Category Archives: Poverty Reduction

A focus on recent developments in poverty reduction

Why Ontario and BC Perform Poorly Compared to New Brunswick and PEI

Leave a Reply

In a recent article on the CVITP participation rates of those living in poverty, we noted that “New Brunswick has the best participation rate, with 43.4% of the province’s poor receiving CVITP services.  At 17.4%, Ontario has the worst participation rate among the provinces, well below the rate for all the provinces combined (24.3%).”

The purpose of this article is to explore some of the reasons for these wide divergences.  To help find some of the reasons, we compare the two best performers, New Brunswick and Prince Edward Island (PEI), with the two weakest performers, Ontario and British Columbia (BC).

First, we dismiss a couple of reasons we think are not relevant.  Next, we analyze the Canada Revenue Agency (CRA) CVITP data for 2021 at the provincial level. Here we discover three important differences between these high and low performing provinces.  Then we look at the provincial level data in 2022 and 2023. We want to see if there have been changes since 2021 in these three areas which might significantly improve the CVITP participation rates of the poor performers relative to the strong performers.

Finally, we link these differences with the expected results of the CRA’s pilot grant program.  We argue that the developments in these areas prove the pilot did not achieve two and arguably three of its four expected results. (No CRA data has been made public which allows for an assessment of the fourth area.)

Read here about the three differences between the high and low performing provinces in 2021, how these differences evolved between 2021 and 2023, and why we believe they demonstrate that the CRA’s pilot grant program has been a disappointment.

CVITP Has Been Forgotten by National Advisory Council on Poverty

Leave a Reply

Our work is based on the connection the federal government has drawn between poverty reduction and the CVITP in its 2018 Poverty Reduction Strategy.  Specifically, this strategy recognizes the important role the CVITP plays in providing access to the many federal (and provincial/territorial) benefits designed to reduce poverty.

Following the publication of the Strategy, the Poverty Reduction Act was adopted as law by Parliament in 2019.  Among other things, the Act requires the federal government to set up a National Advisory Council on Poverty.  To date, the Council has produced five annual reports (2020 – 2024).  Yet nowhere in these five reports is any mention made of the CVITP.  We find this surprising.

In its reports, the Council urges improved access to existing benefits.  Yet the Council never considers the role that the CVITP currently plays in facilitating access to those benefits, the challenges it faces in doing this and its weak performance in meeting these challenges.

Learn here why we think the Council should not remain silent on the only federal government initiative designed to help those living in poverty get the benefits to which they are entitled.  Read here what the Council should instead be doing.

Inequalities of Access to Free CVITP Services Across Canada

Leave a Reply

There are great disparities in vulnerable Canadians’ access to CVITP services across Canada.  This shows up clearly in the different rates of participation in CVITP services between the provinces.

In this article, we look at the 2020 provincial poverty data Statistics Canada estimated using its Market Basket Measure or MBM.  (At that time, Statistics Canada had yet to establish a separate MBM for the territories.)  We compare this data with the CRA’s data on the number of CVITP clients served in each province during the 2021 tax filing season.  From this, we calculate the percentage of those living in poverty who were served by the CVITP.  (We use the generous assumption that all individuals served by the CVITP in 2021 were living in poverty in 2020.)  This gives us what we call CVITP participation rates by province.

These rates vary substantially between the provinces.  See here how your province ranks in comparison to the other provinces in providing CVITP services to those living in poverty.

The CVITP’s 2023 Coverage of the Impoverished in Canada

Leave a Reply

In the 2022 tax season, the CVITP served only 28% of those living in poverty in 2021.  The poverty rate in Canada rose from 7.4% in 2021 to 9.9% in 2022.  What percentage of the 3,037,000 adults living in poverty in 2022 were served by the CVITP in the 2023 tax season?  Read this article to find out more.  Also learn about why we think the Canada Revenue Agency should be doing a lot more to expand the CVITP yet does not seem willing to do so.

Using Municipal Poverty Data to Better Target CVITP Service

Leave a Reply

In a previous article, we argued that the CVITP is not serving enough of Canada’s poor.  In that article, we looked only at the national picture.  Under the most generous assumptions, we determined that the CVITP served at best only one in every five poor people in Canada.

