Provincial and Territorial Ranking
The data on this page are current as of April 2017.
- Compared with international peers, half of Canada’s provinces score “B” grades on the overall society report card. They are middle-of-the-pack performers, with top-ranked province New Brunswick placing 10th overall.
- Alberta, Nova Scotia, P.E.I., Saskatchewan, and Newfoundland and Labrador get “C”s, with Newfoundland and Labrador placing ahead of only bottom-ranked peers France, Japan, and the United States.
- Canada gets a “B” overall and ranks 10th among the 16 peer countries.
- The Nordic countries Norway, Denmark, and Sweden do best overall.
Putting social performance in context
The overarching goal of The Conference Board of Canada’s How Canada Performs is to measure quality of life for Canada, its provinces and territories (whenever comparable data are available), and its peer countries. Quality of life is not only affected by standard of living, i.e., income per capita, but is also a reflection of social outcomes. Inequity and poverty in a country or region have a huge impact on the health of the population, educational outcomes, and social cohesion. For example, low levels of civic participation and engagement, high crime rates, and overall social unrest are all associated with higher levels of poverty and inequity.
How is social performance measured?
To measure social performance, we evaluate and assign grades to Canada, its provinces, and 15 peer countries on 10 indicators. We then calculate an overall society grade for each province and country based on the aggregate performance on these 10 indicators. For more details on how the grades are calculated, please visit the Methodology page.
The territories are not included in the overall society report card because data are not available for key indicators. However, The Conference Board of Canada will be releasing a special How Canada Performs report on social outcomes in the territories in spring/summer 2017.
Although the analysis in this report card remains as consistent as possible with previous international society report cards, the choice of indicators was limited by the availability of comparable data for both provincial and international jurisdictions. For example, in previous society report cards, there were separate indicators for elderly poverty, child poverty, and working-age poverty. Unfortunately, comparable international and provincial data are not available. However, there is an overall poverty indicator.
Provincial and peer-country comparisons are not possible for 4 indicators: intergenerational income mobility, immigrant wage gap, racial wage gap, and income of people with disabilities. These indicators are not included in the computation of the overall society report card grades.
Also, grades are assigned to the provinces on only 2 of these 4 indicators. Grades are not assigned to the provinces for the racial wage gap because the data are older than the data for other society report card indicators. However, it is still important to present data on racial wage gaps to compare race-related earning inequities across jurisdictions. Grades are also not assigned for the income of people with disabilities because of the sizable income gaps of people with and without disabilities for even the best-performing province—in other words, no province deserves an “A.” If we were to only use provincial data to compute the A-B-C-D ranges, the top three provinces get “A” grades, based on the way we assign grades. But even the top-ranked province on this indicator does not do well in absolute terms. If it were possible to grade the provinces relative to peer countries (using peer country data to compute the A-B-C-D grade ranges, as is the case for the other indicators for which comparable international data are available), the results would most likely reveal that none of the provinces were “A” performers. So, it did not make sense to assign A-B-C-D grades to the provinces on this measure based solely on provincial data because even the top-performing province is not worthy of an “A” in a global context.
The 14 indicators in the society report card (10 indicators for which comparable international and provincial data are available and 4 indicators for which only provincial data are available) cover two broad categories: equity and social cohesion.
Equity is assessed by examining performance on seven indicators: poverty, income inequality, intergenerational income mobility (i.e., the extent to which differences in income are transmitted from one generation to the next), gender wage gap, immigrant wage gap, racial wage gap, and income of people with disabilities.
A diverse set of indicators are used to assess social cohesion. Voter turnout and jobless youth (i.e., the share of young people not in school or working) are measures of the extent to which people participate in their communities. Life satisfaction and social network support (i.e., the share of people who say they have relatives or friends they can count on for help in times of need) measure how people feel about their lives and communities. Finally, the rates of homicides, burglaries, and suicides provide information on the breakdown of community life.
|Equity ||Social cohesion |
- Income inequality
- Intergenerational income mobility*
- Gender wage gap
- Immigrant wage gap*
- Racial wage gap*
- Income of people with disabilities*
- Voter turnout
- Jobless youth
- Life satisfaction
- Social network support
*These indicators are not included in the computation of the overall society rankings because comparable peer country data are not available.
Source: The Conference Board of Canada.
