Benefits rolled out during the pandemic to cushion the blow of COVID-19 lockdowns have significantly reduced child poverty rates, a new report says.
Analysis by the anti-poverty group Campaign 2000 indicates that in 2020, 13.5% of Canadian children lived in poverty.
This is down from 17.7% in 2019, and 24.2% 20 years earlier.
The group notes that the decline is the steepest since the federal government pledged to end child poverty in 1989, and accounts for nearly half of the decline in the poverty rate seen over two decades.
Campaign 2000 offers 50 recommendations to further reduce poverty, including the creation of a supplement to the Canada Child Benefit that would target the poorest families.
“We cannot go back. Poverty is a political choice, and the federal government has a choice to build back better,” Campaign 2000 National Director Leila Sarangi said at a press conference Tuesday.
A Statistics Canada report released last year also highlighted how pandemic benefits have helped reduce income inequality, as low-income households have seen their after-tax income grow at a faster rate than others. .
Between 2015 and 2020, the low-income rate recorded its largest drop, dropping from 14.4% to 11.1%. Statistics Canada said the decline was largely due to higher government transfers, both through pandemic-related benefits and the Canada Child Benefit.
Miles Corak, an economics professor at the City University of New York, said COVID-19 benefits have been successful in reversing inequalities caused by the pandemic.
“If you look at the data, we haven’t seen such a powerful role of government transfers against these trends since about the mid-1990s,” Corak said.
This shows that income transfers are an effective tool to alleviate inequality, he said, but it is also important to improve labor market conditions for workers.
Corak is among many economists warning against the expansion of temporary foreign worker programs, which help companies bring in workers from abroad to fill job vacancies. Since these jobs tend to be low-paying, economists fear the programs could drive down wages.
“The government should think about how it is going to shape the market [du travail] for higher productivity, more pro-poor growth, he said. Because there are limits to the fiscal transfer capacity of governments. »