Chapter 4: The Chief Public Health Officer's report on the state of public health in Canada 2008 – Income

Social and Economic Factors that Influence Our Health and Contribute to Health Inequalities

Income

Income – alone, or in concert with other factors – is a significant contributor to health and, consequently, health inequalities. Research indicates that there is a significant difference in disease prevalence and in years of life lost between the highest-income quintile and each income quintile lower than that of the highest. As noted in Chapter 3, if all neighbourhoods had the age- and sex-specific mortality rates of the highest-income quintile neighbourhoods, then the total potential years of life lost for all urban neighbourhoods would have been reduced by approximately 20%. This number is equivalent to more than the total years of life lost annually to injuries (19%) across all neighbourhoods (the second leading cause of premature death).143, 173

Canadians have seen an overall increase in personal income (adjusted for inflation) over time due to decreases in unemployment and increases in basic wages, but the poverty rate has not decreased proportionately. In fact, the gap between those with the highest and lowest incomes is widening
(see Figure 4.1).213

While there is some debate as to how to measure poverty, and in the absence of a consistent national definition, this report uses the after-tax low-income cut-off (LICO). LICO is a reference point for the income level at which an individual or families may find it difficult to meet their basic needs.213 Poverty, however, is more complex than just lack of money (material poverty). It also includes social poverty (or the ability to be a part of society).214 This is particularly relevant considering the long-term impacts on children growing up in poverty. The rates presented here may under-represent the extent of poverty – in terms of the numbers living in poverty and the persistent social impacts of poverty.

In 2005, the overall poverty rate in Canada (i.e. persons living in low-income after tax) was estimated at close to 11%.213 Poverty rates are estimated to be significantly higher than average among certain groups: lone parents (26%); work limited persons (21%); recent immigrants (19%); and off-reserve Aboriginal Peoples (17%). As well, they are higher in some neighbourhoods within Canadian cities.215 Lower-income families and individuals at the lowest income levels tend to be concentrated in lower-income neighbourhoods.216 As a result, they not only deal with individual poverty but with the impacts of living in the economically disadvantaged community around them. Concentration of poverty adds to the total impact of individual poverty on health when this results in neighbourhoods with fewer resources and services, more crime and less social support.261

Figure 4.1 Average incomes for economic families, two persons or more, in constant dollars, Canada, 1996-2005

 

Figure 4.1 Average incomes for economic families, two persons or more, in constant dollars, Canada, 1996-200

Source: Statistics Canada, Income in Canada, 2005.


 

Although Canada does not have a coordinated and integrated national strategy to combat poverty, some provinces and other bodies have introduced their own strategies to address poverty – particularly for children and families. Quebec and Newfoundland and Labrador have introduced poverty reduction strategies, and the Assembly of First Nations has recently launched a strategic plan to decrease poverty through creating opportunities, building on community assets and structural change for management of resources.217, 218, 219

 

Focus on Poverty

Quebec’s Family Policy

Quebec’s Family Policy was put in place in 1997. It includes an integrated child allowance, enhanced maternity and parental leave, extended benefits for self-employed women, and subsidized early childhood education and child care services. Through this policy, the province has been able to establish a network of child care centres for children aged four years and younger from existing non-profit daycare centres and home agencies. The centres offer low-cost care and are no cost for parents on social assistance. Elementary schools in the public system also provide low-cost before- and after-school care and full-day kindergarten is provided to all five-year-olds.220, 221 In addition, some school boards offer full-day kindergarten to four-year-olds from low-income families. Since 1997, Quebec’s steady decline in poverty rates has resulted in the greatest overall decrease among provinces resulting in a 2005 child poverty rate lower than the national average.213 While much of this decline is due to economic growth, government policies are also believed to have contributed to lower poverty rates.217

Saskatchewan’s Initiative

Recognizing the health benefits of employment (such as social networks and self esteem), as well as the fact that some low-income working families experience financial difficulties paying employment-related expenses (e.g. income taxes and contributions, transportation, clothing and child care) in addition to meeting basic needs, Saskatchewan introduced an initiative in 1997, which supports a number of programs and services to help low-income people achieve financial security, including: the Saskatchewan Employment Supplement; the Saskatchewan Child Benefit; and Family Health Benefits (providing additional health coverage for children).218, 223

Further assistance is available in the form of child care subsidies, discount bus passes, rental housing supplements and transitional employment allowances. Eligibility for benefits is based on an income threshold rather than welfare eligibility. By 2004, Saskatchewan had seen 41% fewer families dependent on social assistance (6,800 families and almost 15,000 children) and a substantial increase in after-tax disposable income among families working for minimum wage.218

 

It is estimated that 788,000 children under the age of 18 currently live in poverty, representing a decrease over the last decade from a peak of 18.6% of all children in 1996 to 11.7% in 2005 (see Figure 4.2).8, 213, 224

Figure 4.2 Children aged 0-17 years living in low-income families (after tax), Canada, 1996-2005

 

Figure 4.2 Children aged 0-17 years living in low-income families (after tax), Canada, 1996-2005

Source: Public Health Agency of Canada using Statistics Canada, CANSIM
Table 202-0802.


 

Figure 4.3 shows that while the number of Canadian children living in low-income families is lower than in the U.S., it is more than double that of Nordic countries such as Finland, Sweden and Norway.8 This suggests that Canadian policies and programs have not been as effective as some other OECD countries. Generally, western and northern European countries with a history of providing universal benefits for families with children have the lowest rates of child poverty once taxes and transfers are taken into account.8, 225

Figure 4.3 Child low-income rates in OECD countries based on market sources and disposable income: late 1990s and early 2000s

 

Figure 4.3 Child low-income rates in OECD countries based on market sources and disposable income: late 1990s and early 2000s

Source: Adapted from Corak, M. (provided by Canadian Population
Health Initiative, 2007).


 

While Canada has had limited success in addressing childhood poverty, the ability to reduce seniors’ poverty has been much better demonstrated (see text box).123 Although there are no specific studies that have traced the effect of an increase in overall health among seniors with a reduction in seniors’ poverty, the evidence linking health and income suggests that the health of Canada’s seniors has benefited overall as a result of these social investments.

 

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