Making a living.

People in our society obtain income in three basic ways. Individuals may own valuable assets such as land or machines, have investments such as stocks and bonds, or receive inheritances. Some Canadians own enough assets to support a comfortable lifestyle, but very few are in this fortunate position. The other two ways are by working or through transfer payments from government, such as unemployment insurance, seniors' pension plans or social assistance.

Wages and salaries are the major source of income for most Canadians. If a person is not working - because there are no available jobs, because of illness or a disability which makes it difficult to secure employment, because of retirement, because they are a single parent with child-rearing responsibilities, or because they simply decide not to work - they are probably poor. Not surprisingly, poverty rates in Canada are closely linked to overall unemployment rates.

On the other hand, full-time work does not necessarily guarantee all adequate income in Canada. In 1992, 21% of poor families were actually supported by a full-time employee. Low employment income often results from lacking skills required by employers, from competing for a limited number of jobs with many applicants, or from having a low level of education. Discrimination in the labour market may also contribute to low wages for specific groups, such as women, aboriginal Canadians, visible minorities, and the disabled.

Direct payments from government to individuals are the final important source of income; it is these payment programs that give the greatest support system to the poor. For example, unemployment insurance is an important temporary source of income for the unemployed. Those who qualify must have been employed, they must have paid into the unemployment insurance fund while working, and they must have had a valid reason for losing their job. Provided that they do not stay unemployed for too long, unemployment insurance payments from the government will help the individual maintain a minimum income.

Government transfers to people over the age of 65 and government pension plans (to which people contribute while working and from which they receive benefits after retirement) are an important source of income for the elderly. The gradual improvement in government plans for seniors has actually resulted in a dramatic decline in poverty in this group of Canadians: in 1980, the poverty rate for people 65 and older was 33.6%, but by 1992 this had fallen to 18.6%.

Social assistance, or welfare, also provides support to Canadians in need. "Need," in this case, is determined by social service workers who assess the circumstances of the individual and recommend an "appropriate transfer." Social assistance payments alone are not enough to bring a family or an individual up to the Statistics Canada low-income cutoff point. Indeed, the National Council of Welfare recently reported on 1993 Social Assistance benefits paid to single-parent families with one child, living in the largest city in the province. They ranged from $10,150 in New Brunswick ($8,248 less than the low-income income cutoff) to $16,790 in Ontario ($4,156 less than the low-income cutoff). Social assistance benefits to two parent/two child families in the largest provincial city ranged from $12,151 in New Brunswick ($14,771 less than the low-income cutoff) to $22,334 in Ontario ($8,321 less than the low-income cutoff).

All poverty statistics reported here take into consideration the transfer payments to the poor just described. Although existing government programs have helped reduce its severity, they have still not solved the "poverty problem." In the last dozen years, the overall rate of poverty has stayed about the same. Unemployment has grown by 40% in the last three years and there has been an increase in poverty among children.

However, publicly financed education and training programs, employment subsidies, publicly financed health care, and a variety of other public sector programs help cushion the pain of poverty. Medical bills do not leave people in Canada destitute; Canadian children are not denied access to high-school education when their parents have low incomes, and so forth.

Indeed, billions of dollars are spent on such government programs each year. The failure of governments to eliminate poverty despite such massive spending has led many people to call into question the set of anti-poverty policies currently being followed in Canada.