POLICY RECOMMENDATIONS

The Erosion of Our Social Safety Net

Fifty years ago, Canada had a relatively robust social safety net. Governments at all levels provided supports in many areas, including housing, health care, education, and social assistance. In the last two decades of the 20th century, however, that safety net began to erode significantly as governments sought to reduce spending and assign more responsibility to the individual for their economic and social well-being. Programs became more difficult to access and less effective at supporting individuals and families with low incomes.

Today, we are left with a fragile social safety net that allows millions of people in Canada to fall through the gaps and into a life of poverty. With 2024 seeing another record-breaking number of food bank visits, it is clear that when Canadians have been failed by government systems for support, they turn to food banks as an unofficial social support. In spring 2024, nearly half of Canadians said that rising prices were greatly impacting their ability to make ends meet and nearly 1 in 4 said they were likely to use a food bank over the next six months.[4]

An effective social safety net should ensure that no person in Canada drops below a minimum income level and no one lives in poverty. In other words, a functioning social safety net provides a minimum income floor and minimum acceptable standard of living that no person can fall beneath.

The Four Pillars of an Income Floor for All

In last year’s HungerCount report, Food Banks Canada outlined the need to expand Canada’s social safety net through the development of a minimum income floor for all people in Canada. Our work highlighted the need for governments to develop four pillars that make up the Canadian income floor.

Two of those pillars are already in place for:

1. seniors (through the Canada Pension Plan, Old Age Security, and Guaranteed Income Supplement), and
2. families with children (through the Canada Child Benefit and a promise for more affordable childcare).

Two have yet to be developed for:

1. people who are living with disabilities, and
2. single/unattached working-age adults (singles).

In 2023, Food Banks Canada advocated for the government to focus on developing the two missing pillars for singles and people who are living with disabilities. While modest progress has been made for people living with disabilities, Canadians are now seeing the erosion of the pre-existing pillars for seniors and families. The number of seniors and families with children coming to food banks for help is deeply concerning

Pillar 1: Seniors
Compared to pre-pandemic numbers (2019), the number of seniors visiting food banks has risen dramatically. The income security programs that seniors have relied on for decades have not kept pace with the cost of living. This is another sign that our social safety net is continuing to deteriorate. Seniors who visit food banks are living on fixed incomes that are now stretched thinner than ever before. The risk is even greater for single seniors who must face this challenge alone.

Pillar 2: Families with children
Families with children have been supported by an income floor only since the introduction of the CCB in 2016. When it was implemented, eligible families could receive hundreds of non-taxable dollars each month to help with the costs of raising children. This support played a significant role in reducing the poverty and food insecurity rates in Canada over the following years. Unfortunately, as with support payments for seniors, CCB payments are not going as far as they used to. With families now representing roughly 1 in 4 food bank visits, they are clearly a demographic in need of support.

Pillar 3: People with disabilities
Another group that is struggling badly because of inadequate rates of support is people who rely on disability support, as indicated by the data. In 2022, only 4.3% of the population in Ontario was receiving provincial disability support. However, 30% of food bank users indicated disability support was their main source of income. The numbers peaked in Alberta, where people receiving disability supports were 840% more represented in food banks than other groups. This heartbreaking reality comes as roughly 50% of all food insecure people in Canada have a disability.

Pillar 4: Singles
Singles are another group of individuals whom Food Banks Canada has been concerned about for many years. Now representing 42% of food bank users, they are the largest subset of food bank visitors. Once again, this problem arises due to a lack of government supports for people who do not live in families or who are below the age of 65. With many singles facing the cost of living on their own, there is often little to no money left at the end of the month to put food on the table.

An Intersectional Approach to Policy Development
It is important to remember that the experience of poverty varies largely for different demographic groups. Vulnerable populations — for example, Indigenous people, new Canadians, racialized Canadians, people who are unhoused, single-parent families, young Canadians, and people who identify as 2SLGBTQIA+ — not only experience higher rates of poverty than other populations but also are more likely to live in precarious housing and are often less able to access support or leave poverty. As governments rebuild the social safety net in Canada, they must keep in mind these differences in experience so that no one is left behind.

The Challenge of Today

People are struggling today. The proof is in the 2 million visits that food banks saw in March 2024, almost double the number seen before the pandemic.

