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Financially vulnerable Canadians

Single mothers and their children are among the most financially vulnerable during a short period of joblessness.

By ATB Economics 7 May 2020 2 min read

Economic statistics are often blunt instruments with little to say about the situations and stories of individual Canadians. For example, we know that it’s better when the unemployment rate is at, say, 6 per cent than when it’s at 9, but this doesn’t tell us much about how unemployed workers and their families are actually doing.

This is also the case with a lot of what we know so far about the economic impact of the pandemic. Millions of Canadians have lost their jobs or are making less money. This is clearly a bad situation, but who is most at risk financially during the lockdown and after? 

To help answer this question, Statistics Canada has released a new report entitled “Work Interruptions and Financial Vulnerability.” The report identifies which types of Canadian families  are most at risk of not being able to meet their essential needs during even a short period of joblessness without government programs such as the Canada Emergency Response Benefit and the Canada Emergency Wage Subsidy.*

Approximately one in four Canadians (26 per cent) in families that rely primarily on earnings “would not have enough liquid assets and other private sources of income to make ends meet...during a two-month work stoppage in the absence of government transfers or borrowing.* This rises to 32 per cent if a three-month work stoppage is in play.

The report goes on to examine different types of families and finds that, “in the absence of government transfers, lone-mothers, recent immigrants, Indigenous people living off-reserves and individuals living in families where the main income earner has little education would be highly vulnerable financially during temporary work interruptions.”

“Of all groups considered in this study, single mothers and their children are among the most financially vulnerable during a short period of joblessness: more than half of them (56 per cent) are at-risk of not being able to make ends meet even after selling their liquid assets and using other private sources of income.” 

While these statistics only hint at the individual stories and circumstances facing Canadians, they provide some context regarding the potentially differential effects of the pandemic, especially on those who were financially vulnerable going into it.

*Being unable to make ends meet is defined in the report as falling below the low income cut-off (a.k.a. poverty line).

Some family types are more likely to be financially vulnerable

Some family types are more likely to be financially vulnerable.

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