Comparative Analysis of Poverty Reduction Policies in Canada

This paper compares two poverty reduction strategies in Canada: robust housing provision and raising the minimum wage level. It analyzes the methods, approaches, and results of each strategy and provides policy recommendations.

Running head: COMPARATIVE ANALYSIS OF POVERTY REDUCTION POLICIES IN
CANADA
Comparative analysis of poverty reduction policies in Canada
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Author Note

COMPARATIVE ANALYSIS OF POVERTY REDUCTION POLICIES IN CANADA
Executive summary
This paper has dealt with a comparative analysis between two poverty reduction strategy,
namely robust housing provision and raise of minimum wage level. Numerous methods,
approaches and their respective results are elaborated in the following section. This paper has
concluded by showing how effectively it can implement proper investment strategies by
granting housing provision to the poor and the downtrodden.

COMPARATIVE ANALYSIS OF POVERTY REDUCTION POLICIES IN CANADA
Table of Contents
Introduction............................................................................................................................3
Methods..................................................................................................................................3
Approaches.............................................................................................................................5
Results....................................................................................................................................6
Policy recommendation..........................................................................................................7
Conclusion..............................................................................................................................9

COMPARATIVE ANALYSIS OF POVERTY REDUCTION POLICIES IN CANADA
Introduction
Poverty has been a widespread issue across the country and the globe. Studies show
that nearly five million people in Canada are poverty-stricken. The effects of poverty is all
pervasive but its impact are harsher on people living under dire condition. Therefore, people
with disability, elderly individuals or youths, even single parents are more susceptible in the
effects of poverty. Poverty not only results from income differentials but it also includes
other aspect of person’s life like food security, health and housing. Statistical data shows that
the percentage of Canadian population have grown by 33% whereas the annual national
investment in housing has decreased by 46%. Homelessness has been a prevalent issue in
Canada because 3 million Canadians precariously housed out of which 20% of them belong
to the youth population. Apart from the housing problem, another problem that is burgeoning
in Canada is related to the low wage minimum wage limit of the workers. Statistical records
show that 50% of the precarious employment has been on rise over the past two decades.
This paper will delve deeper for understanding the root-cause of poverty reduction strategy
by following a comparative strategy. In this, paper two primary poverty reduction strategies:
one is developing a robust national housing strategies and second raise of the minimum wage
limit of the workers will be compared.
Methods
Having an access to an adequate housing plays a fundamental role in both
physical and mental health of the person. It also determines the social inclusion and
participation in the society. However, it must be kept in mind that the problem of
Homelessness is not a new phenomenon. In 1980s, the constant erosion of affordable
housing along with decreasing income support programs created a high level of
homelessness and insecurity in the minds of the Canadian Community. The government

COMPARATIVE ANALYSIS OF POVERTY REDUCTION POLICIES IN CANADA
has already renewed the Homeless Partnering Strategy and Investment in Affordable
Housing program because the funding of this previous plan was lacking in financial
supply. One of the main reason for this was opting out of the federal government.
Therefore one-third of Canada’s stock of social housing was at risk. The government is
making a long-term historic plan named National Housing strategy that requires an
investment of 40 billion dollar and it rolls over 10 years of planning. Another program
Reaching Home: Canada’s Homelessness Strategy is also planned to bolster the
community effort to tackle the problem of homelessness. Investment in the public transit
will also enable the lower-income group to access the public facilities easily. The
methods suggested under these policies are as follows:
 It is important to understand the need of building the Housing strategy as a national
importance. Proper legislation need to be developed and accordingly implemented
owing to the international human rights standard.
 Proper and systematic collaboration between Inuit Land Claim, First Nations and
Metis government needs to be harnessed. This will ensure that the housing strategies
will feed on the needs of the indigenous people.
 Due to the shortage of fund, a proper funding strategy needs to be implemented where
at least $2 billion are invested per year to meet the national strategy targets.
The former Premier of Canada Kathleen Wynne has proposed to raise the minimum wage
from 11.60 dollar in 2017 to 15 dollar per hour in 2019. However increasing the minimum
wage level can give rise to another set of problems. Increasing the wage level refers to the
work-based subsidy that will effectively target the poor. The rise of minimum wage can also
result in unintended consequences to the detriment of young and inexperienced workers.
Moreover, most of the wage earner are young and they constitute 59.2% of all the minimum
wage earners. The methods that will promise a better wage policy are as follows:

COMPARATIVE ANALYSIS OF POVERTY REDUCTION POLICIES IN CANADA
 A national job creation and training strategy needs to be developed that will be
collaborate with all levels of the government, employers, labour representatives,
educational groups, so on and so forth. This strategy should ensure that there are
proper job security assured to the employers.
 It is a matter of utter importance to set the wage standard nationally. This will enable
the employers to enable their lives by not getting affected by the poverty line.
 Proper provisions needs to be harnessed for the youths who are facing barrier in
employment opportunities.
 It is also important to strengthen the federal Employment Equity Legislation so that it
can allow equal opportunities for employment for all. Implementation of Pay Equity
and a minimum standard of 360 hours needs to set forth.
Approaches
The homelessness accompanied with poverty has been a major issue in Canada. On
November 22, 2017, the federal government took an historic decision by implementing the
human-right based approach to housing plan in Canada. This step is forwarded to cut down
the chronic homelessness that is rampant in among the Canadians. According to the human
right-based approach the core principle of Accountability, Participation, Non-Discriminating
and Inclusion are entailed in the larger spectrum of Housing needs.
The minimum wage rate refers to the lowest wage offered to the employee; initially it was
paid to the women and the children. However, the Canada Labour Code has been amended
several times. The changes were made so the federal minimum wage could be automatically
adjusted with the provincial and the territorial rates. The current approach to this code covers
two aspects, they are as follows:

COMPARATIVE ANALYSIS OF POVERTY REDUCTION POLICIES IN CANADA
 The first one is to set the minimum wage rate based on the hourly fixed rate. Here
regardless of the employee’s occupation, status or work experience the minimum
wage rate of the employee will be fixed based on the hour.
 The second aspect of this code covers the order given by the Governor in Council.
The order comprises the replacement of the minimum hourly rate that was fixed with
respect to employment in a province. It also comprises the fixation of the minimum
hourly rate with respect to the employment in the province only if there are no further
minimum hourly rate has been fixed.
Results
The National Housing Strategy has resulted in the reduction of homelessness and has
made housing affordable to a large section of the population. The housing needs of the
indigenous groups were also identified and improved year over year. This kind of
development provides inclusive progress regardless of the socio-economic status.
Collaboration with the federal government has resulted in more holistic responses to housing
crisis. This new kind of housing construction has a more significant impact in the overall
economic, social and political development of the country. Estimates show that for every new
home built 1.2 person years of employment has been generated on site with an additional 1.8
person years off site. In this way, government can reap benefits by investing in housing.
Raising the minimum wage rate has resulted in the lowering the turnover rates. This
suggests that there is high tendency of absconding with the higher wage rate. The previous
plan related to rise of minimum wage rate has not effectively resulted in the reduction of
poverty, rather has increased the expense of the government. Increasing their wage rate will
only make them dependent on the government expenditure that can also eventually land in
the trap of vicious circle of poverty. Therefore, even with the new wage rate of $10.45 per
hours a person working in Vancouver will not be able to rid of the poverty line. A further

COMPARATIVE ANALYSIS OF POVERTY REDUCTION POLICIES IN CANADA
raise of $14 would be required to up list the person for the poverty line. Not only will the rise
in minimum wage rate increase the rate of absconding but it can also create a negative
employment effect. After freezing the minimum wage rate from $8 to $10.25 the Frazer
Institute issued a report in which it stated that the rise of $10.25 an hour could lead over
52,000 losses. However, it is important to note that the prediction of the Frazer report did not
materialize but the employment rates declined by 1.6 per cent for 15-24 years old, which was
one-tenth of Frazer Institute Prediction. Again, at the same time the employment rates for
teenagers and young adult remained the same throughout Canada. Thus, the results regarding
the rise in the minimum wage rate remains a highly debatable topic.
Policy recommendation
Policy recommendation for building a robust housing strategy
Canada being one the developed country in the world is in midst of the dire crisis of
housing and homelessness crisis. Homelessness along with inadequate housing can be linked
to other negative outcomes like illness, family breakdown, and increased mortality. Thus, it
will lead to a large sum of incapable workforce. With the increase in the insecurity issues, the
common citizen will start losing their confidence and the development of the country will run
in deficit. Thus, investing the housing province will ensure the proper and systematic
enhancement of the downtrodden and it can lift them out of their poverty-stricken condition.
Therefore, 2016 budget has increased the investment by $2.3 billion over two years. Along
with the housing provision, effective water management and proper sanitation system should
also be provided. Thus the policy recommendation to the effective planning of housing status
in Canada are as follows:
 Reducing the layered obligation that the government confronts while
implementing the right to housing.