There are indicators in other Conference Board report cards that also reflect social performance. For example, the unemployment rate in the economy report card and the high school attainment in the education and skills report card are measures of social cohesion. The education and skills report card also has two indicators of equity: equity in learning outcomes (measured by the gap in the math test scores of native-born and immigrant students) and resilient students (i.e., students in the bottom quarter on socio-economic status in a given country or region who score in the top 25 per cent on standardized math tests across all countries).
What does the provincial society report card look like?
What does Canada’s overall society report card look like?
Overall, Canada earns a “B” grade and ranks 10th among the 16 peer countries. This is a drop in performance from our previous 2013 national report card, where Canada also received a “B” but placed 7th among its peers. However, these grades are not comparable, as the set of indicators in this report card is not identical to the set used in the previous report card. On the indicators that are in both the 2013 report card and this one, Canada’s performance has not changed materially.
Canada’s grade and ordinal ranking on jobless youth remains the same, a “B” and a 9th-place finish. On the gender wage gap indicator, Canada still gets a “C” but now ranks 13th among the 16 peer countries, a drop from 10th place. While the gender wage gap in Canada has been decreasing, other countries have made greater improvements. Looking at income inequality, Canada’s grade has improved, from a “C” to a “B,” but it now ranks 13th among the 16 peer countries, a drop from 12th place in the last report card.
Canada fell from an “A” to a “B” on homicides, but it moved up from 14th to 13th overall among the 16 peer countries. Furthermore, Canada’s homicide rate has been trending downwards. Canada saw notable improvement on the burglaries indicator, moving from a “B” to an “A” and jumping from 7th place to 4th. Note that for both the crime indicators, three-year average rates are now used instead of the rates in the latest year for which data are available. So, the data are not directly comparable to those used in previous reports.
On suicides, Canada still gets a “B” but has moved up a spot from 7th to 5th place among the 16 peer countries. As is the case with the crime indicators, in assessing performance, three-year average suicide rates are compared instead of the latest-year data on suicide rates.
Canada’s standout performance is on the life satisfaction indicator, where it gets an “A” and ranks 4th among its peers. Canada gets its lowest grade, a “C,” on three indicators: poverty, gender wage gap, and voter turnout.
Which provinces rank highest on the society report card?
New Brunswick and Quebec are the top-ranked provinces, earning “B” grades overall and placing behind the Nordic countries and the Netherlands, Germany, Switzerland, Australia, and Austria.
New Brunswick ranks 10th among the 26 comparator jurisdictions. The province scores “A” grades on three of the ten indicators used to compute the overall grades: homicides, burglaries, and income inequality, where it ranks first among the provinces. New Brunswick gets an “A+” on life satisfaction for placing ahead of the best-performing peer country on this indicator, Switzerland. The province gets “B”s on gender wage gap and voter turnout and “C” grades on the remaining indicators: poverty, jobless youth, social network support, and suicides.
Quebec ranks just below New Brunswick in 11th place. The province scores “A”s on three of the indicators used to compute the overall grades: homicides, burglaries, and life satisfaction. Quebec has the second-lowest average homicide rate in the country, after Newfoundland and Labrador, with a significant drop in its homicide rate in 2013 and 2014. Quebec is a “B” performer on a number of indicators: income inequality, jobless youth, social network support, and suicides. The province earns its lowest grades, a “C”, on three indicators: poverty, gender wage gap, and voter turnout. Quebec had the second-lowest voter turnout in the 2015 federal election, after Newfoundland and Labrador.
While Quebec is one of the top-ranked provinces, this may not have been the case had comparable international data been available for some of the equity indicators not included in the computation of the overall report card. Relative to the other provinces, Quebec does not fare well on the immigrant wage gap, racial wage gap, and income of people with disabilities indicators. On the immigrant wage gap, Quebec gets a “C,” with the third-highest wage gap after Manitoba and Saskatchewan. Quebec has the highest racial wage gap among the provinces and ranks second-to-last on the income of people with disabilities measure.
Which provinces are middle-of-the-pack performers?
B.C. and Ontario get “B” grades on the society report card and rank 12th and 14th, respectively, with overall scores just ahead of and just below the national average.
