Budget 2018 overlooks 4.8 million people in poverty

Budget 2018 overlooks 4.8 million people in poverty

Last month, the government released Budget 2018. But what changes will these new federal policies have in our lives? And what kind of impact will they have in the lives of the 4.8 million people currently living in poverty in Canada?

Very little.

The 2018 Federal Budget beefed up just two anti-poverty measures. And both remain inadequate to effectively combat poverty and precarity in Canada.

The fact stands that without funding a comprehensive anti-poverty strategy with effective, evidence-based policies, millions of people living in Canada will continue to be left behind.

Last month, the Dignity for All Campaign launched a series of infographics called Living in the Gap. Featuring six fictitious case studies, the infographics paint a picture of what it is like for real families and individuals across Canada who are living in the gap between what they have and what they need. Based on actual living expenses, these infographics are also a powerful tool to determine the real impact of existing and new policies from Budget 2018.

Canada Child Benefit

The Canada Child Benefit (CCB) has certainly closed the gap for many families with children across the country since it was introduced in 2016. But for those facing prohibitively high childcare costs, even with recent improvements the CCB remains inadequate.

One of the families profiled in Living in the Gap is the Patels. Jessi Patel and her infant son, Benton, reside in Toronto, Ontario and live $22,074.52 above the poverty line. They represent the many households in Toronto in which the high costs of childcare and housing undermine the stability expected of a well-paying job. 

In the Patel’s case, the CCB covers 24 per cent of their childcare costs. Jessi, a single, working mom, pays $1,328.73 out of pocket for daycare every month. Without factoring in additional monthly expenses such as clothing or activities, Jessi and Benton still live with a monthly shortfall of $135.60.

The Patels: Living in the Gap

The announcement in the budget that the CCB will be indexed to inflation will have a minimal impact on families like the Patels and their ability to juggle staggering childcare costs. Their CCB transfer will only increase by $103.02 annually, or $8.50 per month (based on a projected 2 per cent inflation rate). This additional transfer amount accounts for just 0.04 per cent of their monthly cost of childcare.

If the federal government truly wants to be hailed as a champion for women’s equality, they need to make affordable childcare accessible to all. With access to universal, no-fee childcare, the Patels shortfall of $135.60 would instantly become a monthly surplus of $1,193.13.

Without a strong commitment to a universal childcare system, inaccessible childcare will continue to be a barrier to employment for working parents, especially women. It is estimated that the low-fee, universally accessible childcare system in Quebec directly contributed to 70,000 more mothers entering the workforce and an increase in gross domestic income of 1.7 per cent - around $5 billion.

Not only is it the right thing to do within the gender analysis framework, accessible childcare would essentially pay for itself - making it the smart thing to do, not only for women, but for society as a whole.

Canada Workers Benefit

The 2018 Budget also announced the introduction of the Canada Workers Benefit (CWB), a new version of the Working Income Tax Benefit. It will provide additional income to low-wage earners and households in Canada.

One of the families featured in Living in the Gap who we might assume would stand to gain from the CWB is the Dulaimis. They are a refugee family of four with the father working full-time. But, despite the fact that they are $14,868.52 below the poverty line and have a monthly shortfall of $140.10 for their most basic needs, the Dulaimis only qualify to receive approximately $60 every month with this ”new and improved” benefit—which does not even cover half of their monthly shortfall.

The government boasts that 70,000 people will be lifted above the poverty line by the CWB. But as David MacDonald from the CCPA points out, this is just 0.2 per cent of those living in poverty in Canada. The Dulaimis represent the 99.98 per cent of families living in poverty that this benefit will leave behind.

Beyond the Rhetoric

The Patels live far above the poverty line, while the Dulaimis live far below it. Yet both families still struggle to make ends meet.

And neither will receive help from Budget 2018.

It is disappointing that these two policies, the CCB and the CWB, were the only anti-poverty measures in Budget 2018. Particularly since it is clear that they are inadequate.

As the federal government prepares to release their Canadian Poverty Reduction Strategy (CPRS) sometime this year, it is imperative that they move beyond piecemeal programs that leave people falling through the cracks. They can and must demonstrate leadership that goes beyond rhetoric to develop and invest in universal social programs and policies that build a foundation of accessibility, equity, and dignity for all Canadians.

Given that Budget 2018 dedicated no additional funding for the CPRS, the pressure is on for Liberals to put their money where their mouth is in their final Budget before the next federal election.

Sarah is former CPJ's Public Justice Intern - Poverty Issues

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