The Canada Child Benefit (CCB), introduced in 2016, is widely considered to be successful in reducing child poverty, with research finding that it reduces income poverty.
Going beyond that, Canada’s first child material-deprivation scale enables a more comprehensive evaluation, demonstrating that the benefit also reaches households with children experiencing adverse outcomes associated with a poverty level standard of living, despite the family being over official income poverty thresholds.
With the recent federal government announcement of the new Canada Groceries and Essentials Benefit, along with its continued investments in other programs such as the CCB, adopting a material deprivation lens is crucial to designing and evaluating the success of these and other programs to address the full scope of poverty.
Beyond income as proxy for well-being
Key to the CCB’s success is that it involves much more generous benefits than previous programs, with a maximum amount of $7,787 per child per year, and that its benefits are tapered only gradually at incomes of more than $36,000 annually.
However, both the program’s design and the measures used to estimate its effect on poverty assume that income is an acceptably accurate proxy of a family’s true level of material well-being.
The CCB is an income support program, administered through the tax system and its benefits are income-tested, meaning they are lower when a family’s income is higher. Moreover, Canada’s official poverty measure, the market basket measure, is income-based, as is the also commonly used low-income measure.
However, income is only one crude proxy for a family’s level of material well-being. Other factors are its non-income financial situation (such as savings, assets, debts), its specific basic needs (such as a chronic illness or disability) and the costs of meeting its needs in its specific circumstances (such as paying a much higher rent after renoviction).
Material deprivation indicators provide an alternative measure of poverty through the tracking of adverse outcomes that arise due to a lack of money. Though they focus on outcomes, material deprivation indicators capture a family’s material well-being more broadly than income-based poverty indicators.
A recent study by two of the authors of this commentary, Notten & Sène (2025, forthcoming 2026), investigates to what extent the CCB reaches poor families when child poverty is measured through a child material-deprivation lens. The resulting index is based on Canada’s first child material-deprivation (CMD) scale (described here) and includes both child-specific and household items.
A child-specific index reflects that children’s needs and experiences are unique in important ways, compared to those of other Canadians. For example, the index shows that nearly 15 per cent of children cannot afford to participate in organized activities outside school and nearly five per cent of parents cannot afford to buy the school supplies required by their teacher.
The overall rates of material deprivation for children depend on how many items are missing from the 15-item CDM scale. Our study found that 39.3 per cent of children are living in households missing one or more items, while 26.6 per cent of children are missing two or more items. Further analysis shows the optimal deprivation thresholds to distinguish between deprived and non-deprived households would be one or two missing items.
Notten and Sène’s research draws on survey data collected by Food Banks Canada in 2023 – data that were used in earlier research to develop a material deprivation index. While our research uses the child material-deprivation index, a similar analysis with the material deprivation index without child-specific indicators is feasible, appropriate and would have similar policy implications.
Child material deprivation and low-income measures
The results of our research are consistent with those of other studies of material deprivation or similar indicators, such as food insecurity, and those that look at adverse outcomes resulting from low financial resources.
Rates of material deprivation tend to be higher than those of income-based poverty measures. In many instances, there is an imperfect overlap between those families considered to be living in income poverty and those facing material deprivation.
For example, our study found that 27 per cent of children whose families do not have a low income, as measured by the low-income measure before taxes, still experienced one or more deprivations, while 17 per cent faced two or more deprivations. This can happen, for instance, because a family’s particular basic needs or circumstances are more costly (e.g., a chronic illness) or because part of the family’s income goes toward debt payments.
Conversely, 32 per cent of children living in households below the income-poverty threshold are not materially deprived. This can happen because a family’s costs are lower (e.g., they pay well-below market rent or they live in a mortgage-free home) or because they have savings or access to credit to supplement their currently low income.
Overlap of material deprivation with income
Given that income is often a key source of information for governments in targeting support to families with children, our study explores the overlap (or lack thereof) between material deprivation and income by quintiles.
The chart below shows that deprivation levels consistently decline as income levels rise, from affecting the 16.6 per cent of children in the sample experiencing at least one deprivation while their family’s income is ranked in the first quintile to only 1.4 per cent of children in the fifth quintile.
Nonetheless, the chart below also clearly illustrates that many deprived children are ranked in the second and third quintile: 15 per cent of children (9.2+5.8) compared to the 16.6 per cent in the first quintile.
Our study found that about as many materially deprived children live in households whose income is above the poverty line but under the national median income (15.1 per cent) as those who live in households that have an income under the poverty line (14.2 per cent).
This has important implications for designing child benefit programs. To reduce child poverty in the broader sense of low levels of material well-being, income support that is tightly targeted at low(er)-income families and/or that tapers quickly will leave out many families with children who are struggling to afford the basic necessities of life or who, if they qualify, will get benefits that are much less generous.
The CCB reaches both income-poor and materially deprived children
By combining income and deprivation data from the survey with government-provided information on benefit amounts at different income levels, our study evaluated the degree to which the CCB reaches poor households with children.
We found that the benefit is very successful in reaching children experiencing material deprivation, due to its near-universal coverage and generous support, which reduces only gradually as households move up the income ladder.
Using a hypothetical household of a couple with two children under six, the table below provides an overview of CCB amounts per child per year according to the household income level.
The median net income of a household with children in the first quintile is $25,000 and it receives an additional income of $15,574 per year in child benefits. For households in the third quintile, with a median net income of $67,000, annual benefits are still $11,457. The CCB is thus quite successful in reaching materially deprived children, even if their families’ incomes are well up in the income distribution.
Use both income and deprivation to design programs
Canadian governments often rely on the income tax system and income-testing to administer a broadening range of benefits. There are clear operational advantages, such as lower program costs and the ability to reach a target audience, to using an existing vehicle.
Yet, irrespective of whether these benefits are income transfers, such as the CCB, or benefits in-kind, such as the Canadian Dental Care Plan, the imperfect nature of using income as a proxy for actual levels of material well-being makes outcome-based indicators of poverty such as (child) material well-being important complements when designing such programs and when evaluating their cost-effectiveness.
Without such complements, an overreliance on income leads to biased program designs and biased program evaluations and thus potentially biased policy decisions.
When households’ specific circumstances are less favourable than their income would suggest, they are more likely to be excluded and/or to receive considerably lower levels of support. Programs that rely on narrow targeting and/or steep benefit clawbacks as income levels increase are more prone to such errors of exclusion.
Outcome-based measures such as indicators of (child) material deprivation are thus not only important complements to income poverty indicators but are also crucial when designing and evaluating support programs in terms of their capacity to reduce poverty.
