Published in the Montreal Gazette, Wed. Dec. 8th, 2004. Submitted by Campaign 2000, in
response to a Gazette editorial of Nov. 26th, 2004, “the wrong yardstick”
However you measure it, child poverty is too high
A recent Gazette editorial (Nov. 26th) challenged the use of Statistics Canada’s Low Income
Cut-Off (LICO) as an accurate measure of poverty. At stake is the question of whether
Campaign 2000’s Report Card on Child Poverty in Canada is inflating the numbers of the
poor.
First, given that Canada does not have an official poverty line, it should come as no surprise
that government agencies caution against using the LICO as a measure. However, let’s not
confuse the question of official assent with whether the LICO is accurate in measuring low
income in Canada. It’s simple to dismiss the LICO as “unofficial” but turn the question
around, and the answers are not as categorical. If the LICO is not a good measure of who’s
struggling in Canada, than how do we know whether Canada’s income security programs
like pensions and provincial welfare payments are doing their job?
The government of Canada provides three primary measures of low income in Canada,
none of which are officially endorsed as poverty lines.
The Low Income Measure (LIM) is a purely relative measure of inequality. It sets the
benchmark of low income at half the median income. It is widely used by international
bodies, such as the UN, to compare poverty across nations. Using this measure, UNICEF
ranks Canada 17th worst out of 23 industrialized nations in terms of child poverty levels (at
15.5%).
Statistics Canada’s LICO has been widely used as an indicator of low income in Canada for
more than 20 years and has provided a consistent measure for tracking trends over time. It
is published annually by Statistics Canada as a measure of “low income”.
The LICO is mix of relative and absolute measures of poverty. It looks at what the average
family in different-sized communities spends on shelter, food and clothing and then
determines the levels at which families spend a disproportionate amount of their income on
life’s most basic needs. It is not simply income which is at stake in the LICO, it is what that
income can buy you in the real world. So, to build on the Gazette’s example, if the average
income in Canada became $1 million overnight, we can almost be sure that rents, along with
grocery and clothing prices would rise accordingly.
A third measure, the Market Basket Measure (MBM), addresses head-on the Gazette’s
call for “a yardstick for how much a family requires to meet basic needs ... that would be
very helpful in working towards the elimination of child poverty.” In fact, the MBM was
commissioned by the federal, provincial and territorial governments as a "consensus
definition of basic needs/poverty level." Released in 2003, the MBM defines a basket of
goods and services necessary to live in communities across Canada and then
determines the necessary disposable income to purchase those services.
The MBM has essentially set the standard for how many families and children are at a
severe disadvantage in meeting their basic needs. What is that standard? The MBM
shows almost exactly the same child poverty rate for 2000 (16.9 per cent) than the pretax
LICO as reported by Campaign 2000 (16.4 per cent).
It is clear that however you measure it, be it through relative or absolute means, child
poverty in Canada remains at about 16 per cent, meaning that more than a million
children are living in conditions of disadvantage, low income, or poverty. Whatever word
we want to use, that’s one million too many children.
So what do we do about it?
We know what it will take to make a difference. Nations that have significantly reduced
child and family poverty have done so by investing in widely accessible early learning
and child care programs, effective child benefit systems, national affordable housing
programs, a healthy stock of good jobs and generous income security and
unemployment benefits.
Canada can do the same. Over the next decade, Canada’s multi-year surpluses afford
us the fiscal capacity for social investments that will make a real difference in the lives of
children and families in Canada. It’s time to end to social deficit..