The Fraser Institute

The Fraser Institute

November 14, 2013 06:15 ET

The Fraser Institute: Most Poverty Measurements Used in Canada Focus on Inequality, Not Real Deprivation

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Nov. 14, 2013) - High, relative definitions of poverty currently used by governments, media and social activists do nothing to help Canadians suffering real deprivation, concludes a new study published today by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.

In the study, Poverty: Where do we Draw the Line? author Christopher Sarlo argues that Canadians still do not have a reliable measure of real deprivation, of poverty.

"There are approximately 1.6 million Canadians - about five per cent of the population - who have insufficient income to acquire all of their needs. They don't lack iPads, a week's vacation, or restaurant meals, as might be the case with relative poverty. They lack basic necessities," said Sarlo, professor of economics at Nipissing University and Fraser Institute senior fellow.

"People experiencing absolute poverty are likely hungry; they have inadequate shelter and lack basic hygiene or health care. They are not just 'less well off' than most others in their society. They are poor."

One of the most commonly used measures of poverty, Statistics Canada's Low-Income Cut-Off (LICO) and Low-Income Measure (LIM), are in reality measures of inequality and should not be used as measures of poverty, Sarlo said. He points out that Statistics Canada has made it clear repeatedly, including in a 2012 paper by Brian Murphy, Xuelin Zhang and Claude Dionne, that these prevailing measures are not poverty lines and that Statistics Canada does not measure poverty.

"These measures are unable to tell us about hunger, inadequate housing, or serious deprivation. Worse, however, is the dishonest description of the relatively poor as 'hungry, ill-housed, and poorly clothed'. This is simply not true. This switching of definitions is so common among social activists and politicians and yet no one ever calls them on it."

As a first step towards creating a real poverty measure, Sarlo developed a basic needs (or absolute) poverty measure in the early 1990s. That measure showed real poverty has declined substantially over the past 40 years. The study also reiterates an idea Sarlo has long advocated - creating an expert panel that includes people who have actually experience poverty to help develop a measure of real deprivation.

"The measurement of poverty cannot be an exercise in compassion. In counting the number of poor people, we should set aside how we feel about poverty and what we think should be done about it. If poverty is a condition of serious deprivation, then we should find a way to objectively determine the number of people who are, in fact, likely to be deprived in that way," he said.

Sarlo points out that Canada signed on to the Copenhagen declaration in 1995 which committed all nations of the world to measure absolute poverty and then to develop a plan to eradicate it. Canada has done neither.

"If it was a good idea in 1995 to measure and strive to eliminate absolute poverty in all nations of the world, what changed to make it a bad idea? If absolute poverty relates to hunger, inadequate housing, and serious deprivation, why would those most closely associated with poverty such as politicians, reporters, academics, and especially social activists, not want to measure the true incidence of this problem?" Sarlo asked.

"Looked at from the perspective of poor people, it seems scandalous that these commitments have remained both unfulfilled and hidden."

Sarlo's study concludes that a definition of absolute poverty would lead to three benefits. First, those who study poverty internationally could see Canada for what it is - a country with very low rates of absolute poverty. Second, it would allow policy-makers to raise specific, achievable recommendations to eradicate absolute poverty, rather than focus on the much more unwieldy concept of inequality. And third, a definition would enable journalists to ask more nuanced questions about both poverty and inequality.

"Real deprivation, hunger and poor health are not characteristics of people who are simply unequal. They're markers of poverty," Sarlo said.

"If Canada is serious about eradicating poverty, we need to measure poverty."

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The Fraser Institute is an independent Canadian public policy research and educational organization with offices in Vancouver, Calgary, Toronto, and Montreal and ties to a global network of 86 think-tanks. Its mission is to measure, study, and communicate the impact of competitive markets and government intervention on the welfare of individuals. To protect the Institute's independence, it does not accept grants from governments or contracts for research. Visit www.fraserinstitute.org.

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