Canadian poverty measurements flawed

Canada doesn’t properly measure real deprivation and poverty, finds a new study by the Fraser Institute.

“There are approximately 1.6 million Canadians (about 5%) who have insufficient income to acquire all of their needs, says Chris Sarlo, professor of economics at Nipissing University, who adds these people lack basic necessities such as food, shelter and health care.

Two of the most commonly used measures of poverty are Statistics Canada’s low-income cut-off (LICO) and low-income measure (LIM). Sarlo says these measures of inequality shouldn’t be used to examine Canada’s poor since Statistics Canada stated in a 2012 paper that their benchmarks are not based on real poverty lines.

Instead, Sarlo says Canada should find a way to measure whether people have basic needs rather than certain income levels.

He notes Canada signed on to the Copenhagen declaration in 1995. That document committed all nations of the world to measure absolute poverty and then to develop a plan to eradicate it. Canada has done neither as yet.

That’s why creating a definition of absolute poverty is essential, says Sarlo. He adds it would help the country’s policy-makers raise specific, achievable recommendations to get rid of absolute poverty, rather than focus on the much more unwieldy concept of inequality.

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