Pandemic benefits reduced child poverty
OTTAWA — A new report says pandemic benefits that were rolled out to cushion the blow of COVID-19 lockdowns significantly reduced the child poverty rate.
The analysis by the anti-poverty group Campaign 2000 found that 13.5 per cent of Canadian children were living in poverty in 2020.
That is down from 17.7 per cent in 2019, and 24.2 per cent 20 years earlier.
The group notes this is the largest decline since the federal government pledged to end child poverty in 1989, and accounts for nearly half of the decline in the poverty rate seen over two decades.
Campaign 2000 is offering 50 recommendations to further reduce poverty, including creating a supplement to the Canada Child Benefit that would target the poorest families.
“We cannot go backwards. Poverty is a policy choice, and the federal government has the choice to build back better,” said Leila Sarangi, the national director of Campaign 2000, during a news conference on Tuesday.
A Statistics Canada report published last year also highlighted how pandemic benefits helped narrow income inequality, as lower-income households saw their after-tax income grow at a faster rate than others.
Between 2015 and 2020, the lowincome rate recorded its largest decline, falling from 14.4 per cent to 11.1 per cent.
Statistics Canada said the decline was largely driven by higher government transfers both through pandemic benefits and the Canada Child Benefit.
Miles Corak, an economics professor at the City University of New York, said the COVID-19 benefits successfully reversed inequality caused by the pandemic.
“If you look back at the data, we haven’t seen such a powerful role for government transfers pushing against these forces since about the mid-1990s,” Corak said.
This shows income transfers are an effective tool for smoothing out inequalities, he said, but improving labour market outcomes for workers is also important.
Corak is among many economists who caution against expanding temporary foreign worker programs, which help businesses bring in workers from abroad to fill vacancies. Given these jobs tend to be low-paying, economists are concerned about the wages.
“The government should think about how it’s going to shape the (labour) market to higher productivity, more pro-poor growth,” he said.
“Because there are limits to the fiscal transfer capacity of governments.”