The Canadian poverty landscape is influenced by a diverse range of contexts, including social, economic, and demographic trends.

Housing Affordability

From the nation’s major urban centres such as Vancouver and Toronto to more rural remote communities, housing affordability is a significant issue that is affecting millions of Canadians’ standard of living, but particularly those living near and below the poverty line. Skyrocketing housing costs make it nearly impossible for individuals and families with low incomes to find adequate and affordable housing.

Indigenous Poverty

The data is clear: Indigenous peoples experience higher rates of poverty than non-Indigenous Canadians. Systemic discrimination, the legacy of the residential school system, and limited access to employment opportunities all play a major role in this concerning reality. Indigenous leaders have emphasized that curbing Indigenous poverty is integral to improving health and social outcomes and essential to advancing reconciliation.

income Inequality

According to experts, financial inequality in Canada has been steadily rising for the past two decades. Beyond raising important questions about social justice and fairness, rampant financial inequality means people struggle to make ends meet and cannot share in the benefits of economic growth. One indication of how inequality is presenting new challenges is that food banks are seeing record-high numbers despite unemployment being the lowest on record.

Changing Demographics

Canada’s population is rapidly aging, and a growing number of senior citizens are projected to rely on government programs like Guaranteed Income Supplements (GIS) and Old Age Security (OAS). At the same time, increasing immigration targets mean large numbers of newcomers will be coming to Canada and finding themselves in a challenging labour market and dealing with rising costs of living. This has the potential to dramatically increase poverty rates.

While the examples above are not an exhaustive account of Canada’s poverty landscape, any effort to address poverty in Canada must foreground these contexts and trends.

Poverty in Canada is a long-standing issue, and it has recently been exacerbated by various external and internal factors such as the COVID-19 pandemic, Russia’s invasion of Ukraine, the affordable housing crisis, and inflation. The multitude of challenges facing the Canadian population has led to 43% of Canadians indicating that they feel financially worse off than they did a year prior.

The COVID-19 Pandemic

The pandemic deepened the financial struggles of vulnerable populations, including marginalized groups, low-wage and precarious workers, and people living in areas where average incomes are low. Furthermore, it brought to the forefront the importance of having strong and accessible social support programs that can provide basic necessities such as housing, food, and health care.

Global Food Crisis

The crisis in the global food system, which started during the pandemic and worsened in part because of the invasion of Ukraine, affected the production and trade of essential crops such as wheat, corn, and soy, leading to higher food prices for Canadians. It also led to food shortages in some regions, making it more difficult for people to access affordable and nutritious food.

Russia’s Invasion of Ukraine

Russia’s invasion of Ukraine has also caused gas prices to soar, putting an even greater burden on people who rely on their vehicles to get to and from work.

Affordable Housing Crisis

Housing has been among the top issues in Canada for several years. As the cost of housing skyrocketed through the pandemic, the situation went from bad to worse. Average rent prices in Canada are now over $2000 a month, representing an increase of more than 20% in the last two years. And while housing prices are also rising (now well above a national average of $700,000), renters are struggling significantly, and too little is being done to help them. Nearly 70% of food bank clients live in rental housing, which indicates a severe struggle with food insecurity amongst low-income individuals who rent.  Beyond food bank clients, 31% of the general population agrees that its hard to keep up with the cost of rent.

Across Canada, 36% of the country is paying more than 30% of their income on housing and 13% are paying more than 50% of their income to keep a roof over their heads. These rates are unacceptable and demonstrate that the amount people pay towards housing is taking up too much of a household’s budget.

Inflation and the Cost of Living

Inflation has also been a major cause of financial worry and stress for Canadians, particularly people who have low incomes and those experiencing poverty. It has been caused by a combination of factors, including supply chain disruptions, higher energy costs, and speculation. These factors have all contributed to the rising cost of goods and services, making it more difficult for individuals and families to make ends meet.

As the cost of living rises and people’s wages remain stagnant, there is less money to pay for fixed costs like groceries, housing, and transportation. For households with incomes below $75,000 annually, as much as 56% of income is being dedicated to fixed costs outside of housing. As mentioned previously, with so many Canadians spending an additional 30% or 50% of their income on housing, many families would have to spend well over 100% of their income just for the bare necessities.

Incomes are so stretched that roughly 22% of Canadians couldn’t afford to cover an unexpected cost of $500 and 9% cannot pay their bills on time. Moreover, reducing the cost of groceries and utilities are 2 of the top 3 issues for Canadians at 95% and 85% agreement respectively.

With all of these issues present, more Canadians are relying on government support systems to help keep them out of poverty. Unfortunately, 40% of Canadians find the tax system difficult to navigate and don’t know which benefits they are eligible for. For those receiving benefits, 46% report that the rates are not high enough to help them keep up with the cost of living. With that, 47% of Canadians think there is a need to expand social security benefits.

