The Broadbent Blog


How the Conservatives have failed on child poverty

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Twenty-five years ago, the House of Commons unanimously passed Ed Broadbent's resolution to abolish child poverty by the year 2000. We are far from that goal.

Child poverty as measured by the Statistics Canada Low Income Cut Off has fallen since 1989, meaning that the proportion of families forced to spend a well above average share of their budgets on food, clothing and shelter has diminished somewhat. 

But it is a different story if we use the low income measure, which looks at the gap between poor children and the middle class, calculating the number of children who live in a family which has less than one half of the income of a comparable middle income family.

By this measure, the child poverty rate increased from 15.8% in 1989 to 19.2% in 2012, according to data provided to Campaign 2000 by Statistics Canada. Poverty measured in these relative terms significantly affects the life chances of children.

There can be no real equality of opportunity if there are excessively large income gaps, and indeed the chances of a child leaving the social class into which she or he or born are much greater in countries such as those in Northern Europe with low levels of child poverty. 

There has been no progress on child poverty in Canada despite the fact that the employment rate for families with children has risen from 62.5% in 1989 to 74.4% in 2013. Single-parent mothers have fewer children, are more highly educated, and are more likely to be employed.

But low paid and precarious work is a serious issue. More than one in three families with children (37%) today have at least one parent working full-time for a full year, and far fewer poor families are on social assistance. 

Child poverty is not inevitable, but the result of the political choices we make. OECD figures show that Canada has one of the lowest rates of poverty among the elderly in the industrial world, but is worse than average when it comes to child poverty.

If it was not for government social programs, the child poverty rate would be much higher. But the overall impact of transfers, while important, has changed very little since 1989.

Recent research by Statistics Canada shows that the redistributive impacts of both social assistance and Employment Insurance were significantly reduced in the 1990s as a result of major reductions in the size of both programs. However, the impact on families with children was offset to a modest degree by an increase in the redistributive impacts of child benefits.

From a poverty reduction perspective, the most important initiative by far has been the National Child Benefit Supplement or NCBS. Launched by the federal government and the provinces in 1998, the NCBS, in combination with the Canada Child Tax Benefit or CCTB, targets significant federal government cash benefits to low income families.

In combination, the CCTB and the NCBS provide a maximum of $3,687 per year for a one child family, with the NCBS component phased out above an income of $25,584. However, the NCBS has not been increased in inflation-adjusted terms since 2007. 

The Harper Conservatives have preferred to create and then expand the Child Tax Credit and the so-called Universal Child Care Benefit or UCCB, a flat rate benefit of $100 per month paid to all families with young children. This is set to rise in 2015 to $160 per month plus there will be a benefit of $60 per month for older children, at a net cost of $2.6 billion per year.

The federal government also plans to spend $1.9 billion per year on family income splitting which would mainly benefit high income traditional families with a stay at home spouse to a maximum amount of $2,000 per year. There would be no benefit at all from income splitting for single parents, or for two parent families in which both earners are in the bottom tax bracket. In short, there will be zero impact on child poverty.

Today, the income tested CCTB and the NCBS combined pay out $10.8 billion per year, of which $3.9 billion goes to low income families through the NCBS. 

Next year the UCCB will cost $5.6 billion per year on top of the $1.9 billion cost of family income splitting, to a total of $7.5 Billion per year for the measures introduced by the Conservatives since being elected in 2006.

There is a “horizontal equity” case for providing benefits to all families with children. But the fact remains that we could have made a significant impact upon child poverty and helped the middle class more effectively if the government had chosen to expand the CCTB and the NCBS.

The Conservative government also refuses to provide direct funding for a national child care program delivered by the provinces. Yet the lack of availability of affordable child care spaces traps many single parents in the welfare system, and the lack of quality, affordable early learning programs places children from low income families at a significant disadvantage.

If we are to seriously address the continuing problem of child poverty, the federal government must show real leadership, and the needs of low income families must be given priority.

Andrew Jackson is the former Packer Professor at York University and senior policy adviser to the Broadbent Institute.

This article originally appeared in the Globe and Mail's Economy Lab.