Ten things to know about poverty measurement in Canada

Ten things to know about poverty measurement in Canada

Ten things to know about poverty measurement in Canada

On October 29, I gave a guest presentation to Professor Filipe Duarte’s master’s seminar class at the University of Windsor. The topic of my presentation was poverty measurement in Canada.

Here are 10 things to know.

  1. Use of the Low-Income Cut-Off (LICO) would suggest that poverty in Canada has decreased dramatically since the mid-1990s. LICO focuses on the amount of money spent by a family on ‘necessities’ (i.e., housing, food and clothing) as determined by a group of federal public servants. If a family is spending a substantially higher percentage of their income on such necessities—e.g., 20 percentage points higher than the average Canadian family—then the family in question falls below the LICO. The LICO was supposed to be recalculated on a regular basis to reflect changes in spending patterns, but that hasn’t happened since 1992 and is one likely reason for the reduction in poverty shown by this measure (having said that, the LICO has been adjusted each year for inflation). Today, very few experts take the LICO seriously.
  2. Use of the Low Income Measure (LIM) would suggest that poverty in Canada has seen mild fluctuations since the mid-1990s. LIM’s focus is on the family’s income, not on what they spend. A family whose income is below 50% of the national median income (adjusted for family size) is said to be poor according to this measure. LIM, in effect, measures income inequality among the bottom half of income earners. The LIM is useful for international comparisons (though it is far from perfect in that regard, as it looks only at income, not the availability of social programs). 
  3. Use of the Market Basket Measure (MBM) suggests that Canada has seen a major decrease in poverty over the past decade. With the MBM, public officials figure out the cost of a basket of goods and services they feel is sufficient for a standard of living “between the poles of subsistence and social inclusion.” Calculations are then made about how much such a basket costs (the cost of this basket has been estimated for 50 regions across Canada). The content of this basket is periodically adjusted, the last time being in 2011, and its value gets adjusted each year for inflation. If you’re poor according to the MBM, it’s because experts believe you could not afford that basket of goods in your community.

    Visual courtesy of Kevin Milligan.

  4. One of the LICO’s shortcomings is that it doesn’t do a good job of accounting for regional variations in the cost of living across Canada. The LICO (as mentioned above) also hasn’t been adjusted since 1992, meaning that it doesn’t currently account for how much things cost today or what people spend money on today (as Andrew Jackson notes, it doesn’t include the cost of Internet). Finally, LICO doesn’t easily allow for international comparisons. 
  5. One of the LIM’s shortcomings is that it can suggest that recessions are good for poverty reduction. As Alain Noël notes, the LIM is “sensitive to changes in the median income, which sometimes produces counterintuitive results. In a recession, for example, when the median income is flat, the poverty rate may seem to be decreasing while unemployment and economic hardship are increasing.” What’s more, the fact that LIM is based on national median income—as opposed to the median income for the province or territory in question—seems arbitrary to many. Indeed, Professor Noël further notes that “real median incomes vary considerably from one province to another.”
  6. Of the three major indicators, my own preference is the LIM. First, it avoids the inherent challenge of deciding what constitutes an appropriate a basket of goods and services in a country of 37 million people, spanning 10 million km2 and six time zones. Second, I think relativity is what’s really important here—if median income across Canada is increasing, then so too should everyone’s (and vice versa). Third, the LIM lends itself well to international comparisons. I’d like to see it calculated based on national median income for international comparisons, and also based on median income for the economic region in question, in order to provide a more meaningful number.
  7. The debate within Canada has largely ignored the need for indicators of assets. This point has been made by David Rothwell and Jennifer Robson, who note that income and assets are not always correlated. For example, a low-wage worker might have an income that brings them above the LIM, but they may also have $75,000 in student loans and credit card debt. Conversely, a senior could be relying exclusively on Old Age Security as a source of income while also owning a $2 million home outright. (Monitoring asset poverty might put pressure on provincial and territorial officials to stop discouraging asset accumulation among social assistance recipients.)
  8. It’s also important to directly measure material deprivation. For example, core housing need measures the affordability, suitability and adequacy of a person’s housing. Likewise, food insecurity measurement directly assesses the inadequacy or insecurity in access to food due to financial challenges. It’s also important to assess who has access to high-quality childcare and prescription medication. (For a critical analysis of the need to directly measure material deprivation, see this 2017 conference paper.)
  9. In August 2018, Canada’s federal government announced its formal adoption of the MBM as its official poverty measure. Its poverty reduction strategy also unveiled a dashboard of poverty-related indicators. This seems very much in line with a position taken by Peter Hicks in a recent blog post, in which he calls for “an evolving ‘dashboard’ of carefully selected indicators would be more useful than a single measure.” The new federal strategy will use the MBM to monitor progress—importantly, it will not use the MBM to determine program eligibility.
  10. Seniors make for an interesting case study here. According to the LIM, a great many seniors in Canada currently experience poverty. But according to the MBM, very few seniors in Canada currently experience poverty. As Andrew Jackson pointed out last year: “There is a huge difference between the LIM and MBM poverty rates for seniors (14.3% vs 5.1% in 2015.)” And this raises an important question: if Canada’s official poverty measure suggests there’s very little seniors’ poverty, to what extent will Canada’s federal government prioritize assistance for seniors?

