One in four Canadians live in poverty, new report says

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A new report by Food Banks Canada suggests that more Canadians may be living in poverty than previously estimated, with 25 per cent potentially falling into this category.

The new report applies Canadian data to a Material Deprivation Index (MDI), a poverty metric widely used in Europe, in order to measure the standard of living.

“A better understanding of poverty is critical if we are to accurately evaluate our progress, or lack of progress, in reducing material distress among households in Canada,” the report reads.

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The report suggests that poverty is about lacking more than the basic necessities. Instead, the author looked at 11 types of essential “items” Canadians said they could not afford, such as transportation, footwear, special occasions, and more.

Experts determined that 25 per cent of Canadians are living at a poverty level living standard because they cannot afford two or more of such essentials. The author’s findings greatly exceed past estimations of the poverty rate, which Statistics Canada reported in 2019 to be 10.3 per cent.

Typically, when defining poverty, analysts look at the “poverty line,” which is determined by household income.

Canada’s existing measure of poverty, the Market Basket Measure (MBM), determines the standard of living by adding the cost of a “basket” of goods and services, which represents a modest household of two adults and two children in various locations across Canada.

However, the new report’s methodology would mean that 10 million of Canada’s 40 million people are living in poverty, compared with four million people, as reported by Statistics Canada.

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The report claims that 30 per cent of people 18-30 years old, 44.5 per cent of single-parent households and 42 per cent of renters can’t afford two or more household essentials.

17 per cent of Canadians are over the three-item deprivation threshold, the report says, and are therefore even more likely to be experiencing a poverty-level standard of living.

According to the MDI results, the highest levels of deprivation – were found among minority respondents, including Black and Indigenous, people living with disabilities, respondents who were unemployed and looking for work and those who were relying on government transfers.

“We believe that our research has shown that poverty may be different, and perhaps more extensive, than it appears when viewed through the single lens of the MBM income-based poverty line,” the Food Banks Canada report concludes.

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