Low Income in Canada: 2000-2006 Using the Market Basket Measure - October 2008

1. 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 fourth report presents new results for 2005 and 2006 and updates results from 2000 to 2004 to take into account revisions made to the MBM thresholds as a result of the introduction of a revised clothing and footwear component in 2005 and revisions to the shelter cost component arising from the inclusion of 2006 Census data.

The MBM was developed in response to a request in 1997 from the federal, provincial, and territorial ministers responsible for social services by the Federal-Provincial-Territorial Working Group on Social Development Research and Information. Ministers wished to supplement the existing Statistics Canada measures of low income with a measure based on the cost of a specific basket of goods and services, which would be sensitive to differences in the cost of the basket between similar sized communities in different provinces and between different geographical regions within provinces. 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 10 provinces.³

Section II of this report provides a brief discussion of low-income measures in Canada and internationally. Section III provides a description of the MBM. An overview of the incidence⁴, depth⁵, and persistence⁶ of low income in Canada for the period 2000 to 2006 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.