A closer look reveals that the largest percentage decreases are among households receiving provincial social assistance. This is also noteworthy because households receiving social assistance are more likely to experience poverty and food insecurity in Toronto, as well as province-wide.
While we only have initial numbers at this time – full results will be released in our Who’s Hungry report in September 2018 – they give an indication of some key trends we are seeing in those accessing food banks in Toronto. These trends are also occurring at the same time when there has been a wide range of investments in social policy initiatives at both the federal and provincial level – many of which Daily Bread and its front line partners have advocated for.
The majority of clients accessing food banks in Toronto receive one of two provincial social assistance programs as their main source of income. According to the 2017 Who’s Hungry report 64 per cent of those surveyed rely on either Ontario Works (OW) or Ontario Disability Support Program (ODSP).
Ontario Works is designed to be a short-term source of income support for those who are out of work and looking for employment, and have no other source of income. ODSP is intended for people who have a long- or short-term disability or serious illness and are not likely to be able to work full time. As the labour market continues its general shift from full-time employment to part-time employment, greater numbers of people out of work are forced to rely on provincial social assistance, and those with a disability are less likely to be able to access employer-triggered disability income programs.
There was an 11 per cent decrease in the number of people accessing food banks who were receiving Ontario Works as their main source of income, and a 7.2 per cent decrease of those receiving ODSP as their main income source. There was a less dramatic drop of those receiving employment income or old age pension as their primary source of income, with both decreasing at just over 3 percent.
WHAT ARE THE FACTORS THAT INFLUENCE POVERTY AND FOOD BANK USE?
WHY SOCIAL POLICY MATTERS
It is difficult to attribute a decrease in visits to any one factor.
Many assume it is just a strong economy that reduces poverty. Indeed, unemployment rates in Toronto as of March 2018 are at 6.4 per cent, a full percentage point lower than the same period last year1. In reality, however, we also know that many of our clients have fallen out of the labour market due to age or disability, or are struggling to cope within a labour market that has become more fragmented and less likely to provide enough steady income to manage increasing costs of living.
There have also been a wide range of social policy initiatives at both the federal and provincial level which, in combination, may have helped to increase the incomes of people living in poverty, in particular for those receiving social assistance in Ontario.
Some recent key initiatives include:
The Canada Child Benefit: In July 2016 the federal government implemented the Canada Child Benefit, which consolidated the previous patchwork of federal benefits and targeted it to those in the greatest need. When initially implemented, the benefit provided up to $6,400 per child per year under the age of six, and up to $5,400 per child per year for those aged six through 17. The benefit has since been indexed to inflation. The province of Ontario made an important decision not to claw back this income from families receiving social assistance. While this benefit was implemented in July 2016, representing a significant increase for many low-income families over the previous child benefit framework, newcomers with children have to apply for the benefit once they receive permanent resident status, and the application process takes on average two to three months. Toronto saw the arrival of many newcomers throughout 2016 and 2017, including refugees from Syria, many of whom had to access food banks due to the high cost of rent. Once received, this federal benefit would be a large complement to other sources of income they were receiving. This could explain in part why there would be a decrease between 2017 and 2018, despite the benefit being implemented in 2016.
Changes to social assistance in Ontario: As part of its poverty reduction strategy, the province of Ontario made numerous, significant changes to social assistance in Ontario that could have had a substantial impact in increasing the incomes of people receiving Ontario Works or ODSP.
While rates were marginally increased in late 2017 (2 per cent across the board), other changes may also have had an impact:
- In early 2017, child support payments became fully exempt from income claw backs for parents receiving social assistance, and not deducted dollar for dollar as they were previously.
- In September 2017, the income exemption for cash gifts for those receiving social assistance was increased from $6,000 to $10,000 for the year, acknowledging the support people get from friends and family during difficult financial periods.
- In September 2017 changes to the Ontario Student Assistance Program (OSAP) also came into effect. This enabled free tuition among low income students, and 100 per cent exemption on earnings for those receiving social assistance and in full-time post-secondary studies. (Approximately 10 per cent of our clients are post-secondary students.)
- In early 2018, the allowable liquid asset limits for those receiving social assistance were increased. For single people receiving Ontario Works, the limits were increased to $10,000 from $2,500, and to $15,000 for couples from $5,000. For those receiving ODSP, asset limits were increased to $40,000 from $5,000 for single individuals and to $50,000 for couples from $7,500.
- OHIP+ was implemented in January 2018, offering free prescription medications for all those 24 and under. While this initiative wasn’t targeted just to those receiving social assistance, we know from previous research that parents receiving income from any source often give up food to help pay for children’s needs, including prescription medications.
