VANCOUVER, BC-Efforts to accurately measure and define
poverty in Canada have been hindered by inconsistent and poor
quality data, resulting in a confusing picture that is often
further distorted by politicians and activists, says a new
study from noted poverty researcher Professor Chris Sarlo of
In What is Poverty? Providing Clarity for Canada, released today by independent research organization the Fraser Institute, Sarlo finds that poverty, whether measured by
income or consumption, has remained in the four to six per cent
range since 1996. His numbers stand in stark contrast to media
reports last week that claimed census data showed increased
levels of poverty and a growing gap between rich and poor.
"Last week's report from Statistics Canada described
'relative poverty,' which is really an estimate of the
proportion of Canadians who are less well off than average;
it's a measure of inequality and tells us nothing about the
state of deprivation in Canada," Sarlo said.
"Media commentators and politicians then take those numbers
and describe poverty in absolute terms, using graphic images
and over-the-top language that brings to mind hunger and misery
usually associated with third-world countries. This problem of
definition "switching" confuses people and impedes intelligent
public discussion of this important issue."
Sarlo, who is also a senior fellow with the Fraser
Institute, has long argued that the most realistic and credible
measurement of poverty is one based on the necessities of life.
He defines poverty as the cost of a list of basic needs
required for long-term physical well-being, including
nutritious food purchased at grocery stores fulfilling all
Canada Food Guide requirements, rental accommodation, clothing
purchased new at major department stores, household
furnishings, supplies, personal hygiene items, laundry,
insurance, and out-of-pocket health costs such as medications,
dental, and vision care.
"We need to know how many of our fellow citizens cannot
afford all of their basic needs. This measurement of genuine
deprivation is based on the absence of these basic needs,"
"Relative poverty, which is what the census report from
Statistics Canada described, is largely a function of the
degree of inequality in a nation. It is not about poverty as
most people understand that term. Unless a nation becomes more
or less unequal over time, there will be no change in relative
poverty despite any improvements in real income. A rising
living standard, by itself, will do nothing to reduce relative
What is Poverty? Providing Clarity for Canada
, Sarlo tracks the latest information about the incidence of
basic needs poverty in Canada, utilizing two different sets of
data (one focused on family spending and the other on labour
market information), and two different equivalence scales in
the estimation of poverty in Canada.
Among Sarlo's findings:
• Poverty rates have declined over the past 36 years,
but it is unclear what has happened to poverty over the past 31
years. One of the sets of data shows poverty declining sharply
after 1996 (after being relatively stagnant over the preceding
22 years) and the other set of data has poverty rates rising
slowly from 1974 to 2005.
• Using incomes drawn from the spending databases,
overall poverty (that is, the poverty rate for everyone,
including children, as distinct from the child poverty rate)
fell sharply from about 12 per cent in 1969 to approximately
three per cent in 1974 and then drifted slowly upwards to about
4.5 per cent in 2005. Using incomes drawn from the labor market
databases, overall poverty fluctuated between eight and 12 per
cent between 1973 and 1996, and then fell sharply after that to
around five per cent.
• The estimation of child income poverty closely
follows the patterns for overall income poverty.
• Consumption poverty for all people and for children
fell sharply between 1969 and 1974 and has drifted up slowly
after that using either equivalence scale.
Sarlo notes that his latest research again reveals concerns
about data quality related to the issue of underreporting and
hidden income, particularly in regards to income data, which is
often used to indicate economic well-being in studies of
poverty. He calls for Statistics Canada to improve the quality
and reliability of its data collection.
"Underreporting of true income which includes gifts or
subsidized rents understates how a household is doing. All of
the income data collected by Statistics Canada, including the
census and tax filer data, is "reported income" that relies on
people giving accurate information about their incomes for the
previous year," Sarlo said.
He suggests that more work is needed to get a more accurate
picture of the extent and varying levels of poverty in
"The measurement of poverty in Canada is considerably
hampered by the apparent sensitivity to the type of survey that
income is drawn from, and by real concerns about data quality,
specifically possible omissions and underreporting. Statistics
Canada needs to examine these considerations and investigate
issues related to data quality."