Oct 5, 2009

Poverty: How do we measure up? Very poorly


Discussions about poverty in Canada and BC are, sadly, forever weighed down by debates about how to define and measure poverty. Statistics Canada’s low-income cut-off (LICO) is the line most commonly used, as it is the only measure reliably produced by the federal government each year. It is imperfect, but the best we have to work with for now.

The feds do produce another measure that, I believe, is better – The Market Basket Measure (MBM) – but it has tended to be produced irregularly by Human Resources and Skills Development Canada. What makes the MBM helpful is that it is a more fine calculation that looks at the actual costs of basic goods and services in a given community. So, for example, instead of having the same line for all large cities (as is the case with the LICO), the MBM varies, sensitive in particular to things like differing housing costs.

In August, HRSDC quietly released the latest update of the MBM, with poverty rates for 2007 (which is also the latest year for which we have LICO numbers). For some reason, HRSDC never seems to issue a public announcement or news release when it releases these excellent MBM reports (so hat tip to Steve Kerstetter for drawing the latest one to my attention). But you can find it here.

The upshot: poverty fell in 2007 across Canada. Not surprising, given that this was the last year of strong economic growth before the downturn hit in 2008. However, at 10.1% according to the MBM, the poverty rate is higher than the national rate derived from the LICO (at 9.2%), and remains extremely high given that 2007 represents the peak of the business cycle after more than a decade of positive economic growth. And alarmingly, the depth of poverty in 2007 was greater than in 2004 (when the MBM calculations began).

And British Columbia? According to the MBM, our poverty rate also fell in 2007. However, as with the LICO, BC’s poverty rate remains the highest in the country at 13.4% (with child poverty at 18.4%; again the highest rate in Canada.).

Last month also saw the publication of a new report by the Conference Board of Canada that examined Canada’s poverty rate compared to other OECD countries.  Their finding: “Canada’s Record on Poverty Among The Worst of Developed Countries—And Slipping.” The Conference board news release reads:

“Poverty rates in Canada— especially among children and the working-age population—are among the worst of 17 leading developed countries, according to the Conference Board’s annual ranking on Society indicators. 
With more than 12 per cent of the working-age population living in poverty, Canada is in 15th place out of 17 countries—a “D” grade—ahead of only Japan and the United States.”

So, there you have it; BC ranks as home to the highest poverty rate in Canada, which in turn ranks as among the worst in the industrialized world. The Best Place on Earth indeed.