WHAT IS POVERTY?

Research Highlights

• Individuals with less than a high school diploma, recent immigrants, unattached individuals, lone mothers, and persons living alone account for 71% of all full-time workers in low paid jobs.
• The number of children living in low-income families in Ontario has increased by 41% over the last decade.
• In 2000, 48% of single mothers were low-income.
• The low-income rate of recent immigrants in 2000 was 2.5 times that of natural-born Canadians.
• 17% of seniors are living in poverty, and 71% of these are women.
• And in Guelph & Wellington…
  • A single, employable person on social assistance in Guelph receives an income equivalent to 45% of the Low Income Cut-off poverty line.  In Wellington County, the equivalent number is 58%.
  • A person working full-year, full-time at the minimum wage rate would be living under the poverty line in Guelph. 

What is Poverty?
Poverty can be measured in two ways: absolute and relative. Absolute poverty is measured by taking a person’s income and comparing it against the cost of a predetermined basket of goods. If that person’s income is insufficient to cover the cost of the basket then they are deemed to be living in poverty. Relative poverty compares a person’s total income and spending patterns with those of the general population. People spending a larger proportion of their income than the threshold that is deemed typical of the general population are considered to be living in poverty¹.
 
Low Income Cut-off (LICO)
Although there is no official measure of poverty in Canada, the Statistics Canada measure is probably the best known. The Low Income Cut-off (LICO), commonly referred to as the poverty line, is based on an assumption of what percentage of gross income the average family spends on necessities such as food, shelter and clothing. Once this percentage has been determined, Statistics Canada assumes that any household spending 20% more than this amount is living in poverty. The current LICO of 54.7% is based on the estimation that the typical Canadian household spends 34.7% of its gross income on basic necessities.  Those spending 54.7% or more are considered to be living in poverty².

Prevalence
Poverty in Canada
Despite recent economic growth and an increase in average incomes, poverty in Canada remains a persistent problem.  Average incomes of the lowest 10% of Canadian earners increased by only 7.3% from 1993 to 2003, while overall incomes increased by 18.8%³.  Certain groups of people are more vulnerable to poverty in Canada: studies have found that individuals with less than a high school diploma, recent immigrants, unattached individuals, lone mothers, and persons living alone account for 71% of all full-time workers in low paid jobs, while constituting only 37% of all full-time workers⁴.
 
Families
Despite national commitments to eradicate child poverty in 1989, the number of children living in poverty has increased steadily.  Today, 35% of Canadian children living in low-income families live in Ontario, approximately 443,000 in number.  This is a 41% increase over the last decade⁵.
 
Low income affects all aspects of a family’s existence, including safe and affordable housing, nutritious food, reliable child care, and full community participation.  Government funding cuts to education and community services limit the ability of children living in low-income families to attain positive outcomes.
 
Lone-parent households continue to be disproportionately represented in low-income statistics, particularly female-headed households.  In 2000, 48% of single mothers were low-income⁶.  However, the proportion of lone mothers who are low-income has declined steadily over the years.  Higher education levels, older childbearing ages, and smaller families have all contributed to increasing incomes for single mother families.  Employment rates for single mothers were up 12% from 1980 to 2000 and average earnings increased by 39% over the same period⁷.
 
Recent Immigrants
In 1980 the low-income rate of recent immigrants was 1.4 times that of the Canadian-born; by 2000 this figure had risen to 2.5⁸.  This occurred despite the fact that the educational attainment of recent immigrants increased tremendously during that time.  Recent research suggests that the deterioration of their economic position is related to changes in their demographics (i.e. country of origin, language skills, etc.), a decline in the return to their foreign work experience, and a general decline in the labour market outcomes of new labour force entrants overall⁹.

Child Poverty Rates Among Selected Groups in Canada (2001) 

Low Education
Over the period of 1980 to 2000, family earnings remained stagnant or fell among less educated couples, while rising among the more highly educated. Among young Canadian-born couples with a high school education or less, employment income declined between 6 and 15%¹⁰. Median weekly earnings of young male high school graduates employed in the private sector fell by 20%.

