It came up only briefly but the subject of Nova Scotians’ lagging family incomes produced one of the livelier exchanges in last week’s leaders’ debate. Responding to a question about plans for the post-pandemic recovery, Iain Rankin recited the familiar pre-pandemic catalogue of Liberal talking points on the economy. He mentioned growth in population, exports, tourism and employment, proof in his view that the Liberal government was “on the right track before the pandemic hit and we need to get back to that.”
“Right track,” interjected an incredulous Gary Burrill. “The truth is that we had going into the pandemic the single lowest median income in all of Canada. We had that after one term of the Liberal party and we have it now after a second term of the Liberal party.” To the NDP leader, Rankin’s notion of the “right track” indicated “a great remove from the reality of people’s daily financial life,” a view shared by PC leader Tim Houston, reporting on the stories of financial struggles from people he’s been meeting on doorsteps.
The latest income data from Statistics Canada, released in mid-July, provided fresh ammunition for the opposition leaders’ attack on the Liberal record. Estimates of family and individual income generated from 2019 personal income tax returns allow for analysis of incomes over the six years of Liberal government preceding the pandemic.
The numbers do indeed show that as Burrill asserted, Nova Scotia had the lowest median income in the country in 2019 and at the end of the first Liberal term in 2017. The numbers also reveal that this is a drop in ranking since 2015, down from third lowest ahead of New Brunswick and Quebec.
The table below presents median after tax family income and ranking for key years relative to other lower income provinces.
Table 1: Change in median after-tax family income
|NS||43,010 (9)||44,760 (8)||46,250 (10)||48,040 (10)||11.7%|
|Que.||42,910 (10)||44,190 (10)||46,980 (8)||49,980 (7)||16.5%|
|NB||43,030 (8)||44,690 (9)||46,610 (9)||48,660 (8)||13.1%|
|PEI||44,020 (7)||45,540 (7)||47,470 (7)||48,570 (9)||10.3%|
Source: CANSIM 11-10-0017-01
A couple of noteworthy points emerge from the data in the table. First, Nova Scotia’s increase of 11.7 percent since 2013 was more than 20 percent lower than the national increase of 14.9 percent over the period. As a result, Nova Scotia’s median family income fell from 90.1 percent of the national average in 2013 to 87.6 percent in 2019.
The second thing to note is the increase in family incomes in Quebec, up 16.5 percent between 2013 and 2019. A complete explanation for that is beyond me, but one hypothesis is that it’s the result of Quebec’s superior day care system allowing more parents to join the workforce.
Indeed, the notion that there’s a connection between improved family incomes and better child care dawned on the Liberal leader in response to the derision with which his opponents greeted the initial recitation of Liberal economic achievements. Ten dollars a day child care, promised for 2025 as a result of a recently announced agreement with the Trudeau government, was belatedly cited by Rankin as evidence of a Liberal commitment to “an equitable recovery.”
But considering how past federal Liberal promises have failed to materialize, Rankin would be more convincing if, recognizing the economic and social benefits of child care, he had committed to going ahead with or without the feds.
The same data that revealed how Nova Scotia has fallen further behind in terms of family incomes also showed, not surprisingly, that contrary to the national trend, poverty has worsened in this province. The percentage of Nova Scotia tax filers and dependants in low income went up between 2013 and 2019. Nationally the poverty rate dropped from 17.8 percent in 2013 to 16.5 in 2019 while in Nova Scotia it went up from 18.7 to 19.3 percent.
The rate for those under 18 did decline in Nova Scotia over the six-year period, from 26.5 to 24.3 percent. But the drop here was much less than the decline in the national rate, which went from 22.2 to 17.6 percent.
The poverty issue came up briefly during the leaders’ debate, a passing reference to Nova Scotia’s dubious achievement of the third highest rate of child poverty in the country. This would not be news to those who follow the annual reports on child poverty put out by the Canadian Centre for Policy Alternatives. However, it would be a jolt to anyone trying to defend the Liberal record on child poverty based on a report earlier this year from Statistics Canada showing significant improvement in rates of child poverty in Nova Scotia since 2017. And the difference in ranking is confusing for everybody.
Which numbers to go by is a conundrum I’ve written about before, most recently in April. Twice a year Statistics Canada puts out data on incomes derived from different sources and using different metrics to calculate rates of low income, i.e. poverty. The March stats, based on the Canadian Income Survey (CIS) and using the Market Basket Measure (MBM) we’ll call apples. The summer stats, source of the data in Table 1, are based on tax returns (T1 Family File) and use the after-tax Census Family Low Income Measure (CFLIM-AT). Call those oranges.
