Question Period Note: POVERTY REDUCTION STRATEGY

Update on the Canadian Poverty Reduction Strategy

The Government released Canada’s First Poverty Reduction Strategy in 2018.

The Strategy sets a target of a 20 percent reduction in poverty by 2020 and a 50 percent reduction in poverty by 2030.

The Poverty Reduction Act, which received Royal Assent in June 2019, entrenches the poverty reduction targets into law.

Results from the 2021 Canadian Income Survey show that the overall poverty rate was 7.4 percent in 2021. This means that between 2015 and 2021, close to 2.3 million Canadians have been lifted out of poverty, including 653,000 fewer children and 11,000 fewer seniors.

The Government will continue to support Canadians currently struggling with higher costs of living. The Government remains committed to meeting its 2030 poverty reduction target.

The Government of Canada undertook extensive engagement with Canadians to inform the development of the Canadian Poverty Reduction Strategy. The nationwide engagement process, launched in February 2017, gave Canadians an opportunity to have their say on reducing poverty through a Poverty Reduction Strategy engagement website, including discussion forums and online town halls. The online engagement was complemented by roundtables with stakeholders; Indigenous organizations; businesses; community organizations; academic experts; and Canadians who have experienced poverty.

Three major themes emerged from the engagement and form the pillars of the Poverty Reduction Strategy: 1) Dignity: Lifting Canadians out of poverty by ensuring basic needs – such as safe and affordable housing, healthy food, and healthcare – are met; 2) Opportunity and Inclusion: Helping Canadians join the middle class by promoting full participation in society and equality of opportunity; and 3) Resilience and Security: Supporting the middle class by protecting Canadians from falling into poverty and by supporting income security and resilience.

"Opportunity for All" acknowledges that many Canadians struggle to get ahead because of barriers beyond their control, such as discrimination or unacceptable prejudices. For example, Black Canadians and people from other racialized communities can face discrimination that prevents them from getting a good job despite being qualified, or from advancing in their career. Discrimination based on skin colour can also lead to social exclusion, whether in the workplace or in the community.

Based on understanding the linkages between poverty and discriminatory barriers, Opportunity for All was developed using a Gender-based Analysis Plus (GBA+) lens, in order to take into consideration the variation in experiences and barriers that different groups face related to poverty.

Understanding the unique risk factors, the impact of intersecting experiences and the needs of diverse groups will help the Government to tailor interventions under the Strategy to more effectively address poverty in Canada.

"Opportunity for All" includes long-term commitments to guide current and future government’s actions and investments:

Canada’s Official Poverty Line - For the first time in Canada’s history, the Government set an official measure of income poverty based on Statistics Canada’s Market Basket Measure (MBM). The MBM is calculated based on the costs of a basket of goods and services that individuals and families require to meet their basic needs and achieve a basic, modest standard of living. The Poverty Reduction Act requires the MBM to be reviewed regularly to ensure that basket costs are up-to-date and that basket contents reflect the items required to meet basic needs and achieve a modest standard of living. On June 21, 2023, Statistics Canada released official 2021 poverty estimates based on the Northern Market Basket Measure (MBM-N) for Yukon and the Northwest Territories. Provisional poverty rates for Nunavut based on a proposed MBM-N methodology for Nunavut were also made available for the first time.

A joint Statistics Canada – ESDC review of the MBM was launched in the fall of 2018. This was the second comprehensive review of the MBM. Statistics Canada was responsible for launching the review, updating the statistical methodology, and leading public consultations. ESDC was responsible for determining the scope of the review and setting the policy direction. The new poverty statistics using the 2018-base were released in September 2020. The third comprehensive review of the MBM was launched in spring 2023 and is expected to conclude in 2025.

Poverty Reduction Targets - Canada’s Official Poverty Line is being used to measure progress towards two targets for poverty reduction, using a baseline year of 2015: reduce the rate of poverty by 20% by 2020 (target met in 2018); and reduce the rate of poverty by 50% by 2030. The target to reduced poverty by 50% by 2030 relative to 2015 is aligned with the United Nations Sustainable Development Goals.

Data and Measurement Plan - In addition to the introduction of Canada’s Official Poverty Line, the Government is making improvements to the measurement of poverty that will help address data gaps and track progress. Budget 2018 announced an investment of $12.1 million over five years, and $1.5 million per year thereafter, to address key gaps in poverty measurement in Canada.

Canada's Official Poverty Dashboard has been created to allow Canadians to track progress against the targets and other dimensions of poverty aligned with the three pillars.

National Advisory Council on Poverty - To ensure accountability to Canadians, the Government has established a National Advisory Council on Poverty with a mandate to both advise the Government on poverty reduction and to produce a report on the progress in poverty reduction that will be tabled annually in Parliament. The Advisory Council has completed two annual reports, the latest of which was tabled in the House of Commons in December 2021.

Poverty Reduction Legislation - To cement the commitment to reducing poverty, the Poverty Reduction Act, which received Royal Assent in June 2019, entrenched into law Canada’s Official Poverty Line, the poverty reduction targets, and the National Advisory Council on Poverty.

As part of "Opportunity for All," the Government has also committed to working with National Indigenous Organizations to identify and co-develop indicators of poverty and well-being that reflect the multiple dimensions of poverty and well-being experienced by First Nations, Métis and Inuit.

