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Low Income in Canada: 2000-2007 Using the Market Basket Measure - August 2009

Highlights

The Market Basket Measure (MBM) is a measure of low income based on the cost of a specified basket of goods and services. It was designed to complement two Statistics Canada measures of low income: the Low Income Cut-offs (LICOs), based on average consumption patterns, and the Low Income Measure (LIM), based on median incomes.

This report examines low income trends, based on the MBM, between 2000 and 2007. The report also provides data based on the paid work status of the main income recipient (MIR) of economic families and on five groups who are particularly at risk of persistent low income: lone parents with at least one child under age 18; unattached individuals aged 45 to 64; persons with work-limiting physical or mental disabilities; persons immigrating to Canada within the past 10 years; and Aboriginal Canadians living off-reserve.

Incidence of Low Income

  • The national incidence of low income fell from 14.6% in 2000 to 10.1% in 2007.
  • This decline in incidence was widespread across all age groups with children under 18 experiencing the largest decline since 2000 (6.2 percentage points to 11.9% in 2007). An identical decline of 6.2 percentage points was experienced by children under age 6, from 19.5% in 2000 to 13.3% in 2007.
  • Among age groups, the incidence among seniors was the lowest; falling from 5.5% in 2000 to 2.6% in 2007.
  • The incidence among working families whose MIR worked for pay at least 910 hours during the reference year fell from 8.3% in 2000 to 5.9% in 2007. Despite having a low rate, these families accounted for 31% of low-income families and for 43% of low-income children under 18 in 2007.
  • Of the five socio-demographic categories of MIRs identified as being disproportionately at risk of experiencing persistent low income, all except recent immigrants had statistically significant improvements in their low income situation between 2000 and 2007. The incidence of low income for economic families whose MIR belonged to one or more of these groups fell from 35.9% to 26.5% over this period.
  • The national incidence of low income in 2007 was higher using the MBM (10.1%) than Statistics Canada's post-income tax Low Income Cut-offs (LICOs-IAT) (9.2%). Footnote 1 This pattern was repeated for most sub-groups.

Major exceptions include seniors and unattached individuals aged 45 to 64. Footnote 2

Table - Incidence of Low Income (percent)

Depth of Low Income

  • Nationally, the depth of low income (the average gap between the disposable income of all economic families in low income and their low income thresholds expressed as a percentage) rose marginally from 32.2% in 2000 to 32.6% in 2007.
  • The depth of low income was less for the low-income elderly (25.8%) and low-income children under age 18 (26.0%) than for the working-age population (35.2%).
  • The depth of low income for working poor families was considerably lower (30.2%) than for low income families where the MIR had zero hours of paid work (38.3%) or worked for pay up to 909 hours (37.9%).
  • Among high risk groups, unattached persons aged 45 to 64 had the largest depth of low income (40.4%) while families, where the MIR was a lone parent, had the smallest (30.9%) in 2007.

Persistence of Low Income

  • For the 2002 to 2007 period, 23.4% of persons aged 18 to 59 in 2002, experienced low income for at least one year while 6.1% experienced persistent low income. That is, they were in low income for most of this period.
  • For seniors, 10.0% experienced low income for at least one year between 2002 and 2007, while 1.9% experienced persistent low income, the lowest rate among age groups.
  • For children under age 13 in 2002, 27.8% experienced low income for at least one year between 2002 and 2007, but 9.1% experienced persistent low income.
  • Between 2002 and 2007, 4.1% of children in working-age families whose MIR worked for pay at least 910 hours a year in 2002 experienced persistent low income, well below the percentage of those in families where the MIR had zero hours of paid work in 2002 (46.1%) or 1 to 909 hours of paid work (34.2%).
  • Among working-age families, full-time students registered the second highest incidence of low income in 2007, 42.9%, after those families who did not work for pay, 47.3%. However, the former group had a significantly lower rate of persistent low income, 12.9%, than those families whose MIR did not work for pay, 41.1%. This implies that low income incidence among most full-time students is a temporary situation.
  • 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. Return to reference 1
  • 2 The higher incidence of low income for seniors and unattached individuals using the LICOs-IAT is due to the different equivalence scales used by the two measures. Return to reference 2

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Date Modified:
2011-12-14