In this article, we look briefly at 2020 provincial and territorial level data (the most recent year available) to establish CVITP coverage (again, using a very generous assumption).  Our estimates reconfirm that CVITP service to the poor remains surprisingly low across Canada (with the lower populated regions doing a comparatively better job).

Given the CVITP’s very limited delivery capacity, we believe that the best way to serve more of the poor is with better targeting.  But to do this effectively, host organizations need poverty data at the local level.  By this we mean both reaching out to specific groups to encourage them to use the service and greater selectivity in whom the service is provided to.

A new Statistics Canada website where poverty data for most Canadian municipalities can be found offers the CRA and host organizations the information needed to devise strategies to improve access to CVITP services for those who need it the most.  But we argue it is unclear whether either group has the will to make this happen.

CRA Scales Back Its Ambition For The CVITP

Leave a Reply

In this series of five short articles, we show how the CRA has publicly scaled back its growth ambitions for the CVITP.  We cover four distinct periods in the evolution of the CVITP over the last 10 years:

  • During the 2013-2017 period, the CVITP saw steady growth but this does not appear to be because of any explicit strategy.
  • In the 2018-2019 period, aided by the quadrupling of the budget to support its administration of this program, the CRA established its first performance targets for the CVITP.  These targets would cover the 2018 to 2021 tax seasons.  The CRA planned to achieve these targets without providing the community-based organizations and their volunteers who delivered this service any financial support.
  • The 2020-2021 period saw a collapse in CVITP services followed by a modest rebound.  This was due to the introduction of COVID-related public health restrictions which restricted in-person clinics, the main delivery model which had been used up to that point in time.
  • Given that the CVITP’s performance was well short of the targets established by the CRA, the Agency eliminated any further targeting or performance reporting to Parliament on the CVITP for the 2022-2024 period.  It also introduced a pilot grant program to provide modest support to community-based organizations hosting the CVITP during the 2021, 2022 and 2023 tax seasons.  The intent of the program is to provide a financial incentive for existing host organizations to take on more clients and new community-based programs to host CVITP services.  However, this period also coincides with the return to normalcy in public life.  Thus, we should expect the CVITP to recover some of the ground it lost in 2020 even in the absence of financial incentives.

Given the history of CRA’s changing ambitions for the CVITP, we draw three conclusions:

  1. The CRA’s track record in performance targeting with the CVITP illustrates how meaningless it is for federal departments and agencies to set, monitor and report on their own results.  When performance falls short of targets, these can be changed or dropped entirely to avoid the inconvenience of having to explain awkward results.  The elimination of any further performance indicator for the CVITP suggests the CRA no longer considers that the CVITP is part of its key responsibilities.
  2. CRA data for the 2022 tax season, the most recent available, show the CVITP’s numbers of returns completed and of individuals assisted represent about three quarters of the results achieved in the 2019 tax season.  Worse still, the number of returns completed is only a 13% increase over the number produced for the 2013 tax season (the earliest figure reported by the CRA).  And the number of individuals assisted is only about 80% of the number for the 2016 tax season (the earliest figure reported by the CRA).  Yet, over the same period, the Canadian population has grown and the federal government has increasingly resorted to using the return filing process as its principal tool for allocating a growing number of income-tested benefits.  It is unclear how, despite a quadrupling of its CVITP budget, the CRA has managed to produce such poor results.
  3. The fact that the CRA has quietly abandoned its growth ambitions for the CVITP calls into question the federal government’s statement in its 2018 Poverty Reduction Strategy (PRS) that the CVITP is a key program for helping to deliver on the PRS objectives.  If the PRS is genuinely a strategy and not just a communications tool, the federal government needs to follow up and ensure that the relevant departments and agencies it depends on to achieve the PRS objectives are implementing their initiatives effectively.  Someone senior inside the federal government needs to be calling the CRA to account for its poor implementation of the CVITP.

