There are numerous ways to define and measure poverty. For example, Indigenous Peoples’ conceptions of poverty go beyond financial considerations, and the concept may be discussed in a way that places an emphasis on well-being. Views of poverty vary between Indigenous groups.
For the Government of Canada, poverty is broadly defined as “the condition of a person who is deprived of the resources, means, choices and power necessary to acquire and maintain a basic level of living standards and to facilitate integration and participation in society.” In 2018, the federal government launched a poverty reduction strategy, aiming to halve the national poverty rate by 2030, relative to its 2015 level.
This HillNote summarizes the federal role in poverty reduction, outlines the main features of Canada’s poverty reduction strategy and analyzes the evolution of poverty rates in Canada since 2002.
Federal Role in Poverty Reduction
The distribution of powers related to poverty reduction is complex. Employment Insurance parental benefits (except in Quebec), income tax concessions (except in Quebec) and most income security programs fall under federal jurisdiction. Social assistance, child care and child welfare legislation fall under provincial jurisdiction, with financial support from the federal government. For some programs, such as old age pensions, the jurisdiction is shared between the federal and provincial governments.
In addition, the federal government provides long-term funding for the provinces and territories through the Canada Social Transfer, which supports post-secondary education, social assistance, social services, early childhood development, early childhood learning and childcare.
Figure 1 outlines key federal income support programs available to Canadians at different life stages. The federal government also offers targeted supports for population groups such as Indigenous people, persons with disabilities and veterans. Certain programs address issues related to poverty, such as addictions, education and employment, and housing needs (e.g., through the National Housing Strategy).
Recent poverty-related initiatives include:
- a 10% increase in Old Age Security payments for seniors over 75;
- the Canada Disability Benefit;
- the Canada National School Food Program;
- the Canada-Wide Early Learning and Child Care System;
- the Canadian Dental Care Plan; and national pharmacare.
Figure 1 – Key Federal Income Support Programs
Sources: Receiver General for Canada, “Table 2a – Recapitulation of external expenses by type,” Public Accounts of Canada 2024: Volume II – Details of Expenses and Revenues; Government of Canada, Canada Child Benefit; Government of Canada, Child disability benefit (CDB); Department of Finance Canada, Report on Federal Tax Expenditures – Concepts, Estimates and Evaluations, 2024; Government of Canada, GST/HST credit – Overview; Government of Canada, Canada Workers Benefit (Working Income Tax Benefit before 2019); Office of the Superintendent of Financial Institutions, Office of the Chief Actuary, 2025 Actuarial report on the Employment Insurance Premium Rate, 13 September 2024; Employment and Social Development Canada (ESDC), Employment Insurance (EI); ESDC, “Introduction,” Employment Insurance Monitoring and Assessment Report for the fiscal year beginning April 1, 2018 and ending March 31, 2019, 2020; Jill Giswold and Kaitlyn Vanderwees, The Government’s Expenditure Plan and Main Estimates for 2024-25, Office of the Parliamentary Budget Officer, 7 March 2024; Government of Canada, Old Age Security; Government of Canada, Guaranteed Income Supplement – Allowance; ESDC, Canada Pension Plan: 2021 to 2022 Annual Report, 2023; and Government of Quebec, Québec Pension Plan.
Canada’s Poverty Reduction Strategy
In August 2018, following a review of the results of consultations with Canadians, the federal government launched Opportunity for All: Canada’s First Poverty Reduction Strategy. The strategy builds on existing poverty reduction efforts, some dating back decades. The key components of the strategy were set out in the Poverty Reduction Act, which came fully into force on 9 July 2019. These include the following:
- Establishing an Official Poverty Line determined by the Market Basket Measure (MBM), as published by Statistics Canada, with the requirement that it be reviewed regularly. As explained in the strategy, the MBM is “based on the cost of a basket of goods and services that individuals and families require to meet their basic needs and achieve a modest standard of living in communities across the country.”
- Setting targets to reduce the poverty rate in Canada by 20% by 2020, and by 50% by 2030, based on Canada’s Official Poverty Line and relative to 2015 levels. This aligns with Canada’s targets under United Nations Sustainable Development Goal 1, which was adopted by all United Nations member states in 2015 and aims to eradicate poverty in all its forms.
- Determining requirements for a National Advisory Council on Poverty tasked with, among other things, advising the designated minister on poverty reduction programs, funding and activities; conducting public consultations; and submitting an annual progress report, to be tabled in the Senate and House of Commons.
Poverty Rates in Canada
While the MBM is the official threshold for poverty in Canada, the Government of Canada also assesses poverty by measuring low income through the Low Income Cut-Offs (LICO) and the Low Income Measure (LIM). The LICO categorizes a household as low income if it spends 20 percentage points more on necessities like food, shelter and clothing than the average family, based on 1992 spending patterns. The LIM defines low-income households as those with incomes below 50% of the median household income, adjusted for household size.
