This column was published in the November 28, 2011 Christian Courier and is reprinted here with the permission of the Christian Courier.

As the economic news out of Europe seems to worsen constantly, many are wondering if Canada will be dragged back into a recession.  These fears seem confirmed by a decline in Gross Domestic Product in the second quarter of this year and by massive job losses in October.

However, even before our economic recovery began to seem shaky, the reality on the ground wasn’t as good as the official narrative. While some Canadians were experiencing the benefits of recovery, maintaining employment or finding a new job, for too many others recovery was either precarious or non-existent.   They are still unemployed with inadequate Employment Insurance or social assistance benefits or precariously employed with low wages, faced with rising costs for housing, and more likely to be forced to turn to food banks for support.

While we have regained the number of jobs lost during the recession, a worrisome shift has taken place from full-time jobs to part-time jobs and from permanent jobs to temporary jobs, increasing the number of Canadians who are precariously employed. Part-time and temporary jobs are both lower-waged on average than full-time and permanent jobs. More Canadians are now involuntarily working part-time than before the recession, finding it difficult to make ends meet on part-time wages. There has also been a shift from jobs in high paying goods industries to jobs in the low paying service industry.

And unemployment remains high, with 1,374,200 Canadians unable to find work in October. The number of discouraged seekers who have stopped looking for work and are no longer counted as unemployed increased 37.8 percent between October 2008 and October 2010. The number of students also increased 17.3 percent as people chose to go back to school or stay in school to avoid an unfriendly hiring climate. Young people have been particularly impacted by unemployment, with the official youth unemployment rate at 14.1 percent in October 2011. However, youth participation in the labour force has dropped nearly 3 percentage points since 2008, meaning that youth unemployment is actually higher than that.

Those who lose their jobs need to turn to Employment Insurance, but EI has turned out to be completely inadequate. While at the peak of the recession just over half of the unemployed were receiving benefits, the coverage rate has now declined to 42 percent of unemployed Canadians in May 2011, below the pre-recession rate. The number of unemployed Canadians not receiving EI has been rising in 2011, despite the fact that unemployment has been falling. Over 500,000 Canadians also exhausted their benefits in 2009 and 2010 without finding new work.

As a result of EI’s inadequacies, social assistance caseloads have increased dramatically across the country. In Alberta (46 percent), Ontario (27.91 percent) and BC (23.29 percent), the increases since 2008 have been particularly high, but all 10 provinces have experienced an increase. Quebec is the lone province to have seen a decline in welfare caseloads between 2009 and 2010. The recession’s full impact may not have been experienced yet, as 7 out of 9 provinces with available data witnessed their peak caseload since October 2008 in 2011.

Meanwhile, Canadians who are struggling to make ends meet on the poverty income of EI or social assistance benefits or on the wages of a part-time job have been confronted with rising energy costs and average rents that have increased by more than the rate of inflation.

The increasing strain of precarious or poverty incomes on Canadian households can be seen in rising debt levels and mortgage arrears. The average debt load per household in Canada reached record levels in 2010, rising above $100,000 per household and equaling 150 percent of disposable income. The number of mortgages that are in arrears by 3 months or more increased by more than 52 percent during the recession, and is still 49 percent higher than before the recession began.

Perhaps the best indicator of economic strain is food bank use, which reached record levels in 2010. The number of food bank users increased 28 percent between 2008 and 2010, reaching a new record high.  The number barely edged down in 2011, highlighting the ongoing vulnerability of many Canadian families.

Without intentional action on the part of Canadian governments, these Canadians will not experience the benefits of recovery. The recession significantly increased poverty in Canada, which had been at a record low in 2007. Since the recession ended the situation has not gotten any better for poor Canadians. We need deliberate action to reduce poverty and unemployment in Canada. Without a poverty elimination strategy, we will simply see the poverty rate continue to rise and fall along with the economic cycle, without making any progress towards eliminating poverty.

The good news is that action on poverty will bring economic growth. The Department of Finance estimates that a $1 billion investment in low income Canadians will create a $1.7 billion boost to GDP. This is greater than the return on almost any other investment. We can’t afford to leave any Canadians behind if we want a good news recovery story for Canada.

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