Trends in Poverty Reduction With Implications for the CVITP

Leave a Reply

Our website is focused on the link between the CVITP and poverty reduction.  The federal government’s first ever Poverty Reduction Strategy, introduced in 2018, set a target for reducing the poverty rate by 2020 by 20% from its 2015 level.  In March 2022, the Official Poverty Dashboard of Indicators maintained by Statistics Canada indicated that the poverty rate, which was 14.5% in 2014, had declined to 6.4% in 2020.  This is well in excess of a 20% reduction!

However, Statistics Canada recently released a paper which revised the poverty rate for 2020 to 8.1%.  This revision took into account the 2021 Census of Population figures.  While not as impressive as 6.4%, it still exceeds the target the government set for reducing poverty by 2020.

But this accomplishment is likely to be short-lived for two reasons.

First, 2020 saw the introduction of a large number of benefits to help people who had suffered loss of income due to COVID related lockdowns.  While not the intended objective, these benefits lowered income inequality as well as the proportion of the population living on low incomes.  While many of these supports were maintained in 2021, these income supports were largely withdrawn in 2022 as the economy opened back up.

Second, 2022 has also seen rising price inflation.  Price inflation disproportionately impacts those on low incomes, reducing their purchasing power, as people in this group live on fixed incomes or low wages which do not rise as fast as inflation.

Whether or not these two factors have led to an increase in the poverty rate will only be known in March 2024 when Statistics Canada releases its poverty data for 2022.  The implications for the CVITP will be evident more immediately as an increasing number of residents fall into poverty, becoming eligible to receive federal and provincial or territorial government benefits which are income tested.  Since the filing of a current income tax and benefit return is a condition for receiving many of these benefits, the federal government will be keen to facilitate filing.

But will the CVITP be ready to provide this service in the 2023 season to an expanding clientele?  The most recent figures for the CVITP show, at the very least, that the CRA will struggle to do this. Consequently, many low-income people who are eligible for this service in 2023 will likely have to turn to commercial return preparers to file in a timely manner.  Others will file late, risking interruptions in the flow of their benefits.

For more details, see our full article on this topic here.

The Issue of Non-filers

Leave a Reply

Conservative estimates suggest there are over 1 million eligible people in Canada who do not file annually.  A significant number, perhaps the majority, are individuals living on very low incomes.  Because they do not file, they are missing out on important federal and provincial/territorial benefits.

The Canada Revenue Agency (CRA) recently introduced an initiative to encourage low-income non-filers to file their income tax and benefit returns.  However, the success rate for this initiative is pitifully low.

This article suggests why the CRA should and how it could work with CVITP host organizations to significantly increase the number of low-income non-filers who decide to file returns.

How well are your CVITP clinics targeted to clients who need this service the most?

Leave a Reply

For many CVITP host organizations, the demand for free clinic services exceeds the supply of volunteer time available to prepare returns.  The income ceilings suggested by the Canada Revenue Agency (CRA) are an established way of limiting access to this free service.  This article compares the income ceilings suggested by CVITP with the incomes that make up poverty lines and finds that, with a few exceptions, the former are generally greater than the latter.  Host organizations which want to target their services to those who need it the most may wish to use income ceilings that are more closely aligned with the poverty lines for their region.

To learn more, you can read the full article here.

A Primer on Canada’s Official Poverty Line and Why It Matters to the CVITP

Leave a Reply

Canada’s Poverty Reduction Strategy gives time-bound targets for making progress in reducing poverty linked to one indicator.  This suggests that the federal government can be held accountable for its efforts in achieving these time-bound targets.  The indicator it uses is an official poverty line.  The official poverty line is a uniquely income-based concept.  The targets are as follows:

– By 2020, the poverty rate will be reduced by 20% from its 2015 level, and

– By 2030, the poverty rate will be reduced by 50% from its 2015 level (aligned with the United Nations Sustainable Development Goals)

In other words, the official poverty line can be used to calculate the poverty rate: the percentage of the population with an annual income lying below this line at a particular point in time forms the poverty rate.

In an article entitled A Primer on Canada’s Official Poverty Line and Why It Matters to the CVITP, we explore what the official poverty line is and how it is used to determine poverty rates.  In the conclusion, we draw the CVITP’s connection with this official poverty line.  As you will see, the income tax and benefit returns processed by the CVITP play a crucial role in helping to raise clients’ incomes relative to the official poverty line.