Two recent events were significant in shining a spotlight on poverty in Toronto: the release of the Vital Signs report, which demonstrated the growing inequities in our city, and the release of the federal budget, which showed the important role the federal government has in improving the health of our cities.
The Vital Signs report, the Toronto Foundation’s annual snapshot of urban life, showed that Toronto is increasingly becoming two cities – one underserved, one not – with quality of life greatly impacted by income, race, immigration status, gender, sexual identity, and age.
Vital Signs referenced Daily Bread’s 2017 Who’s Hungry report to help illustrate this increasing inequity, highlighting how Toronto food banks saw almost 1 million visits last year, with the most sustained increase among those aged 45 and up1. This increase happened despite on-paper prosperity and low unemployment rates.
How can a robust economy and recession-era food bank demand co-exist? The answer relates to the labour market.
People who have fallen out of the labour market, such as seniors or those with a disability who cannot work, are having an increasingly difficult time keeping up with rapidly rising costs of living. The labour market itself is also becoming more fragmented and less likely to provide steady income.
And while there has been a pervasive shift in the labour market from full-time employment to more part-time and casual work, there is evidence this shift may not be impacting everyone equally. The Vital Signs report highlighted that racialized groups are more likely than non-racialized groups to be working in precarious or part-time work without benefits2.
Similarly, the Who’s Hungry survey found that recent newcomers, including many from Afghanistan, Nigeria, Iraq, and Syria, are almost twice as likely than non-recent newcomers to be receiving their main source of income from employment.
Despite earning more than the minimum wage, respondents reported only being able to get jobs with part-time hours, and having to skip meals because they are paying upwards of 74 per cent of their income on rent3. With this kind of financial pressure, skipping meals and/or accessing food banks becomes a necessity, despite living in the wealthiest city in the country.
The 2018 Federal Budget and the Canada Workers Benefit
The 2018 Federal Budget took an important step in acknowledging the increasing precariousness of the labour market by creating what the budget referred to as a more “generous” and “accessible” Working Income Tax Benefit, now rebranded as the Canada Workers Benefit.
The 2018 federal budget commits to increasing the amounts given to those who are eligible, as well as increasing eligibility by expanding the income range so more low income workers can access it.
For instance, a single parent or couple earning $25,000 a year could receive as much as $717 more from the program in 2019 than in 2018. And those earning $30,000 per year are now eligible to receive the benefit, whereas in 2018 they would have not been eligible. A single, unattached person could receive up to $500 more from the program, and singles earning $20,000 a year are now eligible. This is an important step towards greater income security and we are pleased to see it come to fruition.
In 2007 Daily Bread had praised the introduction of the Working Income Tax Benefit, but we also pushed for a more generous benefit that would provide more money and raising the “phase-out” points so more working poor could access it. This is particularly important for income security for many working poor, including food bank clients, who receive more than the minimum wage but are restricted in the number of hours they get at work.
Automatic enrolment in the Canada Workers Benefit – just as important in the increase in benefits itself
The federal budget also commits to increasing access to the benefit by enabling the Canada Revenue Agency (CRA) to automatically determine eligibility, instead of a potential recipient having to apply separately and potentially miss out on receiving the benefit. All too often we see food bank clients, seniors in particular, who are not accessing their benefits because of a lack of awareness, no access to internet, or not being able to read the forms due to language barriers. Moving to automatic enrolment is just as important a step as the increase in benefits itself, which the government estimates will enable 300,000 additional low-income workers to access it.
But it is worth highlighting again that what appears to be simply an administrative change (automatic enrolment in the CWB) can have a potentially large impact on improving the lives of people living on low income, particularly groups such as recent newcomers, those who don’t speak English as a first language, and other vulnerable populations who are more likely to encounter administrative barriers when trying to access government services. This is what we are calling the pragmatic face of equity.
Other measures in the federal budget, such as investments in affordable housing, and indexing child and seniors benefits to inflation underscore the federal government’s crucial role in income support – indeed, what is becoming more evident is that all three levels of government have a role to play in helping to create more equitable and just cities.
1 Toronto Vital Signs 2017-2018, pg. 35.
2 Vital Signs Report 2017-2018, pg.71.
3 2017 Who’s Hungry, pg.29.
The National Housing Collaborative is recommending a housing benefit for renters in the 2017 federal budget. A housing benefit, given directly to a tenant, would help to address the lack of income which drives the need to get emergency food relief from a food bank.
The financial pressure of housing costs is the key reason for the high demand on Toronto food banks, which saw over 900,000 visits in 2016. Daily Bread’s 2016 Who’s Hungry report showed that, on average, food bank clients spend 71 per cent of their income on rent and utilities; of those who reported skipping meals to pay for something else, the most commonly cited expense was rent.
