No recovery yet for Nova Scotia

While Atlantic Canada was spared the worst of the recession, it couldn’t escape the recession’s impact entirely. Poverty and economic insecurity increased in Nova Scotia as unemployment climbed. Despite high coverage of Employment Insurance, many Nova Scotian families had to turn to social assistance to get by. Cost of living rose sharply in 2009, driving up food bank use and resulting in an increase in bankruptcies in the province.

Standard measures of poverty are published with a two year lag time. But while we need to wait until 2011 to see the recession’s effect on those measures, new research by Citizens for Public Justice, with funding from World Vision Canada, already reveals the impact of the recession on key economic indicators and poverty trends.

Bearing the Brunt: How the Recession Created Poverty for Canadian Families details the growing economic insecurity in Canada and the rise in the national poverty and child poverty rates. Nova Scotia also felt the recession’s impact, with an increase in poverty and economic insecurity.

Job losses in the Atlantic provinces were comparatively low. Together, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, and New Brunswick lost only 8,800 jobs between October 2008 and October 2009, a loss of 0.8% of their economy.

Nonetheless, Nova Scotia saw a significant rise in unemployment, which climbed from 7.6% in October 2008 to 9.3% in October 2009.

Nova Scotia had the second highest EI coverage in Canada, with 97.3% of unemployed workers receiving benefits in October 2009. Still, there was an increase of 1,131 social assistance cases between October 2008 and December 2009, a 4.2% rise.

The Employment Support and Income Assistance caseload rose even higher in January 2010, reaching 28,069 cases. This suggests that the peak has not yet been reached, and more people may be turning to social assistance as their EI benefits are exhausted without finding new work.

Nova Scotians were also feeling the pinch from increased cost of living in 2009. Food prices jumped 5.5%, compared to inflation of -0.2%. The price of fruit (5.9%) and vegetables (12.9%) both increased more than 5%.

Average rent for a two-bedroom apartment grew 2.8% between October 2008 and October 2009, higher than the Canadian average of 2.3%. This growth was due in part to a decline in the vacancy rate from 3.5% to 3.1%. As a result, Halifax was one of 11 major urban centres in Canada to experience a decrease in rental affordability.

Because of this increase in prices, low income families faced a greater challenge in stretching their incomes to pay for rent, food, utilities and other necessities.

The increasing economic insecurity was immediately visible in rising bankruptcies and food bank use. Bankruptcies increased 21.2% between the third quarter of 2008 and the third quarter of 2009.

Food bank use climbed 20% in 2009, higher than the national increase of 18%. 20,344 people needed to use a food bank in Nova Scotia in March 2009. 34% of food bank clients are children.

A significant proportion of low income Nova Scotians are working poor, as demonstrated by the fact that 8% of food bank clients report employment income as their primary source of income. Another 6% of food bank users are EI recipients.

While Nova Scotia may have avoided the worst impact of the recession, these trends of increased poverty and economic insecurity are still cause for concern. While media and governments focus on stories of economic recovery, recovery is still far from the reality on the ground for too many families.

It is important not to ignore these families. After the last recession, it took almost 8 years for the unemployment rate in Canada to return to its pre-recession rate. It took 14 years for the poverty rate to decline to its pre-recession rate. So far, despite the increase in economic production, Canada’s unemployment scenario has barely budged.

The Canadian government and the Nova Scotian government must remember the many families struggling with poverty and unemployment. If the recession’s impact is ignored, many Nova Scotian families could suffer from the recession’s effect for many years to come.