˙˙˙˙˙Before we offer support for changing the poverty lines, it seems reasonable to ask how the changes would affect our view of poverty. Some of our colleagues in anti-poverty and social policy groups are wary that governments might use the exercise on market basket measures as a "convenient" way of defining a large portion of poverty out of existence. Lowering the poverty lines invariably means lowering the number of people living in poverty. The National Council of Welfare believes these concerns must be fully and completely addressed by governments if they expect public support for any changes in the poverty lines.
˙˙˙˙˙More than anything else, moving to market basket measures would affect our perception of the distribution of poverty in different parts of the country. The low income cut-offs are based on the size of the area of residence and lump all the biggest cities in Canada into the same category. All the market basket measures we have seen involve poverty lines that were drawn to reflect the cost of living in individual cities.
˙˙˙˙˙We saw in Chapter II that actual living costs are much lower in Montreal, Quebec City and Winnipeg than they are in most other big cities, so the move to market basket lines would lead to much lower poverty rates in those three cities. Because of their large populations, lower rates in Montreal, Quebec City and Winnipeg would translate into lower provincial poverty rates in Quebec and Manitoba.
˙˙˙˙˙Table 7 on the next page shows how the provincial poverty rates for all persons would have changed in 1996 with the shift from LICOs to the market basket measures being developed by HRDC. At first glance, the most striking changes would appear to be the drop in poverty rates in all provinces except Newfoundland. On closer inspection, it is the differences in the drops from province to province that are the most interesting.
˙˙˙˙˙The most dramatic drop is in Quebec, where the poverty rate falls by 49 percent with the switch from LICOs to MBMs. The drops are almost as sharp in Manitoba and Alberta. Meanwhile, the poverty rate in Ontario falls by only 21 percent. Ontario, long regarded as the richest of the so-called "have" provinces, winds up with a poverty rate that is higher than the poverty rate in Quebec and five other provinces.
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|
˙ |
Before-Tax Low Income Cut-Offs |
HRDC After-Tax Market Basket Measures |
Percentage Change |
|
Newfoundland |
17.2 |
17.8 |
+4% |
|
Prince Edward Island |
12.6 |
9.6 |
-24% |
|
Nova Scotia |
18.1 |
14.9 |
-18% |
|
New Brunswick |
15.8 |
12.0 |
-24% |
|
Quebec |
21.2 |
10.8 |
-49% |
|
Ontario |
15.8 |
12.5 |
-21% |
|
Manitoba |
18.8 |
11.1 |
-41% |
|
Saskatchewan |
16.5 |
12.1 |
-27% |
|
Alberta |
15.8 |
9.2 |
-42% |
|
British Columbia |
17.6 |
13.9 |
-21% |
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˙˙˙˙˙Many of the other changes in poverty rates would probably be much easier to understand and to accept. Unfortunately, we have not yet seen the full range of statistics that could be produced using any given set of market basket poverty lines.
˙˙˙˙˙Based on our past work, the National Council of Welfare would expect to see a range of poverty rates by family type not unlike the current range. Single-parent mothers under 65 with children under 18 would still be the family type with the highest poverty rate by far. Married couples 65 and older would still be the family type with the lowest poverty rate. In fact, poverty among all groups of seniors could fall noticeably. Seniors tend to have incomes that are very close to the current low income cut-offs. Even a modest drop in the poverty lines under a shift to market basket measures could lead to a further decline in the poverty rates of seniors.
˙˙˙˙˙One other unknown is the way that poverty rates based on market basket poverty lines would change over time. The researchers at HRDC have yet to produce any poverty statistics for years except 1996. The National Council of Welfare would like to see data for an entire economic cycle before offering a firm opinion on any changes in the way we measure poverty.
˙˙˙˙˙Under the low income cut-offs, poverty rates tend to go up when the economy goes into a recession, and they tend to go down when economic growth resumes. Market basket poverty lines simply would not be credible if they produced poverty rates that were almost identical from one year to the next or if the poverty trends turned out to be strikingly different from the trends using LICOs.
˙˙˙˙˙When Statistics Canada experimented with its Low Income Measures a few years ago as an alternative to the low income cut-offs, it produced several years' worth of data using LIMs to allow researchers a chance to see whether the results were useful or not. The same should happen long before there is any move to market baskets as measures of poverty.
˙˙˙˙˙Historical data would also be a good safeguard against those who would minimize the extent of poverty in Canada by focusing on lower poverty rates resulting from any move to market basket measures. The National Council of Welfare would be the first to criticize anyone who mixed the "old" poverty rates with the "new" poverty rates in an effort to show that poverty was no longer a serious problem in Canada.
Last Update:˙˙2001 02 14