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Food insecurity and poverty ticks up in 2021 as COVID-19 aid declines

Single-parent families, those with disabilities and Indigenous people are facing the most financial stress exiting the period of COVID-19 pandemic restrictions, according to new StatCan data.
The increase in food prices has many families strapped for cash.

The Canadian Income Survey for 2021 shows Canadians were still better off financially than in 2019, before the COVID-19 pandemic; however, a significant reversal is expected due to higher cost of living pressures in 2022.

Newly released 2021 national income data shows poverty rates remain relatively low as family incomes stabilize, with greater employment making up for declining COVID-19 benefits; however, an elevated rate of inflation in 2022, particularly for food, and a further decline of government aid is expected to propel poverty rates higher through this year.

According to the survey from Statistics Canada, the median after-tax income for Canadian families was $68,400 in 2021, declining just $600 from 2020 when the economy was propped up by government debt. The poverty rate increased one percentage point to 7.4 per cent in 2021, as employment rebounded, offsetting a decline in government benefits.

Still, the poverty rate is still much lower than in 2019 when 10.3 per cent of Canadians fell below the line and the median after-tax income was $64,500. In 2019, 3.8 million people lived below the poverty line whereas in 2021 2.8 million people did so.

And despite the government cheques and rebound in employment income, food insecurity as a percentage of the population rose in 2021 (18.4 per cent total) compared to 2020 (15.7 per cent) and 2019 (15.9 per cent). Of the 1.1 million more Canadians experiencing food insecurity in 2021, 802,000 were in families with children, the survey showed.

And food insecurity trends in 2021 may be a harbinger of greater economic strife for Canadians in 2022, the survey noted.

“In 2022, Canadians were faced with rapidly increasing costs of living, driven by increased shelter and food costs. At the same time, disposable income grew at a slower-than-average pace for the lowest quintile in 2022.

“The changes observed in the annual Consumer Price Index and disposable income suggest that the poverty rate will increase in 2022 to a level approaching the pre-pandemic mark of 10.3 per cent,” stated the report, noting official poverty rates for 2022 will be released in 2024.

Meanwhile, the survey showed some of the groups of individuals who struggled the most.

The poverty rate for seniors, for example, increased by 2.5 percentage points to 5.6 per cent in 2021, close to the 2019 poverty rate (5.7 per cent).

Furthermore, the survey noted  “lone-parent families” and “unattached individuals” are more vulnerable to poverty, with rates of 16.1 per cent and 21.9 per cent, respectively.

And among Indigenous people aged 16 and older, 13.9 per cent were below the poverty line in 2021 (nearly double the national rate).

And people with disabilities fared worse in 2021 than in 2020, with poverty rates increasing to 10.6 per cent, up from 8.5 per cent (and still below the 2019 mark of 13.7 per cent).

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