There are 1.4 million fewer Canadians living in poverty: report

Some 1.4 million Canadians were lifted out of poverty in 2020.

Data from the 2020 Canadian Income Survey indicates that the said number represents a 3.9 percent decrease in the country’s poverty rate.

The poverty rate declined from 10.3 percent in 2019 to 6.4 percent in 2020.

Statistics Canada presented this picture as it released Wednesday (March 23) new data from the income survey made during the first year of the COVID-19 pandemic.

The country uses the so-called market basket measure or MBM to gauge poverty.

As Statistics Canada explains, MBM is the cost of a basket of goods and services, which equates to a basic standard of living.

The basket includes costs in a specific community of food and shelter and other needs.

These costs are compared with disposable income to determine whether one falls below the poverty line.

The decline in the poverty rate in 2020 doesn’t mean an improvement in the economic situation of people based on their market incomes.

Rather, the change was due to substantial government supports in the face of the COVID-19 pandemic.

“Although the national poverty rate for years before 2020 was generally trending downward, the large decrease observed from 2019 to 2020 was mostly attributable to the increases in government transfers,” Statistics Canada stated.

A poverty rate of 6.4 percent means that around 2.4 million Canadians are living below the basic standard.

Statistics Canada also reported that the median after-tax income of Canadian families and unattached individuals was $66,800 in 2020.

This represents an increase of $4,400 or 7.1 percent from 2019.

Like the decline in the poverty rate, the improvement in median after-tax income was related to government subsidies on account of the pandemic.

“The increase in after-tax income was larger for lower-income individuals and families and was mainly driven by income support programs put in place to assist Canadians impacted by the COVID-19 economic shutdowns,” Statistics Canada stated.

The agency underscored some of the changes noted in 2020 were “not permanent”.

“Therefore, to some degree, the changes observed in market income, government transfers and poverty rates in 2020 were likely temporary,” Statistics Canada stated.