Poverty in Canada Worse than Reported, Study Says

January 5, 2009, 5:53 PM EST


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A new report that examined poverty rates in Canada between 2000 and 2006 indicates that more Canadians are now living in poverty than what is commonly reported.

The report released by Human Resources and Social Development Canada puts the level of poverty among Canadians at 11.9%. This rate is substantially higher than the more commonly referred to after tax Low-Income Cut Off (LICO) measure, which suggests a 10.5% poverty rate in Canada. 

The key distinguishing characteristic of these two poverty measures is that the Market Based Mechanism used by HRSDC compares the cost of an average basket of goods and services to the average household income of families. Instead, the LICO compares spending patterns and average household income between families.

The HRSDC report highlights the incidence of low income among young Canadians (under the age of 18) as higher using the MBM measure (14.4%) than the poverty rate for youth as reported by the after tax LICO (11.4%). The demographic group that has the highest risk of low income is unattached individuals between the ages of 45-64 (about 1 in 3 single adults).

A number of Canadian provinces have recently adopted comprehensive poverty reduction strategies to combat poverty, including Newfoundland and Quebec.

The HRSDC report was released prior to the Ontario government's poverty reduction strategy announcement in December 2008, which has been criticized by social justice groups, including the Ontario Coalition for Social Justice, for failing to improve provincial social assistance and disability rates as well as other government-based income distribution programs.

According to the HRSDC, senior citizens represent the demographic group least at risk from low income in part because of publicly funded income transfer programs including the Canada Pension Plan, Old Age Security and the Guaranteed Income Supplement. 

To read the full HRSDC report visit: http://www.hrsdc.gc.ca/eng/publications_resources/research/categories/inclusion/2008/sp-864-10-2008/page00.shtml

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