Canada has made significant strides in reducing poverty since 2015. According to the 2021 Canadian Income Survey released by Employment and Social Development Canada in May 2023, the poverty rate has substantially decreased, from 14.5% in 2015 to 7.4% in 2021. This represents the largest five-year decrease since 1976. The drop can be attributed to the swath of government programs made available to Canadians since 2015. The number of Canadians aged 15 and over who received government transfers in 2020 rose to 84%, a notable increase from the 69% reported in 2015. These government programs included a range of benefits, such as OAS/ GIS, Canada Pension Plan (CPP)/Quebec Pension Plan (QPP) benefits, EI benefits, and child benefits.

In 2018, the Government of Canada released Opportunity for All: Canada’s First Poverty Reduction Strategy. The goal of the strategy was to reduce the poverty rate in Canada by 50% by 2030. The federal government has also taken various measures to address poverty and income inequality, including, during the pandemic, implementing social support programs such as the Canada Emergency Response Benefit (CERB) and the Canada Recovery Benefit (CRB).

The government has also pledged to increase investments in affordable housing, infrastructure, and social programs. In response to the inflation crisis, the Bank of Canada has raised interest rates to combat inflation, and the government has promised to take further measures to support Canadians with low incomes. In its 2023 budget, the federal government proposed modest measures to address the inflation crisis. To help Canadians deal with the challenge of the rising cost of groceries, the government introduced a $2.5 billion one-time “grocery rebate” for eligible residents. In real terms, eligible couples with two children received up to $467 delivered through the Canada Revenue Agency, single Canadians without children up to $234, and seniors an average of $225. While this addresses the short-term concern, experts are predicting a continuous rise in food prices over the next year. More needs to be done to ensure food remains affordable for all Canadians.

The impact of COVID-19 continues to be felt in Canada, with vulnerable populations still struggling to make ends meet. The crisis in the global food system following the invasion of Ukraine is expected to continue, leading to higher prices for essential goods. While inflation is expected to decrease in the coming months, the government will need to continue to implement long-term solutions to address poverty and income inequality, including expanding accessible social support programs and investments in affordable housing and infrastructure.

Finally, Canada’s changing demographics and immigration patterns mean there will be greater potential for poverty to rise in the coming years. By anticipating these developments and crafting bold new policies and targeted programs that address the root causes of poverty, policymakers can ensure that Canada’s future is one in which all Canadians have the support and access to resources they need to achieve economic stability.

Improving the Adequacy of Supports for Those in Need

1. Given the potential uncertainty of the timeline for Bill C-22 (now with Royal Assent) and a possible upcoming federal election at some point over the next 12–24 months, all parties should commit to working collaboratively with whomever is in government to bring a final benefit in to place no later than early 2025, regardless of the timing of an election. It will be crucial to develop the benefit with implementation in mind to avoid any slowdown in the work needed within the public service should it be implemented during or around a federal election.
   • The ultimate Canada Disability Benefit (CDB) design should provide adequate payments that are in parity with similar robust benefits like benefits for seniors, and ideally should provide value equal or above the MBM line.
   • In defining the MBM line for people with disabilities, the government and Statistics Canada should study and account for the impact of inflation and higher costs of care and basic needs on people with disabilities.
2. Since the onset of the pandemic, the federal government has provided multiple one-time top-ups to the GST tax credit and other tax-related programs either to help Canadians avoid loss of income during the pandemic or to address the subsequent affordability challenges resulting from inflation and the economic restart. The government should make a clear commitment that these supports will continue until inflation has returned to the 2 per cent target.
   • Having made these payments on a one-off basis over the last four tax years, the government should assess the impact the payments have had on various demographic groups. This should inform future work on how to improve tools such as the Canada Child Benefit and Canada Workers Benefit. Finally, the findings should be used for broader objectives to make the poverty reduction progress experienced during the pandemic permanent.
3. In the short term, allow all households with low incomes to have access to the non-cash benefits that are currently only available to those on social assistance (e.g., childcare subsidies, affordable housing supplements, drug and dental insurance).
4. Make single adults with a low income a priority consideration in all future poverty reduction measures, including an expanded and modernized EI, to ensure that this population is no longer left behind.
   
   • As part of this, the government should set a clear timetable for when it will bring forward EI modernization reforms, which have been continually promised since the 2020 Speech from the Throne.
5. As the federal and provincial Ministers of Health move forward with shared federal health priorities, as outlined in the funding framework agreed to earlier this year, further work is required to develop new mental health measures that include a specific focus on the impact of low incomes on mental health and the acute needs of single working-age adults, people with disabilities, and people living with addictions.
6. Ensure all federal benefits are indexed to inflation and that agreements with provincial governments explicitly forbid claw-backs of provincial social supports for new federal benefit programs.

Affordable Housing

1. 1. Examine the potential for a national rent assistance program, delivered collaboratively with the provinces and territories as part of the federal-provincial housing agreements.In the development process, the government should consider:
      • A model based on Manitoba’s Rent Assist program should be considered.
      • Exploring the National Housing Accord report on affordable rentals, recommendation 9.
   2. The federal government should fulfill its promise to develop tools that address the costs of housing, including a review of the tax treatment of residential real estate investment trusts (REITs) and other large corporate owners.
      
