The number of children living in poverty has halved in Canada in 2020 thanks to government support programs related to COVID-19, Statistics Canada revealed on Wednesday.
Posted at 7:45 p.m.
Over 8 million families helped
The pandemic has caused a sudden shock in the labor market, which has affected the incomes of Canadians. In response, the Government of Canada has introduced a number of support measures. In total, about 82 billion dollars were distributed to more than 8 million households in 2020. “A lot of people benefited from it and what we see today is that in some cases, it overcompensated the losses,” says David Boisclair, Executive Director of the HEC Montréal Retirement and Savings Institute. The median amount of support received by these families was $8,000.
Fewer children living in poverty
Thanks to support programs, the number of children living in poverty has been reduced by half in Canada in 2020 compared to 2019. The child poverty rate has fallen from 9.4% in 2019 to 4.7% in 2020 .
Decline in poverty in all provinces
A decrease in the poverty rate was observed across all age groups in 2020. Canada’s official poverty rate was 6.4% in 2020, down from 10.3% in 2019. All Canadian provinces saw a decline, but the declines were most pronounced in Saskatchewan, Prince Edward Island and Manitoba.
Revenue increase
The pandemic has caused the income of families and unattached individuals in Canada to fall by 3.3%, from $57,600 in 2019 to $55,700 in 2020. However, thanks to the support benefits related to the COVID- 19, median after-tax household income increased to $66,800 in 2020, up $4,400 from the previous year. “In the long term, it may have allowed some households to put a little more money aside,” says Mr. Boisclair.
Temporary results
The changes observed in income and poverty rates in 2020 were likely temporary, due to the supports that were not permanent, however, underlines Statistics Canada in its report. Moreover, Mr. Boisclair fears that the savings of some households will be stifled by the current rise in the cost of living. “Inflation has come into play, and that’s putting pressure on household budgets,” he concludes.