In response to the “everything is worse” rhetoric of the Poilievre party I committed a while ago to ferret out examples of how, after eight-plus years of Justin Trudeau some things are objectively getting better. One thing I had in mind was the poverty rate which dipped significantly when the Liberals introduced the Canada Child Benefit (CCB) at the beginning of their mandate. As is their habit, the Liberals called the drop “historic.”
The benefit kicked in on July 1, 2016 providing a maximum tax-free annual benefit of $ 6,400 per child under the age of six and $5,400 for kids aged 6 through 17. Indexed to inflation, the benefit will rise to $7,437 and $6,275 this July 1. Families with incomes of less than $34,863 receive the maximum amounts, with payments falling as income rises.
With the introduction of the CCB the overall rate and the child poverty rate drifted down between 2015 and 2019 before dropping drastically with the influx of pandemic benefits in 2020-21. But yoyo-like, rates jumped in 2022 with withdrawal of benefits reducing incomes and the rise in the cost of living increasing expenses.
But despite that dramatic reversal of fortunes the latest Canadian Income Survey (CIS) released last week by Statistics Canada shows that even with the big year-over-year increase in 2022, overall poverty rates were significantly lower in 2022 than they were when the Liberals came to power, with the rate of child poverty down by almost 40 percent.
Table 1: Poverty rates in Canada -Market Basket Measure
| Population | 2015 | 2019 | 2020 | 2021 | 2022 | Change 2015-22 |
| Overall | 14.5% | 10.3% | 6.4% | 7.4% | 9.9% | -31.7% |
| Under 18 | 16.3% | 9.4% | 4.7% | 6.4% | 9.9% | -39.3% |
Source: Statistics Canada Table 11-10-0135-01
However, the fact that poverty rates were well down from 2015 provided little comfort in 2022 when more than one million Canadians – including 273,000 children – fell below the official poverty line. Nova Scotians had the worst of it.
Nova Scotia nosedives
Nova Scotians’ median income – the level of income at which half the population had higher income and half had lower – dropped nine percent in 2022, from $64,300 to $58,500. That was more than double the national decline in the median income’ and the worst in the country.
The drop in median income was reflected in poverty levels- 47,000 more Nova Scotians had poverty incomes in 2022, an increase of 57 percent from 2021. At 13.1 percent, Nova Scotia’s poverty rate was the highest in the country, just as it was in 2016, 2018 and 2020.
The increase in child poverty was even greater – up from 10,000 children in 2021 to 24,000 in 2022. The resulting rate, to 14.0 from 6.1 percent, was also the highest among the provinces. But the shocking year-over-year jump in the number of children living in poverty in Nova Scotia needs some context.
As I reported a year ago the unusually low 2021 child poverty estimate of 6.1 percent for Nova Scotia was given an “E” rating by Statistics Canada. That was a warning for interested parties to “use with caution” – due mainly to the limited sample sizes in smaller provinces like Nova Scotia.
The caution was appropriate. Data for 2021 from the T1 Family File (T1FF), released last July, told quite a different story. Compiled mainly from tax returns, the T1FF has more reliable estimates. Rather than having the second lowest rate in the country as reported by the CIS, the T1FF-based calculation put Nova Scotia in its accustomed position – third highest rate of child poverty, with only Manitoba and Saskatchewan showing higher rates.
Given the “use with caution” warning on the 2021 data, the year-over-year increase should also be approached cautiously. A better way to get a sense of progress – or the recent lack of it – on poverty reduction in Nova Scotia is to go back to 2015 when the Canada Child Benefit was introduced. StatsCan gives data quality for that year a “D” for acceptable, which is also the case for 2022 as well as 2018.
As Table 2 shows, using those years, the CIS shows a significant reduction in poverty rates in Nova Scotia, albeit one that is less than national average shown in Table 1.
Table 2: Nova Scotia poverty rates for selected years
| 2015 | 2018 | 2022 | Change 2015-22 | Canada 2015-22 | |
| Under 18 | 20.6% | 15.8% | 14.0% | -32.0% | -39.3% |
| All ages | 16.8% | 13.8% | 13.1% | -22.0% | -31.7% |
Source: Tables 11-10-0018-01
At 14 percent in 2022, Nova Scotia’s child poverty rate was 41 percent higher than the national rate of 9.9 percent. In 2015 Nova Scotia’s child poverty rate was only 26.4 per cent higher than the national average. So even though there was some improvement in Nova Scotia over the first seven years of the Trudeau government, the province lagged behind the national rate of decrease.
The 2023 picture
A problem with using the Canadian Income Survey to draw any conclusions about the record of the Trudeau government – or for that matter the Houston government – is that by the time survey results come out they are already more than a year old. The latest year-over-year statistics, which attracted some negative publicity this week, described deteriorating conditions in 2022 as pandemic benefits expired and inflation kicked in.
Until the next issue of the Canada Income Survey comes out this time next year the unfavourable numbers will provide grist for the mill for anti-poverty advocates and opposition politicians alike, including Pierre Poilievre, that most unlikely champion of the downtrodden. There is no clear indication whether the 2023 poverty rates will be better or worse.
In 2023 Canada avoided the recession predicted by economists – that is we did not have two consecutive quarters of no economic growth. However, those same economists pointed out that the only reason there was any growth at all was the unprecedented increase in population. Because the population increase exceeded the growth in GDP, Canada’s per-capita GDP dropped by about 1.8 percent in 2023.
Weighing against the bad news about slower per-capita growth are two more positive indicators. First off, inflation wasn’t as bad in 2023. The overall inflation rate was up only three percent, with both food and shelter increases lower than 2022. Secondly, household disposable income rose a bit faster than household spending in 2023, enabling households to increase net savings.
So maybe 2022 was a blip and the poverty reductions resulting from the Canada Child Benefit will be the basis for more progress – improving the CCB or getting some foot-dragging provincial governments like Nova Scotia’s to do more. In the meantime, it is fair to say that based on the latest available evidence poverty in Canada is clearly not worse than it was in 2015.
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