In sum. The Trudeau government deserves praise for unveiling a dashboard of poverty indicators that will hopefully receive close attention from federal officials in partnership with provincial, territorial and municipal officials, as well as researchers and advocates. Having said that, Ron Kneebone reminds me that the MBM has yet to be formally adopted by provincial or territorial governments. There is also reason to be very concerned about what initiatives may or not be in store for seniors, given that the MBM suggests they currently experience very little poverty.

 

I wish to thank the following individuals for assistance with this blog post: Miles Corak, Filipe Duarte and his students, Susan Falvo, Reuben Ford, Rob Gillezeau, Seth Klein, Ron Kneebone, Andrew Jackson, Marc Lee, David Macdonald, Michael Mendelson, Allan Moscovitch, Geranda Notten, Charles Plante, Saul Schwartz, Richard Shillington, Vincent St-Martin, John Stapleton, Ricardo Tranjan, and Mike Veall. Any errors are mine.

The use of homeless shelters by Indigenous peoples in Canada

The use of homeless shelters by Indigenous peoples in Canada

The use of homeless shelters by Indigenous peoples in Canada

The Canadian Press recently gained access to results of analysis of the use of homeless shelters across Canada by Indigenous peoples. The results are summarized in a March 2019 slide presentation obtained by Jordan Press through an Access to Information and Privacy (ATIP) request, and are discussed in this Canadian Press article. They are based on a research project conducted by Employment and Social Development Canada (ESDC).

Here are 10 things to know:

 

