A new report on poverty challenges both Liberals and Conservatives

Conservative Leader Pierre Poilievre understandably seized on a new report card released last week by Food Banks Canada that highlighted the number of Canadians who are living in poverty, struggling to pay their bills and turning to food banks for help.

"Mr. Speaker, after nine years of the NDP-Liberal prime minister's taxes, debt, inflation and promises, Canadians are literally hungry," Poilievre said in the House of Commons on Wednesday.

Prime Minister Justin Trudeau predictably responded by pointing to the support programs his government is rolling out — including funding for child care, dental care and a new school food program — and warned that a Conservative government would only cut such initiatives.

"These are investments that they are opposed to and that we are there to help Canadians with," Trudeau said.

In fact, the findings and recommendations laid out in last week's report present a challenge for both Liberals and Conservatives.

As the report notes, poverty in Canada declined markedly between 2015 and 2020 — the share of Canadians living below the poverty line fell from 14.5 per cent to 6.4 per cent. A report released by UNICEF last December found that Canada experienced one of the largest proportional drops in child poverty among developed countries between 2012 and 2021.

Some of that reduction in poverty can be attributed to policies like the Canada Child Benefit, introduced by the Trudeau government in 2016. The income support programs launched at the outset of the COVID-19 pandemic actually helped to drive poverty in Canada even lower.

But that progress has eroded over the last few years; in 2022, the poverty rate was back up to 9.9 per cent. The report also points out that 23 per cent of Canadians are experiencing "food insecurity" and 44 per cent say they feel worse off than they were last year.

Some of that erosion, the Food Banks report notes, can be traced to the withdrawal of pandemic-era income supports. But the authors also point to four larger factors: rapid population growth without the social infrastructure to support it, a succession of interest rate hikes alongside high inflation, a lack of housing and a slowdown in economic activity accompanied by a slightly higher unemployment rate.

The Trudeau Liberals would say they're taking action in response to those challenges. And the authors of the Food Banks Canada report would not disagree entirely, particularly when it comes to the moves the government has made on housing over the last year.

But they also argue there's more the government could be doing — or should have done already.

Calls for EI reform and an enhanced disability benefit

Seven of the 27 federal policy recommendations reviewed in the report relate to employment insurance reform. All are listed as showing "no progress." In the throne speech delivered in September 2020, the Liberals said it was clear Canada needed an "EI system for the 21st century"; so far they've failed to follow through. At this point, it seems unlikely EI will see comprehensive reform before the next election.

The Food Banks Canada report commends the creation of the new Canada Disability Benefit but laments, as others have, that it has not received more funding. Advocates had hoped it would provide about $1,000 per month to recipients, but the benefit is currently set to provide just $200 per month.

The report suggests all federal benefits should be indexed to inflation and that efforts should be made to prevent provinces from clawing back their own programs in response to new federal programs (a potentially relevant issue for the Canada Disability Benefit). It also proposes the creation of a permanent "groceries and essentials benefit" — effectively an enhanced GST tax rebate, which was first proposed last year by a panel of experts convened by the Institute for Research on Public Policy.

(While the Food Banks Canada report generated considerable heat in Ottawa this week, most of the report actually deals with policies and challenges at the provincial level — and while they are often excused from the national discourse, provincial governments continue to exist and possess responsibilities.)

The Conservatives are eager to wave the Food Banks Canada report in the government's face. Would they be willing to implement any of its recommendations?

What would a Conservative government do?

The Liberals can point to recent and proposed federal programs and can cite actions on housing that could go a long way toward alleviating the current problems. But the Food Banks Canada report suggests they could be doing much more. 

The Conservatives tend to criticize the rollout of those social programs; in the case of the school food program, they point out that it's not yet operating. But such criticisms don't tell us what a Conservative government would do with those programs and funding commitments — whether Conservatives would seek to improve such programs or simply eliminate them.

(One of the things the Conservatives have vowed to eliminate is the federal carbon tax — but because that policy includes a rebate, some low-income households may actually end up worse off if the tax is repealed.)

The Conservatives also seized this week on a report from the parliamentary budget officer that noted homelessness has increased over the last six years, despite new federal funding to reduce it. But while the federal program has failed to meet its goal of reducing chronic homelessness by 50 per cent, it also has provided stable or temporary housing to 23,000 people annually.

The foundation of Poilievre's argument against the Trudeau government is that it has increased federal spending too much — and that by doing so, it has driven up inflation, the price of housing and the cost of living. That argument might now be running up against the fact that inflation continues to decline.

But in the context of this week's debate about poverty, Poilievre's view of federal spending raises at least two questions. Would his spending cuts touch any of the social supports that lower the cost of living for some Canadians? If so, would any benefits derived from lower levels of federal spending — and perhaps lower taxes — somehow offset the loss of those supports?

Conservatives might be comforted by the fact that a strong plurality of Canadians seems inclined to think it's time for a Conservative government. But while Abacus Data recently found a 16-point lead for the Conservatives, it also didn't find a great desire to see social programs rolled back — just 28 per cent of respondents said a Poilievre government definitely or probably should end funding for child care or dental care.

If the Conservatives have a plan to sharply reduce federal spending without touching such programs, they aren't explaining it yet.

For now, the Food Banks Canada report focuses useful political attention on people who badly need it — those facing poverty and income insecurity. That challenges the Liberal government's current response, but it also challenges the Conservatives to explain exactly what they would do differently.