It is unknown what the specific impact of each initiative would have had on the number of people accessing food banks. Academic research that examined policy impacts in Newfoundland and Labrador has demonstrated that the cumulative impact of similar social policy initiatives was likely the main factor in the significant decline of food insecurity, particularly among those receiving social assistance. During their multi-year poverty reduction strategy from 2007 to 2012, Newfoundland and Labrador implemented a range of measures similar to what we have seen in Ontario, including reduction of clawbacks from employment earnings, increases in asset limits, free prescription drugs, and rate increases to social assistance2. Further academic research that examines the impacts of social policy in Ontario should be considered as a next step.
THE WORKING POOR AND SENIORS
In the last year we saw fewer dramatic decreases in food bank use amongst those receiving their primary source of income from employment or government pensions: just over 3 per cent for either income source. While the working poor and seniors comprise a much smaller portion of food bank clients than those receiving social assistance, it is important these populations also benefit from policy initiatives so they don’t face increasing levels of poverty and food insecurity.
Two recent policy developments in these areas include:
Increase in Guaranteed Income Supplement (GIS) for seniors: In July 2016 GIS payments to single seniors increased to $947, as a top-up to their Old Age Security (OAS) or CPP. However our 2017 research showed that many of our clients weren’t receiving the GIS even though they were entitled to it, either because they did not know about it, or the application process was too complex. In a positive development, there was recent announcement that enrolment to the GIS became automatic as of January 2018. Further changes may need to be made so that groups of seniors who are particularly vulnerable, such as recent newcomers, are also eligible for this income.
Bill 148: In January 2018 Bill 148 came into effect in Ontario, which made large changes to employment law. These changes included an increase of the minimum wage to $14 an hour, and a requirement that casual, part-time and seasonal employees receive the same rate of pay to those in full-time employment. The implementation of the Canada Child Benefit and OHIP+ would be equivalently important factors that could impact the circumstances of the working poor, as could the newly announced Canada Workers Benefit that takes effect in the next year. Time will tell how this Bill, as well as these other initiatives, will impact this unique situation.
CAUTIOUS OPTIMISM BUT NO SILVER BULLET
What is clear is that there is no silver bullet to reducing poverty: it is not solely due to a strong economy, nor to one policy or benefit.
It is important to note that, even with an 8 per cent decrease, we are still well above pre-recession levels of food bank visits, with nearly 190,000 visits in the first quarter of 2018 alone.
Continued positive changes like further increases to and reform of social assistance, universal benefits such as prescription drugs for the working poor and seniors, affordable housing initiatives, and sustained collaboration at all levels of government are required to reduce poverty and hunger in our province.
2 Loopstra et. al, 2015, “An Exploration of the Unprecedented Decline in the Prevalence of Household Food Insecurity in Newfoundland and Labrador, 2007-2012.” Canadian Public Policy, September 2015.
While much needs to be done to improve and strengthen our social safety net and income security system, there is extra income that is already available through our tax system, but receiving these benefits is dependent on people filing their taxes.
Food banks can help remove barriers to accessing extra income
Sometimes people don’t file their taxes because they are not aware of the benefits to them, or may encounter other barriers due to the complexity and administrative requirements involved. Unfortunately, people on low incomes are losing out on potentially thousands of dollars of additional income because of these barriers.
Recognizing the barriers many low income people face in getting the benefits from tax filing, some food banks and other member agencies of Daily Bread Food Bank provide tax clinics and other tax filing assistance for their clients. With targeted outreach and administrative and technological support, many more low income people could be receiving all the benefits they’re entitled to receive.
Daily Bread Food Bank member agencies such as The Bluffs, New Toronto Street Food Bank, St. James Food Basket, Toronto West SDA, and Native Canadian Centre among many others offer tax filing assistance. These member agencies are similar to many other community tax clinics that provide trained volunteers, many through the Canada Revenue Agency’s Community Volunteer Income Tax Program (CVITP), which help people file their taxes through one on one support. Through continued outreach such as this, hopefully more people who are less likely to file taxes will be able to do so, and be informed of all the benefits to which they’re entitled.
Who’s filing – and who’s not filing – by the numbers
In 2013 Daily Bread’s Who’s Hungry survey found that 72 per cent of respondents accessing food banks across the GTA had filed their income taxes that year.1 While it is good news that nearly three quarters of respondents filed their taxes and are getting the benefits they are entitled to, there are more than 25 per cent of clients who are potentially missing out. And despite outreach efforts to inform people of these benefits, newer strategies may be needed to reach those who are less likely to file.
The Maytree Foundation recently published a piece entitled “Filing taxes brings major benefits to people on low incomes”. The article, which will be referenced throughout this report, noted that while provincial and federal tax benefits such as the Canada Child Benefit, Old Age Security, and GST/HST credits can cumulatively add up to thousands of dollars of additional income for low income households, many miss out because they either don’t file or are not aware of what they’re eligible to apply for or even how to apply.
