Question Period Note: CHILD POVERTY

Campaign 2000 report on child and family poverty in Canada

Our Government believes that, in a country as prosperous as Canada, all Canadians, and especially children, should have a real and fair chance to succeed. This is why our Government introduced the first Poverty Reduction Strategy in 2018 and has taken actions to tackle poverty through measures such as the introduction of the Canada Child Benefit (CCB).

Our Government is committed to giving families more money to help with the high costs of raising their kids. Because it is tax-free and based on income, the CCB provides more support to those who need help the most. The CCB is also indexed to keep up with the cost of living.

Our Government has helped lift hundreds of thousands of children out of poverty through the CCB, and the poverty rate for children has been decreasing since 2015.

IF PRESSED ON THE POVERTY IMPACTS OF ENDING EMERGENCY BENEFITS:

The CCB is having a significant positive impact on families with children. According to the most recent survey data, the 2020 Canadian Income Survey released on March 23, 2022, the poverty rate for children decreased from 16.3 percent in 2015 to 9.4 percent in 2019, and to 4.7 percent in 2020. While the decrease in children’s poverty between 2019 and 2020 is largely attributed to temporary COVID-19 emergency benefits (including additional payments made through the CCB), the trend is clear and the poverty rate for children has been decreasing since 2015.

IF PRESSED ON INTERACTIONS BETWEEN CCB AND EMERGENCY BENEFITS

The Canada Child Benefit is income tested and based on the income from the prior year. This ensures that the benefit targets support to those who need it most.

It is important to note that low income families have been shielded from any decline in their CCB, again reflecting the income tested nature of the CCB.

Campaign 2000 Report

Campaign 2000, a national coalition that advocates for Canadian children and families, released the report entitled Pandemic Lessons: Ending Child and Family Poverty is Possible, on February 14, 2023, focusing on child and family poverty in Canada.

The report claims that during the global pandemic, rates of child poverty in Canada were reduced by a record 40%. Using custom tables of tax filer data from 2020 (the latest available) and the Census Family Low Income Measure, After Tax (CFLIM-AT), the report card finds that child poverty fell to 13.5% down in 2020 from 17.7% in the previous year. Campaign 2000 recognizes that this drop is largely a result of temporary pandemic benefits, and policies such as the Canada Child Benefit (CCB).

The report highlights that child and family poverty disproportionately affects marginalized communities. It notes that between 2015 and 2020, poverty rates for First Nations, Inuit and Métis children fell considerably, but remain significantly higher than rates for non-Indigenous children.

Among the many recommendations offered in the report to help further reduce poverty, some suggested poverty reduction measures include:

Implement a Canadian Livable Income for working age individuals to replace the Canada Workers Benefit;

Research and develop a parallel community-based benefit eligibility and delivery system for low income, marginalized non-tax filers. Delivery methods can include prepaid reloadable credit or debit card systems or mobile and digital transfers. Any cash transfer system must be co-created and co-led by locally trusted organizations that can help to mitigate barriers to government systems faced by marginalized groups; and

Invest $2 billion into the Canada Social Transfer (CST) to support social assistance adequacy.

Background on Files Related to Issues Raised in the Report:

Inequality

The latest Campaign 2000 report, Pandemic Lessons: Ending Child and Family Poverty is Possible, has a chapter dedicated to income inequality. The report claims that up until 2020, income inequality had persisted at high levels for two decades. Pandemic benefits, however, helped to close the gap. Rising inflation, increased corporate profits and the rollback of pandemic benefits suggest that reductions in poverty and inequality will not be sustained.

Sustainable Development Goal (SDG) 10 aims to reduce inequality within and among countries. 

Canada’s ambition for this goal is to reduce inequalities and ensure Canadians live free of discrimination. Income disparities between and among diverse groups of people, including Indigenous peoples and non-Indigenous Canadians, and men, women and gender diverse people, are expected to decrease over time. Fewer Canadians will report being discriminated against or treated unfairly. Some of the many steps Canada is taking to achieve this goal include:

The Government of Canada is working with provincial, territorial, and Indigenous partners to build a Canada-wide, community-based Early Learning and Child Care (ELCC) system, so all families have access to high-quality, affordable, flexible and inclusive early learning and child care no matter where they live. This includes investments under the Enabling Accessibility Fund to make Early Learning and Child Care systems more accessible and inclusive for persons with disabilities.

The Social Development Partnerships Program (Children and Families) makes strategic grant- and contribution-based investments to support the creation of more responsive programs, services or tools to better serve the diverse needs of children and their families, particularly those living in disadvantaged circumstances.