      • As part of this work, the government should consider options to preserve or limit tax benefits to help establish conditions that deepen affordability for those currently paying market rent and/or provide guidelines on rent increases and renovictions.
   3. Leveraging its inventory of public lands, and working in collaboration with municipalities and provincial governments, the federal government should set a target for opening up properties for the possible conversion or development of affordable housing. As part of this, it should consider innovative approaches such as using Canada Mortgage and Housing Corporation, Canada Lands Company, or similar entities, to assess the potential for a public development corporation that would enable governments to fully leverage their balance sheet, reduce the cost of construction, and in turn make housing more affordable. The government should also establish a national acquisition fund that complements the recently announced Housing Accelerator Fund to support community-targeted funding for the acquisition of affordable housing. In other words, provide capital funding (loans and grants) to non-profits so they can purchase and provide rental properties at or below the median market rent. 
   4. Introduce new investments to help address an important omission of the National Housing Strategy and build supportive housing for people with mental and physical health disabilities, particularly among populations that are marginalized or living on low incomes.
   5. Work with the provinces and territories to develop targeted and coordinated tax policies to spur the development of purpose-built market rental housing and complement the recent decision to remove the GST from new rental housing construction—a policy that previous HungerCount reports had advocated for. Access to tax benefits should be conditional on clearly set national targets for affordability associated with these projects.
   6. Introduce an action plan to support students—particularly international students—who are struggling with housing and food insecurity. The plan must include:
      1. A funding stream for universities to build and develop more affordable student housing.
      2. Awarding an appropriate amount of student permits to institutions based on their ability to prove that adequate affordable housing is available to all international students.
      3. Collecting data on student housing through Statistics Canada to inform better decision making.

Workers with Low Incomes

1. 1. 1. Develop a new program within EI that specifically supports older workers (aged 45–65) who lose employment at a later age and who may need specific training and education programs to help them re-enter the modern workforce.
      2. Permanently broaden the EI qualifying definition of “employment” to include self-employed and precarious work.
      3. Review and reduce the number of qualifying “hours of employment” needed (currently between 420 and 700 hours of insurable employment) to better reflect the nature of modern jobs and working situations.
         • Include a specific stream for seasonal workers who may work as few as 12–16 weeks a year.
      4. Immediately expand the Working-While-on-Claim (WWC) provisions in EI to allow workers to retain more of their income from temporary/part-time work while on EI without losing benefits or having their income clawed back.
      5. Extend the maximum duration of EI benefits beyond 45 weeks to 52 weeks, followed by a staggered reduction in cash benefits while retaining access to non-cash EI supports (such as training and education) so that people are not forced into our broken and grossly inadequate provincial social assistance system once their EI benefits run out.
      6. Work with provinces and territories to reduce the claw-backs and improve harmony between social assistance and EI.
      7. To better support workers who are currently employed and have a low income:
         
         • Improve the Canada Workers Benefit (CWB) by increasing the maximum payout, especially for those earning below the poverty line and ensure this integrates effectively with similar provincial tax credits such as Ontario’s Low-Income Individuals and Families Tax Credit (LIFT) and others.
         • Introduce government incentives to encourage businesses to pay living wages to all employees.

Northern and Remote Food Insecurity and Poverty

1. 1. Since 2015 the government has twice revised the Northern Residents Deduction (NRD) to assist people in the North with the high cost of living. While this is a welcome step, as a tax deduction it is most beneficial to those with higher incomes. The federal government should examine options for how the NRD can be transformed into a progressive and refundable design. This would better help those in need and reduce poverty in areas where it is highest, while maintaining a basic degree of assistance for all Northerners in recognition of the differential cost of living. If developed properly, the new and improved NRD could be the basis for a regional minimum income floor.
   2. In collaboration with Indigenous communities and organizations, the government must continue to review Nutrition North Canada to determine why the program is only minimally achieving its objectives of reducing the cost of food in the North and work toward exploring innovative ways the program can better support communities.
   3. Working in partnership with local groups, create a Canada-wide Northern development and revitalization plan that is focused on the research and development of regional programs that aim to train workers and grow commerce in strategic economic sectors like tourism, natural resources, and local/regional business.
      • As part of this plan, work with territorial and Indigenous governments to develop a long-term community infrastructure vision that will close gaps in access to housing, food production, and broadband Internet to ensure a degree of parity with the standard of living that Canadians in the south enjoy.
   4. Develop funding for a national program of community-based representatives whose focus is on connecting their communities to funds and resources that are available to communities in the North, yet too often go unused for lack of awareness. These representatives will provide an opportunity for knowledge sharing between communities across the North.
   5. As part of the federal government’s Critical Minerals Strategy, there must be a clear focus on the development of community infrastructure in northern communities such as housing, educational institutions, and broadband Internet; the localization of economic and community benefits so that local residents benefit from these projects; and the development of incentives and strategies to retain capital in the North and reduce the reliance on temporary workers.
   6. Offer additional training for remote work skills and funding for the procurement of work-from-home supplies.