Prosper Canada helps Canadians overcome financial barriers to food security
During tax filing season and throughout the year, Prosper Canada helps low-income households receive the benefits they’re entitled to.
For the over 4 million Canadians who face food insecurity, lack of sufficient income is most often the biggest cause. We know that improving low-income households’ access to financial resources can be an efficient and effective way to reduce food insecurity. Many low-income households rely on tax refunds and government benefits as a major source of income. Low- and moderate-income Canadians rely most heavily on this system, with tax credits and other income benefits accounting for 44% and 38.1% of their total incomes respectively on average.
Yet, many individual and systemic barriers can get in the way of low-income households being able to access this income. Income transfers provided by government come through tax refunds and benefits, and many income supports are delivered through, or contingent on, tax filing. Accessing these benefits requires documentation, resources like computers or printers, and have associated costs that low-income people may struggle to absorb. Tax and benefit processes are complicated and difficult to navigate and may not be an immediate priority for folks who have pressing concerns like precarious housing. As a result, it is estimated that over $1 billion in federal benefits goes unclaimed annually by people with low incomes. While it is difficult to accurately measure benefit and tax filing gaps, experts estimate that 5-10% of people with low incomes are not receiving all their benefits and this rate is much higher in some groups, including newcomers to Canada, people who are self-employed, and those who live in a rented accommodation.
Prosper Canada, a national charity dedicated to expanding economic opportunity for Canadians living in poverty through program and policy innovation, have created programs to support low-income Canadians to access the benefits to which they are entitled. They work with 14 non-profit Financial Empowerment Champions across the country that provide hands-on tax and benefits assistance, which has increased their clients’ annual incomes by ~$3,600 per person, on average. Since January 2016, Prosper Canada and its partners have helped over 464,000 people build their financial capability, over 146,000 people to file their taxes, and cumulatively boosted incomes of low-income people by over $794 million.
Since tax filing and accessing benefits is a direct way to increase the income of households experiencing food insecurity, we have partnered with Prosper Canada to evaluate the extent to which access to benefit services for Canadians living on low incomes leads to reduced food insecurity. This work would support the design and testing of a Benefits Screening Tool Service, which would help users identify and access tax credits and benefits that they may be eligible for, but are not yet receiving, and result in a tested service model that can then be piloted on a broader scale to help improve users’ income and food security outcomes.
Unfortunately, federal funding for financial empowerment clinics are set to expire at the end of April, despite the hundreds of thousands of Canadians who rely on these services to access government benefits. Hear from Elizabeth Mulholland, the CEO of Prosper Canada, in a recent Toronto Star article on the return on investment of these programs and why the extension of this funding is crucial for a more equitable recovery from COVID-19.
More about Prosper Canada:
- Founded in 1986, Prosper Canada is a national charity dedicated to expanding economic opportunity for Canadians living in poverty through program and policy innovation.
- As Canada’s leading national champion of financial empowerment, they work with governments, businesses, and community groups to develop and promote financial policies, programs, and resources that transform lives and foster the prosperity of all Canadians.
- For more information, please visit www.prospercanada.org.
April 5, 2021