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The Market Basket Measure: The Report, The Response
June 9, 2003
By Louise Chatterton Luchuk
What does it cost to survive as a family in Canada? How many Canadian
families are unable to afford sufficient food, shelter, clothing, and
transportation for a healthy existence? Human Resources
Development
Canada (HRDC) has just released a new research tool to
answer these
questions about low-income families in Canada - the Market
Basket Measure (MBM).
François Weldon, HRDC's director of research
partnerships
and knowledge exchange, explains that in 1997 the federal, provincial
and territorial ministers responsible for social services requested
the development of a new tool to track low-income trends
among Canadian
children. The result is the MBM, which unlike existing measures, is
more sensitive to regional cost differences and is based on
a specific
"basket" of goods and services for a reference family of two adults
and two children (a boy aged nine and a girl aged 13). The
basket includes:
- food (a nutritious diet as defined by Health Canada's 1998
Nutritious Food Basket)
- clothing and footwear (suitable for work and social
occasions)
- shelter (median rental shelter costs including the cost of heat,
light and electricity, a stove, a refrigerator, and the
use of a washer
and dryer)
- transportation (in urban areas served by public transit, monthly
transit passes for each adult family member and 12 taxi
trips costing
$16 each per year and, in areas not served by public transit, the
cost per year of paying for a five-year old Chevrolet
Cavalier including
1,500 litres of gasoline, a tune up and oil change, and
government-mandated
automobile insurance and licenses)
- other necessary goods and services (including personal
care items,
household supplies, furniture, basic telephone service,
reading material,
school supplies, and modest levels of recreation and entertainment)
The total cost of the goods and services in the reference family's basket was
calculated by Statistics Canada for 19 specific urban areas and
29 different community sizes in the 10 provinces. To
determine if a household
is in the low income range, the cost of the basket in their
geographical
area is compared to their MBM disposable income derived from Statistics
Canada's Survey of Labour and Income Dynamics (calculated as
gross family
income minus income taxes and other mandatory payroll deductions, child
support and alimony payments made to another household,
actual out-of-pocket
(not reimbursed) child care expenses, and actual
out-of-pocket medically
recommended spending).
What the MBM tells us is that in 2000 approximately 16% of Canadians
could not afford sufficient food, shelter, clothing and
transportation for a healthy existence. Interestingly, the MBM
percentage is very similar and confirms the percentages determined by
previously used measures.
What the MBM is not
Weldon makes it clear that the intent of the MBM is not to replace
the Low Income
Cut-offs (LICOs) or the post-tax Low Income Measure (LIM-IAT). "The MBM
is complementary. It answers different questions and fleshes out what
we know. We need to look at the measures together to get a full picture
of poverty." Weldon also points out that the MBM is not an
official measure
of poverty, nor will it be used to determine eligibility for
federal government
income support programs.
Response to the report
Laurel Rothman works at the Family Service Association of Toronto and is
the national coordinator of Campaign
2000 - a nonpartisan national coalition of 87
organizations committed
to securing the implementation of the 1989 federal all-party resolution
"to seek to achieve the goal of eliminating poverty among
Canadian children
by the year 2000". Rothman notes the fact that the MBM numbers are very
close to the findings of previous measures. "That is good
because it validates
what we've been saying," says Rothman, "But it's not good because it is
reflecting a distressing situation and that there has been virtually no
progress since 1989."
John Anderson, vice president of research for the Canadian
Council on Social Development, notes right off the top
that "no matter
how we measure it, Canada's poverty rates are too high. And you can't
buy the basket if you are a family with two kids on welfare
or on minimum
wage…anywhere in Canada." He calls for the government to
revisit minimum
wage levels and social assistance programs. Rothman agrees. The way she
sees it, the provinces are pulling away from their responsibilities and
they need to review social assistance and minimum wage rates.
MBM sheds light on practical ways to reduce poverty
The MBM also confirms, says Anderson, how much housing costs eat up disposable
income. Affordable housing is minimally available and hard to find and
social housing has fallen off the agenda of provincial and
federal governments.
The MBM demonstrates that providing affordable housing can go
a long way
to reduce poverty. So, too, would affordable childcare -
which also would
extend the choices available to lone parent families. Rothman
points out
that the MBM is based on a reference family of two adults and
two children
and "we need to talk about lone parent issues."
The difference between a poverty line and a social
comfort line
While Rothman sees the MBM as a move towards recognizing that child and family
poverty is more than a tally of basic survival goods,
Chris Sarlo,
an academic economist at the University of Nipissing
and a senior
fellow with the Fraser Institute,
thinks the MBM fails to address the function of a poverty line. Sarlo
argues for a basic needs poverty measurement because, he
says, it is fundamentally
imperative to measure real deprivation. While some may call
Sarlo's basic
needs poverty measurement a "subsistence" measurement, Sarlo sees merit
in having a poverty measure rather than a social comfort measure. "I'm
not saying that the poor shouldn't have computer access, memberships to
the Y or be able to make charitable donations, what I am saying is that
there is value in knowing who has barely enough." Sarlo places the MBM
as a "Canadian compromise" with the Sarlo/Fraser Institute measurement
on the low side and the LICO on the high side for measuring
low income.
Regardless, Sarlo hopes that those with differing political viewpoints
can work together because "Nobody wants poverty. We don't want hungry
children. We might disagree on policy but our end goal is clear." This
is a viewpoint that Anderson and Rothman echo in their comments about
the amount of time spent defining measures rather than acting
on poverty.
As Rothman puts it, "the people I've spoken to are more interested in
getting on with resolving the situation rather than focusing
on the measure."
So, while measuring low-income levels is important, the greater need is
action and action now.
Louise Chatterton Luchuk is a freelance writer and consultant who
combines her love of writing with experience at the local, provincial
and national levels of volunteer-involving organizations.
For more information,
visit www.luchuk.com.