In addition, 44% of people in Canada are feeling financially worse off than they did a year ago, over 40% are spending more than 30% of their income on housing , and 30% are worried about feeding themselves and their families.[5]

The federal government has taken some minor steps toward building one of the missing pillars of the social safety net this year by committing to a Canada Disability Benefit (CDB). Unfortunately, this benefit and other actions , such as the new Pharmacare program, remain far too modest to reverse the pull of poverty for most Canadians. This year, Canada received a C grade in the Legislative Progress section of the Poverty Report Cards. This signals that the government is focusing on the right things but is failing to make a substantial impact. Much like the affordable housing crisis, erosion is outpacing progress.

The process of building and improving income floors takes both time and sufficient investment, and governments can delay this process no longer. In one year alone, we have seen how much the safety net can erode for families, for example. In 2024, in addition to talking about building two new pillars for the income floor we are also talking about rebuilding the two existing pillars that have decayed in recent years. If governments took meaningful action to improve the social safety net, far fewer people in Canada would face food insecurity and poverty in the long term. In the short term, the federal government cannot let future goals take away from the current need that exists.

Our Recommendations:

1. Immediately introduce a Groceries and Essentials Benefit to help Canadians with low incomes who are struggling today.
   1. In accordance with the model introduced by the Affordability Action Council, this benefit should be introduced using the already effective GST tax credit policy lever.
2. In advance of the next federal election, all parties should commit to continuing to enhance the proposed CDB.
3. In the short term, allow all households with low incomes to have access to the non-cash benefits that are currently available only to those on social assistance — for example, childcare subsidies, affordable housing supplements, drug and dental insurance coverage.
4. Make single adults with a low income a priority consideration in all future poverty-reduction measures, including an expanded and modernized EI, to ensure that this population is no longer left behind.
   1. As part of this, the government should set a clear timetable for when it will bring forward EI modernization reforms, as these have been continually promised since the 2020 Speech from the Throne but have yet to materialize.
5. Develop new mental health programs and strategies that include a specific focus on the impact of low incomes on mental health and the acute needs of single working-age adults, people with disabilities, and people living with addictions.
6. Ensure all federal benefits are indexed to inflation and that agreements with provincial governments explicitly forbid clawbacks of provincial social supports for new federal benefit programs like the CDB.
7. Improve the way government measures and understands the experience of poverty in Canada by adopting a Material Deprivation Index (MDI) into its poverty reduction framework as a complement to the Market Basket Measure (MBM).
8. Continue the Menstrual Equity Fund, with a commitment of at least $25 million each year, until permanent legislation is passed to make all menstrual products free and accessible to people across the country.

Housing remains one of largest issues — and may in fact be the largest issue — facing struggling Canadians in 2024. For several years now, governments and advocates across the country have been working on solutions to this crisis. In the spring of 2024, the federal government took a large step in the right direction with the launch of the National Housing Strategy (NHS). While Food Banks Canada has applauded some of these steps forward through the NHS, progress remains slow, and there has been little in the way of immediate relief for the millions of Canadians who cannot wait for long-term policies to take effect.

The Building Gap

To address Canada’s housing affordability crisis, the country needs 5.8 million homes built by 2030.[6] In other words, between 2023 and 2030, roughly 830,000 units need to be built each year. Unfortunately, just over 130,000 homes have started construction so far in 2024[7] — a mere 16% of what is required. Overall, housing construction has actually slowed down in recent years. This disappointing finding comes after even fewer homes – 123,000 — were started in the entire 2023 calendar year. If the number of new builds continues to be less than is required , the pressure to restore housing affordability will increase with each passing year.

The figures show clearly that governments at all levels must tackle this issue with more urgency. Housing affordability matters a great deal to many Canadians who are struggling to pay their monthly housing costs. And, while both homeowners and renters are struggling, renters are in acute need of assistance.

Renters in Acute Need

Nearly 70% of Canadians own their homes, but 7 in 10 food bank clients are renters. This tells us that people who are struggling to pay for the most basic needs, like food, are more likely to be renters. With housing costs listed as the second-most common reason for a person to visit a food bank, governments need to take a serious look at how they can help renters who are struggling with housing affordability today and not just in the future.

A Dual-Path Approach

With the new National Housing Plan, the future of housing affordability in Canada looks hopeful. Unfortunately, there are still millions of people in Canada looking for affordable housing today. If the government is to be successful in helping residents access affordable housing, it will need to focus on (1) taking decisive action around the Housing Plan to build millions more homes this decade, and (2) helping make the existing market more affordable until affordability is restored.

