A year and a half into a pandemic that has exposed long-standing social and economic cracks in our system, the Trudeau government is still lagging on major repairs.

This year’s federal budget, the most critical one in decades due to the steep hill of post-pandemic recovery that lies ahead, does little to address Canada’s widening income inequality gap. This failure is all the more egregious given the opportunity for Prime Minister Justin Trudeau to embrace a just recovery and fight the perpetuation of racialized poverty.

The most unsettling outcome of the pandemic — after accounting for those who have fallen ill or died, disproportionately people of colour — has been the enrichment of a handful of people by billions of dollars while three million people lost jobs and 2.5 million others faced reduced hours. Lower-wage earners have suffered the most job losses, while there has been a net increase in jobs among highly paid workers.

In delivering the budget, Finance Minister Chrystia Freeland noted the pandemic’s asymmetric impact on racialized people. But “instead of recognizing those realities [within the budget], they simply delivered platitudes instead,” says Shalini Konanur, executive director and lawyer with the South Asian Legal Clinic of Ontario and steering committee member of Colour of Poverty – Colour of Change.

According to Konanur, one of the biggest absences in the budget was the attachment of employment equity conditions to the billions of dollars in stimulus funding. That is, little to zero accountability has been implemented to ensure that the budget’s promise of one million new jobs will trickle down to those who have been most affected — racialized people, particularly women. If history is anything to go by, they will carry the burden longer than others because recessions tend to have a long-term impact on individual earnings, employment and overall wealth.

“The driver for economic security is jobs, and you have to recognize intergenerational issues around poverty. Racialized people just don’t get good jobs because of discrimination and so everything about their economic outcomes is intergenerationally less,” says Konanur.

More inequality, less social mobility

In other words, growing up poor makes it harder for you to break from that poverty as an adult — and harder for your kids too.

Just this year Statistics Canada released a study on intergenerational mobility and income inequality.

The researchers found that parents’ income was linked to how far up the social mobility ladder their child could climb — and, compared to previous generations, they can’t ascend as high as they used to. People in every province are now more likely to remain within the circle of wealth, or poverty, they were born into, as compared to earlier decades.

“Children born in families with a total family income in the bottom 20% of the income distribution have become less likely to exit the bottom quintile themselves and less likely to transition into the middle class,” note the researchers.

“More inequality has gone hand in hand with lower mobility.”

However, the study didn’t analyze the data through the lens of race, leaving a gap in understanding how certain communities become trapped in cycles of poverty. (Canada suffers from a general scarcity of race-based data. The federal budget provides $172 million over five years to Statistics Canada to fill data gaps related to racialized groups and women.)

One in five racialized families live in poverty, compared to one in 20 white families, according to Canada Without Poverty, and Indigenous people are overwhelmingly overrepresented in the homeless population. A 2019 report on the working poor in the Toronto area found that 46 per cent of the working-age population are racialized, but 63 per cent of the working poor are racialized, with working poverty rates highest among South Asian, Chinese and Black men, as well as Black women.

It’s a problem with long roots.

Devaluation

“Racialized labour has been historically devalued and discounted in Canada,” says Grace-Edward Galabuzi, associate professor of politics and governance at Ryerson University. “One thing we often forget to acknowledge in Canada is that slavery in Canada existed for 200 years” and “most of the prominent founders here had slaves.”

The violent extraction of racialized labour didn’t end with slavery. Galabuzi describes how employers were allowed to pay Black people a quarter of what they paid white workers. A few decades later, Chinese workers — brought over to fill a shortage of labour needed to build the Canadian Pacific Railway — were paid less than white workers were while also being given the most dangerous jobs. After completion of the railroad, Canada sought to stop further immigration from China through implementation of the head tax and then the Chinese Exclusion Act, making it almost impossible for Chinese people to legally enter the country.

This exclusion and devaluation of racialized labour continues today.

While racialized workers are more likely to be working or searching for work than their white counterparts, they have a higher unemployment rate (9.2 per cent vs. 7.3 per cent for the white population), according to a Canadian Centre for Policy Alternatives study based on the 2016 census. Women of colour experience the brunt of economic racism, earning 59 cents for every dollar that white men earn (white women earn 64 cents for every such dollar). Interestingly, among racialized men, one age group defied this pattern: the employment rate for 55- to 64-year-olds was 5.9 per cent higher than for their white counterparts.

In terms of wealth — essentially leftover income that can be invested in assets — the study again uncovered inequities. A higher proportion of white people reported capital gains (12 per cent vs. 8 per cent of the racialized population), along with 29 per cent higher returns on average. Similarly, a higher proportion of white people reported investment income (31 per cent vs. 25 per cent of the racialized population), along with an astounding 47 per cent higher average return on investment.

Lower lifetime earnings coupled with restricted access to pension plans makes retirement more difficult for racialized people, forcing them to work longer and at an older age.

