The issue of Poverty in Canada and the Economic effects of Poverty

Categories: Poverty In Canada

“Poverty is the deprivation in economic provisioning, leaving people unable to achieve the standard of living necessary to avoid hardship and to participate in the life of the community” (Mel, Hurtig The Tragedy and Disgrace of Poverty in Canada ).

Many Canadians are under the misconception that poverty results in skinny children on the edge of starvation, unclothed individuals and babies dying of deprivation. In highly industrialized societies such as Canada, this scene is not typical. In Canada, people suffer deeply not because the necessities of life barely exist for the population at large, but because an uneven distribution of income blocks access to Canada’s abundance.

Poverty is the result of an unequal distribution of riches rather than a lack of riches. Now the matter of poverty is not of starving but rather begging for food at food banks, shelters, and associations that can provide help to the ones in need.

Defining Poverty Away

“Poverty is a situation in which an individual lacks sufficient funds to purchase food, housing, clothing, medical care and other goods and services to maintain an acceptable standard of living.

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” (Johnik, Roth Encyclopedia of Social Issues Vol.5).

However, poverty can mean more than a lack of what is necessary for materials well-being, it can also mean “The denial of opportunities and choices most basic to human development- to lead a long healthy, creative life and to enjoy a decent stand living freedom, dignity, self-esteem and the respect of others.” (Human Development Report, 1997). ” Standards may vary greatly according to time and place.

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” (Scott, Fetzer World Book Encyclopedia Vol. 15). It exist two basics of approaches defining and measuring poverty in Canada. When taken to prospective, they establish the possible income bounds of poverty. The first approach is based on the belief that one can determine an absolute measure of poverty by examining an essential basket of goods and services deemed for physical in medical survival. The cost of this basket represents an objective dollar measure poverty. The strictest application of this approach results in a standard of living sufficient only to keep the human body together. The other approach is based on the belief that any definition of poverty must consider social and psychological as physical well-being.

The relative approach is based on equity which is convinced that society should tolerate inequality in the distribution of income. It argues that someone who has so little that he or she stands out in relation to the surrounding community will feel deprived. “In the rich country of the industrialized world, the income level associated with this definition of poverty is many times level required to assure physical survival.” ( The differences in these approaches is their judgment of what constitute a minimum respects the need to function with dignity in society. These two approaches often lead to some common misconceptions about poverty. One of them are, many times people overstate the number of poor, and the ones classified in that particular sector may not be as poor as their incomes indicate. For example, there are many young students who are temporarily poor; some elderly may have low incomes but own their own properties such as cars, homes; others may be individuals who may have low incomes but receive subsidized housing or Child Care, Child Support or even Child Tax Credit. Income rises as the worker gains maturity and experience, peaks at around fifty (50) years old, and then falls sharply when the worker retires approximately at the age of sixty-five (65). It has to be understood that people

do not always grow up in poverty. Circumstances may cause an individual to be classified in the low income class. The causes of poverty are numerous and complex; to cite one reason or cause as more important than another is often more a matter of opinion or personal belief than of fact. Therefore overstating the number of poor is not the best solution and it needs to be examined more closely.

Poverty in Canada

During the 1980’s Canada saw increases in unemployment rates and wages inequality. Canada usually has a lower rate of poverty than does the United States. Canada’s social support system is more generous and perhaps more effective than that of other countries, as well as offering universal coverage for all citizens under many programs. Some of these systems include Old Age Security, Unemployment Insurance, Canada Assistant Plan and many other types of transfer payments that

can be useful to the ones who are in need of financial support. The social services referred to as welfare, are services offered to the citizens of the country while the government attempts to ensure their economic well-being. 1997 Report of the National Council of Welfare indicates that “Welfare incomes in all parts of Canada fall below the poverty line. They also represent only a small fraction of the average incomes. As the benefit freezes and the decreases continue, people already living in poverty on welfare grow poorer.” (David, L. Bender Poverty Opposing Viewpoints 1999). This report’s statement coincides and makes a good connection with the popular quote ” The rich is getting richer and the poor is getting poorer”. The gap between the rich and the poor is fascinating. The rich lives very comfortably while the poor is struggling desperately to survive, and this is all the result of income inequality in the country.

Poverty and the Economic Effects

While many poor families feel trapped and do not have many options open to them, a family’s income and wealth depends partly on the choices that its members make. The choices people make exaggerate the differences among them and make the distribution of income more unequal that the distribution of abilities. Another choice that results in unequal distributions in income and wealth is the decision to save and make inheritance. To lessen the degree of inequality, governments tax some people and pay benefits to others. The taxpayers who consume these goods and services receive a transfer from the taxpayers who do not consume them. The two most important areas in which this form of redistribution takes place are education, both kindergarten through grade 12, college and university, and health care. Because public education is far from free, every parent is familiar with the constant need to cover fees for outings, special events, athletics, art activities, transportation and school books and supplies. Such as in colleges and universities, students have to pay for their tuition, school fees and books. This constant spending of money for education has caused many students of different levels of education to drop out of school. The young ones depend on their parents and if their parents do not have enough money to support them in that field, the child is deprived from these activities and opportunities.

As a result, poor children stand out in public schools, however, these children should not only depend on the economic circumstance of their parents. The government should find a way to help these children accomplish their dreams and at least be able to taste some of the pleasure fortunate children have. As of the health section, government provision of health care to all residents has brought high quality and high-cost health care to millions of people who earn too little to buy such services themselves. As a result, the program has contributed a great deal to reducing inequality. It is said that “The invisible hand of the marketplace acts to allocate resources efficiently, but it does not necessarily ensure that resources are government should redistribute income. In 1961, all three levels of government collected 27 percent of total income; in 2000 they collected about 40 percent.” (Rowe, Nicholas Principles of Microeconmics 2002). The social costs of poverty take many forms. Some of them are direct, in the form of money spent on social services for the poor, such as provision of food, medical care, and rent subsidized homes. For every dollar spent on the poor, as little as fifty cents may end up as a net increase in the income of the poor people.


In conclusion, solving the problem of poverty will be difficult, but a first step is making poverty and the poor more, not less, visible. “Too many approaches to solving poverty suggest that the poor are themselves the problem; hence the tendency to keep them out of sight and separating them from regular people as much as possible, whether in homeless shelters, n segregated neighborhoods, in understated statistics or in dehumanizing and demonizing rhetoric.” (Bender, David L. Poverty Opposing Viewpoints 1999). The poor are not the problem; rather poor people have a problem. A critical step toward solving poverty is to adopt community development strategies which rely on the poor themselves as the major agents of change. People who genuinely want to work to reduce and eliminate poverty will only be successful through developing their ability to work with low-income communities in a way that empowers people in the development process. They can also accomplish their goal through increasing general economic prosperity and income growth, whereby nobody changes their relative income position, then the poor will indeed always be with us. Income redistribution and inequality are crucial parts of low-income and the changes that come about in relation to poor families.. When people state that poverty cannot be eliminated using a income redistribution as a means.


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The issue of Poverty in Canada and the Economic effects of Poverty. (2022, Feb 26). Retrieved from

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