Rent Assistance

Robust rent assist programs can go a long way in reducing poverty and food insecurity among all renters. Manitoba has introduced a functioning model for a rent assist program that helps households with low incomes live in housing that is below the median market rent. While imperfect, the concept of the program is a practical way to make sure that people in the province can afford their basic right to housing. Beyond affordability, The Canadian Centre for Policy Alternatives found that the program allowed individuals to “focus on other aspects of their life such as furthering their education, raising and/or gaining custody of their children, and rebuilding their mental and physical health.”[8] Furthermore, 70% of the tenants surveyed noted that the program allowed them to buy healthier groceries. As rent is a relatively fixed expense, the program allowed residents to make smart planning decisions with their limited funds. A similar portable housing benefit concept has been introduced in the recent National Housing Accord report on rental affordability.[9]

Toward a Better Future

While the high cost of housing has been a root cause of food bank use for many years, the acute urgency of the matter and the accompanying need for government intervention have never been clearer. If there is one policy area that could immediately help millions of Canadians struggling with poverty and low incomes, it is housing.

The federal government and its provincial and territorial counterparts must begin working with a greater sense of urgency to address the inadequate number of housing units being built. Canada will likely miss its building goal (again) by roughly 600,000 units this year, but the issue will simply be “kicked down the road” to be dealt with in future years. Meanwhile, the need for those units continues to grow.

We are asking that the government take serious urgent action to introduce programs to help reduce housing costs today.

Our Recommendations:

1. Examine the potential for a national rent assistance program, delivered in collaboration with the provinces and territories as part of the federal-provincial housing agreements.
   1. As part of the development process, the government should consider:
      1. Creating a model based on Manitoba’s rent assist program.
      2. Exploring the National Housing Accord report on affordable rentals, recommendation 9.
2. The federal government should fulfill its promise to develop tools that address the costs of housing, including a review of the tax treatment of residential real estate investment trusts (REITs) and other large corporate owners.
3. Building on its recent commitments to tackle development charges, the federal government should work with the provinces and territories to help support a new fiscal relationship with cities and communities that would ultimately enable the elimination of all development charges and help spur the construction of affordable housing.
4. Introduce new investments to build more supportive housing for people who have mental and physical health issues, particularly among populations that are marginalized or living with low incomes.
5. Double the Canada Rental Protection Fund from $1.5 billion to $3 billion.
   1. For the past decade, Canada has lost 10 affordable homes for every new one that was built.[10] To reverse this, and ensure more Canadians have an affordable home to call their own, the federal government should increase the Canada Rental Protection fund to allow more co-ops and non-profit–owned and –managed rentals.

One of the most shocking findings from this year’s HungerCount survey was that the main income source for 18% of food bank users is employment income. Never before have food banks seen such a high level of need among the working population.

Worse yet, when people who are currently collecting EI are included, Canada’s labour force represents 22% of food bank visitors. These people are Canada’s working poor. They are individuals who, despite their best efforts, still come home with too little money to feed themselves and their families.

And while over 1 in 5 is a striking number, the working poor actually account for 40% of people living in poverty in most parts of the country.[11] Even more shocking is that 52% of households experiencing food insecurity report employment as their main source of income.[12] This indicates that Canada has a growing problem around low wages and access to decent work. This year, low or delayed wages was the third-most cited reason for visiting a food bank.

This issue is significantly worse among recent immigrants and racialized people. In 2021, for example, the median after-tax income for racialized individuals was $36,800 compared to $43,100 for individuals who are not racialized.[13] A survey conducted by Pollara on behalf of Food Banks Canada in March 2024 found that more than half (54%) of the racialized population in Canada agreed that low wages are affecting their ability to make ends meet. This rate is a worrying 21 percentage points higher than the figure for non-racialized Canadians (33%).

Purchasing Power on the Decline

At the root of all these concerning statistics is an increasing cost of living that is outpacing wage growth. The rapidly increasing costs of food and housing are outstripping overall inflation (see policy section 2), and inflation has made all the other necessary costs of living unmanageable. In addition, levels of household debt have increased substantially over the last 10 years. This means that even if many workers’ wages have gone up, their ability to pay bills and make ends meet has diminished.