  1. The analysis draws on data gathered from homeless shelters across Canada. ESDC has data on persons using homeless shelters from roughly half of the country’s homeless shelters. This includes data gathered via the Homeless Individuals and Families Information System (HIFIS) software, as well as data gathered via data sharing agreements with the City of Toronto, the Government of Alberta and BC Housing. The data used for this analysis was gathered in 2016 and is based on approximately 133,000 unique individuals (approximately 41,000 of whom are Indigenous).
  2. According to the slide presentation, Indigenous peoples in Canada are more than 11 times more likely to use a homeless shelter than non-Indigenous people. Results of the analysis are succinctly summarized in a memo prepared for the Minister which accompanies the slide presentation: “Results show that Indigenous peoples are consistently overrepresented in homeless shelters in all 46 communities examined [Indigenous peoples accounted for more than 30% of people using homeless shelters over the course of 2016, while representing less than 5% of the total population]…The degree of overrepresentation is particularly high for Indigenous women, seniors, and Inuit. Indigenous shelter users experience more shelter stays each year, and are less likely to exit a shelter because of finding a residence.”
  3. As noted in the accompanying memo: “A report is being written to expand on the results shown in the deck.” Neither the memo nor the slide presentation indicate when the report will be ready, which people and groups will be invited to provide input on drafts of the report, or whether the report will be made public. Put differently, the federal government seems to be holding its cards close to its chest on this.
  4. I was personally surprised to see the extent to which Indigenous peoples experience high episodic shelter use.  In other words, Indigenous peoples (compared with non-Indigenous peoples) tend to cycle in and out of shelters with high frequency, rather than stay for long periods of time.[1]
  5. I find it remarkable that these very important research findings had to be obtained via an ATIP request. In light of the federal government’s stated commitment to reconciliation, I would have thought it would have proactively released these findings and engaged Indigenous stakeholders in the process. This raises the following questions: To what extent were Indigenous peoples part of this analysis (beyond the fact that their data was collected and analyzed)? To what extent will Indigenous peoples be invited to discuss the implications of the analysis? Why does the slide presentation make no mention of the Canadian Housing and Renewal Association’s Indigenous Caucus?
  6. The findings pertaining to shorter shelter stays raise at least two questions. First, why do Indigenous peoples have short, but frequent, stays in homeless shelters? Second, what could be done to address this? Frequent migration between urban centres and First Nations communities may help explain this. This may also speak to the need for more low-barrier and culturally-appropriate housing options in Canada—both emergency and permanent options.
  7. The findings showing Inuit over-representation are disturbing, though not surprising. Canada’s Inuit experience high rates of unemployment, poverty, and housing need. For more on this, see: the Inuit Statistical Profile 2018, published by Inuit Tapiriit Kanatami; this Statistics Canada report from 2018; and this profile of Inuit living in Ottawa.
  8. The findings pertaining to women and seniors merit reflection. The analysis finds that, while Indigenous men are more than 10 times more likely to use a homeless shelter over the course of a year than non-Indigenous men, Indigenous women are more than 15 times more likely to use a homeless shelter than non-Indigenous women over the course of a year. Meanwhile, Indigenous seniors are more than 16 times more likely to use a homeless shelter over the course of a year than non-Indigenous seniors. Why would rates of Indigenous over-representation in Canada’s homeless shelters be higher for women and seniors than for other categories?
  9. I was disappointed to see Canada’s largest city dropped from the analysis. According to the slide presentation, City of Toronto data could not be included in the analysis because the City of Toronto lacked Indigenous status data for more than 40% of unique individuals using its homeless shelters. I hope it serves as wake-up call to the Toronto’s homeless-serving sector.
  10. Among the communities studied, Calgary’s rate of Indigenous over-representation was especially high (see screenshot below). The analysis found that, in Calgary, shelter users are about 16 times more likely to be Indigenous than are members of the city’s total population. The rate for Edmonton appears to be about half of that, with only York Region (near Toronto) having a higher rate among the cities studied. It is worth noting that the Calgary Homeless Foundation recently commissioned a research project assessing flow between Treaty 7 First Nations and Calgary’s Homeless-Serving System of Care. Hopefully that project can shed light on this matter. (Full disclosure: I’m one of the research consultants working on this project, along with Gabrielle Lindstrom, Steve Pomeroy, and Jodi Bruhn.)
In sum. Many years of work go into this kind of analysis. Thousands of people were involved in the data collection, including shelter staff and officials both inside and outside of government. Further, people using homeless shelters patiently answered questions about their lives in order for this analysis to happen. However, it is clear that much work remains. It would appear that ESDC up their game in terms of working with Indigenous peoples and groups on such research projects, and some cities clearly must do a better job of data collection. We must all work collectively to understand what specific policy measures are required to address the over-representation of Indigenous peoples in Canada’s homeless shelters.

The following individuals provided me with assistance in preparing this blog post: Jodi Bruhn, Kathy Christiansen, Damian Collins, Dan Dutton, Ron Kneebone, Diana Krecsy, Eric Latimer, Katelyn Lucas, Jenny Morrow, Jennifer Robson, Vincent St-Martin, and two anonymous reviewers. Any errors are mine.

[1] Federal definitions of chronic vs. episodic homelessness are available here.

Ten things to know about affordable housing in Alberta

Ten things to know about affordable housing in Alberta

Ten things to know about affordable housing in Alberta

People without affordable housing suffer from poor health outcomes, have difficulty finding and sustaining employment and are at greater risk of having their children removed by child welfare authorities.

