Establishing Objective Indicators
It is one task to describe the conditions of poverty, but establishing an objective measure is more difficult. The 2 distinct and opposing methods ("absolute" and "relative") used to illustrate the basic level of income that defines poverty are evidence that the definition and measurement of poverty is an exercise in values and politics; ie, society's beliefs about poverty and its causes largely determine the way poverty is defined and measured.
The absolute approach is based on the belief that poor people only require the absolute necessities of life that can be objectively established, eg, substandard housing and the bare essentials of food and clothing. This view stems from the belief that poverty is an individual's own doing and should not be rewarded or encouraged by the provision of adequate levels of social assistance. The FRASER INSTITUTE has published poverty lines based on a limited market basket of goods designed to ensure minimal physical survival. The levels of income provided by provincial and municipal authorities for welfare recipients also ensure only absolute (ie, substandard) levels of living. The relative approach rejects the "absolute" notion that poverty can be objectively defined without reference to prevailing community standards. A poor Canadian household exists in the context of a highly interrelated, prosperous Canadian community therefore the economic, social and political functioning of that household is relevant.
A well-known national measure based on the relative approach is the one developed by the CANADIAN COUNCIL ON SOCIAL DEVELOPMENT, a national, nonprofit social organization, and the special Senate committee on poverty. The CCSD poverty line is based on average Canadian family income; if a family income is less than 50% of average family income, it is defined as poor. Adjustments are then made for family size but not for place of residence.
If the CCSD lines (not those of STATISTICS CANADA) are used as indicators of the poverty rate, there has been little change in the rate since 1967. Improvements that occurred through the 1980s were eroded in the 1990s, as the relative distribution of income in Canada was increasingly concentrated in the upper income families.
Annual Survey of the Poor
Statistics Canada developed and used the leading relative standard of low income. Canada is one of the few countries to conduct an annual survey of the poor, and the Statistics Canada approach has become the most prevalent and respected measure of low income in Canada. For its annual survey, Statistics Canada begins with an income line based on the actual share of income that an average Canadian family devotes to food, clothing and shelter purchases (thus the amount of income allotted to poor families is related to the expenditure standards of the community), and then adds 20% to this share. Any family that must spend more than this share of its income on food, clothing and shelter has so little discretionary income that it is considered to be living in "straitened circumstances."
As the living standard of the average Canadian household has risen over time, so has the poverty line, in order to maintain a relationship with living standards. (See STANDARD OF LIVING.) Statistics Canada adjusts its income line for family size, and according to whether the household is located in an urban or rural setting. The poverty line for rural households is about 30% lower than that for urban households. Statistics Canada refrains from calling its income measures poverty lines, preferring to label them "low-income cut offs."
The actual calculation of the number of people who are poor is conducted each spring through a questionnaire survey covering a representative sample of some 35,000 Canadian households (excluding native households on reserves, individuals living in institutions and those living in the northern territories). Income includes earnings, investments, government TRANSFER PAYMENTS, PENSION income and other income such as scholarships, ALIMONY and severance pay. The family is defined as all people sharing a dwelling and related by blood, marriage or adoption.
After the sample income data is collected, and projections made for the Canadian population as a whole, family and individual incomes are ranked according to whether they fall above or below the low-income cut-offs. The published results from Statistics Canada make it possible to determine how many individuals and families are poor, as well as the characteristics of these households. (See INCOME DISTRIBUTION and POPULATION.)
A Major Shortcoming
A major shortcoming of this type of poverty survey is that it produces a "snapshot" of poor households for that year only. In preceding or succeeding years, it is not known whether the same or different households registered poverty incomes. This is a serious omission because it is almost certainly the length of time that a person or household suffers such an income that leads to poverty conditions. In the annual survey, no distinction is made between the university student with a temporary low income and the single parent or the person with a disability who has been living on a poverty income for years with few prospects for improvement. Cross-sectional surveys remain important, however, as they provide crucial information on how many and which types of people suffer from poverty from year to year.