The result of this reduced purchasing power is that 60% of working Canadians spend all their net pay each month and 30% spend more than they earn.[14] A report by the Affordability Action Council revealed that, in 2023, people in the lowest income bracket spend 103% of their income on essential costs (shelter, food, and transport) — an increase of 12 percentage points since 2021 — leaving them with no income for other essentials or emergencies.[15]

Dwindling support for a rising number of unemployed workers and people in precarious employment

Another group of labour force participants who are being left behind because of government inaction is those who find themselves without work because of layoffs or who are in precarious or seasonal work.

Canada’s unemployment rate is steadily climbing back up after hitting historic lows in 2022 and 2023. While all workers need some degree of support, recent immigrants — people who immigrated in the last five years and may need additional support in the labour market in their first few years in Canada — and young Canadians — who often have less work experience — are in particular need of help. Both groups are more likely to be the first to be laid off and least likely to qualify for EI. While the unemployment rate among the general population is 6.6%, it is almost double that figure among recent immigrants and young Canadians.

In Canada, immigrants are more likely to work in lower-paid, insecure work and be renters. This makes them more vulnerable to shocks in both the labour and housing markets. Currently, 1 in 10 recent immigrants are unemployed because constraints in the labour market impact them disproportionately. However, they are least able to access EI.[16]

In a country where working hard no longer guarantees an adequate income, people need a social safety system that gives them peace of mind. As the nature of work continues to change, all Canadians need a responsive EI system that they can turn to if and when required. As of June 2024, EI covered less than 34% of Canada’s unemployed workers — a record low. In the early 1990s, it covered over 80% of unemployed workers.[17] Now, almost 40% of households whose main source of income is EI are reporting some level of food insecurity.[18] To put things simply, the country is heading in the wrong direction. There is a very real need for more robust support that more workers can access.

While the federal government has made commitments to review the current inadequate EI program, it has made very little headway , and the process appears to be slowly rolling to a stop. As Canada’s economic conditions continue to worsen, there is no time for slow, drawn-out processes. Action is needed today.

Our Recommendations:

1. Develop a new program within EI that specifically supports older workers (aged 45–65) who lose employment at a later age and who may need specific training and education programs to help them re-enter the modern workforce.
2. Permanently broaden the EI qualifying definition of “employment” to include self-employed and precarious work.
3. Review and reduce the number of qualifying “hours of employment” needed (currently between 420 and 700 hours of insurable employment) to better reflect the nature of modern jobs and working situations.
   1. Include a specific stream for seasonal workers who may work as few as 12–16 weeks a year.
4. Immediately expand the Working-While-on-Claim (WWC) provisions in EI to allow workers to retain more of their income from temporary/part-time work while on EI without losing benefits or having their income clawed back.
5. Extend the maximum duration of EI benefits beyond 45 weeks to 52 weeks, followed by a staggered reduction in cash benefits while retaining access to non-cash EI supports (such as training and education) so that people are not forced into our broken and grossly inadequate provincial social assistance system once their EI benefits run out.
6. Work with provinces and territories to reduce the clawbacks and improve harmony between social assistance and EI.
7. Offer improved support to workers who are currently employed and have a low income.
   1. Improve the Canada Workers Benefit (CWB) by increasing the maximum payout, especially for people who are earning below the poverty line, and ensure this integrates effectively with similar provincial tax credits such as Ontario’s Low-Income Individuals and Families Tax Credit (LIFT).
   2. Introduce government incentives that encourage businesses to pay living wages to all employees.
8. Develop a plan to phase out employer-specific temporary work permits by the end of 2028.
9. Provide better pathways for foreign workers to apply for citizenship by following through on the commitment to include temporary residents as a part of the annual Immigration Levels Plan.
   1. In addition, increase the amount of information available to foreign workers on how to transition from temporary work to permanent residency and implement the recommendations from the Standing Senate Committee on Social Affairs, Science and Technology’s report[19] on solutions for temporary migrant labour in Canada, recommendation 3.
10. Work with provinces and territories to improve the economic outcomes for recent immigrants by:
    1. Increasing funding for language training and post-landing services.
    2. Easing the regulations that apply to professional licensing that prevent immigrants with training in fields like engineering and health care from working in similar roles in Canada.

Food Banks Canada has been monitoring food insecurity and poverty in Canada’s remote and northern regions with increasing concern for many years. With worsening climate conditions — resulting in wildfires, shorter ice road seasons, and changes in animal behaviours — and rising costs of necessities like food and fuel that lead to exponentially higher costs in the North, our concern has never been greater.

