January 1, 2009 - News

Low Income in Canada: 2000-2006 Using the Market Basket Measure - October 2008
Human Resources and Social Development Canada (HRSDC) has just released a new report, Low Income in Canada: 2000-2006 Using the Market Basket Measure. The Market Basket Measure (MBM) is a more robust proxy indicator of poverty in Canada compared to other principal low income measures. Using the MBM, this report documents a decline in the incidence of low income from 2000-2006, from 14.6% to 11.9%. The 11.9% markedly contrasts with the 10.5% incidence of low income using the Low Income Cut-Off After Tax: the LICO AT is perhaps the most widely used proxy indicator of poverty. In other words, using the MBM one could conclude that the poverty rate in Canada in 2006 was some 12% higher than that inferred from LICO AT data.
Other key findings from the report include:

  • The depth of low income in Canada ("the average gap between the disposable income of all economic families in low income and their low-income thresholds expressed as a percentage") was 31.4% in 2006, virtually unchanged from 32.2% in 2000. In other words, the average "economic family" in low income in 2006 lived some 31% below that family's inferred poverty line, using the MBM as the poverty proxy.
  • For children and youth under 18 the incidence of low income was 14.4% in 2006, a drop from 18.1% in 2000 but nonetheless higher than the 11.4% reported in 2006 using the LICO
  • The highest risk demographic group for low income in 2006 was "unattached individuals" aged 45-64, with a 33.8% incidence of low income (i.e., one in three single adults aged 45-64 lived in low income in 2006). Other high risk groups were the disabled (32.8%), lone parents (30.7%), Aboriginal Canadians off reserve (28.6%), and recent immigrants (24.2%).
  • The lowest risk demographic group was seniors 3.3%, notably due income transfers (e.g., Canada Pension Plan, Old Age Security, Guaranteed Income Supplement) available for this group.