Figure 2 shows the evolution of the national poverty rate, based on the LICO, over the past two decades. Unlike the MBM, which was revised in 2008 and 2018 to reflect an updated basket of goods, the LICO is a consistent measure that allows for comparison of the data over a longer timeframe. Further, the LICO provides a different picture of low income compared to the MBM. It is a relative measure of the level of household wealth compared to the average, rather than focussing on the attainment of a specific income level. It also accounts for fewer categories of spending items. Based on the LICO, the poverty rate has been on an overall downward trend over the past 20 years.
Figure 2 – Poverty Rate in Canada Since 2002 (Low-Income Cut-Offs After Tax) (% of total population)
Source: Figure prepared by the Library of Parliament based on data obtained from Statistics Canada’s Canadian Income Survey. See Statistics Canada, Table 11-10-0135-01: Low income statistics by age, sex and economic family type, Database, accessed 12 February 2025.
Figure 3 shows the trend line for the national poverty rate, based on the Official Poverty Line, from 2015 to 2022 (data not publicly available before 2015). By 2018, the poverty rate (11.2%) had already fallen by 20% relative to the 2015 rate (14.5%), meeting the first target in the Poverty Reduction Act. Following the rollout of pandemic-related support measures in 2020, the poverty rate further decreased that year to 6.4%, a reduction of over 50% with respect to 2015. Since then, the poverty rate has risen to 9.9% as of 2022.
Figure 3 – Poverty Rate in Canada Since 2015 (Official Poverty Line) (% of total population)
Note: Figure uses the Market Basket Measure, with a base year of 2018. Data for this base year is publicly available from 2015.
Source: Figure prepared by the Library of Parliament based on data obtained from Statistics Canada’s Canadian Income Survey. See Statistics Canada, Table 11-10-0135-01: Low income statistics by age, sex and economic family type, Database, accessed 12 February 2025
As shown in Figure 4, certain population groups face a higher risk of experiencing poverty. In 2022, persons in female lone-parent families (23.8%), First Nations (22.1%), persons not in an economic family (26%), Indigenous Peoples (17.2%), persons with disabilities (12.3%), recent immigrants (14%), members of racialized groups (13%) and Métis (11.9%) had a higher poverty rate than the total population (9.9%). Seniors experienced a lower poverty rate compared to other groups (6.1%), although some researchers have argued that the MBM does not adequately capture seniors’ poverty.
Figure 4 – Poverty Rate by Population Group (Official Poverty Line), 2015 and 2022 (%)
Notes: This figure uses the Market Basket Measure with 2018 as the base year. It is not applicable on First Nations reserves or in the territories. The terms “female” and “male” reflect the terminology used in the data source. “Racialized groups” corresponds to the term “visible minority” in the data source. An “economic family” is defined by Statistics Canada as “a group of two or more persons who live in the same dwelling and are related to each other by blood, marriage, common-law, adoption or a foster relationship.” “Indigenous population” refers to “persons who reported having an Indigenous identity, that is, First Nations (North American Indian), Métis or Inuk (Inuit), or those who reported more than one identity.” Data for First Nations, recent immigrants and persons with disabilities refer to persons aged 16 and over in 2015, and persons aged 15 and over in 2022. While data for Inuit are collected through the Canadian Income Survey, they have been suppressed due to small sample size. Note that the figure excludes 2015 data for Métis as Statistics Canada has categorized it as “use with caution.” For the Indigenous population and racialized groups, there are no data points available for 2015.
Sources: Figure prepared by the Library of Parliament based on data obtained from Statistics Canada’s Canadian Income Survey. See Statistics Canada, “Table 11-10-0135-01, Low income statistics by age, sex and economic family type,” Database, accessed 12 February 2025; Statistics Canada, “Table: 11-10-0136-01 Low income statistics by economic family type,” Database, accessed 12 February 2025; Statistics Canada, “Table: 11-10-0093-01, Poverty and low-income statistics by selected demographic characteristics,” Database, accessed 12 February 2025; and Statistics Canada, “Table: 11-10-0090-01, Poverty and low-income statistics by disability status,” Database, accessed 12 February 2015.
Poverty advocates and researchers have raised other concerns about the MBM not capturing the full scope of poverty. They have noted, for example, evidence of rising food bank usage despite a decrease in the official poverty rate, and the omission from the MBM of dedicated categories of spending for items such as dental care [in French] or the additional health costs of persons with disabilities. Conversely, the MBM has also been criticized for being too high a threshold, focussing on resources needed for integration in society rather than solely on basic needs.
Experts at Statistics Canada and in academia continue to explore more accurate measures of national poverty. For example, indicators such as unmet housing and health needs, food insecurity, and literacy and numeracy, are tracked through Statistics Canada’s Dimensions of Poverty Hub. The agency has collaborated with territorial governments to propose a Northern Market Basket Measure for Nunavut, the Northwest Territories and Yukon. In addition, there are examples of Indigenous-led data initiatives in Canada using culturally appropriate approaches, many of which measure aspects of poverty and well-being.
By Eleni Kachulis, Library of Parliament
Categories: Government, Parliament and politics, Social affairs and population