Those numbers don’t include Indigenous people, who “experience the worst poverty in this country, even though we hosted people to come on our land and territory,” says Leah Gazan, MP for Winnipeg Centre, the third-poorest riding in the country.
Manitoba has the highest proportion of Indigenous people, at 18 per cent, compared to other Canadian provinces — and it also has the lowest intergenerational mobility in the country, according to the Statistics Canada study. Indigenous people in Manitoba experience poverty at twice the rate, and homelessness at up to six times the rate, of non-Indigenous people.

“Willful systemic racism has been perpetrated for decades on Indigenous Peoples, and it’s almost normalized,” says Gazan.

She blames racist policies that “continue to be in place today” for the impoverished situations of Indigenous Peoples. She says it can take up to two years to get a business started on a reserve, compared to up to six months elsewhere, due to a lack of infrastructure, access to capital and even mentorship — all vital components to kickstarting a business.

Accessible resources

In some cases, the effects of labour devaluation are felt even before a job application is made. Many newcomers to Canada are not fluent in English, which makes it difficult to navigate the job market.

Growing up, Y Vy Truong saw her Vietnamese immigrant parents, based in Vancouver, struggle with employment resources available only in English. “It can be a daunting task to navigate resources in English when it’s not your first language. So it’s common for children to act as translators.”

In March 2020, when the federal government announced the Canada Emergency Response Benefit to support workers during the first wave of COVID-19, all the information was presented in English and French. That’s when Truong, along with a few of her friends, started the Bảo Vệ Collective to translate information from the government into Vietnamese and support people to navigate the pandemic with less stress and fear.

“What poor planning to assume that everyone in Canada knows English. It’s a huge oversight to only have information in English,” says Truong. “The lack of government resources in different languages just shows that they don’t understand the diverse ethnic and linguistic makeup of their country, or the economic realities of immigrant communities.”

Without policy that targets the unique needs of racialized communities, they will continue to be left behind.

For Truong, a way to bridge the inequality gap is to create equal access to information, which is essentially the first step towards employment and understanding workers’ rights. This means the government needs to review the information and resources it’s providing to a diverse demographic, making them accessible in different languages as well as less convoluted.

A basic income — and opportunities

Both Gazan and Galabuzi believe that tackling poverty requires a multipronged approach and that getting money into the hands of people through a basic income is one place to start.

Multiple basic income projects in Canada and abroad have consistently demonstrated that giving people direct cash helps alleviate poverty. A 2018 Canadian study gave a one-time cash transfer of $7,500 to 50 homeless people in British Columbia. One year later, on average, participants had greater food security, spent fewer days homeless as a result of being able to move into stable housing faster and had $1,000 in savings.

Political will is the only thing standing in the way of Canadians getting a basic income, says Gazan. “CERB demonstrated that we have the resources, so the fact that so many people are living in poverty is a choice.”

The pandemic has highlighted that racialized people are more likely to be frontline workers and also more likely to be working low-wage, precarious jobs with no paid sick leave. Precarious work arrangements are the “real reason why” racialized people are stuck in their socioeconomic conditions, Galabuzi says. “Their bargaining power is suppressed.”

How to ensure “equitable access to opportunities is the question,” he says, adding that organizations have little incentive to promote income equity in the absence of legislative change. “Through government legislation, corporations can be obliged to hire people who are underrepresented in their industry.”

The government should also consider including local hiring obligations in labour laws — rather than making people travel for work, bring the work to them, especially as more and more racialized workers find themselves in inner and outer suburbs, for example in Scarborough, Pickering, Brampton, Ajax and others.

“A structural response is more beneficial, as it reduces the burden on the individual, and we have to minimize the extent to which our responses are based on our subconscious biases,” Galabuzi says.

Paul Taylor, the executive director of Foodshare, has also suggested that establishing a fixed wage multiplier — where the CEO’s pay is directly connected to the lowest-paid workers’ — is another policy intervention that can boost equity.

Since poverty is a nuanced problem, moving people upwards will require Canada to come at the issue from many angles. Some ideas can be borrowed from Bernie Sanders’ 2020 U.S. presidential campaign, such as establishing more affordable housing, free childcare and early education for all, a tax plan that ends wealth hoarding at the very top, and more sustainable and green jobs to meet the challenge of the climate crisis

The big elephant in the room, though, is Canada’s colonial history. CCPA Manitoba conducted a study on displacement, housing and homelessness in northern Manitoba communities in 2020, and found that racism, the long-term ramifications of colonization, limited services and housing issues were among the factors driving people from housing to homelessness and severe poverty.

In order to undo the long history of this damage from colonialism, economic justice in the form of jobs and financial security needs to reach racialized people in Canada. This should be treated as the bare minimum starting point towards creating space for everyone in society, including the most vulnerable and disenfranchised, and giving them a fair chance to move up the ladder, without trying to cover up the cracks and inequities exposed by the pandemic with mere platitudes.