A number of measures have been taken to help Canada meet its poverty reduction targets. The Canada Child Benefit provides substantial income support to families raising children. The CCB provides support to over 4.3 million families and over 7 million children, putting close to $25 billion, tax free, in the hands of Canadian families each year. Most families receiving the maximum CCB amounts are single-parent families, with over 90% of them being single mothers. For Canadian seniors, the Old Age Security (OAS) program plays a significant role in providing income security. OAS recipients who receive little to no income, other than this pension, are eligible for additional assistance through the Guaranteed Income Supplement.

On September 13, 2022, the federal government announced The Affordability Plan; a suite of measures totaling $8.9 billion in new support in 2022 to help make life more affordable for millions of Canadians:

By enhancing the Canada Workers Benefit at a cost of $1.7 billion in new support for low-income workers in 2022, the Government of Canada put more money in the pockets of close to 3 million Canadians.

This means that a modest-income couple received up to $2,400 more in support in 2022.

At a time of global inflation, most Canada Workers Benefit recipients received this increased support through their 2021 tax return.

Life can get even more expensive as we get older. That is why the government is increasing the OAS pension for seniors 75 and older by 10% as of July 2022.

This means over $800 in new support to full pensioners in the first year, and increased benefits for more than three million seniors.

Because of the Government of Canada’s new affordable, universal early learning and child care system, Canadian families will see their fees reduced by an average of 50% this year.

The government’s plan means savings for families of up to $6,000 in British Columbia and Ontario, $5,610 in Alberta, $4,690 in Nova Scotia, $5,090 in Newfoundland and Labrador, $3,910 in Saskatchewan and New Brunswick, $3,390 in Prince Edward Island, and $2,610 in Manitoba.

In Quebec, which has a child care system of its own, the government’s plan will help create about 37,000 new child care spaces.

The Government of Canada knows that housing is more expensive than ever. As the government works to build more homes, fight unfair practices, and make housing more affordable for Canadians, it will also provide a one-time $500 payment to nearly one million Canadians who are struggling with the cost of housing.

Seeing a dentist is important for our health, but it can also be expensive. One-third of Canadians do not have dental insurance, and in 2018, more than one in five Canadians reported avoiding dental care because of the cost. That is why the government will provide dental care to families with an income of less than $90,000 annually

The government’s dental care program will start with children under 12 years old this year, meaning families will have an easier time accessing and paying for the cost of dental care for their kids.

As the Government of Canada keeps working to make life more affordable for Canadians, important benefits that millions of Canadians count on are indexed to inflation to help keep up with the cost of living.

This includes the Canada Child Benefit, the Goods and Services Tax Credit, the Canada Pension Plan, OAS, and the Guaranteed Income Supplement.

Climate Action Incentive Payments

Because of the Government of Canada’s price on pollution, in the provinces where the federal system applies, a family of four will receive $745 in Ontario, $832 in Manitoba, $1,101 in Saskatchewan, and $1,079 in Alberta in Climate Action Incentive payments for the 2022-23 fuel charge year.

The majority – 8 families out of 10 – will receive more in Climate Action Incentive payments than they will pay as a result of the price on pollution, with low-and middle-income families – who generally produce fewer emissions – benefitting the most.

As the price on pollution increases, Climate Action Incentive payments will also increase. The Government of Canada does not keep any direct proceeds from pollution pricing.

Budget 2022 also included a comprehensive plan to make housing more affordable and investments focused on growing a more resilient economy to deliver more good-paying jobs for Canadians.

Budget 2023, proposed the following measures to help Canadians face affordability challenges:

Grocery Rebate for Canadians –$2.5 billion in targeted inflation relief to the Canadians who need it most. The Grocery Rebate will be delivered through a one-time payment from the Canada Revenue Agency following the passage of legislation. Eligible couples with two children would receive up to an extra $467; single Canadians without children would receive up to an extra $234; and seniors would receive an extra $225 on average.

Canadian Dental Care Plan –$13.0 billion over five years, starting in 2023-24, and $4.4 billion ongoing to Health Canada to implement the Canadian Dental Care Plan. The plan would provide dental coverage for uninsured Canadians with annual family income of less than $90,000, with no co-pays for those with family incomes under $70,000. The plan would begin providing coverage by the end of 2023 and will be administered by Health Canada, with support from a third-party benefits administrator.

Automatic Tax Filing –federal government will increase the number of eligible Canadians for File My Return to two million by 2025 – almost triple the current number. The CRA will also pilot a new automatic filing service that will help vulnerable Canadians who currently do not file their taxes receive the benefits to which they are entitled. CRA will also present a plan in 2024 to expand this service even further. These measures support the goal of increasing the uptake of federal benefits that require the filling of income tax returns among vulnerable groups with lower rates of tax filing.

Building More Affordable Housing –the government announced the reallocation of funding from the National Housing Co-Investment Fund’s repair stream to its new construction stream, as needed, to boost the construction of new affordable homes for the Canadians who need them most.

Making Life More Affordable for Students –$816.6 million in 2023-24 to enhance student financial assistance for the school year starting August 1, 2023.

“We are certainly excited that the vision of this strategy includes working towards a ‘Canada without poverty’ and recognizes the role that systemic discrimination plays as a barrier to people living in poverty.”

– Leilani Farha, directrice générale, Canada sans pauvreté / Executive Director, Canada Without Poverty

“The first poverty reduction strategy is an important new starting point in the battle against poverty in Canada.”

– Anita Khanna, coordonnatrice nationale de Campagne 2000 / National Coordinator, Campaign 2000