For context, more than 1 in 3 people living in the territories experience some degree of food insecurity, and this rises to 63% in Nunavut.[20] Despite these unacceptable levels, no alarms are sounding for this crisis. Poverty rates are also deeply concerning across the North. According to the Northern Market Basket Measure — the official poverty line in the North — just over 24% of the population in the territories were living in poverty in 2022. This is an increase of 4 percentage points in just one year, and it is double the rate in the rest of the country. In Nunavut, where 1 in 3 residents are younger than 15, nearly half (44.5%) of people live in poverty.

The Cost of Food in the North

Year over year, government officials promise that they are working to improve living conditions in the North, but those conditions continue to worsen. According to the most recent statistics (2021), a basket of food for a family of four in the North cost $420/week.[21] Compare this to the average Canadian basket of food, which cost approximately $267/week in 2021.[22]

With household food-insecurity levels unacceptably high in the territories and social assistance income levels shrinking in real terms, it is time for the federal government, in collaboration with the territories, to review its food-security strategies in the North.

Food Banks Canada and many food banks in the network are doing what they can to support struggling communities in the North, but high shipping costs are stretching already limited funding to breaking point, especially with recent inflationary pressures.

Data as a Barrier

Unfortunately, accurate data collection is challenging in the North, making it difficult to accurately assess how much people are struggling today. Much of the information collected by the Government of Canada is several years old now and does not reflect the new reality of life under inflation and economic stress. For the rest of Canada, a basket of food went up by $46 a week between 2021 and 2023;[23] it would not be unreasonable to expect that number to be closer to an additional $100 a week in the North.

Data collection will play a key role in making real change happen in the North. Policy solutions cannot be implemented, and their efficacy cannot be monitored, if governments do not collaborate with communities to collect data more frequently using culturally safe methods in the region. In some sense, this is step one of the long journey to reduce food insecurity and improve the quality of life in northern and remote areas.

Beyond Food

Food is not the only challenge in the North. High food-insecurity rates can be explained by insufficient wages, high housing and energy costs, inconsistent government funding, and an inadequate social safety net. Exacerbating these policy failures are the devastating and lasting impacts of colonialism, systemic racism, and climate change, with the latter now preventing the gathering of traditional foods.[24] The list of challenges is long, and a new approach is needed to resolve them.

The government provides a Northern Residents Deduction (NRD) to help residents with the cost of living. It has revised it twice since 2015 to respond to rising costs. While each revision has been a welcome development, as a tax deduction, the NRD benefits people with higher incomes more than it benefits those with lower incomes. The structure of the program should be reconsidered to ensure those with the lowest incomes receive the most support.

Addressing food prices and implementing food-driven solutions can only do so much to ease the burden on residents. The federal government must also review its entire approach to the long-term root causes of food insecurity in the North if significant progress is to be achieved.

Our Recommendations:

1. Examine options for improving the design of the NRD.
   1. Making it a progressive, refundable deduction would better help those in need and reduce poverty in areas where it is highest, while maintaining a basic degree of assistance for all Northerners in recognition of the differential cost of living. If developed properly, the new and improved NRD could be the basis for a regional minimum income floor.
2. In collaboration with Indigenous communities and organizations, the government must continue to review Nutrition North Canada to determine why the program is only minimally achieving its objectives of reducing the cost of food in the North and explore innovative ways in which the program can better support communities.
3. Working in partnership with local groups, create a Canada-wide Northern development and revitalization plan that is focused on the research and development of regional programs that aim to train workers and grow commerce in strategic economic sectors like tourism, natural resources, and local/regional business.
   1. As part of this plan, work with territorial and Indigenous governments to develop a long-term community infrastructure vision that will close gaps in access to housing, food production, and broadband Internet to ensure a degree of parity with the standard of living that Canadians in the south enjoy.
4. Develop funding for a national program of community-based representatives whose focus is on connecting their communities to funds and resources that are available to communities in the North but too often go unused because of lack of awareness. These representatives would provide an opportunity for knowledge sharing between communities across the North.
5. As part of the federal government’s Critical Minerals Strategy, there must be a clear focus on the development of community infrastructure in Northern communities — for example, housing, educational institutions, and broadband Internet — so that local residents benefit from these resource projects ; and the development of incentives and strategies to retain capital in the North and reduce the reliance on temporary workers.
6. Offer additional training for remote work skills and funding for the procurement of work-from-home supplies.