The Recession Lives On

From the Catalyst, Spring 2014.

Though the recession hit hard in 2008, we often cite 2009 as the year when markets rebounded and our recovery began. Still, almost five years later, that recovery has not reached everyone in Canada. For about 3 million low-income Canadians, the impact of the recession remains.

“Making Ends Meet” is CPJ’s fourth and final report in the Poverty Trends Scorecard series. It reveals that while the incomes of Canada’s poor have stagnated or fallen, the costs of many essential goods and services have skyrocketed.

Stagnant Incomes

The income side of the equation was detailed in our previous reports and has several root causes, including unemployment, the rise of precarious employment, and static wages at the bottom of the earning scale. Throughout the recession, from February 2008 to July 2009, Canada’s employment rate (or the percentage of working-age Canadians with jobs) dropped from 63.8 per cent to 61.3 per cent, not far from where it sits today (61.6 per cent). During that same time, temporary jobs have grown at two to three times the rate of permanent jobs while the poorest 20 per cent of households have seen their after-tax income decline by 1.3 per cent.

Couple that with a 6.7 per cent increase in the consumer price index, and the constant grind to get by is made that much harder. Cost of living increases, especially for food, shelter, and education, have a much harsher impact on those with low incomes than on those with high incomes. These three budget items make up nearly half of spending for the bottom quintile of households, but barely constitute more than a quarter of spending for the top quintile.

Cost of Living

As rising house prices continue to preclude more and more Canadians from homeownership, there’s added pressure put on the rental market. And it’s not just in big cities like Vancouver and Toronto. Newfoundland & Labrador, Saskatchewan, and Manitoba have seen the largest rental housing price increases since the recession. As a result, the supply of affordable and rent-geared-to income housing can’t meet the growing demand. The average wait times for subsidized housing range from 16 months in Vancouver to 10 years for singles and childless couples in Ontario.

Similarly, food banks are struggling to keep up with the spike in clients since the recession. Food prices have risen 13.1 per cent since 2008. Last year, 833,000 people in Canada turned to food banks in the month of March alone, a significant increase from 676,000 in March of 2008. Children consistently represent over a third of food bank users.

Equally disconcerting are the barriers faced by poor children in the education system. Education is hailed as the ticket out of poverty, but it’s becoming more difficult to access for many low-income people. It’s not just college and university tuition rates that are barriers. In Ontario’s public education system, about half of elementary schools charge extra fees for extracurricular activities and lunchtime programs, while 91 per cent charge fees for field trips. These added costs act as barriers to full participation for low-income students, entrenching the intergenerational cycle of poverty.

Where Do We Go From Here?

Significant action is needed to assist low-income Canadians still struggling to make ends meet. The Dignity for All campaign is crafting a model poverty elimination strategy with measures to increase income security and assistance for lowwage, precarious workers as well as proposals to boost investments in affordable housing, healthy food, childcare, and access to education. These policy recommendations have been drafted collaboratively at Dignity for All policy summits, including our recent summit on health.

Work for public justice continues year round. We can all play a role in reminding governments of their responsibility to implement the necessary public policy levers to help low-income Canadians emerge from the recession that — five years later — still lives on.

Author

  • Brad Wassink is CPJ's former communications coordinator.

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