Statistics Canada is conducting a new longitudinal survey of labour and income that will provide key information on the duration of poverty in the future.
Method Chosen to Define Poverty
Native Populations and Disabilities
Among low-income families in Canada, it is important to note that 52% are headed by a person in the labour force. These families are frequently referred to as the "working poor" because they rely primarily on employment earnings, not public assistance, for their income. The other 48% of all poor families ("welfare poor") rely primarily on some form of public assistance for support. As measured by Statistics Canada, the rate of family poverty declined from 18% in 1967 to 14% in 1997. However, since about 1973, the family rate has stabilized around the 12 to 15% level. The most likely cause for this arrested decline has been the prolonged slowdown and instability of economic growth in virtually all Western industrialized economies. The resulting UNEMPLOYMENT and growth of low-wage employment has made it difficult for an increasing number of families to earn adequate incomes.
Among unattached individuals poverty has fluctuated a great deal in response to the business cycle. Generally, there has been an overall decline in poverty rates among unattached individuals, related primarily to the decline in poverty among senior households. However, the lower rates of poverty that were achieved toward the end of the 1980s have eroded somewhat through the 1990s. In 1997, the poverty rate among unattached individuals was still very high: 44% among unattached females and 35% among unattached males.
There have been noticeable shifts since 1967 in the composition of poor households. For example, poverty is less regionally concentrated. In 1967 a family in the Atlantic provinces had almost 3 times the chance of being poor as a family in Ontario, but by 1997 the poverty rate for families in Ontario was 13%, and for those in the Atlantic Provinces 15%.
Poverty has also been "urbanized", ie, in 1967 45% of all poor families were rural dwellers, but by 1997 this share had declined to 12%. In the larger cities of more than 500 000 people, the proportion of poor families increased from 18% (1967) to 57% (1997).
For the elderly in 1967, families headed by a person 65 years of age or older constituted 27% of all poor families, but by 1997 this had dropped to 7%. On the other hand, female-headed families constituted 15% of all poor families in 1967, but 36% by 1997. The shift in the composition of poverty among families has been so dramatic that poverty is less strongly associated with old age than with being female. (See WOMEN IN THE LABOUR FORCE.)
Most of the decline in poverty among the elderly has taken place in recent years, primarily as a result of gradual improvements in government-funded income retirement programs. Improvements in programs such as the CANADA PENSION PLAN, QUÉBEC PENSION PLAN, OLD-AGE PENSION, Guaranteed Income Supplement, Spouses' Allowance and some provincial income supplement programs have helped more elderly escape poverty. (See SOCIAL SECURITY.)
Duration of Poverty
Until recently there were no reliable sources of information on the duration of poverty in Canada. Statistics Canada is conducting longitudinal surveys of income that provide estimates of the length of time people spend living in poverty and whether individuals are likely to experience one or more periods of poverty. Based on early studies, poverty is a temporary situation for approximately 60% of the poor population in any year, but for the remaining 40% it is a persistent problem that lasts for years. Over a 10-year period, poor persons will spend on average approximately 5 years in poverty, after counting both single and multiple episodes. About 5% of poor persons will experience a continuous spell of poverty lasting 10 years, and 15% will experience a spell of poverty longer than 4 years. Lone parents, persons with disabilities, recent immigrants and persons with lower levels of education are more likely to live in poverty for extended periods of time.
The Working Poor and the Welfare Poor
Low-income households can be subclassified as either welfare poor or working poor. The former tend to be people who cannot be, or are perceived to be, incapable of being productive employees. Lone-parent mothers, who are not necessarily expected to take employment while they are caring for their young children (although this attitude is changing quickly), are a large portion of this category. Although the reasons for their situation are complicated by the long history of PREJUDICE AND DISCRIMINATION, native peoples have also suffered economically and otherwise at the hands of Canada's non-native population. Various groups of welfare poor depend for most of their financial assistance on programs such as social assistance. To rely almost exclusively on these program benefits guarantees a poverty income. Average provincial social assistance (welfare) rates for families and persons with disabilities provide about 55% of official poverty-line income.