You can’t compare apples and oranges but you can choose your fruit. If the poverty issue becomes prominent during the election campaign, expect the Liberals to opt for apples and the opposition to choose oranges, as they did in the debate.
Apples sweet, oranges sour
Looking first at apples, the March stats showed reductions in the rates of child poverty across the country in the wake of increased transfers to households through the Canada Child Benefit. Nova Scotia had the sixth highest rate of child poverty in 2019, better than the three other Atlantic Provinces, Ontario and Saskatchewan. At 11.7 per cent the Nova Scotia rate was higher than the national average of 9.7 per cent. But the drop from 19.4 per cent in 2017 was big, and the number of Nova Scotians 17 and under in low income declined to 19,000 in 2019 from 31,000 in 2017.
Those numbers look good, but come with a caveat. As discussed here and here Stats Canada makes no claims to infallibility for the income and poverty numbers in the CIS, especially at the provincial level. While the data quality of the national numbers is rated “very good,” because of sample size, the provincial child poverty numbers for 2019 are rated E “use with caution.”
The oranges data is more reliable because it comes from actual tax forms. It also uses the internationally recognized Low Income Measure, producing rates significantly higher than those reported through the Canada Income Survey and the Market Basket Measure. And because the series goes back to 2000 it can be used to assess the entirety of the Liberal record on poverty. The MBM – declared Canada’s official poverty line under the Trudeau government – goes back only to 2015.
So comparing oranges with oranges to assess the Liberal record, third-highest rates of child poverty and lowest median family incomes are only the half of it. As mentioned previously, the poverty rate dropped between 2013 and 2019 but Nova Scotia’s went up from 18.7 to 19.3 percent. As a result, we went from being tied with Ontario for the third highest rate in 2013 to having the second highest rate all to ourselves in 2019.
When it comes to the decline for those under 18 from 26.5 to 24.3 percent between 2013 and 2019, there’s a worm in that particular apple. Nova Scotia had the third highest rate in 2019, just as in 2013, but progress in reducing child poverty lagged behind most other provinces, including Manitoba and Saskatchewan, perennially worse than we are at fighting child poverty. Table 2 shows rates in 2013 and 2019 and the percentage point reduction for each province.
Table 2: Change in child poverty rates by province
|2013 rate||2019 rate||PP reduction|
Source: CANSIM 11-01-0018-01
As the last two lines in the table show, only Alberta (tied) and Newfoundland and Labrador, matched Nova Scotia’s poor 2.2 percentage point reduction in child poverty under the Liberal government. And both of those provinces a) started from a better place and b) were hit directly by the drop in oil prices. (Note as well that Quebec had the lowest rate in the country in 2019 – the childcare effect again?)
I could go on to detail how the modest gains in reducing poverty among he young has been offset by an increase in the poverty rate among those 65 and over. Nationally the rate was up by 2.5 percentage points between 2013 and 2019, with Nova Scotia showing the third highest increase among provinces. But even without delving into that development, the evidence is clear – the Nova Scotia Liberal record on poverty reduction has been a bust and deserves more than passing reference in the leader’s debate.
So far the NDP is having the most to say about poverty. The party’s platform contains headlines like “Eliminate homelessness” and “Make Nova Scotia the first jurisdiction in North America to eliminate poverty.” Beyond those aspirational headlines, the specific measures are familiar – raising the minimum wage to $15, increasing income assistance rates and rent control.
While the NDP gives poverty significant space in the platform the other major parties steer clear. If the word poverty appears in Conservative 131-page Conservative platform I’ve yet to find it. When the incomes issue arose during the leader’s debate, Houston indicated that the Tories’ gimmicky “Better Pay Cheque Guarantee” would solve the problem.The Liberals have paid a bit more attention. Their “affordability and equity” platform released on the weekend was a grab bag of previously announced programs, including ten dollar day care, and modest increases in income assistance and affordable housing.
It seems to be generally accepted among political pros that you don’t win votes by talking about poverty and the poor, which is why we hear, in Liberalspeak, about “the middle class and those working hard to join it.” It would be a good thing if this election – in which there are clear policy differences on poverty issues between the NDP and the other major parties – dispelled that particular piece of conventional political wisdom.