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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

I. Introduction

The Market Basket Measure (MBM) is a low income measure based on a specified basket of goods and services. The first report presenting statistics based on this measure was released in May 2003 and covered the year 2000. Data based on this measure have been collected continuously since 2000. This third report presents new results for the years 2003 and 2004 and updates results for the years 2000 to 2002 to take into account revisions made by Statistics Canada in November 2006 to the "MBM Income" variable on the Survey of Labour and Income Dynamics (the SLID).2

The MBM was developed in response to a request in 1997 from the Federal, Provincial and Territorial Ministers responsible for Social Services by a Federal-Provincial-Territorial Working Group on Social Development Research and Information. The development of the MBM involved significant consultations with government departments, academic experts, non-governmental organizations and advisory bodies as well as Statistics Canada.

Statistics Canada, on Human Resources and Social Development Canada's behalf, collects the data on the cost of goods and services in the basket to calculate thresholds for 19 specific communities and 29 community sizes in the ten provinces3.

Section II of this report provides a brief discussion of low income measures in Canada and internationally. Section III provides a description of the Market Basket Measure. An overview of the incidence4, depth5, persistence6 and dynamics7 of low income in Canada for the period 2000-2004 is highlighted in Section IV. Results from the MBM are compared to those using Statistics Canada's post-income tax Low Income Cut-offs (LICOs-IAT).

The remainder of the report focuses on working-age Canadians and their children. Section V examines the incidence, depth and persistence of low income among the "working poor." Section VI focuses on five specific socio-demographic groups most likely to experience persistent low income and their children.

2 The revisions affect the national results and those for the provinces of Alberta and British Columbia. They arise from the discovery of an error in the treatment of health insurance premiums paid in these two provinces. The effect of the revisions is to slightly reduce the incidence of low income in these provinces and nationally from data published in the second MBM report issued in June 2005.

3 The income data for this report are from Statistics Canada's Survey of Labour and Income Dynamics (SLID) which is currently not administered in Nunavut, the Northwest Territories and the Yukon. Consequently, Statistics Canada is not currently able to provide reliable income estimates for persons living in these three jurisdictions. Nor is it able to produce reliable estimates for the costs of some components of the MBM basket in these jurisdictions. For these reasons data cannot yet be produced for the Territories. Work is progressing at Statistics Canada and in other federal government departments to capture reliable income and pricing data for Nunavut, the Northwest Territories and the Yukon, but has not been completed.

4 The incidence of low income, for any low income measure, is the percentage of the population living in economic families (families of two or more persons plus unattached individuals) where the total gross or disposable income falls below the low income thresholds calculated using that measure.

5 The depth of low income is the percentage gap between any low income threshold and the actual income of any family of two or more persons or any unattached individual with an income below the threshold for their family.

6 Persons are said to be in persistent low income if the total income of their family over a period of years falls below the combined low income thresholds for the families in which they resided over that period of years.

7 Low income dynamics are movements into and out of low income over a period of time- usually a pair of years.

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Date Modified:
2007-10-26