What Happened to Québec Poverty Rates, 2000-2009?

What has happened to the level of income inequality and to the incidence of poverty in Québec, relative to Ontario and to Canada as a whole, in the past 10-15 years?

Overall, the answer seems to be that income inequality has gone down, as has the proportion of Québecers living in poverty.

Sentences like that one demand immediate qualification. First, even if inequality and poverty measures have improved, that does not mean that we can turn our attention elsewhere because inequality and poverty are no longer problems. Second, poverty and inequality can be measured in many different ways and not all measures move in the same way at the same time.

Poverty measures come in two flavours, absolute and relative. Absolute measures try to define the cost of the necessities of life such as food, shelter and clothing; those who do not have enough income to buy the necessities are then classified as poor. Human Resources and Skills Development Canada (HRSDC) has developed an absolute measure called the Market Basket Measure (MBM).  Relative measures define poverty in relation to the incomes of other people. Even those who have more than life’s necessities — for example, cellphones and cable TV —  will be classified as poor if their income is far below that of other people. One commonly-used relative measure is called the Low Income Measure (LIM),  defined simply as 50 percent  of median income, adjusted for family size. Statistics Canada’s Low Income Cut-Off (LICO) defines as poor those who spend more than 63% of their after-tax income on food, shelter and clothing.[1]

After providing a clear and concise discussion of the poverty measures available in Canada, the Centre d’étude sur la pauvreté et l’exclusion (CEPE) recommended in 2009 that the Québec government use HRSDC’s Market Basket Measure as the primary indicator of poverty.[2]

From 2000 to 2009, the proportion of all persons living in poverty, as defined by the MBM, fell in Québec (see the Table below).  Measured at 11.6 percent in 2000, the percentage of all persons whose income was below the MBM fell steadily to 8.4 percent in 2004, before rising to 9.5 percent in 2009. In Ontario, the poverty rate, as measured by the MBM, started below Québec in 2000 (9.9 percent versus 11.6 percent) but, by 2008, was effectively the same (9.4 percent versus 9.5 percent).

Ontario’s LICO poverty rate is consistently lower than Québec’s (with the exception of 2009), largely because the LICO does not account for the very different housing prices — lower in Québec, higher in Ontario and British Columbia — across Canada.  One of the reasons that CEPE recommended using the MBM was precisely because it better reflected the different prices of food, shelter and clothing prevailing in different parts of Canada.[3]  But CEPE (p.33) added the caveat that the MBM was to be preferred “as long as its content is periodically reviewed in order to reflect changes in society”.  If the MBM fails to impartially and accurately measure actual costs, then its usefulness will be seriously undermined. Michael Goldberg, Steve Kerstetter and Seth Klein recently wrote that the federal government has changed the method of calculating costs in a way that “no longer passe[s] the test of common sense”, reducing the cost of shelter to levels that were inconsistent with casual observation.[4] If so, then the MBM — or at least the HRSDC version of it — will lose a good part of its appeal.

Measured either by MBM or by LICO-AT, it seems that the incidence of poverty has fallen in Québec since 2000 … more than it fell in Ontario or in Canada as a whole. Next, income inequality.

———–

Poverty Levels in Québec , Ontario and Canada, 2000-2009

All Persons HRSDC Market Basket Measure  (MBM-2008)

Low Income Cut-Off (LICO_AT)

Québec

Ontario

Canada

Québec

Ontario

Canada

2000

11.6

9.9

11.9

14.8

10.8

12.5

2001

11.5

9.2

11.0

13.8

9.3

11.2

2002

10.3

9.7

10.9

12.3

10.7

11.6

2003

9.2

9.5

10.6

12.3

10.4

11.6

2004

8.4

10.5

10.6

11.5

11.0

11.4

2005

8.9

10.1

10.2

11.7

10.3

10.8

2006

9.0

10.0

10.0

11.5

10.3

10.5

2007

8.2

8.7

8.8

10.7

8.8

9.2

2008

9.5

9.4

9.5

11.2

9.3

9.4

2009

9.5

10.5

10.6

9.4

10.1

9.6

Source: Statistics Canada, “Income in Canada, 2009”. IVT Version available from http://www5.statcan.gc.ca/access_acces/alternative_alternatif.action?l=eng&loc=t/804.ivt

Notes:

[1] A more detailed comparison of the various poverty thresholds appears in Xuelin Zhang, Low Income Measurement in Canada: What Do Different Lines and Indexes Tell Us. (2010). Statistics Canada. Income Research Paper Series.  Available at http://www5.statcan.gc.ca/bsolc/olc-cel/olc-cel?catno=75f0002m&lang=eng.

[2] Centre d’étude sur la pauvreté et l’exclusion, “Taking the Measure of Poverty: Proposed Indicators of Poverty, Inequality and Exclusion to Measure Progress in Québec” (2009), pp. 24-34. Available at http://www.cepe.gouv.qc.ca/publications/pdf/Avis_CEPE_en.pdf.

[3] Ibid., pp. 32-33

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About Saul Schwartz

Professor School of Public Policy and Administration Carleton University Ottawa, ON K1S 5B6 Canada
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