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Food Banks Canada is sounding an alarm that drastic measures are needed as soon as possible so that people — including many New Brunswickers — can afford to eat.
“It’s a frightening picture,” said Richard Matern, the group’s director of research and author of its annual Hunger Count report.
The latest version shows almost 2 million Canadians used a food bank last March.
That was up 32 per cent from the previous March and 79 per cent since March of 2019, said Mattern.
In New Brunswick, food bank use increased by 25 per cent, he said.
The jump is the biggest he’s seen since he started collecting data in 1989.
It’s about twice as large as the previous high, which followed the 2008 financial crisis.
At that time, people were losing jobs and running through their savings, said Matern.
This time around, the main drivers are the high cost of living and low incomes, he said.
A significant portion of New Brunswick food bank users — half — were single, working-age adults, said Matern.
Some of them couldn’t afford food because their social assistance payments are too low, but an increasing portion were people with steady jobs and average incomes, he said.
“It’s very, very difficult to keep up with this rate of inflation,” said Matern.
Purchasing power is declining from one month to the next, he said.
High personal debt levels are also driving many working Canadians to resort to food banks, said Herb Emery, an economist at the University of New Brunswick.
“There’s a lot of Canadian households that are maxed out,” he said.
Consumers were enticed to spend beyond their means to keep the economy going after the last recession, said Emery.
As prices and interest rates climb, they have less and less room on their credit cards or lines of credit to cover shortfalls.
“You still have to pay your utilities. You still have to pay your rent.”
“They have to adjust on other margins, like food.”
This is a crisis.– Herb Emery, economist
It’s a perfect storm, said Emery. The job market has cooled, making it more difficult to raise income. And little control can be exerted over prices, because they’re mainly determined by outside factors.
The only thing left for the Bank of Canada to do to control inflation is to force people to spend less, said Emery.
“You do that by making them poor,” he said, which means raising the interest rate and making people struggle to make ends meet.
Low-income households felt the squeeze first. Now it’s starting to hit the middle class, where credit has been more generous, said Emery.
The last time this type of policy was implemented, in the 1990s, it took 10 to 15 years to work, he said.
Mortgage rates were about 10 per cent and unemployment was high.
“There was a lot of pain,” said Emery.
The frustrating part, as shown by the Hunger Count, is that the pain is felt disproportionately by those with lower incomes, he said.
Matern is calling for a multi-pronged approach to address affordability.
He wants gaps to be filled in the social safety net and benefits to be expanded.
Many working people don’t qualify for income support programs, he said.
And many who work gigs, contracts or part time don’t have employee medical or dental insurance.
Income supports can be delivered quickly and make a big difference, he said, pointing to previous short-term relief programs during the pandemic.
Governments should listen to Matern, said Emery.
They need to stop fighting over carbon pricing and do more for immediate relief, he said.
“This is a crisis.”
Sees too much reliance on food banks
If energy prices get too high, the government should issue rebate cheques or pay part of the bill, said Emery.
Food banks have a role to play in “disaster relief,” but they are being relied on too heavily, he said.
The quickest fix for affordability is to boost income, said Emery, suggesting several other ways to provide support, either temporarily or permanently.
Governments should raise social assistance rates, index payments to the cost of living and enrich targeted benefits, he said.
Newfoundland has done something good, he said, by introducing basic income for people 60 to 64 years old and providing much more generous support to households with children.
But single adults are treated too harshly, said Emery. They’re the group most implicated in the homelessness crisis, he noted.
He also supports the creation of a rent bank, which was announced as part of the provincial government’s recent housing strategy but still has not been set up.
The weird thing about this new austerity period is the economy has never been better, said Emery.
Nevertheless, there is a lot of uncertainty about future job losses, especially in the private sector, he said, and it’s not clear when interest rate relief may come.
If the affordability problem isn’t addressed it will get worse, he said.
“When people start going without food, the next thing is they’re going to start losing their homes.”
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