Canada Child Benefit

The Canada Child Benefit (CCB), which is delivered by the Canada Revenue Agency, is:

Simple—families receive a single payment every month;

Tax-free—families will not have to pay back part of the amount received when they file their tax returns;

Targeted to those who need it most— low- and middle-income families receive more benefits, and those with the highest incomes receive lower benefits; and

Generous— on average, families benefitting from the CCB received about $7,300 in CCB payments for the 2020-21 benefit year.

In the previous benefit year (July 2020 to June 2021), the CCB provided support to about 3.5 million families and over 6 million children, putting over $25 billion, tax free, in the hands of Canadian families. Most families receiving the maximum CCB amounts are single-parent families, with over 90% of them being single mothers.

To ensure that the CCB continues to help Canadian families over the long term, since July 2018, the CCB has been indexed to keep pace with the cost of living.

Indexing the CCB means Canadian families will have more money to help keep up with rising costs for things like healthy food, sports programs and music lessons. With this increase, in the 2022–2023 benefit year, the maximum annual benefit is $6,997 per child under 6 years of age, and $5,903 per child aged 6 through 17. Families with less than $32,797 in adjusted family net income receive the maximum benefit. Both the maximum benefits and the income thresholds will be indexed in future years.

To provide support for Canadian families facing hardship as a result of the COVID-19 Pandemic, the Government provided additional temporary support, including:

A one-time enhancement to the CCB payment amounts of up to $300 per child for most families, in May 2020; and,

Up to $1,200 in 2021 for each child under the age of six for families already receiving the CCB, in the form of the temporary CCB young child supplement.

The Children’s Special Allowance (CSA) is a tax-free monthly federal benefit paid in respect of children under the age of 18 who are in the care of federal, provincial/territorial or First Nations agencies and institutions. The CSA is equivalent to the maximum (unreduced) amount of the CCB, plus the Child Disability Benefit, where applicable. The one-time enhancement of $300 to the CCB in May 2020 also applied to the CSA – that is, the CSA was increased by $300 per child for the 2019-20 benefit year, delivered as an increase to a CSA payment for a child for the month of May.

To ensure that all eligible families are able to access the CCB, and other federal benefits, Budget 2018 provided $17.3 million over three years, starting in 2018–19, to expand outreach efforts to Indigenous communities, and to conduct pilot outreach activities for urban Indigenous communities. In 2020, ongoing funding was provided to make these initiatives permanent and, in 2021, the Government worked to make simplified credit and benefit returns and CCB forms more widely available to Indigenous peoples.

The Department of Finance is the policy lead on the CCB, and the Canada Revenue Agency administers the benefit. ESDC contributes to ongoing policy development by working collaboratively with them and with provincial and territorial governments, to help ensure that the CCB continues to result in strengthened systems of support for all low- to middle-income families with children across Canada.

Canada’s First Poverty Reduction Strategy

On August 21, 2018, the Government of Canada released Opportunity for All: Canada’s First Poverty Reduction Strategy.

Opportunity for All includes a target to reduce poverty by 20 percent by 2020 and 50 percent by 2030 relative to 2015 levels. These targets are legislated under the Poverty Reduction Act.

The Government met its interim target of reducing poverty by 20 percent by 2020. In fact, according to the Canadian Income Survey, the poverty rate decreased by 30 percent from 2015 to 2019. This underscores the progress being made towards the Government’s goal to cut poverty in half by 2030.

Results from the 2020 Canadian Income Survey show that the overall poverty rate in Canada, as measured by Canada’s Official Poverty Line, was 6.4% in 2020, down from 10.3% in 2019. This represents a 56% decrease in the poverty rate compared to 2015 (14.5%), the baseline year for measuring results towards Canada’s legislated poverty reduction targets. There were close to 2.7 million fewer people living in poverty in 2020 compared to 2015.

The official poverty rate for children under 18 decreased between 2015 and 2020. There were approximately 333,000 children in poverty in Canada in 2020 (4.7%), meaning that approximately 782,000 fewer children were living in families in poverty in 2020 relative to 2015.

The decrease in children’s poverty between 2019 and 2020 is largely attributed to temporary COVID-19 emergency benefits.

Summary of Child Poverty Statistics - 2015 to 2020 Based on Canada's Official Poverty Line (2018 MBM base)

Year

Number of Children in Poverty

Child Poverty Rate

Cumulative Percent Reduction in Number of Children in Poverty Since 2015

Year Over Year Percentage Point Reduction in Child Poverty Rate

2015

1,115,000

16.3%

2016

965,000

13.9%

13.5%

2.4%

2017

818,000

11.7%

26.7%

2.2%

2018

744,000

10.6%

33.3%

1.1%

2019

665,000

9.4%

40.4%

1.2%

2020

333,000

4.7%

70.1%

4.7%

None