Feds made a bit of progress on the wealth inequality index, but did anyone notice?

OTTAWA—They say no good deed goes unpunished. That certainly applies to the Trudeau government’s billions of dollars in spending meant to keep storefronts open and people from winding up living on the street during the first two years of the pandemic. I don’t remember too many people complaining about the COVID-related support payments at the time. But it is now widely accepted on the right that the Liberal government went overboard in its efforts to protect the public during this once-in-a-century catastrophe. The alleged largesse is to blame, according to these critics, for a variety of woes, mainly supposedly unleashing inflation and, to a lesser extent, purportedly tempting people to think twice about taking jobs they don’t like or that pay too little. The overall goal of reducing poverty, or addressing the 21st century’s grotesque wealth gap, got pushed back even further than usual on the public agenda during the struggle with COVID-19. But the Liberals had actually made some headway on this issue before the pandemic hit. In the Liberals’ first budget under Prime Minister Justin Trudeau in 2016, the government introduced a new, amalgamated Canada Child Benefit (CCB) intended to provide higher benefits for nine-in-10 families. Announcing the more generous payments, then-finance minister Bill Morneau told MPs the CCB “is the most significant social policy innovation in a generation. It will lift hundreds of thousands of kids up from poverty.” Before long, this program was making a difference. The National Advisory Council on Poverty, created in 2018 as part of the federal government’s anti-poverty strategy, reported last year that the poverty rate in Canada fell from 14.5 per cent in 2015 to 10.1 per cent in 2019, representing a 30 per cent reduction over that period. About 3.7 million people were living in poverty in 2019, 1.3 million fewer than in 2015. Between 2015 and 2019, the poverty rate dropped in each province. It was highest in Saskatchewan (12.4 per cent) and lowest in Alberta (8.2 per cent). The largest declines in poverty among provinces were in New Brunswick and British Columbia. Provinces such as Alberta and Quebec, where poverty rates were already below the national average, continued to trend downward, the council said. “The decline in the national poverty rate from 2018 to 2019 represents a continuation of a general downward trend in the poverty rate observed in recent years,” Statistics Canada said in a Canadian Income Survey released last year. Looking back over the period beginning in 2015, the CCB is generally given credit for overall improvements in the wealth gap. Another contributor may be the Canada Workers Benefit (CWB), a refundable tax credit originally introduced in 2007 to help low-income employees get over the “welfare wall.” But many experts believe the CWB, despite increases in funding, remains inadequate. Still, the most accepted definition of wealth inequality, the Gini coefficient, has in recent years shown the first sustained improvement in Canada for decades. “Historically, the Gini coefficient was below 0.296 in most years from 1976 to 1995, then rose from 1996 to 2000, reaching levels above 0.315 in most years from 2000 to 2013, before starting to trend downwards,” according to Statistics Canada. “The level of 0.299 reached in 2019 was the lowest Gini coefficient measured for Canada since 1995.” And this trend continued through the first year of the pandemic as the federal government focused its support payments on those who needed them most. On average, the gap in household disposable income between the lowest- and highest-income earners declined in 2020, Statistics Canada reported: “Households in the lowest income quintile increased their share of disposable income from 6.1 per cent in the first quarter to a high of 7.2 per cent in the second quarter of 2020, while those in the highest income quintile decreased their share from 40.1 per cent to 37.7 per cent over the same period.” This effort by Finance Minister Chrystia Freeland helped keep many Canadians afloat during COVID-19 and warded off an even more devastating recession. But huge problems remain in food insecurity, housing, workplace gender imbalance, precarious work, and now, inflation. Whether the CCB’s positive impact will make any difference, as a political matter, is impossible to say. The improvement in wealth inequality has attracted little media attention, and a lot of the people helped by the federal government’s anti-poverty efforts are not among those with a high voting tendency. Moreover, the federal government’s financial rescue mission has obviously been forgotten by many Canadians in the increasingly ill-tempered mood in the tail end of the long health crisis. Beyond that, the NDP still labels the Liberals enablers of Canada’s corporate profiteers and many Conservatives consider Trudeau’s party to be wildly free-spending socialists hell-bent on bankrupting the country. Les Whittington is a regular columnist for The Hill Times. The Hill Times