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Opinion

Why inequality and poverty fell after 2000

By Michael Hatfield      

In short, whereas in the 1990s governments of all political stripes had cut important benefits to the poor and the bottom half of the income distribution, after 2000 they substantially increased them. Moreover, they delivered a larger share of those benefits in the form of income-tested refundable tax credits.

Unlike increased welfare payments, these present no disincentive to earn and, in the case of the WITB, actually provide an incentive to take low-paying jobs. The incentive to take entry-level jobs was further buttressed by substantial real increases in minimum wages in almost every province. The result was lower income inequality, lower poverty rates, particularly for children and substantial real increases in disposable incomes in the bottom half of the income distribution. The Hill Times photograph by Jake Wright
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OTTAWA—My column in last Monday's issue, “It’s time to tackle inequality and poverty in Canada," pointed out that between 2000 and 2014, market and disposable income inequality declined slightly in Canada, poverty rates for the non-elderly fell significantly and all parts of the income distribution experienced substantial real gains in disposable income with the poorest tenth posting the largest percentage gain. All these results reversed the trends in these indicators between 1990 and 2000. This column will attempt to

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