Canada’s improvements in poverty proved to be more transitory than inflation. New survey data from Food Banks Canada (FBC) shows over a fifth of households have recently gone hungry. With inflation running higher than incomes, many households can’t easily absorb rising costs. FBC found more food bank users are citing high inflation and rising shelter costs as the reason they’re starving.
Over 1 In 5 Canadians Now Use Food Banks
Millions of Canadians are going hungry despite the country boasting of its poverty reduction. The survey found 1 in 5 (23%) of households are eating less than they should due to a lack of cash. That’s roughly 7 million Canadians rationing food due to poverty, estimates FBC.
The trend is obviously concentrated towards lower income households, but not *that* low. About 1 in 3 households earning less than $50,000/year report not having enough cash for food. Two adults working 35 hours per week at minimum wage wouldn’t clear that hurdle in 7 provinces. In the other 3 provinces, they would only just clear it.
Canada’s Rising Real Estate Prices Are Playing A Big Factor
Rapidly rising home prices play a significant role in the issue, and it’s easy to see why. The survey data shows 61% of Canadians see the “cost of housing” as a barrier to buying food. Over the past year, the number has nearly doubled, says Kirstin Beardsley, the CEO of FBC.
Early 80s-Style Food Inflation Is Accelerating The Trend Very Quickly
Diverting funds from food to shelter isn’t the only reason food bank use is soaring. Statistics Canada estimates food prices have shown annual growth of 9.7% in April. It was the biggest jump since 1981, during the last inflation crisis Canadians faced. Since wages made less-than-stellar gains, the increased cost is often coming from reduced consumption.
“The biggest sign that inflation is seriously impacting hunger and food insecurity in Canada, is that the reasons why people say they are coming to food banks is changing,” says Beardsley.
“In the past, people would turn to food banks during times of job loss, or due to lower wages — but over the past six months, Canadians are telling us that they are running out of money for food because of rising housing, gas, energy and food costs. That’s an indication that we need to find new longer-term solutions to fight hunger and food insecurity.”
The dangers of high inflation to the public are often underestimated. Most middle and higher income households think of it more like a minor inconvenience. However, those on fixed, low, or middle incomes can’t easily absorb higher costs. If you don’t have much discretionary spending, you can’t double up on not buying stuff.
Rising costs come at the expense of more debt (if you can get it) or reduced consumption. As we’re now seeing, that means some people will be going hungry to balance the budget. Sure, the budget might be balanced but it won’t be pretty.
Hopefully hunger is more transitory than the Bank of Canada hoped inflation would be.