6 Million More Canadians in Poverty Than Previously Thought, Says Study Using New Metrics

A new report says 25 percent of Canadians are living in poverty, six million more than identified in Statistics Canada’s poverty rate data.(diy13/Shutterstock)

A new report shows a hidden level of poverty in Canada, with a quarter of Canadians reporting they cannot buy two or more household necessities.

Using a material deprivation index (MDI) rather than the Market Basket Measure (MBM) test of household poverty, the report, published by Food Banks Canada, said that 25 percent of Canadians are living in poverty, six million more than identified in Statistics Canada’s poverty rate data, they said.  The report is co-authored by Michael Mendelson, a former deputy minister in Ontario and Manitoba, and Geranda Notten, a professor of comparative public policy at the University of Ottawa

MBM testing is based on the calculations of a “basket” of goods and services and how much income is required for a family of four to afford it. Families with income below that threshold are considered poor. In comparison, the authors of the MDI report used a list of 11 items identified as a deprivation index, with researchers surveying 4,625 Canadians and measuring their ability to afford the items. The items ranged from clothing and transportation to a diet with protein and the ability to keep one’s home at a comfortable temperature.

“Poverty is relative to a country’s overall standard of living. It does not mean only lacking the minimum resources to make it possible to carry on for one more day without physical deterioration,” the authors wrote in the report, “Poverty Through a Deprivation Lens.”

“The more deprivation items a household wants but cannot afford, the more likely it is that the household has a poverty-level standard of living,” they said.

MDI metrics in the report found that 30 percent of Canadians between 18 and 30 years old cannot afford two or more household essentials. That number increases to 44.5 percent for single-parent families.

“A better understanding of poverty is critical to accurately track our progress in reducing economic distress among households in Canada,” Kirstin Beardsley, CEO of Food Banks Canada, said in a news release.

“Adopting an MDI in Canada could improve our understanding of the extent and nature of poverty and help explain the gaps we’re seeing between real-life demand at food banks and the current official poverty rate,” she said, adding that the organization wants the Canadian government to include MDI in its poverty measurements.

The authors said they undertook the study as they noted a rise in visits to the food bank during the COVID-19 pandemic.

“In addition, surveys were revealing that an alarming proportion of households seemed to be experiencing a poverty-level standard of living, much higher than the approximately 10 percent estimated based on the MBM,” the authors wrote.

Based on the survey results, 25 percent of Canadians have a poverty-level standard of living, the report says, meaning they are not able to afford two or more items on the deprivation list, while 17 percent could not afford three or more items.

“Our analysis of poverty through outcomes, via an MDI, suggests that poverty may be more extensive and possibly more multifaceted than it appears when viewed only via an income-based poverty line,” the authors said.

They concluded by suggesting the government use both types of measurement for a “deeper and more accurate” insight into poverty in Canada.