Education Level of People in Poverty (2002) 

Seniors
The poverty rate among seniors has declined from 20% to 17% over the last decade, and has nearly halved from its 30% rate in 1980¹¹. One of the major contributors to this trend has been the availability of higher government income transfers, such as CPP premiums. While there are fewer seniors in poverty the numbers are not gender neutral. Of the seniors living in low-incomes 71% were women and 29% were men. 
 
Seniors living alone are at high risk of poverty.  While the low-income rate has declined from 65% in 1980, today 40% of seniors who are living alone are living in poverty¹⁰.

Risk & Contributing Factors
Cost of Living
Statistics Canada estimates that the average cost for food and shelter in Ontario has increased by roughly twice the average rate of inflation between 2004 and 2005, meaning people have less real income to spend on basic necessities¹³.  Recent increases to both Ontario Works and the minimum wage rate will allow people to take home more income, but these increases have not kept pace with inflation. 
 
Minimum and Low-wage
The last decade in Ontario has seen a net loss of permanent, full-time jobs in the province¹⁴.  These positions have been lost in great part due to global economic trends, which result in companies moving factories to developing nations and downsizing in an effort to remain internationally competitive.  This has led to many permanent positions being replaced by non-standard employment, meaning work that is part-time, contract, seasonal, or self-employment.  This is particularly true for jobs traditionally occupied by women and youth.  Non-standard employment has grown to 37% of all jobs in Canada, compared to just 25% in the mid-1970s¹⁵.  With this increase in non-standard employment has come a loss of job security, income, and benefits.

Minimum Wage Rate in Ontario, 1980-2006 (constant 2005 dollars) 

Despite these changes, Guelph and Wellington’s economy is strong. While many skilled, well-paying jobs have left the area, there are many entry-level positions for low-skill workers. While these positions do not necessarily allow people to move out of poverty, they will provide them with training and experience and assist them in moving forward through the workforce.  The challenge for many people living in poverty is often maintaining employment due to personal barriers.
 
Of all the low-income families in Canada, over one third have parent/s who worked full time for the whole year¹⁶. That means that many families are living in poverty despite being able to maintain full-time employment.  At the minimum wage rate in Ontario, despite the recent increase to $8.00 per hour in February 2007, a single person working full-time would only earn $13,559 annually. This is still below the $14,253 poverty line for a community the size of Guelph¹⁷. 
 
The working poor are trapped by their inability to save or invest in training that would allow them to earn higher wages.  Few low paying positions offer benefits, only 31% of unemployed workers qualify for employment insurance, and few are legally protected by employment standards¹⁸. Low-wage earners in Ontario must continuously struggle to meet their basic needs and are often at risk of homelessness.

Social Assistance
Social assistance has declined in value by over 35% in the last decade¹⁹.  Ontario currently provides the 3rd lowest welfare income as a percentage of the poverty line in all of Canada.  The Low Income Cut-off rate (LICO) for a city the size of Guelph (2004) was $26,948 for a family of four²⁰.  In 2006, the Ontario social assistance rate for a couple with two dependent children was $13,980, only 52% of the government’s established poverty rate²¹.  The average rental price of a two-bedroom apartment in Guelph in 2004 was $829, or $9,948 per year²².  For a family living on social assistance, this means that only $336 per month would be left after paying rent to cover all of their other basic needs.

Low Income Cut-offs, Ontario Works, and Ontario Disability Support Program (ODSP)
monthly rates for different family sizes in Guelph (2004).

Effects of Poverty
A lack of income is not only a hardship in and of itself, but it leads to a wide variety of other stresses to be faced by families in need.  Among those identified by local service providers in Guelph and Wellington are unstable housing and a lack of food, affordable child care, quality medical and dental care, reliable transportation, and mental health supports.  Furthermore, acquiring sufficient income must often take precedence over all other activities, including educational training, medical appointments, and time spent with family, creating additional stress. 
 
In addition to the personal stresses faced by low-income families, municipalities are facing increased demands for shelter services, rental supplements, and other support services because people are less able to afford their basic needs.
 
Homelessness
A lack of affordable housing in the Guelph and Wellington area has made it increasingly difficult for people with limited means to move out of poverty.  Although the County of Wellington owns and manages 1,189 affordable housing units in Guelph and the County, demand consistently outpaces supply.  Between January and April of 2006, an average of 129 individuals and families applied for subsidized housing from the County every month.  Of these, 25 were able to obtain housing²³. 
 
