Statistics Canada’s offices at Tunny’s Pasture in Ottawa are shown on Friday, March 8, 2019. The Canadian economy posted its biggest monthly job loss since the financial crisis as the unemployment rate also pushed higher in November. THE CANADIAN PRESS/Justin Tang

Bump in low-income rates expected as StatCan sets to redraw poverty line

The measure calculates the minimum a person or family would have to earn for a modest living standard

The national statistics office is looking at changes to the federally adopted poverty line which, if approved, could mean more people are considered to live below the low-income threshold.

The last time the made-in-Canada measure was updated was in 2008 and poverty rates increased by 2.2 per cent because the financial cut-off used to define low-income was raised.

Experts suggest that a plan by Statistics Canada to recalculate the threshold by changing the “market basket measure” early next year could lead to a similar bump in poverty rates.

The measure calculates the minimum a person or family would have to earn to afford a basket of goods and services needed to reach a modest or basic living standard.

The Liberals adopted the measure as the country’s official poverty line last year and set aside $12 million over five years to update the basket, which doesn’t include things like wireless services.

In July, the top official at Employment and Social Development Canada and the minister at the time were told federal officials would decide “on the actions to be taken” with Statistics Canada’s recommendations, including which to implement, and which to send for more research when it comes to making the changes.

A final report from Statistics Canada is expected in February.

The Canadian Press obtained copies of the briefing notes under the access-to-information law.

Statistics Canada has published reports outlining possible updates to the cost and items in the basket of goods and services, as well as “disposable income” thresholds, which are how much income a family has leftover after accounting for taxes and payroll deductions.

ALSO READ: Canada’s GDP falls 0.1 per cent in October

A family or individual would be considered in poverty if the basket of goods strips away too much of their disposable income.

Other updates proposed by Statistics Canada include reflecting changes to the national food guide in the cost of food, and updating transportation costs to reflect census findings that while some low-income earners take public transit, others drive. The agency has also suggested excluding capital gains taxes when calculating disposable income to avoid families “appearing to be in poverty” from a hefty tax bill, and putting homeowners with a mortgage and people in subsidized housing on “more equal footing” with renters when determining who is in poverty.

Garima Talwar Kapoor, director of policy and research at Maytree, said the cost of housing, for instance, has gone up faster in the last 10 years than earnings, which could help increase the percentage of Canadians living in poverty.

She said a similar effect happened in the 2008 update when costs rose faster than incomes.

“That trend is continuing,” Kapoor said.

“The growth in costs is so much faster than the average income … which would therefore translate to a higher poverty level.”

ALSO READ: Feds lowered poverty line, reducing the number of seniors in need: documents

Changes to measuring poverty would likely result in an increase not only in the percentage of people in poverty, but a slight increase in the raw numbers as well, Kapoor said.

The Liberals have touted that under their watch, more than 800,000 people, including some 280,000 children, have been lifted out of poverty, and rates have dropped by about 20 per cent of where they were in 2015. The figures are key benchmarks — politically and from a policy perspective — to track the path of the government’s anti-poverty strategy.

Iglika Ivanova, a senior economist at the Canadian Centre for Policy Alternatives, doesn’t foresee a revamped poverty line shifting Canada off the recent decrease in poverty rates.

The changes could drop those just above the line into poverty despite no material changes to their circumstances, she said.

Updates to the measurement will help identify the financial pressure points for people in poverty, which in turn would help governments set anti-poverty plans, she said.

“It’s just important to keep updating these things because sometimes they are used to say we’ve done enough by the government — provincial or federal.”

Jordan Press, The Canadian Press


Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

‘Each step is a prayer’: Ojibwe man will walk from Hope to Vancouver Island for Indigenous healing, reconciliation

James Taylor departs Sept. 20, returns to Saanich in five days for sacred fire

OUR VIEW: Fox fight continues

Thanks for keeping this courageous young man’s vision alive 40 years later

Lantern Park townhomes set to open this Sunday on Aldergrove/Abbotsford border

Developer Peter Reimer said more homes, including a mid-rise complex, are in store for the future

Scarecrow Festival given COVID twist

Art’s Nursery’s annual fall fundraiser, on the Langley-Surrey border, continues with some tweaks

3 new deaths due to COVID-19 in B.C., 139 new cases

B.C. confirms 40 ‘historic cases,’ as well

Ferry riders say lower fares are what’s most needed to improve service

Provincial government announces findings of public engagement process

Air quality advisory ends for the Lower Mainland

It had been in effect since Sept. 8

Supreme Court Justice Ruth Bader Ginsburg dies at 87

The court’s second female justice, died Friday at her home in Washington

Emaciated grizzly found dead on central B.C. coast as low salmon count sparks concern

Grizzly was found on Gwa’sala-‘Nakwaxda’xw territory in Smith Inlet, 60K north of Port Hardy

Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

VIDEO: B.C. to launch mouth-rinse COVID-19 test for kids

Test involves swishing and gargling saline in mouth and no deep-nasal swab

Young Canadians have curtailed vaping during pandemic, survey finds

The survey funded by Heart & Stroke also found the decrease in vaping frequency is most notable in British Columbia and Ontario

B.C. teachers file Labour Relations Board application over COVID-19 classroom concerns

The application comes as B.C.’s second week of the new school year comes to a close

Most Read