British Columbia's best performance is on the life satisfaction and social support network indicators. On perceived social network support, the province ranks second highest among all jurisdictions, after Ireland. B.C. gets “B” grades on the two crime indicators, on jobless youth, and on suicides. The province gets “C”s for poverty, voter turnout, and income inequality—in 2013, B.C. had the second-highest income inequality among the provinces. The province gets its lowest grade, a “D,” for its gender wage gap, with the fourth-highest gender wage gap among all 26 jurisdictions.
Like Quebec, Ontario gets “A” grades on homicides, burglaries, and life satisfaction. The province has the second-lowest burglary rate among all the peer countries and provinces, with an average of just under 300 burglaries per 100,000 population. Ontario also scores an “A” on suicides, with the third-lowest average suicide rate among all the jurisdictions. Ontario gets its sole “B” on jobless youth and, like B.C., gets “C” grades on poverty, income inequality, and voter turnout. The province also gets “C”s on social network support and gender wage gap.
How do the Prairie provinces rank on social performance?
Manitoba is also a “B” performer on the overall society report card. Alberta and Saskatchewan get “C” grades overall.
Manitoba is the top-performing Prairie province, ranking 15th overall, placing just ahead of Belgium. The province gets “A” grades on life satisfaction and social network support and “B” grades on income inequality, the gender wage gap, jobless youth, burglaries, and suicides. On poverty and voter turnout, Manitoba is a “C” performer. The province’s worst showing is on homicides, where it gets a “D.” After the U.S., Manitoba has the highest three-year average homicide rate among all the jurisdictions. The province also does poorly on a couple of the equity indicators not included in the computation of the overall rankings. Manitoba has the highest immigrant wage gap—there is a 39 per cent difference in median hourly wages between university-educated landed immigrants and Canadian-born citizens in the province. On intergenerational income mobility, Manitoba doesn’t fare any better, ranking last among all Canadian jurisdictions with income mobility over two times lower than that of top-ranked province, P.E.I.
Alberta places 19th overall, just behind Ireland. The province’s best showing is on poverty and life satisfaction, where it gets “A” grades. Alberta has the lowest poverty rate among all the provinces and the third-lowest among all 26 jurisdictions, after Denmark and Finland. These are 2013 data, however—before commodity prices plummeted—and reflect pre-recession performance. So, when more current data become available, there may be some deterioration and potential change in the rankings.
Alberta gets “B” grades on income inequality, jobless youth, burglaries, and suicides and “C”s on voter turnout and homicides. The province gets its lowest grades, two “D”s, on social network support and the gender wage gap. Alberta has the third-highest gender wage gap among all the jurisdictions—only Japan and Newfoundland and Labrador fare worse. The province also ranks poorly on the income of people with disabilities, an indicator not included in the overall report card. In Alberta, people with disabilities earn 66 per cent of the income of people without disabilities—the poorest showing among all the provinces.
Saskatchewan, the poorest-performing Prairie province, ranks 21st overall. The province gets a “D” on the gender wage gap indicator and a “D–” on social network support, where it ranks below the worst-performing peer country on that measure, Japan. Saskatchewan gets a “C” on homicides, with the third-highest average homicide rate among all the comparator jurisdictions, after the U.S. and Manitoba. The province also does poorly on a couple of indicators not included in the overall society report card. Saskatchewan scores a “D” relative to the other provinces on the immigrant wage gap, with the second-highest wage gap after Manitoba. Saskatchewan also ranks below the national average on intergenerational income mobility.
Saskatchewan is a “B” performer on poverty, income inequality, voter turnout, burglaries, and suicides. It does well on the jobless youth indicator, with a fourth-place finish overall. With a jobless youth rate of only 11 per cent, Saskatchewan is the top-ranked province and the only one with an “A.” Saskatchewan earns its top grade, an “A+” on life satisfaction, placing first among all the comparator jurisdictions.
How do the remaining Atlantic provinces do?
While New Brunswick gets a “B” overall and a respectable 10th-place finish, the remaining Atlantic provinces don’t fare as well, ranking close to the bottom of the pack and scoring “C” grades on the overall society report card.
Nova Scotia ranks 20th overall, although it does do well on a number of the social cohesion indicators, scoring “A” grades on homicides, burglaries, and life satisfaction. The province gets “B” grades on suicides and income inequality and “C” grades on poverty, the gender wage gap, voter turnout, and social network support. Nova Scotia’s worst performance is on jobless youth, where it gets a “D,” with the highest jobless youth rate among all the provinces and the second-highest overall, after Ireland. In 2012, 21 per cent of the province’s population aged 20 to 24 were neither in school nor working.
