August 28, 2023
In a previous article, we argued that the CVITP is not serving enough of Canada’s poor. Given the CVITP’s very limited delivery capacity, we believe that the best way to serve more of the poor is with better targeting. 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.
The purpose of this article is to describe where one can find poverty data at the level of the municipality and how the data could be used to improve efforts to reach those who most need this free service.
Provincial and territorial data confirm weak CVITP performance in reaching the poor
In our previous article on CVITP coverage, we looked only at the national picture. Before describing where poverty data can be found for individual Canadian municipalities, we look briefly at data for the provinces and territories. The most recent breakdown of poverty by province available from Statistics Canada is for 2020.
The CRA’s CVITP statistics for the 2021 tax season reflect the filing of returns for the 2020 tax year, on which Statistics Canada’s poverty data are based.
We make two assumptions:
- All the individuals assisted by the CVITP in 2021 filed a return at the very least for the 2020 tax year (in which their income was given). This is a reasonable assumption as the primary focus for most clients is for filing the current year. (Some may also file for prior years which is why the number of returns completed usually exceeds the number of individuals assisted.)
- All the individuals assisted by the CVITP in 2021 had incomes below their region’s official poverty line in 2020. This is a very generous assumption as the CRA’s recommended income ceilings for eligibility to receive CVITP services remain above many regions’ official poverty lines; this means some people served by the CVITP were not poor.
Below, we calculate the percentage of the poor in each province and territory who received the CVITP service.
Here are some important explanatory notes for the numbers in the above table.
- Poverty estimates for Yukon and the Northwest Territories are taken from a recently released paper by Statistics Canada.
- The Market Basket Measure for Nunavut, on which the official poverty line is based, has not been finalized and thus estimates of poverty for 2020 are not yet available.
- The total number of people served by the CVITP in 2021 excludes persons served outside Canada and individuals not assigned to a specific province or territory (“not applicable”).
- The national poverty figure cited here for 2020 (2,895,025) is over 500,000 more than the figure given in Statistics Canada’s 2021 Canadian Income Survey for 2020 (2,357,000). Why is this? The Canadian Income Survey, which establishes the poverty rate for 2020 at 6.4%, uses pre-2021 Census data. However, a Statistics Canada paper published in November 2022 uses the 2021 Census data to establish the poverty rate for 2020 at 8.1%. We make use of this more recent Statistics Canada data on poverty for 2020. (We wonder how and when Statistics Canada will revise its poverty dashboard to reflect the more recent estimate for the 2020 poverty rate.)
Two conclusions can be drawn from the above table:
- Nationally, the CVITP served at best only one in every five poor people in 2020; and
- The CVITP’s coverage was comparatively better in the provinces and territories with lower populations (the one exception was Quebec – the availability of financial incentives for filing provincial returns, in addition to the pilot project at the federal level offering financial incentives may be one possible explanation for this result).
These estimates reconfirm our view that the CVITP is not serving enough of Canada’s poor. 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.
Municipal data on CVITP performance are needed to better target the poor
Statistics Canada has created a website where poverty data by municipality can be found.
Ideally, the CRA could compare this data with CVITP filing rates within the same municipality to get a better understanding of how well host organizations served the poor in the 2021 tax season. If Statistics Canada updates this website with more recent poverty data for municipalities, the CRA could then track the trend in coverage over time. It could devise strategies, in collaboration with host organizations, to improve outreach to the poor in municipalities where the coverage rate was low and the trend showed no improvement over time.
above requires the CRA to be proactive. A second possibility would be for all the host organizations within a municipality to consolidate their numbers for the individuals assisted in the 2021 tax season. (It does not require the CRA to play any active role in providing data.) This consolidated number could then be compared with their municipality’s poverty number for 2020 to get an understanding of how well the poor were served in the 2021 tax season. If data were collected on the age and gender of their clients, this could also form part of the comparison. Similarly, this could be a step toward formulating strategies to improve host organizations’ outreach to the poor within the municipality for future CVITP service.
How to find data on your municipality
First, go to the “Municipal Quality of Life Dashboard”. Click on “Municipality Profile”. Once on the “Municipality” Profile page, make sure to choose the municipality and the province you want to find out more about using the dropdown menus. Then you will see toward the top of the page on the right-hand side, three options. The default seems to be “Housing Needs” so click on “Poverty”.
This changes the page to include the following information:
- Poverty figures and rate for 2020 using the Market Basket Measure based official poverty line for the municipality
- The poverty rate for different age groups and by gender
- Comparison of the municipality’s poverty rate with the provincial or territorial and national rates
(A reminder: in both cases, assuming all the individuals assisted through the CVITP have incomes below the official poverty line yields a generous estimate of the CVITP rate of coverage for serving the poor population as the income ceilings used to establish client eligibility within the CVITP are generally above the official poverty line.)
However, these options assume that the CRA and its host organizations want to improve access to CVITP services to those who need it the most and are willing to take the necessary steps to make this happen.
Will it happen?
Although the federal government lists the CVITP as one of its key programs contributing to the objectives laid out in its 2018 Poverty Reduction Strategy, there is no evidence to suggest the CRA views the CVITP through the lens of poverty reduction. It does not have any explicit strategy to make the CVITP more effective in reaching more of Canada’s poor. Somewhat disappointingly, the CRA seems to be headed in the opposite direction, reducing its ambitions for the CVITP. Furthermore, the CRA has never acknowledged in any of its official publications that its administration of income-tested benefits or the CVITP contributes to poverty reduction. Thus, we are not optimistic that it will be proactive in working to ensure the CVITP reaches more of those who need this service the most.
CVITP’s host organizations fall into two general groups: those with financial empowerment (and, by association, income-based poverty reduction) as their core mandate and those who have a different mandate but who offer this service to their regular clients or members of a defined group (e.g., religion, ethnicity, sexual orientation). Host organizations with a financial empowerment mandate are far smaller in number than the second group. Thus, for there to be a substantial increase in the access of Canada’s poor to CVITP services, host organizations who do not have financial empowerment or income-based poverty reduction as their core mandate will need to take the steps to make this happen. However, they have little incentive to expand CVITP service delivery on their own initiative beyond current capacity. Even collaboration between these host organizations to establish global figures for their municipalities, to say nothing of coordination, can be a challenge.
Thus, we are left with a puzzle: how to get the CRA to be more proactive in ensuring the CVITP reaches more of Canada’s poor population? Although Budget 2018 confirmed a quadrupling of the CRA’s budget for the CVITP, some five years later there is little to show for it.