Here are 10 things to know about affordable housing in Alberta specifically:

  1. The NDP government of Rachel Notley undertook important initiatives pertaining to affordable housing. In its 2016 budget, the Notley government announced the near doubling of provincial spending on housing. This represented a total of $892 million in new funding, spanning a five-year period.
  2. According to the most recent Census, 11.4% of Alberta households experience core housing need, representing more than 164,000 households. In order to assess housing need for Canadians, the Canada Mortgage and Housing Corporation uses a measure called core housing need. A household is said to be in core housing need if, out of financial necessity, they either pay more than 30% of their gross household income on housing, live in housing requiring major repairs, or live in housing with insufficient bedrooms for the household size in question (as determined by the National Occupancy Standards).
  3. Seniors living alone in Alberta face particularly high rates of core housing need. Nearly 34% of senior (65+) females living alone in Alberta were in core housing need in 2011, while the figure for senior (65+) males living alone was just under 26%. 
  4. Female lone-parent households in Alberta also face a particularly high rate of core housing need. More than 27% of these households were in core housing need in 2011. However, that figure likely dropped after the NDP government of Rachel Notley introduced the Alberta Child Benefit, a major feature of the 2016 Alberta budget.
  5. Members of Alberta First Nations also experience very high rates of core housing need. In fact, the rate of core housing need for Status Indians is nearly 25%—more than double the rate for non-Indigenous households in the province. And get this: these core need figures do not account for households living on reserve (if they did, that figure would be much greater). I should also note that more than 25% of  persons experiencing absolute homelessness in Alberta identify as being Indigenous, even though Indigenous peoples make up just 7% of Alberta’s total population.
  6. Housing typically constitutes a larger share of spending for low-income households (compared with middle- and higher-income households). And as the figure below illustrates, that phenomenon got measurably worse for low-income households in Alberta between 2010 and 2016.

    Source. Kneebone, R., & Wilkins, M. G. (2018). Social Policy Trends: Paying for the Essentials: Shelter, Food and Energy Consumption by Household Income Quintile for 2010 and 2016. The School of Public Policy Publications, 11. Retrieved from Policy School’s website: https://www.policyschool.ca/wp-content/uploads/2018/07/Social-Trends-Engel-Curves-July-2018.pdf

  7. On a per capita basis, Alberta has far fewer subsidized housing units than the rest of Canada. According to the most recent Census, subsidized housing represents just 2.9% of Alberta’s housing units; for Canada as a whole, the figure is 4.2%.
  8. Some Alberta cities have much more low-cost rental housing (per capita) than others. The visual below shows the range of private market rents paid on one- and two-bedroom apartments across Alberta’s seven major cities. The light-coloured bars show the range of rents paid on the second quintile (i.e., the second-poorest quintile) of private market rents. The next darkest bar shows the range of rents paid on the third quintile (i.e., the middle quintile) of rents, while the darkest bars define the range of rents paid on the fourth quintile of rents. Among the seven major cities, Medicine Hat appears to have the most low-cost rental housing units (per capita), and Calgary the fewest.

    Notes. Monthly rent quintiles by city in 2017. Data provided to Ron Kneebone (University of Calgary) by Canada Mortgage and Housing Corporation. The range of rents paid on the first and fifth quintiles are not reported due to confidentiality reasons.

  9. Going forward, the impact of the federal government’s National Housing Strategy will be modest. Recent analysis by Canada’s Parliamentary Budget Officer (PBO) projects future federal housing spending to actually decrease over the next decade (relative to Gross Domestic Product). The same analysis projects that total spending on Indigenous housing by Canada’s federal government will be “substantially lower” going forward. (For a general overview of the National Housing Strategy, see this analysis.)
  10. There are considerable cost savings to be realized when investing in affordable housing, especially when the tenants have serious mental health challenges. Subsidized housing for vulnerable subpopulations (including persons with mental health challenges) that is accompanied by professional staff support is referred to as supportive housing. Recent analysis in Calgary estimates considerable cost savings in the health and justice sectors attributable to formerly-homeless persons receiving supportive housing.

In Sum. For a more comprehensive look at affordable housing in Alberta, see this year’s Alberta Alternative Budget (AAB). Full disclosure: I was primary author of the chapter on affordable housing and homelessness.

I wish to thank the following individuals for invaluable assistance with the housing chapter of this year’s AAB: Meaghan Bell, John Kmech, Claire Noble, Chidom Otogwu, Steve Pomeroy, Ron Kneebone, Vincent St. Martin, John Veenstra and one anonymous reviewer. Any errors are mine.