Nova Scotia does well on the equity indicators not included in the computation of the overall rankings. With an immigrant wage gap of 2.8 per cent, Nova Scotia has smallest difference in median hourly wages between university-educated landed immigrants and Canadian-born citizens. The province also has the lowest racial wage gap among all the provinces.
P.E.I. ranks just behind Nova Scotia and Saskatchewan, in 22nd place. Like Nova Scotia, P.E.I. does well on a number of the social cohesion indicators, with “A” grades on homicides, burglaries, and suicides, and an “A+” on life satisfaction. The province has the second-lowest suicide rate after the U.K. and ranks among the top five overall with one of the lowest burglary rates. P.E.I. also gets an “A” grade on an equity indicator: income inequality. The province gets a "B" on the gender wage gap but has the fourth lowest gender wage gap among all 26 comparator jurisdictions, after Belgium, Denmark, and Norway. P.E.I. also gets a “B” on voter turnout—it ranks behind six peer countries but has the highest voter turnout of all the provinces.
P.E.I.’s overall performance is pulled down by its showing on three indicators: poverty, jobless youth, and social network support. The province gets “C” grades on poverty and jobless youth—it had the highest poverty rate among the provinces in 2013 and the third-highest jobless youth rate in 2014, at 18 per cent. On perceived social network support, P.E.I. ranks last among all the peer countries and provinces and gets a “D–” grade.
Like Nova Scotia, P.E.I. does well on equity indicators not included in the computation of the overall rankings. The province has the highest intergenerational income mobility among all the provinces and the second-lowest racial wage gap, after Nova Scotia.
Ranking 23rd among the 26 comparator regions, Newfoundland and Labrador is at the bottom of the pack—only France, Japan and the United States do worse. The province scores a “D–” for its gender wage gap, with the highest wage gap among all the jurisdictions. The gap in weekly full-time earnings between men and women in Newfoundland and Labrador is close to 30 per cent—almost three times higher than the gap in the top-ranking province, Prince Edward Island. Newfoundland and Labrador also does poorly on the jobless youth and social network support indicators, with “D” grades on both. The province has the third-highest jobless youth rate overall, after Ireland and Nova Scotia. Newfoundland and Labrador gets “C”s on poverty and voter turnout, with the lowest voter turnout among the provinces in the last federal election. The province gets “B”s on income inequality, burglaries, and suicides. Newfoundland and Labrador does well on two indicators: homicides and life satisfaction. The province gets an “A” on homicides, with the lowest three-year average homicide rate in the country. On life satisfaction, Newfoundland and Labrador scores an “A+,” ranking second only to Saskatchewan.
Like the other Atlantic provinces, Newfoundland and Labrador does well on equity indicators not included in the overall rankings. The province has the third-highest intergenerational income mobility after P.E.I. and B.C., the second-lowest immigrant wage gap among the provinces, and the third-lowest racial wage gap.
What about the territories?
The territories are not included in the overall provincial and international benchmarking calculations because data for each individual territory are not available for key indicators in the overall society report card. The Conference Board of Canada is, however, committed to including the territories in our analysis, and so information on territorial performance is provided when data are available.
Gender wage gap: Both Nunavut and Yukon do well on the gender wage indicator. Nunavut gets an “A+,” with a smaller wage gap than top-ranked peer country Belgium. Yukon gets an “A.” N.W.T., on the other hand, is a “D” performer, with a gender wage gap of 23 per cent.
Income mobility: Like most of the provinces, the territories do well on intergenerational income mobility. Separate data are not available for the Northwest Territories and Nunavut; together, however, these territories earn an “A,” as does Yukon.
Income of people with disabilities: Grades were not assigned to any jurisdiction since comparable international data are not available, and since no province is a strong performer (i.e., grading the provinces relative to one another did not make sense because none of them are “A” performers). Nonetheless, both Nunavut and Yukon do better than the top-performing province, Manitoba. In fact, in Nunavut, the income of people with disabilities is 92.7 per cent that of people without disabilities. Nunavut’s performance is 16 percentage points higher than that of top-performing province, Manitoba (76.5 per cent), while Yukon ranks slightly ahead of the province (76.9 per cent). But N.W.T. does poorly on this indicator. The income of people with disabilities in N.W.T. is only 57.6 per cent that of people without disabilities, making it the poorest-performing Canadian jurisdiction.
