Yahoo Finance Posthaste: Canada at 'critical turning point' as poverty worsens, warns report
Canada has reached “a critical turning point” as the high cost of living and housing in this country push more people below the poverty line, says a report out today from Food Banks Canada.
According to the 2024 Poverty Report Cards, almost half of people nationally feel financially worse off than last year and one in four are suffering from food insecurity.
“Food Bank Canada’s 2024 Report Cards show that people in Canada, from coast to coast, are struggling to keep up with the rising cost of living, said Food Banks Canada chief executive Kirstin Beardsley.
“Though deeply concerning, these results are sadly unsurprising to the thousands of food banks across the country who have seen a 50 per cent increase in visits since 2021.”
One in 10 Canadians now live in poverty by the latest data, up substantially from just a few years ago, said the report.
It wasn’t always so. Between 2015 and 2020, Canada saw the most dramatic decline in poverty on record, with the rate dropping from over 14 per cent to 6.4 per cent, the report said.
But in 2022 poverty rates began to climb as the economy was buffeted by a series of challenges. Rising interest rates, though aimed at taming inflation, hit lower-income households the hardest, rapid population growth put pressure on social services and rents soared, increasing the share of income households needed to dedicate to housing.
Between February and April of this year, 25 per cent of people aged 18 to 24 went to a food charity because of lack of money.
The report lays out policy recommendations for Canada and each province designed to alleviate poverty, ranging from rent controls to youth employment programs to ramping up social assistance.
But so far governments aren’t rising to the challenge, said Food Banks Canada.
The report downgrades Canada from a D to D-, signalling that people are struggling more in 2024 with poverty and the cost of living than they did in 2023.
The country also received failing grades for housing affordability, access to health care and adequacy of government supports.
The study found that across Canada 47 per cent of people had difficulty navigating the tax system and didn’t know what tax benefits they were eligible for.
A quarter of Canadians said they struggle to access the social services they need.
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Canada’s inflation eased again in April, bolstering the case for an interest rate cut in June, say economists. Core inflation measures, which the Bank of Canada looks at, cooled for the fourth straight month and are now all below 3 per cent, falling within the central bank’s target range.
“There is nothing in today’s report that would prevent the BoC to cut June,” said Alberta Central chief economist Charles St-Arnaud.
“If the BoC doesn’t cut, it would be a matter of extreme caution in our view, rather than suggesting that upside risks to inflation remain a concern.”
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Today’s Posthaste was written by Pamela Heaven with additional reporting from Financial Post staff, The Canadian Press and Bloomberg.
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