Measuring Poverty

A Brief Update of Data Available through Statistics Canada

Planning and Policy SupportDecember 10, 2013

Topics

• Statistics Canada and Measuring Poverty• London’s numbers• Threshold amounts• Definitions• Pros and Cons• Current availability• Recommended reading

Statistics Canada & Measuring Poverty

• “Statistics Canada does not define 'poor' nor does it estimate the number of poor families and individuals in Canada.”

• Early 1960’s to today - published low-income statistics – key dimension of poverty – low income = at-risk of poverty

Source: Statistics Canada. Income Research Paper Series. Low Income Lines 2011-2012. Catalogue no. 75F0002M — No. 002. Modified June 27, 2013.

London’s Numbers

LICO (a

fter tax)

LICO (b

efore tax)

LIM (a

fter tax)

MBM0

4

8

12

16

20

% of People Below Low Income Lines: London CMA, 2011

NHS Taxfiler16.25

16.316.35

16.416.45

16.516.55

16.616.65

16.716.75

% of People Below LIM: London, 2010

Source: Statistics Canada CANSIM table 202-0802. Data must be used with caution.

Source: Statistics Canada NHS Community Profile and Small Area Administrative Data provided through the Community Data Program.

The Thresholds

single 2 person 4 person$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

$45,000

$50,000

$20,366

$25,353

$37,843

$16,513 $20,170

$31,335

$22,720

$32,131

$45,440

$19,930

$28,185

$39,860

$16,829

$23,799

$33,657

before tax LICOafter tax LICObefore tax LIMafter tax LIMMBM

Source: Statistics Canada. Low Income Lines 2011-2012

Measure #1 – Low Income Cut Off• First published in 1967; current thresholds based on 1992 spending

patterns• If family income below LICO, then likely to be spending more than the

average on food, shelter, clothing• Mixed consumption/equity measure

Measure #2 – Market Basket Measure• Dates back to 2000• Measure of consumption • Cost of nutritious diet, shelter, public transit, clothing and footwear, other

necessary goods and services• If family income below the MBM line, unlikely to be able to afford all items

Measure #3 – Low Income Measure

• Used by Province to track progress• Measure of equity• Household considered poor if income is 50% below the

median

Median household income

Poor = having income 50% below the LIM

50% have income

above the median

50% have income below the median

Before Tax or After Tax?

• Before Tax – historic – does not take into account tax transfers and credits – Campaign 2000

• After Tax – 2006 Census – preferred by Stats Can as takes into account tax transfers and credits

• Looking at both allows us to see impact of tax measures

Pros and Cons

Pros Cons

LICO HistoryAdjusts for family size Adjusts for community size

Expenditure assumptions not being updated

LIM Used by Province to track progress Community size and regional differences not accounted for

MBM Adjusts for family size, regional differencesClarity

Debate as to contents of basket

Current Status of Data Availability for London

Data source Geography Timing Trend

# below LICO NHS by request City Census Not to be compared to previous years

Taxfiler - CANSIM

CMA Annual, 2 to 3 year lag

Yes

# below LIM NHS online City Census None

Taxfiler – Community Data Program

City Annual, 2 to 3 year lag

Yes

Taxfiler - CANSIM

CMA Annual, 2 to 3 year lag

Yes

# below MBM Taxfiler - CANSIM

CMA Annual, 2 to 3 year lag

Yes

A Final Thought

• “… low-income statistics are not intended to provide an indication of the success or failure of specific programs designed to assist the poor.”

Source: Statistics Canada. Income Research Paper Series. Low Income Lines 2011-2012. Catalogue no. 75F0002M — No. 002. Modified June 27, 2013.

Recommended Reading• Cutting Through the Fog by John Stapletonhttp://metcalffoundation.com/wp-content/uploads/2011/05/cutting-through-the-fog.pdf • Poverty. Where Do We Draw the Line by Chris Sarlohttp://www.fraserinstitute.org/uploadedFiles/fraser-ca/Content/research-news/research/publications/Poverty-where-do-we-draw-the-line.pdf • A Measure of Poverty in Canada. A Guide to the Debate About

Poverty Lines by Greg DeGroot-Maggettihttp://action.web.ca/home/cpj/attach/A_measure_of_poverty.pdf• Research & Policy Development Poverty Linkshttp://www.london.ca/About-London/community-statistics/social-issues/Pages/Poverty.aspx