Voter turnout: Yukon is a “B” performer, while N.W.T. ranks just ahead of the bottom-ranked province, Newfoundland and Labrador, and gets a “C.” Nunavut has the lowest voter turnout among all Canadian jurisdictions and is a “D” performer.
Jobless youth: Yukon gets a “B.” N.W.T. and Nunavut, however, have the highest jobless youth rates among all jurisdictions and are “D–” performers.
Homicides: All three territories have high homicide rates relative to the other jurisdictions. Yukon gets a “D.” N.W.T. and Nunavut each get “D–” for having the highest homicide rates among all the comparator jurisdictions.
Burglaries: Yukon’s burglary rate is higher than the national average but still relatively low compared with the rates in most peer countries—the territory is a “B” performer. N.W.T. and Nunavut have the highest burglary rates in Canada and get “C” and “D” grades, respectively.
Life satisfaction: Nunavut is the highest-ranked territory and outperforms all international peers, making it an “A+” performer on life satisfaction. Yukon is an “A” performer, while N.W.T. places among the “B” performers.
Suicides: The Yukon and N.W.T. both get “C”s and have average suicides rates that are higher than that of the lowest-ranked province, New Brunswick. With the highest suicide rate among all the jurisdictions, Nunavut is a “D–” performer.
Territorial data are not available for the income inequality and poverty indicators. Grades were also not assigned to the territories on the immigrant and racial wage gap indicators.
The Conference Board will be releasing a special How Canada Performs report on social outcomes in the territories. The report is tentatively scheduled for release in spring/summer 2017.
What are the key social challenges facing Canada?
Canada is a “B” performer on the overall society report card, ranking 10th among 16 peer countries—not a poor performance per se, but there is definitely room for improvement. Addressing income inequality and poverty are key challenges facing Canada and a number of its peer countries. Canada gets a “C” on poverty, ranking 13th among its peers. While the nation does better on income inequality, scoring a “B,” it places a not-so-impressive 13th among the 16 peers on this measure. The World Economic Forum’s 2017 Global Risks report identified “rising income and wealth disparity” as the trend most likely to determine global developments over the next 10 years.
The surprising results of two major electoral events of 2016, the U.K. vote to leave the European Union (a.k.a. Brexit) and the election of Donald Trump as U.S. president, highlight the social unrest underpinned by growing inequality. Both the U.K. and the U.S. have much higher income inequality than Canada and appear to have greater social polarization; however, Canada cannot afford to be complacent.
Income inequality (as measured by the Gini coefficient) in Canada has risen since the late 1970s. Furthermore, the share of income going to the richest (top decile—that is, the top 10 per cent) in Canada increased notably from the late 1980s to the early 2000s, while the share going to the bottom decile decreased.1 According to the latest data available, the income received by the top decile in Canada is nine times higher than the income received by the lowest decile.
Since 2000, the share of the top 10 per cent has been trending modestly lower, and the Gini has remained relatively stable, so Canada as a whole has been seemingly unaffected by the rising inequality that has accompanied increasing globalization and technological advances. But this has been in large part thanks to Canada’s once-thriving resource-based economy and a real estate boom that created many middle-skill positions. The end of the resource boom means that well-paying resource-industry jobs can no longer cushion the weaknesses in other industries, particularly manufacturing. Moreover, real estate cannot continue to be a driver of economic growth. So, barring policy action, income inequality in Canada may again start to trend upwards.
Income inequality shapes opportunity, which, in turn, affects intergenerational income mobility, or the extent to which differences in income are transmitted from one generation to the next. As Miles Corak, a professor of economics at the University of Ottawa and leading researcher on intergenerational income mobility writes, “Anything that boosts inequality reduces mobility because it differentially changes both opportunities and incentives for families to invest in their children.”2 Canada does well when it comes to intergenerational income mobility. Relative to its peers, Canada has high mobility and is an “A” performer. Conversely, the U.S. and the U.K. have the lowest intergenerational income mobility among the peer countries.