Of those who do not file, the Who’s Hungry survey found that certain demographic groups accessing food banks were less likely to file than others.2 They include single people, households receiving social assistance as a main form of income, and recent newcomers who have been in Canada for more than a year but less than four years. These groups are not mutually exclusive, and many issues they face overlap. Highlighting those groups who are less likely to file may help to provide some insight as to what some potential barriers to filing might be and where more outreach may be needed.
Single person households
Single person households are significantly less likely to have filed their taxes, with 69 per cent filing a tax return the previous year compared to 75 per cent for other household types.
Of all household types, working age single person households without children have the least amount of pre-retirement tax credits available to them, unlike households with children who can access various child tax benefits, including the Ontario Child Benefit and the Canada Child Tax Benefit. For single people living on low income, there may be less incentive to file taxes due to lack of awareness of the benefits that are available to them even if they had no employment income the previous year.
Social assistance as a main source of income
People receiving social assistance as their main form of income are also significantly less likely to have filed their taxes the previous year, with 70 per cent reporting that they filed compared with 78 per cent not receiving social assistance as their main form of income. Respondents who were not receiving social assistance as their main form of income were receiving other sources such as employment, pensions, or child tax benefits.
In addition to the misperception that if they don’t owe income tax there is little reason to file, people receiving social assistance may face other barriers. In Maytree’s article, it was noted that since the CRA is promoting electronic filing the lack of accessibility for people with disabilities or those who don’t have high-speed internet or a computer, may pose barriers. Clients living on social assistance spend the vast majority of their income on rent and utilities, and some may not be able to afford to have high speed internet at home.
The article also noted that “people with low incomes experiencing challenges or who have complex tax situations may need hands-on help to tax file, but can’t afford paid tax advisors and may not know where to turn for free help it it’s available in their community.”
Recent newcomers, for the purposes of this analysis defined as being in Canada for four years or less (but here for more than one year), are less likely to have filed their taxes. Fifty-seven per cent of recent newcomers filed their taxes the previous year, versus 76 per cent of those who are not recent newcomers.
The barriers faced by recent newcomers are similar to those faced by others, including lack of awareness of available benefits, cost, and lack of knowledge of the system that affect their ability to access a range of services beyond just financial ones. Limited knowledge of English could be another reason, with a previous study by Daily Bread noting that those who did not have a good command of the language were less likely to file.
Despite being more likely to file their taxes, low income seniors are still not receiving all the benefits they’re entitled to
According to the 2013 Who’s Hungry survey, respondents who were seniors 65 or older were significantly more likely to have filed their taxes: 85 per cent filed the previous year compared to 71 per cent who were not seniors. However, only 11 per cent were receiving the Guaranteed Income Supplement for seniors, even though many more were likely eligible. The most recent Who’s Hungry survey for 2016 did not ask a question about tax filing, but the number of seniors accessing the GIS had not significantly changed.
The Guaranteed Income Supplement (GIS) is part of a basic income-type program that exists for seniors in Canada. Low income seniors qualify for the GIS if they are receiving the Old Age Security pension (OAS), and have an annual income lower than a set threshold ($17,544 annually for a single person household, or approximately $1,500 per month). They also need to have resided in Canada for at least 10 years in order to receive it.
The Maytree report referenced an evaluation by Human Resources and Development Canada, which estimated that while 87 per cent of eligible seniors are accessing the GIS, there are potentially 200,000 more who may be missing out.
Food bank clients who are seniors provide some insight as to the circumstances of those who are not receiving the benefit.
he median monthly income reported by Who’s Hungry survey respondents 65 and over is $1,200 per month, which from a financial standpoint make them eligible for the GIS. While three quarters of survey respondents were not born in Canada, the vast majority – 74 per cent – have lived here at least 10 years or more which would make also them eligible due to their length of residence in Canada.
In order to receive the GIS, a senior must specifically request it when applying for OAS. While a much higher percentage of senior respondents (50%) reported that they were receiving OAS, it’s still possible that some are not applying for that source of income as well even though they’re entitled to it.
Because the application process for both OAS and GIS can be administratively complex without some assistance, language barriers may be a factor for some seniors in Toronto not accessing it. Fifty-one per cent of seniors reported not speaking English as their main language at home. Other seniors who have just turned 65 may not have applied in time, and are still receiving social assistance (either Ontario Works or Ontario Disability Support Program) despite being qualified to receive seniors’ benefits that could increase their income by hundreds of dollars a month.
“Tax-filing is a proven way to improve the financial situation of Canadians with low incomes, but has yet to be fully exploited as a means to reduce poverty in Canada.”
– U. Bajwa
Accessing Income-Boosting Benefits Through Tax Filing – U. Bajwa for Prosper Canada
1 The results from the 2013 Who’s Hungry survey are based on 1680 interviews conducted with people accessing food banks across the GTA.
2 Chi square analyses were conducted for the results in this report, with significance at the .05 level.