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

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}

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

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

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.