The working poor include workers on the margin of the labour force. They are frequently the last hired and the first laid off, but even when they are employed they work for low wages and poor benefits. They are seldom able to accumulate savings, and rarely qualify for benefits such as sickness insurance, health and dental plans, private pensions and paid vacations. Their lives are marked by extreme economic insecurity. The fact that about one-half of the working poor actually work year-round quells the time-worn belief that people can always work their way out of poverty. The persistence of this belief has led to a situation in Canada where the social security system provides very little comprehensive assistance to the working poor while they are working, even though they are earning poverty incomes.
National measures of poverty in Canada date to the 1960s, when poverty became a public issue. Much of the concern was generated by the appalling living conditions under which many of Canada's native people and elderly lived, and by large regional income disparities. This sudden "discovery" of poverty contradicted the vision of affluence that prevailed in the post-WWII era. In 1964 the US launched its "war against poverty" and Canada began a more quiet campaign of study and legislation in an effort to understand the causes of and remedies for poverty. In 1965 the federal PRIVY COUNCIL OFFICE established a group of specialists to study and encourage greater federal-provincial co-operation in combating poverty. In the same year the COMPANY OF YOUNG CANADIANS was created to help co-ordinate and stimulate local self-help efforts to overcome poverty. Although the CYC was later disbanded, it was a precursor of federal government programs such as Opportunities for Youth, the Local Initiatives Program and Canada Works, which attempted to provide employment and reduce poverty through local initiative efforts in the 1970s and 1980s.
In 1968 Statistics Canada released a study on the incomes of Canadians that became the basis for defining and measuring low incomes in Canada. In the same year, the ECONOMIC COUNCIL OF CANADA shocked the nation by using this new low-income measure to estimate the extent of poverty in Canada. It concluded that 27% of the Canadian population lived in poverty. In 1968, partly because of these findings, the influential special Senate committee on poverty, chaired by David CROLL, began its cross-country hearings and investigations. Its widely publicized report, released in 1971, reiterated much of what had been revealed in the ECC's report and proposed a guaranteed annual income program to eliminate poverty in Canada.
Another influential commission created during this period, headed by Claude CASTONGUAY, also released its report following a massive examination of social security in Québec. This commission also advocated (among many recommendations concerning health care, income security, employment and social services) a guaranteed annual income.
The concern with poverty during the 1960s, particularly its disturbing presence among affluence, also led to several significant new pieces of antipoverty legislation. Negotiations between the provinces and the federal government, which began in 1964, resulted in the introduction of the Canada and Québec pension plans, which were based on the recognition that the private pension system did not provide adequate coverage to low-income retired workers and their families. (See PENSION.) In conjunction with these new pension plans, the Guaranteed Income Supplement Program was implemented, which assured a basic income support level to all low-income seniors.
The Canada Assistance Plan was also introduced in 1966. As a comprehensive social-assistance program it replaced the federal and provincial governments' piecemeal cost-shared programs, some of which had been in place since 1927. As well as providing a major source of funds for the disabled and unemployed, the CAP assisted other low-income persons, including the working poor. Also brought into federal cost-sharing under CAP were a wide range of SOCIAL SERVICES, including DAY CARE, family counselling, visiting homemaker and CHILD WELFARE services.
Exponents of CAP claimed it would allow for the expenditure of funds to the needy who could not secure sufficient aid; ie, it was a promise to use public funds to prevent, and not just respond to poverty. In practice, however, CAP maintained the earlier tradition of only responding to poverty. In the 1995 budget, CAP was replaced by the Canada Health and Social Transfer. This new funding arrangement merged federal transfer payments for social assistance (previously under CAP) with those for health and post-secondary education into a single "block" fund transfer. (See EQUALIZATION PAYMENTS.) As a result, provinces now have greater discretion over social programs' spending, including those programs intended to alleviate or prevent poverty. (See HEALTH POLICY and INTERGOVERNMENT FINANCE.)