For low-income families unable to obtain subsidized housing, remaining housed is a monthly challenge.  Recent increases in the cost of hydro, gas and rent mean that there is less money left over at the end of the month to buy food and clothing.  There are several organizations in Guelph and Wellington which provide shelter assistance payments to cover shortfalls in rent and hydro, but these funds are limited.
 
Children
There are 1.2 million children in Canada living in poverty.  Despite strong economic growth, Ontario’s child low-income rate has stalled at 15-16% since 2000.  40% of low-income children live in female lone-parent families.  Almost half of children in new immigrant families (47%) and about one third (32%) of all children in visible minority families are living in poverty in Ontario²⁴.  Growing up in poverty is linked to poor health, lower school performance, and low pay and unemployment as adults²⁵.
 
Inability to Save
Low-income families tend to save very little and accumulate few or no assets.  A lack of savings limits a person’s ability to obtain education or training that may allow them to move out of poverty.  Furthermore, having no savings means there is nothing to cushion a family should any shocks occur.  Household shocks such as illness or injury, job loss, or natural disasters often overwhelm low-income families and access to savings could prevent them from being forced onto social assistance or dehoused.
 
Individuals receiving social assistance are limited in the amount of assets they are allowed to retain.  For example, a single person receiving Ontario Works is only entitled to have $536 in assets, either in cash or in specific items that are easily convertible²⁶.  For families this limit is higher, but it means that families and individuals must deplete their savings if they hope to become eligible for social assistance.  Without savings it is much more difficult to move out of poverty.
 
Transportation
One of the largest challenges for low-income people in Guelph and Wellington County, particularly for those living in rural areas, is a lack of transportation.  Not having access to affordable and reliable transportation means that many people are unable to attend training programs, find housing, and go to job interviews or medical appointments.  Many people without transportation have been forced to relocate from rural communities to larger centres because they were unable to access the services they require. 
 
In Guelph, low-income individuals are able to apply for subsidized bus passes through Guelph Transit, paying $30 a month rather than $50.  There is no public transportation in Wellington County.  The Community Resource Centre and the County of Wellington are currently working to establish a volunteer transportation service for rural County residents. 

Ontario Works
Ontario Works is a program which provides financial and employment assistance to people in financial need.  The Mission Statement is “To empower clients to achieve their maximum potential including financial independence by providing integrated services, which meet individual, family, and community need”. The principle components of the program are Income Services, Employment Services, and Cost Recovery Services. 
 
In addition to providing a monthly income to eligible people who are unemployed, the County of Wellington Ontario Works department also provides assistance with transportation, child care costs, employment start-up costs, parenting training for young parents, funeral costs, health benefits, and employment and training services.  Ontario Works provides programming and counselling in an effort to allow people to become financially independent and permanently employed. 

Community Supports & Services
A number of services exist in Guelph and Wellington County that aim to assist low-income households in remaining housed, obtaining healthy food, staying adequately clothed, and obtaining access to transportation.
 
Centre Wellington Food Bank
Provides free groceries (one week’s supply, once a month) and other basic supplies to individuals and families.  Also offers individuals the opportunity to upgrade skills through the Wellington Centre for Continuing Education.
 
Chalmers Community Services Centre
The Chalmers Outreach Program provides individual support and counselling/referrals for individuals with urgent needs.  Services include a fair share food shelf, clothing cupboard, haircuts, mending of clothes, assistance with transportation, and Saturday night suppers.
 
The Saturday night supper program offers a no cost meal to people experiencing food insecurity in Guelph and Wellington.  There are 16 churches in Guelph on an 11-week rotation that provide a complete meal by supplying all the food and the preparation.
 
Community Resource Centre
The Community Resource Centre is a multi-service centre serving the needs of individuals, families and seniors in Centre and North Wellington.  Their services include outreach support, crisis intervention, child care and early years programs, information and referral, family resource programs, parent and child groups, toy lending, assistance for children to access sporting and cultural activities, housing supports for families, and volunteer transportation.
 