So, does this mean that Canada does not have to worry about high income inequality as long as there is high income mobility? Not really. Canadians are fortunate to have strong education outcomes and less segregation than their southern neighbour—both of which help income mobility. However, income persistence is much greater for Canadians who grow up in the top income brackets—those in the top 1 per cent have two times less income mobility than those in the bottom 2 per cent.3 This is good in the sense that children growing up in the lowest-income households are more likely to move to a higher income bracket once they become adults. What is also suggests though is that children who grow up to have high earnings are most likely to come from families with high-earnings fathers (income mobility is typically calculated using data on father-son earnings). So, with rising income inequality and a higher concentration of income going to the top 1 per cent, there may be less opportunity for those from low-income backgrounds to move higher up the income ladder—in other words, less income mobility and higher persistence of poverty.
Canada has the fourth-highest poverty rate—as examined using low income measures4—among its peers—only the U.S., Japan and Australia fare worse. And, while total population poverty in Canada has remained more or less stable for the past few decades, the elderly poverty rate is edging upwards. Furthermore, Canada’s record on child poverty is poor: among the 16 peer countries, Canada had the second-highest child poverty rate after the United States in 2013, the latest year for which internationally comparable data are available.
Certain groups are more at risk of poverty than others. Women, in particular single parents and single elderly women, are more greatly affected by poverty. In Canada, for those aged 65 and older, the poverty rate in 2014 was 14.4 per cent for women and 10.3 per cent for men—a difference of just over 4 percentage points.5 Children raised in single-parent families headed by women are particularly vulnerable: the poverty rate in Canada for children under 18 raised in single-parent families headed by women was 45 per cent.6 People with disabilities, Indigenous people, visible minorities, and recent immigrants are also disproportionately affected by poverty. So, finding ways to increase the participation rates and incomes of people with disabilities, as well as address the gender wage gap, immigrant wage gap, and racial wage gap, is a start.
Canada is a “C” performer on the gender wage gap indicator, with a 13th-place finish among the 16 peer countries. The wage gap between the weekly median earnings of men and women in Canada is 18 per cent. If we look at the wage gap in hourly earnings (which excludes information on choices of how much to work and better reflects actual compensation for work), the wage gap is lower but still high at just over 12 per cent.
While comparable international data are not available for immigrant and racial wage gaps and the income of people with disabilities, the data for Canada reveal that the country must do better on these fronts as well. The percentage difference in median hourly wages between university-educated landed immigrants and Canadian-born citizens is just over 20 per cent. The racial wage gap data reveal a 13 per cent difference in median annual wages and salaries between university-educated Caucasians and visible minorities. The income of people with disabilities indicator is a reflection of the persistent under- and unemployment of people with disabilities in Canada. The income of people with disabilities in Canada is 73 per cent that of people without disabilities. We have not yet examined the poverty rates among the Aboriginal population and the wage gap between Aboriginal and non-Aboriginal people in Canada—however, the How Canada Performs report to be released later this year on social performance in the territories likely won’t reveal a better story.
Income inequality and poverty—particularly among disadvantaged populations—are critical issues facing Canada. They affect health and education outcomes and affect social cohesion, by leading to higher crime rates, discrimination, and social exclusion. Large income gaps can also diminish economic growth if these gaps mean the country or region is not fully using the skills and capabilities of all its citizens.
What can be done to reduce income inequality and poverty?
Focusing on the following will help tackle income inequality and poverty:
- Revisit the role of personal income taxes and government transfers.
- Improve education outcomes, with a specific focus on early childhood learning as well as continuing education and ongoing skills training.
- Tackle child poverty.
- Target inequities that disadvantaged groups face and work towards closing wage gaps.
Personal income taxes and government transfers (such as social assistance, unemployment insurance, old age security, and child benefits) play an important role in reducing income inequality and poverty. Data from 2014 reveal that Canada’s tax and transfer system reduced inequality by 27 per cent—the Gini coefficient fell from 0.440 to 0.322 after taxes and transfers. But Canada’s tax and transfer system does not reduce the Gini coefficient now as much as it did in the 1980s and early 1990s.7
The weakening redistributive effect of taxes and transfers is more obvious when looking at income deciles. In the mid-1990s, taxes and transfers reduced the difference in the ratio of the share of income going to the top decile in Canada relative to the share going to the bottom decile by 35 per cent. In 2014, taxes and transfers reduced this ratio by only 8 per cent.8 Changes introduced in the 2016 federal budget—the new high-income tax bracket and the reduced tax rate for those in the middle-income bracket—will likely increase the redistribution of income. However, the extent of the overall impact on income inequality is likely to be modest.
