Any comments... M ---------- Forwarded message ---------- Date: Tue, 15 Dec 1998 03:39:06 +0000 From: Janet M. Eaton <[EMAIL PROTECTED]> To: [EMAIL PROTECTED] Subject: Canada redefines poverty http://www.nationalpost.com/home.asp?f=981214/2100894 National Post Monday December 14, 1998 Canada redefines poverty Preliminary model: New market basket measure would see poverty level plunge Eric Beauchesne National Post The federal, provincial and territorial governments have been quietly working on a scheme to slash the official poverty level in Canada by nearly 30%, or 1.5 million people. It won't cost taxpayers a dime, and may even save them money, though it won't make anyone richer, either. The governments, instead, are redefining poverty. They are replacing the most commonly used, though controversial, definition -- Statistics Canada's low-income cutoffs (LICOs) -- with a new "market basket measure" (MBM) of poverty. Under the preliminary market basket measure, a family of two adults and two children would not be poor if it had sufficient income to: - Eat nutritious meals, as defined by Health Canada. - Buy clothing for work and social occasions. - Rent a median-cost, three-bedroom apartment in their community. - Have an additional amount of income -- equal to 60% of the combined cost of the food and clothing budgets -- to cover other necessary expenditures, such as for personal care, household needs, furniture, telephone service, public transportation, reading, recreation, entertainment and school supplies. The measure of poverty would deduct taxes and some other costs, such as for child care, from the income a family has available to purchase its basket of goods and services. It would also be adjusted to take into account family size and variations in the cost of living in different parts of the country. Under the new measure, which the provinces want to use as a guide for setting their welfare rates and Ottawa for its child tax benefit, Canada's poverty rate would plunge overnight to 12% from 17%. It would also halve the annual cost to Ottawa of attempting to meet Canada's commitment to wipe out child poverty by 2000, to $3.3-billion from $6.6-billion. Details and an explanation of what's still a preliminary model of the new poverty definition are revealed in a report published in the latest Human Resources and Development Canada's Applied Research Bulletin. "The Federal/Provincial/Territorial Working Group on Social Development Research and Information is developing a new measure of poverty, which could achieve greater consensus on this issue," it says. Or it may just fuel more controversy. The new measure isn't acceptable to many of those who speak for low-income Canadians. "It's one of those backdoor deals that nobody had any input into," says Michael Farrell, of the National Anti-Poverty Organization. Nor is it acceptable to those such as the Fraser Institute, an economic think-tank, which argues poverty is vastly overstated in Canada. "It's a social comfort index, not a basic needs index," says Michael Walker, the institute's head. But it's worth looking at, argues Steve Kerstetter of the National Council of Welfare, a federal advisory group. He says the council would welcome a much more transparent measure of poverty in Canada. "At least you can see what's in the basket and have a reasonable debate on it," Mr. Kerstetter says, noting the low-income cutoffs that are now commonly used, even by the council, as poverty measures, are difficult for the public to understand. The low-income cutoff line is the income level where a household will, on average, spend on food, clothing and shelter a share of its pre-tax income that is 20% higher than the average family." With a poverty index based on the level of disposable income needed to purchase a set basket of goods and services, Mr. Kerstetter says, "at least you can see it has so much for food, so much for clothing, so much for transportation, so much for education, and so much for personal care and so on." However, he also notes that disagreement will remain about what should be included in that basket. There's clearly too much in it for the Fraser Institute and too little for most social groups. The research report also cautions that more work is needed on the new market basket index. Defining poverty has become an increasingly contentious issue this decade. One view, held by social groups, the report notes, is that people or households are poor if they cannot enjoy amenities available to most Canadians. But others, such as the Fraser Institute see poverty as an inability to purchase subsistence level. ----end--- -- For MAI-not (un)subscription information, posting guidelines and links to other MAI sites please see http://mai.flora.org/
