NCPA - National Center for Policy Analysis

THE DEBATE OVER CANADA'S POVERTY LINE

November 16, 2007

Recent statistics from the last decade seem to demonstrate a healthy trend and little-publicized phenomenon: Both the percentage and the absolute number of Canadians living in poverty is shrinking.

Consider:

  • Since 1996, the overall poverty rate in Canada has fallen steeply, from 15.7 percent to 10.8 percent in 2005, the most recent year for which numbers are available; that is a reduction of about one-third.
  • According to Statistics Canada, about 3.5 million people were living below what it calls the low-income cut-off line in 2004; that is a 1.1 million drop from 1996.

John Richards, an economist and professor at Simon Fraser University in British Columbia, says this good fortune signals that anti-poverty initiatives implemented during the last decade are working.

In his report for the C.D. Howe Institute, entitled "Reducing Poverty: What has worked, and what should come next," Richards credits policy changes by the two senior levels of governments that he calls two parts "tough love" and one dose "soft love."

  • In the mid-1990s, several provinces tightened up the rules under which Canadians were eligible for welfare; those deemed employable by a social worker were not recommended for social assistance.
  • At the same time, the reins were tightened around who qualified for unemployment insurance; taken together, these "tough-love" measures were strong incentives for Canadians to get into the labor market.
  • At the same time, Ottawa also rolled out the National Child Benefit, which supplements the salaries of families with low-to-middle incomes; coupled with a rising labor market, the result lead to a drop in the overall number of people living under the low-income cut-off.

Source: Armina Ligaya, "The debate over Canada's poverty line," CBC News Online, November 12, 2007.

 

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