Food Banks Canada’s latest poverty report card found that 28 per cent of people in Canada experienced a poverty-level standard of living, according to the material deprivation index (MDI) for 2026, far exceeding the official poverty rate of 11 per cent as calculated by Statistics Canada’s market basket measure (MBM).
Food Banks Canada uses both the MBM and MDI in its annual poverty report card to assess national progress in addressing poverty and food insecurity. This year’s version graded the federal government D+, in large part due to historically high levels of food insecurity and rising unemployment, despite some important legislative progress including the launch of the Canada Groceries and Essentials Benefit and investments in affordable housing.
The 2025 MDI similarly found 28 per cent of people in Canada experienced a poverty-level standard of living and the Food Banks report card gave Ottawa a grade of D last year. This suggests that despite some minor shifts, there has been no reduction in poverty between 2025 and 2026.
Official income poverty statistics measure whether a household’s income falls below a certain level whereas the MDI tracks the number of Canadians who cannot afford two or more items on an 11-item scale.
As we argued in both 2024 and 2025, using the MBM and MDI together provides a stronger foundation for measuring the overall extent and impact of poverty in Canada.
Food insecurity increasing
Statistics Canada says almost 10 million people or 24 per cent of Canadians, lived in households that reported some form of food insecurity in 2025. That’s an increase of almost four million in just six years. Food bank use has risen in step, while official poverty rates have changed much more slowly. Statistics Canada says only 4.5 million people live below the official poverty line.
While food insecurity provides crucial insight into the financial hardship being experienced by some parts of the population, it captures only one dimension of material deprivation and thus only one part of a modest, basic living standard.
Similarly, while food bank use is not in itself a measure of poverty, it provides a real-time snapshot of financial hardship. Although people living in poverty are much more likely to experience food insecurity, the differing trajectories of these indicators suggest the official Statistics Canada approach alone does not fully capture the hardship many people are experiencing.
While some anti-poverty initiatives have shown promise, there is not one silver bullet that will adequately address the scale of food insecurity we see in Canada today. However, by using both indicators of poverty in policy design and evaluation, we can better understand who is experiencing poverty and evaluate which policies are making a difference to better inform the design of future initiatives.
Poverty measurement needs to consider both inputs and outcomes
Statistics Canada’s MBM is an income-based measure based on the cost of a basket of goods and services representing a modest standard of living. Households with incomes below this cost are considered to be in poverty.
The MBM is crucial for assessing whether Canada’s social safety net provides sufficient income for people to meet their basic needs and is well-suited to measuring income changes. However, it is less able to take into consideration other factors that may impact a household’s standard of living.
On the other hand, the MDI consists of 11 items and activities that a majority of the population feel are necessary for an acceptable standard of living, such as having appropriate clothes to wear for a job interview, an annual dental checkup or a small birthday present for a child.
The Canadian MDI was developed using an internationally validated methodology that has been used in the European Union to monitor poverty for decades, alongside income measures.
These outcome-based measures capture the combined effects of cost pressures and life circumstances – such as disability-related costs or debt – on people’s ability to meet basic needs. Income-based measures can miss these forms of hardship because they focus on income rather than material conditions.
The MDI, therefore, can better capture the millions of people who are experiencing the negative outcomes of poverty despite living above Statistics Canada’s income poverty threshold and who are therefore overlooked by many government anti-poverty initiatives.
The measure can also better highlight government initiatives, such as the Canada Child Benefit, that are successful in more fully reaching those experiencing poverty, but who might live above the official poverty line.
Tracking material deprivation over time
The first Canadian MDI in 2023 estimated that 25 per cent of people were living in poverty. Since then, Food Banks Canada has conducted surveys using the MDI during the spring of each year. A key advantage of this approach is that it can publish data the same year it is collected, whereas there is a two-year lag with Statistics Canada due in large part to its dependence on tax filer data.
As shown in Figure 1, living standards deteriorated even further between 2023 and 2024, then showed marginal improvement in 2025. However, that improvement plateaued in 2026, with the results indicating a substantial portion of the population continues to face significant financial hardship.
When taking other indicators of economic hardship and food insecurity into account, the results of this year’s MDI add to the evidence that the forces impacting the standard of living are no longer episodic or confined to specific shocks, but rather are a result of deeper structural shifts in how income, housing and work interact in the economy.
An MDI can capture the impact of in-kind government benefits
Another benefit of the MDI is that it demonstrates an elevated level of sensitivity to poverty-reduction policies, including those that reduce the need for out-of-pocket spending.
The Canadian Dental Care Plan is one example of an “in-kind” poverty-reduction initiative freeing up money that the household previously spent for necessities. Introduced in 2023, the plan covers a portion of the costs of various dental care services for people who do not currently have dental insurance and who have a household income below $90,000.
The MDI reflects the impact of this program, which is missed by standard income poverty measures.
Table 1 shows the 11 components in the MDI and the proportion of respondents who said they could not afford them. While most components show an increase or stabilization compared to previous years, the rate of dental deprivation shows a notable decrease to 15.7 per cent in 2026 from a high of 22.8 per cent in 2024.
Figure 2 highlights that dental deprivation in 2026 is now lower than the initial 2023 baseline. This decrease coincided with the full rollout of the plan to all age groups in May 2025.
This finding builds on last year’s results showing a notable drop in dental deprivation among seniors 65 and older, who were included in the first phase of the rollout.
Using the MDI at both the national and regional level
Beyond providing a more complete picture of poverty and capturing the national impact of social programs, this year’s poverty report card also demonstrates the potential use of the MDI in demonstrating the success of provincial and territorial anti-poverty initiatives.
For instance, MDI rates showed notable improvement in both Manitoba and Newfoundland and Labrador, coinciding with significant and sustained investments in poverty reduction in those provinces.
Adopting the MDI as a complementary federal poverty indicator and incorporating it into the existing Statistics Canada survey would enable the robust sample size needed to assess poverty at both the national and regional levels, support better design and evaluation of poverty-reduction policies and offer more timely insights into changing economic conditions and policy impacts.
Food Banks Canada’s annual report card illustrates how governments can better monitor progress and improve federal and provincial poverty-reduction strategies. At the same time, sustained investment in income support, affordable housing and affordability in Northern communities remain essential to reducing poverty.
Together, the MBM and MDI provide a stronger foundation for measuring that progress.
Editor’s note: The authors thank Geranda Notten for her feedback on an earlier draft.
