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Human Resources and Skills Development Canada

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Low Income in Canada: 2000-2004 Using the Market Basket Measure

Highlights

  • The Market Basket Measure (MBM) is a measure of low income based on the cost of a specified basket of goods and services. Five years of data based on this measure are now available. This makes possible an examination of the persistence of low income for various groups over a five-year period (2000 to 2004).
  • Between 2000 and 2004 the incidence of low income using the MBM declined from 14.7% to 12.7%.
  • This gradual decline in the overall incidence of low income obscures large movements of people into and out of low income between any pair of years. On average 976,000 people moved into a low income situation using the MBM each year between 2001 and 2004 while at the same time 1,184,000 persons left low income each year during the same period.
  • While 21.7% of persons aged 18-60 in 2000 experienced low income at least one year between 2000 and 2004 using the MBM, only 7.8% experienced persistent low income over this period. Similarly, 26.3% of all children under age 14 in 2000 in a family where the main income recipient was aged 18-60 experienced low income at least one year between 2000 and 2004, but only 11.5% experienced persistent low income.
  • The incidence of low income for families headed by persons who worked for pay at least 910 hours a year- the definition of "working poor" families used in this report-was 7.6% in 2004. But they still accounted for 34% of working-age, low income families and for 48% of low income children.
  • Five socio-demographic groups among working-age adults have been identified as being disproportionately at risk of experiencing persistent low income- lone parents with at least one child under age 18; unattached individuals aged 45-64; persons with work-limiting physical or mental disabilities; persons immigrating to Canada within the past 10 years; and, Aboriginal Canadians living off-reserve. Two of these groups- unattached persons 45-64 and persons with work-limiting disabilities- had statistically significant improvements in their low income situation between 2000 and 2004. There was no significant change for the other three groups.
  • Using the Market Basket Measure (MBM), the incidence of low income in 2004 (12.7%) was higher than that (11.2%) using Statistics Canada's post-income tax Low Income Cut-offs (LICOs-IAT).1

1 This is not because the MBM low income thresholds are higher than those for the LICOs-IAT, but because the MBM definition of family disposable income which is compared to those thresholds is much more stringent.

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Date Modified:
2007-10-25