East Wellington Advisory Group (EWAG)
The East Wellington Advisory Group is a community-based, non-profit organization whose mission is to improve the quality of life through the provision of a multi-service centre, support of individuals in need, co-ordination of information on available services, liaison with related organizations, initiation of new programs and encouragement of community development.  Services include a food shelf, clothing cupboard, assistance with transportation, and programs to support parents, children and seniors.
 
Guelph Churches Outreach Program (CORE)
In response to the growing need for assistance within the community, a number of Guelph churches formed the CORE group to address the issue.  As a result, an assistance policy has been created and will address some of the needs on an emergency basis only.  The CORE churches include:

• Chalmers United Church
• Dublin Street United Church
• First Baptist Church
• Knox Presbyterian Church
• St. Andrew’s Presbyterian Church
• St. George’s Anglican Church
• Trinity United Church

The churches vary in the services they offer.  Individual churches should be contacted to determine available assistance.
 
Guelph Food Bank
Offers food hampers for individuals and families in need, counselling, advocacy on behalf of clients and referrals to community agencies.  Budget and employment and nutrition counselling are provided along with a food reference guide.
 
Guelph Neighbourhood Support Groups
Several neighbourhood groups offer services that aim to assist low-income families from their neighbourhoods.  These services include emergency food, clothing closet, family literacy programs, as well as personal and family counselling.  The neighbourhood groups offering some or all of these services include:

• Brant Avenue Neighbourhood Group
• Onward Willow Better Beginnings Project
• Parkwood Gardens Neighbourhood Group
• Two Rivers Neighbourhood Group
• Waverly Neighbourhood Group
• West Willow Woods Neighbourhood Group

Salvation Army – Community and Family Services
The Guelph branch of the Salvation Army provides assistance with food and clothing, baby food and diapers, transportation for travel outside of Guelph (up to $30), prescriptions (non-narcotic), housing (hydro and gas payments made through the Last Month’s Rent Fund), emergency accommodation, family and budget counselling.
 
Welcome In Drop-in Centre
The Drop-In Centre is a place where people can receive nutritious meals, health care, hair care, emergency transportation costs and many baby care needs.  The Centre also acts as a liaison between people and social services.
 
The Last Month’s Rent Fund is a Program designed to assist individuals in obtaining housing by providing financial assistance for the last month rent deposit and/or half the hydro deposit.  The Drop In Centre will phone landlords and other services to advocate for individuals requiring housing support or assistance with Hydro and Gas.
 
The Winter Warmth Fund is a joint initiative between the United Way and Union Gas; it is administered locally by the Welcome In Drop-In Centre.  The program provides one-time financial assistance to low-income individuals and families whose gas bills are in arrears.  Funds are credited directly to the applicant’s Union Gas account.
 
*Of the above mentioned programs, the United Way of Guelph & Wellington funds and supports Chalmers Outreach Program, the Community Resource Centre, EWAG, the Guelph Neighbourhood Support Groups, and the Welcome In Drop-in Centre.

What are the Social Service Issues in Guelph and Wellington?

• Despite economic growth in Guelph and Wellington County, many people living in poverty are unable to secure and maintain permanent employment due to personal barriers.
• The demand for food assistance has increased greatly throughout Wellington County.
• There is not enough housing for people with low-incomes.  Demand for County of Wellington supported housing vastly outpaces supply.
• Many families are paying more than 30% of their income and are living in housing that does not meet their needs (i.e. too cramped, not enough bedrooms, run-down physical state, etc.).  Marginal and/or unstable housing makes it more difficult for low-income families to deal with other stresses in their lives.
• The limitations of the social assistance system force people in need to live with financial resources that are far below what is necessary to maintain a household.
  
• There are too few services in Guelph to assist new Canadians to integrate into the community.
• Social services in the area are unable to meet all the needs of the community. Low-income individuals and families are often unable to find available doctors, dentists and mental health workers.
• The minimum wage rate is so low that a family with two working parents may still be living in poverty.
• Low-wage working families are often unable to afford child care.
• More middle class families are struggling with financial pressures.
• There is no public transportation in Wellington County and there are limited transportation options for low-income families.

