Inaction on poverty costs Canada

Hey there, time traveller!
This article was published 13/01/2020 (2122 days ago), so information in it may no longer be current.

The government of Canada is next month expected to announce an updated “market basket measure.” 

Don’t know what that is?

The MBM is the poverty line, the calculated rate where a household’s annual income meets the cost of goods and services necessary for a “modest” or “basic living standard.”

Canada hasn’t updated the rate since 2008, meaning poverty in this country is calculated according to income and prices from more than a decade ago.

Last year, in their new poverty reduction strategy, the federal Liberals adopted the MBM as the country’s official line and committed $12 million to update it.

Not an easy task. Just like how incomes and costs are regionally-based, so is the MBM. Currently, there are 50 MBM rates in the country. In Manitoba, for instance, the rural MBM is $35,127, for small urban centres it’s $36,544, Brandon is $34,246, and Winnipeg is $36,558.

Here is where problems emerge: could your family survive on $3,000 a month?

Even though the MBM is more than 10 years old, statisticians and politicians spend a lot of time relying on it’s conclusions.

For instance, Statistics Canada reports the national poverty rate floats around 10 per cent, or around 3.5 million Canadians. That’s in the top 10 per cent of the world.

The federal Liberals tout they have ushered in the “lowest poverty rate in history,” lifting more then 800,000 Canadians (including around 280,000 children) above the poverty line, marking “an important step toward the government of Canada’s goal to cut poverty in half by 2030.”

Poverty rates are crucial political capital, meaning the announcement of a new MBM could be a game-changer.

The problem, though, those numbers may be the wrong way to understand poverty, according to a new report.

“The MBM has some serious limitations,” says the researchers of the 2019 Report on Child and Family Poverty in Canada, which “contributes to reduced poverty thresholds.”

According to the report card, released by Campaign 2000 (a non-partisan, cross-Canada coalition of more than 120 national, provincial and community organizations “committed to working together to end child and family poverty”), the MBM is based on faulty census and spending data. The group says it does not take into account First Nations communities, specific costs and circumstances such as disabilities or immigration or urban regional differences (think of the costs to live in Winnipeg’s North End compared to Tuxedo).

Also, there is no tangible definition of what a “modest” or “basic living standard” is in Canada, and costs such as child care, prescription drugs or a cellphone aren’t included in MBM calculations (all of which are necessities to life today).

The Campaign 2000 researchers argue the use of these “consumption patterns, prices and statistical practices… significantly underestimates the rate and prevalence of poverty.”

Using tax filing data, which the researchers call “reliable” and more inclusive of communities, the report claims Canada’s poverty rate is higher than previously reported. And children are suffering the most.

“Over 1,350,000 children in Canada continue to live in poverty,” the report states, “with Indigenous children, racialized and immigrant children, and children in female-led single parent families disproportionately affected.”

In addition to nearly one in five (18.6 per cent) of Canadian children living in poverty, Indigenous children experience the worst rates, with 53 per cent on-reserve and 41 per cent off-reserve living under the poverty line. Immigrant children have a poverty rate of 35 per cent and racialized children 22 per cent.

Children in poverty access less opportunities, face more stress and strife, and most often end up with less outcomes and more challenges.

The report suggests an aggressive approach of supporting families by increasing the Canada Child Benefit (as well as reducing barriers to obtaining it), adopting Indigenous-led solutions, and providing universal child care, housing, and pharmacare.

The report also calls for a universal, national minimum wage of $15/hour within “federally regulated industries indexed annually to inflation.”

The researchers found since 1989 “the national poverty has decreased by 3.3 percentage points. This is an average decrease of 0.12 percentage points per year. At this rate, it will take 155.8 years to eliminate child and family poverty.”

This waste of nearly three decades is the cost of calculating Canada’s poverty rate according to the faulty MBM.

It’s also cost money, and lives.

The costs of doing so little to address poverty and its impacts on children come down to whether Canadians want to pay less for this now, or more later.

Helping those caught in cycles of poverty is the right thing to do.

“Despite multiple commitments to end poverty, we still have exceptionally high rates of poverty and unjustifiable levels of income inequality for a country as wealthy as Canada,” says Leila Sarangi, national co-ordinator for Campaign 2000. “We simply cannot afford to fail another generation of children.” 

niigaan.sinclair@freepress.mb.ca