“A portable housing benefit helps to address the demand side of affordable housing by increasing tenant incomes,” said Richard Matern, Director of Research and Communications at Daily Bread Food Bank. “To maximize its effectiveness in reducing poverty, a federal housing benefit should be one piece of the affordable housing response, in addition to increasing the supply of affordable housing.”
Working on the frontlines at Daily Bread and our 130 member agencies, we see far too often how people are forced to choose between buying food or paying rent. A housing benefit would go a long way toward helping to make sure that people don’t have to make those painful choices.
Read the Daily Bread press release about the federal housing benefit.
The 2016 Federal Budget brought the federal government back to the table when it comes to fighting poverty across the country. From the creation of a new federal child benefit to coordinating a national housing strategy, there is potential that these investments can make a substantial impact in poverty reduction when combined with provincial and local initiatives.
- Creation of the Canada Child Benefit
The new Canada Child Benefit announced in the federal budget is one of the biggest developments in social policy at the federal level in many years. This new progressive, non-taxable benefit has real potential to lift hundreds of thousands of children out of poverty. However the devil will be in the details when it comes to families receiving social assistance, who would be among the poorest families needing the maximum amount of the benefit the most.
The 2016 federal budget created the new Canada Child Benefit by consolidated the existing patchwork of federal child benefits, and targeting it so it could better benefit low income families. The Canada Child Benefit will provide a maximum annual benefit of up to$6,400 per child under the age of six, and up to $5,400 per child for those aged six through 17. According to the federal budget document, for families receiving less than $30,000 a year, this could mean a maximum increase of $1,548 per child under six, and a $1,484 increase for per child six and over.
In Toronto, 35 per cent of households accessing food banks are families with children. This extra income could make a big impact in reducing the need for food banks for these families. However, in order to ensure the families who need the support the most will benefit from the new Canada Child Benefit, it is important that the provinces and territories do not claw back that income from families receiving social assistance.
This is a particularly important consideration for those accessing food banks in Toronto, as nearly 60 per cent of families with children accessing food banks receive social assistance as their main form of income. While the previously implemented National Child Benefit Supplement allowed provinces and territories to claw back this income from families on social assistance, the federal government can take a strong lead in setting a standard of not allowing this income to be clawed back.
- Creation of a National Early Learning and Child Care Framework
Lack of affordable childcare is a significant financial barrier for many families. Past Who’s Hungry surveys found that almost a quarter of parents said that they could not enter the workforce because of both cost and access to daycare.
The federal budget proposed to invest $500 million in 2017–18 to support the establishment of a National Framework on Early Learning and Child Care, to be developed in consultation with the provinces, territories and indigenous communities beginning this year.
- Increased access to Employment Insurance
The most common reason people need a food bank for the first time is because they have lost their job.
Many cannot access E.I. because they do not have enough hours and have to apply directly to social assistance as a last resort. Increasing part time, contract and seasonal arrangements make acquiring enough hours to qualify more difficult.
The federal budget expands E.I. coverage to those that are new to or re-entering the labour force, by reducing the number of hours required for them have worked in order to be eligible for the program. This will expand access to the program for an estimated 50,000 additional claimants.
The budget also commits to reducing the waiting period to access E.I. from two weeks to one week. This will give people who have lost their jobs quicker access to a source of income.
- Topping up the Guaranteed Income Supplement for Seniors
Food insecurity among seniors has been increasing. The Canadian Community Health Survey reported a 24 per cent increase in the number of severely food insecure seniors from 2007 to 2012. For many seniors on low income, their pensions have not been able to keep up with rapidly rising food and housing costs.
The federal budget has committed to increase the Guaranteed Income Supplement for single seniors with the lowest levels of income, increasing their payments by $947, as well as adjusting benefits on a quarterly basis to match increases in the cost of living.
The federal budget also commits to restoring the eligibility for Old Age Security and Guaranteed Income Supplement to age 65 from age 67. This is especially important for those living in poverty who will be able to receive this essential form of income when they turn 65.
- Increasing affordable housing and leading a National Housing Strategy
One of the most common barriers food bank clients face is the high cost of housing. Clients spend 71 per cent of their income on rent and utilities, and one-third skip meals in order to be able to keep a roof over their heads. Toronto is becoming increasingly unaffordable for too many families, and the supply of subsidized housing units is way too small to be able to keep up with the demand.
The new federal budget makes a $2.3 billion commitment over two years to repair and retrofit existing subsidized housing units as well as creating new affordable housing. The budget also commits the federal government to leading the coordination of provinces, territories, and other groups to develop a National Housing Strategy. With the City of Toronto, the Province and Federal government now aligned in seeking to address the need of affordable housing, there is new opportunity to create long term, transformational change in this area.