Ten Things to Know About Homelessness in Canada

Ten Things to Know About Homelessness in Canada

Ten Things to Know About Homelessness in Canada

This afternoon I gave a presentation at Raising the Roof’s Child & Family Homelessness Stakeholder Summit in Toronto. My slide deck can be downloaded here. To accompany the presentation, I’ve prepared the following list of Ten Things to Know About Homelessness in Canada.

1.Efforts to enumerate persons experiencing homeless have generally been spotty, but it is reasonable to assert that homelessness in Canada saw substantial growth in the 1980s and 1990s. On a nightly basis in Toronto, there were about 1,000 persons per night staying in emergency shelters in 1980. By 1990, that figure had doubled. And ten years later, there were 4,000 persons per night staying in Toronto’s emergency shelters. The Toronto figure of 4,000 per night has remained relatively constant for the past 15 years, though it has edged up in the aftermath of the 2008-2009 recession a phenomenon which I’ve previously written about here. (Admittedly, the number of persons living in emergency shelters on a nightly basis is a rather narrow gauge of homelessness. According to Canada Mortgage and Housing Corporation, approximately 13% of Canadian households are in core housing need; for Nunavut, the figure is a whopping 39%.)

2. Though it’s difficult to establish causation, I think relatively safe assumptions can be made about some of the major contributors to homelessness. Researchers are generally careful about using the term causation in fact, there are long-standing tensions among academic disciplines as to what methodological approaches are required to establish it. Statisticians, for example, generally believe that randomized controlled trials (RCTs) are needed to establish causation; but as David Freedman has argued, RCTs are often impractical or unethical (Freedman, 1999, p. 255). Rather, careful researchers are more likely to say things like these factors have likely contributed to this effect,” or “I think it’s likely that this effect caused this to happen And with that in mind, I’d like to suggest that there are probably three major factors that have contributed to homelessness in Canada: 1) macroeconomic factors (especially unemployment); 2) changes to our social welfare system (including a decrease in the availability of government-subsidized housing); and 3) the design and administration of policies whose specific intent is to respond directly to homelessness (often referred to as ‘systems responses’ to homelessness).

3. Homelessness has profound ramifications on the lives of children. As I wrote in 2012: Two studies have been done in Toronto looking at the role of housing with respect to children in care. Results of both studies indicate that the state of the family housing was a factor in one in five cases in which a child was temporarily admitted into care. Results from the Toronto research also indicate that, in one in 10 cases, housing status delayed the return home of a child from care (Falvo, 2012, p. 14). Other research estimates that, on an annual basis in Toronto alone, approximately 300 babies are born to mothers who are homeless. (Of course, homelessness can have profound ramifications on the lives of adults as well. For more on this, see this 2007 study.)

4. The role of Canada’s federal government in funding both housing for low-income persons and programming for homeless persons has varied considerably over time. Provinces and territories spend much more of their own money on housing for low-income persons when the federal government leads. Thus, a considerable amount of subsidized housing for low-income Canadians was built from the mid-1960s through to the early 1990s. Since the early 1990s, comparatively little subsidized housing has been built for low-income persons in Canada. I should also note that the annual, inflation-adjusted value of federal funding for homelessness today is worth just 35% of what it was worth in 1999.

5. Not every province/territory responds to homelessness in the same way. While much mores subsidized housing for low-income persons gets built when the federal government leads, provinces and territories don’t always respond to federal funding initiatives in the same way. For example, between 2002 and 2013, three times as many subsidized housing units were built in Alberta (on a per capita basis) than in Ontario. I would argue that a driving force behind this differential stems from Alberta’s strong economic performance during this same period relative to that of Ontario’s.

6. Though a careful researcher will be cautious in discussing what causes homelessness, I think we know a lot about what solves it. In many cases, a person who stays in an emergency shelter will exit homelessness without substantial public resources. In some cases, they might find housing on their own; in other cases, family and friends may provide them with short term assistance e.g. some financial support, a couch to sleep on, etc. (To learn more about lengths of stay in homeless shelters in a sample of Canadian cities, see this 2013 study.) Researchers and advocates for the homeless generally don’t view such short-term stays as a major public policy challenge the bigger challenge is in the case of persons who stay in emergency shelters (and outside) for longer periods of time. Even here though, I would argue that it’s hardly a mystery as to what constitutes an effective policy response.