There is growing interest in Canada in pursuing a basic income guarantee (also known as guaranteed annual income) to reduce poverty and income inequality. Finland and the Netherlands have introduced pilot basic income programs, in which residents receive an unconditional sum of money each year. Ontario and P.E.I. will soon be implementing basic income pilot projects.9 While a basic income guarantee can have a huge impact on poverty rates, it is a costly endeavour, and critics argue it can act as a disincentive to work or displace other important social welfare programs.
Improving education outcomes benefits everyone in society. Education is the key to upward social mobility. The level of a child’s education has a significant effect on the persistence of income across generations, but so does that of his or her parents. In fact, parental education is one of the most critical determinants, as educational attainment tends to persist across generations.10 Focusing on early childhood education is particularly important—disadvantaged children need access to good-quality early childhood education programs.
Those growing up in low-income households also need access to good-quality health care because their health outcomes and, consequently, development and education are affected by poor nutrition and housing. Childhood poverty must be tackled to properly address income mobility and income inequality and break the low-income cycle. On a promising note, the federal government’s new Canada Child Benefit provides up to $6,400 per year for eligible children under 6 and $5,400 per year for eligible children aged 6 to 17.11
On the education and skills front, there also needs to be a focus on continuing education and ongoing skills training. The reality is that many jobs have been and will continue to be displaced by globalization and advances in technology. So, it is imperative to ensure that Canada’s workforce keeps up with the changing demands of the workplace.
Certain groups are disproportionately affected by poverty, so it is crucial to address the inequities facing disadvantaged groups. In 2016, in response to a letter written by the advocacy organization One, Prime Minister Justin Trudeau wrote: “I wholeheartedly agree: Poverty is Sexist. Women and girls are less likely to get an education, more likely to be impoverished, and face greater risk of disease and poor health.”12
Finding ways to improve career opportunities and help close the gender wage gap would have a marked impact on poverty in Canada. Encouraging women to seek employment in higher-wage occupations and education in traditionally male-dominated fields can help, but it’s not enough. Women also need to be treated fairly in the labour market and provided clear paths for advancement and the opportunity to strengthen and develop new skills. Improved workplace policies—such as flexible hours, telecommuting, and parental leave—that allow women to balance the demands of work and family also make a difference. Making child care more affordable and encouraging men to take parental leave are also critical to improving career development and advancement opportunities for women and narrowing the gender wage gap.
While more women in higher-paying occupations and industries, flexible workplace policies, and affordable child care would no doubt make a difference, action must be taken to target discrimination and unconscious biases. Organizations, companies, and governments need to be transparent about hiring practices, wages, and requirements for promotions. Organizations can address issues only if they know they exist, and this can be achieved only by monitoring and disclosing information on salaries, promotions, and recruitment. The introduction of objective, transparent processes for hiring, giving feedback to, and promoting employees can also help other equity groups—such as visible minorities, recent immigrants, Indigenous people, and people with disabilities—benefit from fair employment, compensation, and advancement opportunities.
To improve employment and wage outcomes for immigrants, more needs to be done to ensure that they have sufficient access to opportunities to strengthen their language skills. Furthermore, revisiting and redesigning foreign qualification assessment and recognition policies and targeted bridging programs can help immigrants gain necessary licensing and certification requirements for a given occupation.
People with disabilities need accessible and inclusive work environments. Labour market programs need to be aimed at facilitating and increasing employment of people with disabilities to ensure that they focus on creating inclusive, not segregated, solutions.13 Youth with disabilities would benefit from enhanced school-to-work transition planning, including upskilling and apprenticeship opportunities, to help them prepare for employment. Finally, social protection programs—such as long-term disability benefits—need to effectively support people with disabilities’ return to work, rather than create disincentives to returning to employment.
Improving labour market opportunities and conditions for disadvantaged groups and those disproportionately affected by poverty will help to improve their socio-economic outcomes, as well as contribute to social cohesion and socio-economic capacity.