COMPARATIVE ANALYSIS OF POVERTY REDUCTION POLICIES IN CANADA
 Efforts must be made to make a more inclusive development strategy where
regardless of the person’s caste, colour, creed can exercise the right to housing.
 Local and territorial initiatives should also be encouraged for reuniting the homeless
youth with their families. Thus, a more preventive care will be put forward to reduce
the homelessness in Canada.
 Proper accessible and effective remedies must be implemented for ready redressal of
complaints.
 Collaborations need to be made between National Indigenous Housing Strategy
including Urban Indigenous Housing Strategy. Partnership between Indigenous
leaders, Housing Service Provider and Community Organizations.
Policy recommendation for rise in the minimum wage level
Authors like Neuman (2017) reviewed the repercussion related to rise in minimum wage
level. According to his study there are large negative outcome than occasional positive
outcomes in the context of rise of minimum wage level. In 2015 in a commentary by
Canadian Labour economist David Green showed 10 percent of a minimum wage increase
for young adults aged between 20 to 24 years with a 0.5 percent decline in their employment
rate. He also estimated that workers over 25 years old had no effect on the employment
status. For Canadian Labour economists co-authored an open piece in The Globe and Mail
stating, “There is almost no employment impact from the moderate increases in minimum
wages”. Substantial research in Canada, USA and Britain has stated that only higher
minimum wage level can lift out people form their dire poverty-stricken condition. Thus, the
necessary policy recommendation can be suggested as follows:
 The condition of poverty can rise due to various issue and reducing the situation of
poverty to level of income can result futile outcome. Thus, variants like standard of

COMPARATIVE ANALYSIS OF POVERTY REDUCTION POLICIES IN CANADA
lifestyle or the ability of access freedom or the level of nutrient they consume needs to
be garnered.
 Raising the minimum wage level cannot only result in increase of expenditure from
the part of the government but it also result in negative employment feedback. Thus
raising the minimum level in come needs to categorise and their consequences needs
to be effectively analysed.
 If only better provision are created by the government to use the reserve of labour and
proper considerations are put forward regarding the development of the skill and
values, the poverty-stricken condition can be improved. Moreover. studies show rise
in the minimum wage level can cause low skill labour substitution for high skills
labour substitution. This might induce endangering the social capital development.
Conclusion
Thus, it can be concluded that both the strategies of poverty reduction contain pros as
well as cons. However raising the minimum wage rate can have diverse effect, as it will make
the citizens dependent on the government. Moreover raising the minimum wage limit will not
create an atmosphere of social loafing where people will become lethargic to work but it is
also redundant because it has shown no effect in the employment status of the Canadian.
Furthermore raising the minimum wage level also creates a substitution of high-skilled labour
with low-skilled labour. Thus providing the growth rate, which is detrimental to future
outcome of the country. On the similar vein, granting a robust housing strategy will also
incur huge expenditure on the part of the government. However, it will be able to provide the
basic amenities to the student, homeless youth and disable students. In this, it will be able to
uplift majority of people from the dire condition of their living. It is also essential to
implement preventive strategies to minimise the homelessness on the first hand but there is
also a need for larger collaboration of the government agencies to raise fund for such a robust

COMPARATIVE ANALYSIS OF POVERTY REDUCTION POLICIES IN CANADA
execution of plan a program. After a critical analysis of the both, the strategies granting or
providing for the proper house provision to the downtrodden people seems to be appropriate.
This is because it can enhance the reserve labour power of the country and can assist in
making an inclusive developed country. Raising the minimum wage can the solve the
problem temporarily but providing proper infrastructure and housing provisions can have a
more long-lasting impact.

COMPARATIVE ANALYSIS OF POVERTY REDUCTION POLICIES IN CANADA
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27 Feb. 2019].
Pearce, B. (2010). Health and Housing Policy Recommendations for New Administration.
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