income cutoff rate shows poverty to be somewhat lower than the other two measures — but all three measures show the low-income rate to be on a slow increase.

While the national poverty picture isn’t pretty, the number of people in the top, middle and bottom echelons of income in Canada remained fairly steady as the recession took hold.

About 55 per cent of Canadians benefitted from an increase in their after-tax income in 2009, while 45 per cent suffered a decline. Before the recession, in 2007, income rose for 58 per cent and declined for 42 per cent.

In some regions, however, incomes were far from stagnant. Median incomes for families in the provinces hardest hit by the recession — Ontario, Alberta and British Columbia — all lost some ground, while other regions at least treaded water.

“The real story lies beneath the all-Canadian figures, and it speaks to the fractured nature of the Canadian economy in the wake of the recession — one part booming, the other part busted,” said Armine Yalnizyan, senior economist for the Canadian Centre for Policy Alternatives.

Poverty also climbed significantly in the West — although there are still more people living on low incomes in the East than in the West.

Low-income rates among seniors fell in 2009, to 5.2 per cent from 5.8 per cent in 2008. Seniors have the lowest incidence of poverty of all the demographics, according to the main Statistics Canada measure of poverty, called the low-income cut-off.

And single mothers have shown remarkable improvement over the past 15 years. While poverty is still high for single moms, at 21.5 per cent, that’s an improvement from 23.4 per cent in 2008, and a continuation of the steady declines noted since 2002.

Now, about 22 per cent children living with a single mother were considered low-income, compared with a troubling 56 per cent in 1996.

StatsCan has not explored why, but other analysts point to the advent of government programs and benefits for children over the past decade, as well as a growing number of women in the workforce, and tougher enforcement of rules for support payments from fathers.

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