PEI

Poverty rates falling on P.E.I., but not for everyone

Poverty rates on P.E.I. are down over the last decade, but the picture is mixed.

Poverty rates for the working age population have risen

Poverty rates for children have dropped the most. (Costea Andrea M/Shutterstock)

Poverty rates on P.E.I. are down over the last decade, but the picture is mixed.

The Canadian Income Survey from Statistics Canada, released at the end of February, reports on incomes up to 2017. The numbers for a small province such as P.E.I. can be difficult to interpret. They show spikes in 2013 and 2015 that could be significant or could be sampling errors.

Using five-year averages shows that despite those spikes, poverty levels were 0.5 percentage points lower from 2013-17 than from 2008-12.

  • 2008-12: 12.9%.
  • 2013-17: 12.4%.

The report breaks down the numbers demographically as well, and they show an uneven picture. Child poverty rates, measured for people under the age of 18, were down 3.6 percentage points. For seniors they were down 1.8 percentage points.

But for people aged 18 to 64 the rate was up 0.9 percentage points.

Federal program having an impact

UPEI economics Prof. Jim Sentance said rates of child poverty fell across the country, and he believes he can see why.

"I think the biggest impact there is what's happened in the last couple of years with the Canada Child Benefit," said Sentance.

"2017 compared to 2015 — when there was no Canada Child Benefit, so the previous system — in some provinces child poverty has been cut in half."

Nationally from 2015 to 2017 child poverty rates fell 38 per cent.

UPEI economist Jim Sentance says the cost of living has outpaced wage growth, which could be contributing to higher levels of poverty among people aged 18-65. (Shane Hennessey/CBC)

"We are very happy with the outcome seen from the implementation of the CCB. It provides more money to nine out of 10 families and it provides this money tax free," said Valérie Glazer, press secretary for the Department of Families, Children and Social Development in an emailed statement to CBC News.

"This is a great advancement in terms of social policy in Canada and it helps reduce poverty while supporting economic growth, and ensures more Canadians can make ends meet."

The Canada Revenue Agency has reviewed the application forms for the program to make them easier to complete. It hopes the simplified forms will allow the program to reach even more families.

Improvement in seniors population more complicated

Sentance can't think of any single government program that might explain the reduction in poverty for seniors as the Canada Child Benefit does for children. He believes there may be a number of factors coming together to explain the change.

The number of seniors participating in the workforce has increased significantly over the last decade, so seniors are more likely to be topping up their pensions.

Workforce participation, age 55 and over

  • Jan. 2008: 36.3.
  • Jan. 2018: 41.4.

There is a generally younger senior demographic on P.E.I. now than there was a decade ago. That's because there are more boomers, who are currently aging into that category, than there were people in the previous generation.

Percentage of seniors aged 65-74

  • 2008: 54%.
  • 2017: 60%.

These seniors are more likely to be working, and less likely to have used up their retirement savings.

Another factor could be that interprovincial migration has favoured an older demographic. From 2014-18, interprovincial migration was positive for people aged 55-74, and negative for most other age groups.

Older Canadians living outside P.E.I. are less likely to be living in poverty than those on P.E.I. Interprovincial migration could be bringing more relatively wealthy seniors to the province.

And finally, older boomers have in general had more lucrative careers than the generation that came before, so as they pass the age of 65, they will lower the poverty levels for seniors.

Income versus cost of living

The increase in poverty in what might be considered the working-age population, those aged 18 to 65, might be best explained, said Sentance, by looking more closely at the two sides of the poverty calculation.

That is income on the one side, and cost of living on the other.

It's really important to remember that even though from year to year things may change, it may go up or it may go down, we still have a lot of people who can't afford the basics.— Ann Wheatley, Cooper Institute

"We have seen … slight increases in wages but we're still fairly low level there," he said.

"Certainly with higher rents and so on the cost of living on the Island has probably gone up a bit in the last few years, and the HST [introduced in 2013] might have added a little bit to the cost of living there as well. That's one possibility."

Poverty levels still 'pretty high'

While there are fewer people on P.E.I. and in Canada living below the poverty level, Ann Wheatley of the Cooper Institute, part of the P.E.I. Working Group for a Livable Income, said it's important to remember what those numbers represent.

"I'm concerned that there are so many people who are still affected by poverty living in this province," said Wheatley.

"It's really important to remember that even though from year to year things may change, it may go up or it may go down, we still have a lot of people who can't afford the basics."

In November the provincial government released its poverty reduction plan. It immediately increased some social assistance payments, set a new target for the minimum wage, and approached the cost side of poverty by pledging to support affordable housing.

Ann Wheatley, of the Cooper Institute, says the federal and provincial plans to reduce poverty need to 'aim higher,' than reducing poverty by 50 per cent. (Dominique Daoust)

The long-term goal is to reduce poverty by 50 per cent by 2030. The plan includes 67 individual action points. Unlike the Canada Child Benefit, the plan addresses the needs of all people.

"They're meant to have an impact on people across the life cycle," said Jennifer Burgess, the manager of planning, policy and innovation in the provincial Family Services Department.

Wheatley said she liked a lot of what she saw in the plan.

"They were really good at demonstrating how there are so many factors that affect a person's income and how a person will have access to things like housing and food security," she said.

"I don't think you can really take any one of those things out of the mix."

But she still feels the ultimate goal of the plan falls short.

"What gives me pause is that those strategies, the P.E.I. strategy and the federal government's strategy, both aim to reduce poverty by 50 per cent over the next decade," she said.

"We need to aim higher than that."

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About the Author

Kevin Yarr is the early morning web journalist at CBC P.E.I. You can reach him at kevin.yarr@cbc.ca.

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