Saskatchewan can't quite dodge the recession's bullet

Saskatchewan was spared the full force of the 2008-2009 recession, but poverty and economic insecurity in the province still increased. Job losses were comparatively low, giving Saskatchewan the lowest unemployment rate in the country. But social assistance cases still increased 8.4% over the course of the recession. Food bank use and bankruptcies also rose in 2009, as the cost of living jumped significantly in Saskatchewan.

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. While Saskatchewan was spared the worst, it too fell victim to the national trend of rising poverty and child poverty rates as low income families bore the brunt of the recession’s impact.

Together, Manitoba and Saskatchewan lost only 3,400 jobs between October 2008 and October 2009, a decline of 0.3%. Saskatchewan, which went into the recession with the second lowest unemployment rate in the country, came out with the lowest. Unemployment rose from 3.9% in October 2008 to 5.3% in October 2009.

While Employment Insurance coverage increased during the recession, less than half of all unemployed workers in Saskatchewan received regular EI benefits in October 2009. Four Saskatchewan communities had an increase in EI recipients of 115% or greater: Estevan, Saskatoon, Swift Current and Yorkton.

Because of this low EI coverage, social assistance needed to fill in the gap. The Saskatchewan Assistance caseload rose 8.4% between October 2008 and December 2009. This was the fifth highest increase in welfare cases, despite the fact that Saskatchewan was one of the provinces with the lowest job losses.

The caseload grew even higher in January 2010, reaching a 3 year high of 26,295 cases.

Bankruptcies provided another visible effect of the recession’s impact on Saskatchewan, rising 28.1% between the third quarter of 2008 and the third quarter of 2009.

More Saskatchewan families needed to use a food bank, as food bank use rose 6% in 2009. 82% of food banks reported an increase in demand. 18,875 people needed to use a food bank in Saskatchewan in March 2009. A higher than average number of food bank clients in Saskatchewan are children: 44%, compared to a national average of 37.2%.

A high proportion of food bank clients in Saskatchewan are working poor, as 14.5% of food bank users report employment income. Another 3% of food bank clients were recipients of EI.

One of the primary causes of this increased poverty and insecurity in Saskatchewan is the steep increase in cost of living in 2009. While inflation was 1%, food prices jumped 6%. Prices for dairy products (6.6%) and vegetables (8.3%) were even higher.

Shelter costs increased 3.2%, as Saskatchewan was the only province in the country to experience a rise in water, fuel and electricity costs. Average rent for a two-bedroom apartment in the province rose 8.7%, far higher than the national average of 2.3%.

Regina, which had the lowest vacancy rate in the country at 0.6%, not surprisingly had the highest rent increase in the country at 10.2%. Saskatoon had the second highest rent increase in the country at 8.3%.

This large increase in the cost of living places significant pressure on low income residents to stretch their meagre incomes far enough to pay for rent, utilities and food.

While Saskatchewan may have one of the best economies in the country coming out of the recession, it is important not to lose sight of the many Saskatchewan families still suffering from the recession’s impact.

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 headlines of economic recovery, Canada’s unemployment scenario has barely budged.

If the Saskatchewan government and federal government ignore the increase in poverty and unemployment created by the recession, many Saskatchewan families could suffer from the recession’s effects for years to come.