Measurement & Trends

Canadian measures of poverty are monetary in nature and now the federal standard for the poverty line will be the Market Basket Measure, or MBM, which is “based on the cost of a basket of goods and services that individuals and families require to meet their basic needs and achieve a modest standard of living in communities across the country” (Government of Canada, 2018).

• Market Basket Measure (MBM): In the case of the MBM, a household’s low-income status is determined by a “specific set of goods and services that represent a basic standard of living” (Government of Canada, 2018). When an individual or family is unable to afford this ‘basket’ of items in the community in which they live, they will be considered low income. MBM statistics are only available beginning in 2002 (Government of Canada, 2018).

• Low Income Cut-offs (LICO): The LICO is a measure of relative poverty that uses an income threshold to determine if a household is living with low-income. By this measure, if an individual or family is spending 20% or more than the average Canadian family on basic needs—food, shelter, clothing, etc.—they will be considered low income. In Canada, Low Income Cut-offs are adjusted for 7 different family sizes in 5 different community profiles as a means of comprehending differences in the cost of living as experienced across Canada. Statistical data is available from 1976, making the LICO especially useful for long-range, comparative analysis and accounting for one of the reasons why the LICO, calculated after tax, is the most commonly used measure of low income in Canada (Government of Canada, 2016).

• Low Income Measure (LIM): The LIM, like the LICO and the MBM, is a measure of relative poverty, whereby low income is determined by a household’s income in relation to the national median household income. In this case, when an individual or family’s income is below 50% of the national median income, they will be considered low income. Statistical information regarding low income as measure by the LIM is available from 1976 (Government of Canada, 2016).

The fact that each of these measures construe poverty in different ways is readily evident in a comparison of 2014’s low income statistics, where the LICO revealed 8.8% of Canadians as low income, the MBM suggested 11.3%, and the LIM indicated 13% (Lamman and MacIntyre, 2016).

Discrepancy in measurements and, as a result, how poverty in Canada is understood, has led some to suggest alternative measurements. For example, Christopher Sarlo of the Fraser Institute advocates for a Basic Needs Poverty Line (BNL), which would function as a measure of absolute poverty (Lamman and MacIntyre, 2016). In this model, absolute poverty is measure by a person’s ability to access sufficient resources to attain the necessities for physical and mental well-being—that is, to attain basic needs (Lamman and MacIntyre, 2016).

In Canada, those most likely to be living in poverty include those aged 45-65, single parents, recent immigrants, persons with disabilities, and indigenous people. Significantly, Canada also has a higher percentage of child poverty than other industrialized countries, such as Germany or France (Government of Canada, 2016).



Using low income and material deprivation to monitor poverty reduction (Caledon Institute of Social Policy)

Strength in Numbers Series - Canadian Council on Social Development (Infographic)

Poverty Trends 2018

Methodological Changes to the Market Basket Measure in 2019

Canadian Income Survey 2017

Ideas presented here do not reflect the COH and the Homeless Hub.