During the 1970s and early 1980s, most legislative activity either represented slight improvements to, or cutbacks in, earlier legislated programs. The UNEMPLOYMENT INSURANCE Act was amended in 1971 to provide more extensive coverage to the unemployed and to the sick. The Child Tax Credit of 1978 extended federal benefits to families with children in a manner that was most beneficial to low-income families. (See FAMILY ALLOWANCE.) Several provinces instituted income-tested payments to the aged, while Saskatchewan, Manitoba and Québec introduced programs that provided assistance to the families of the working poor. But the comprehensive federal-provincial review of Canada's social-security system conducted in the mid-1970s failed in its central purpose to establish a guaranteed annual income, and the 1980s were marked by budget cuts on income provision and social services directed towards the poor. These cuts have been accelerated in the 1990s.
Notably, the federal government has introduced new employment insurance legislation that has resulted in reduced benefits and stricter program eligibility. Roughly 40% of unemployed workers now have access to the EI program, down from 75% a decade ago. Transfers to the provinces under the new CHST have also been substantially reduced. With its implementation in 1996, cash transfers to the provinces were cut by 40%. Responding to pressure, the government set a cash floor of $12.5 billion for the CHST in 1997 and set aside one-time funding for health care and post-secondary education in the 1999 and 2000 budgets. The government has refused to fully restore and index cash transfers to the provinces. In an effort to combat child poverty, the new Canada Child Tax Benefit (CCTB) was introduced in 1998. The CCTB has 2 main elements: the base benefit, which is paid monthly to an estimated 80% of Canadian families with children, and the National Child Benefit Supplement (NCB-S), which goes to low-income families with children. The government plans to increase the maximum amount of the CCTB benefit (base benefit plus supplement) from its current value of $1805 (1999) for the first child to $2400 by 2004.
Why So Many Poor ?
The concern and legislation of the 1960s also raised the question of why there were so many poor people in a country as rich as Canada. In the prevailing ethos, poverty is perceived and treated as an individual, not a social problem; ie, individuals who are poor have themselves to blame. Therefore, it is not a country's total wealth that is relevant, but how that country distributes its wealth. A society can distribute its wealth under the laissez-faire or free-enterprise economic system, where people are presumed to get back from the marketplace what they put in; ie, those that put in very little or nothing get little or nothing back. Under this system those who work at home for their lifetimes receive nothing directly. Theoretically a society can also distribute its wealth through a collective or socialist system under which the fruits of economic production are distributed according to need.
The economic and income distribution system in Canada is still evolving from the precepts of 19th-century capitalism, although government involvement in the income distribution process ensures that those in need and those without economic means do receive some assistance. Thus the Canadian system is generally described as mixed. Most wealth is distributed through a market-based economic system, under which ownership of resources and well-paying jobs are the keys to an adequate share of the country's economic benefits. Those who are unable to find a decent place within this market system - persons with disabilities, aboriginal peoples and those with poor job skills - must rely on some combination of assistance from family, social organizations and government, but because individuals are held responsible for their inability to benefit from the economic system, the amount of aid is generally small and extended begrudgingly.
Historically, it was accepted that women belonged in the home, where they received no direct income for their labour. While these attitudes are changing, if a male breadwinner leaves the household or dies, women are particularly vulnerable if there are dependants in her care. Divorced, separated and widowed women are still prime candidates for poverty. In addition, WOMEN IN THE LABOUR FORCE face barriers in the labour market. On average women working full-time earn about 73% of the income of the average male full-time worker because women have not had access to the same type of training and advancement opportunities as men; they are often placed in lower-paying, lower-skilled jobs, and they frequently receive less pay than men for jobs that are identical. Consequently, many working women, particularly if they are single parents, live in poverty.
Author DAVID P. ROSS AND CLARENCE LOCHHEAD, Revised: KATHERINE SCOTT
Links to Other Sites
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The website for Food Banks Canada, an umbrella organization representing approximately 250 food banks across every Canadian province and territory. Features statistics on hunger in Canada and more.
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