Indeed, as early as the mid-1980s, small non-profit organizations in Ontario (and possibly in other provinces as well) found success in building subsidized housing for persons who had experienced long-term homelessness they did so by providing professional staff support to help such tenants live independently in those units. This was (and still is) known as supportive housing. The emergence of supportive housing in Ontario happened in large part due to strong advocacy by community-based groups. This included: the Singles Displaced Persons Project; the consumer/survivor movement; the slogan homes not hostels the founding of Houselink Community Homes; and the founding of Homes First Society. Conditions of eligibility for such housing varied from one provider to the next. In many cases, the tenant did not have to prove housing readiness before being offered a unit. In fact, Homes First Society got its name because its founders believed that its tenants needed homes first before addressing other challenges (i.e. mental health, substance use, employment, etc.).

Today, researchers, practitioners and advocates refer to this approach ashousing first. And very recently, a successful RCT of housing first was conducted in five Canadian cities; I’ve previously written about that study here.

7. There are several ways of making housing available to low-income households; all of them involve the private sector to varying degrees. Sometimes when government subsidizes housing for low-income persons, it provides money to a non-profit entity that develops, owns and operates the units. Other times, government provides a subsidy to landlords (either for-profit or non-profit); in exchange for the subsidy, the landlord agree to rent units at a reduced rate for a specified period of time (e.g. in some cases, for 10 years). And other times, government provides money (often known as a housing allowance) to low-income tenants who then rent a unit from a for-profit landlord. Of the three possible approaches, I personally have a preference for the option where a non-profit entity develops, owns and operates the units (and I have previously written about this here). Having said that, I think there’s a place for all three approaches, depending on local context.

8. Some jurisdictions have used sophisticated information management systems as part of their efforts to respond to homelessness. Many organizations serving homeless persons in Calgary enter client information into a database called the Homelessness Management Information System, a system that is also used in many American cities. Client-level information (such as age, health status, employment status and housing status) is entered into the database when an initial intake is done. While the client is receiving services, updated information is entered again; in the case of some programs, follow-up assessments are done every three months. In the case of some program types, there are both exit and post-exit follow-up assessments completed. All information-gathering is subject to provincial privacy legislation. There are many uses for the data once it’s gathered. For example, some organizations use the data to provide case management services to clients. Also, funders are able to assess each organization’s performance against benchmarks (i.e. percentage of clients who receive housing after a specific period of time).

9. When it comes to both preventing and responding to homelessness, the capacity of government to generate revenue matters a great deal.Governments typically use revenue generated from taxation to finance both subsidized housing and other important social programs. When tax revenue decreases, many governments have less ability to spend on such programs. Since the mid-1990s, tax revenue in Canada (measured as a percentage of our Gross Domestic Product) has decreased substantially. If this trend doesn’t reverse itself soon, it will be very challenging for many governments (especially provincial, territorial and municipal governments) to invest in important social programs. There is currently a move afoot by some Canadians to increase taxes; it is led by Alex Himelfarb, former Clerk of the Privy Council. Alex and his son Jordan recently co-edited a book that calls for the need for higher taxation in Canada. (Note: according to some schools of thought, it isn’t necessary for a sovereign government with its own currency to tax more in order to finance more social spending. While keeping in mind that such an approach would be most relevant to Canada’s federal government and much less relevant to provincial, territorial and municipal governments readers can read more about one such school of thought here.)

10. Over the course of the next decade, Canada will likely see substantial increases in homelessness among both seniors and Indigenous peoples (First Nation, Metis and Inuit). Seniors and Indigenous peoples are growing as a percentage of Canada’s total population. Further, the percentage of seniors living below Statistics Canada’s Low-Income Measure has grown substantially since the mid-1990s. I think all of this makes it likely that both of these groups will begin to grow as a percentage of Canada’s homeless populations.

The following individuals were very helpful in helping me prepare the present blog post: Maroine Bendaoud, Lisa Burke, George Fallis, Greg Suttor, Francesco Falvo, Louise Gallagher, Ali Jadidzadeh, Lisa Ker, Jennifer Legate, Kevin McNichol, Richard Shillington, Blake Thomas and Mike Veall. Any errors are mine.