A lone parent leaving social assistance for a job paying $10 an hour will experience the following:

• Loss of social assistance benefits for adult and each child
• Increased child care expenses
• Loss of basic dental coverage for the child
• Loss of prescription drug coverage that doesn’t require payment upfront
• Loss of back to school benefits
• Loss of winter clothing allowance
• Becomes ineligible for special diet allowances where required
• Loses community start-up benefits for medically necessary move
• Will begin to pay net federal taxes at approximately $1,600 per month net income
• Ontario sales tax credits will be reduced

Barriers to moving from social assistance to working[1] .

1. Government of Canada (2006).  Economic Concepts: Poverty.  Retrieved July 19, 2006, from http://canadianeconomy.gc.ca/english/economy/poverty.html.
2. Ross, D.; Shillington, E.R.; Lochhead, C. (1994).  The Canadian Fact Book on Poverty.  The Canadian Council on Social Development.  Retrieved July 19, 2006, from http://www.ccsd.ca/pubs/archive/fb94/fs_povbk.htm.
   
3. Statistics Canada (2006).  Income in Canada 2004.  Ottawa, Ontario: Statistics Canada – Catalogue no. 75-202-XIE.
4. Ibid.
5. Canadian Association of Food Banks (2005).  Time for Action: Hunger Count 2005.  Toronto, Ontario: Canadian Association of Food Banks.
6. Myles, J. & Hou, F. (2006).  Why did Employment and Earnings Rise Among Lone Mothers During the 1980s and 1990s?  Ottawa, Ontario: Statistics Canada – Catalogue no. 11F0019MIE – No. 282.
7. Ibid.
8. Morisette, R. & Picot, G. (2005).  Summary of: Low-paid Work and Economically Vulnerable Families over the Last Two Decades.  Ottawa, Ontario: Statistics Canada – Catalogue no. 11F0019MIE – No. 249.
9. Ibid.
10. Campaign 2000 (2005).  Decision time for Canada: Lets Make Poverty History: 2005 Report Card on Child Poverty in Canada.  Toronto, Ontario: Campaign 2000.
11. Canadian Council on Social Development (2003).  Census Shows Growing Polarization of Income in Canada.  Retrieved July 20, 2006, from http://www.ccsd.ca/pr/2003/censusincome.htm.
12. Ibid.
13. Canadian Association of Food Banks (2005).  Time for Action: Hunger Count 2005.  Toronto, Ontario: Canadian Association of Food Banks.
14. Campaign 2000 (2005).  Decision time for Canada: Lets Make Poverty History: 2005 Report Card on Child Poverty in Canada.  Toronto, Ontario: Campaign 2000.
15. Ibid.
16. Ibid.
17. Canadian Association of Food Banks (2005).  Time for Action: Hunger Count 2005.  Toronto, Ontario: Canadian Association of Food Banks.
18. Saunders, R. (2006).  Making Work Pay: Findings and Recommendations from CPRN’s Vulnerable Workers Series.  Research Highlights, No. 6.  Canadian Policy Research Networks.
19. Ibid.
20. Statistics Canada (2005).  Low income cut-offs for 2004 and low income measures for 2002.  Income Research Paper Series.  Ottawa, Ontario: Statistics Canada – Catalogue no. 75F0002MIE – No. 003.
21. County of Wellington (2006).  Ontario Works: Rate of Assistance.  Retrieved July 15, 2006, from http://www.county.wellington.on.ca/social_subpage.aspx?id=13.
22. Ontario Non-Profit Housing Association (2005).  Where’s Home? 2005: A Picture of Housing Needs in Ontario.  Toronto, Ontario:  Ontario Non-Profit Housing Association & Co-operative Housing Federation of Canada, Ontario Region.
23. County of Wellington (2006).  Centralized Waiting List Stats Update: January 1 – April 30, 2006.
24. Campaign 2000 (2005).  Putting Children First: 2005 Report Card on Child Poverty in Ontario.  Toronto, Ontario: Campaign 2000.
25. Ibid.
26. Ministry of Community & Social Services (2006).  Social Assistance.  Retrieved July 21, 2006, from http://www.mcss.gov.on.ca/mcss/english/pillars/social/questions/ow/about_ow.htm.