Thank you for your invitation to speak with you this morning.
We will begin by putting low-income measures into context. I don't know if everyone has received a copy of the presentation.
As Mr. Fedyk mentioned, Canada, like many other countries, does not have any official measure of poverty. Indeed, determining a measure of poverty implies making choices, and Statistics Canada has never sought to define and then measure poverty. However, if an official measure were to be adopted, this would fall within Statistics Canada's mandate.
Measures of low income can be grouped into two large categories. There are measures anchored in time within which the low-income cutoff is determined and established. Some prefer to qualify this first category as an absolute measure. Each year, these measures are indexed to inflation. There are also low-income measures that are recalculated every year. Those measures are comprised of low-income cutoffs which is the official measure used by Statistics Canada. There is also the market basket measure as just described to you by Mr. Fedyk.
Of the measures that are calculated on a yearly basis, there is the low-income measure that takes into account the entire scale of income, from lowest to the highest. Middle income is considered the median income. This is a relative measure. It is used for international comparisons.
I will therefore be talking to you about these three measures: two measures that are anchored in time and that vary according to inflation, and a relative measure.
Generally speaking, measures anchored in time, or absolute measures tend to follow the economic cycle. You can observe the trends as depicted by the graph on the slide. The first line, the blue line, represents the low-income cutoff, which is the official measure used by Statistics Canada. During the recession of the 1990s, unemployment rates rose. The line underneath represents unemployment rates.
Generally speaking, a measure that is anchored in time will mimic the economic cycle. From 1993 to 1995, unemployment rates began to fall, but low-income cutoffs did not follow the same trend, because of reforms to social assistance programs. Measures anchored in time follow the economic cycle.
Let us now move on to the following slide. The blue and green line depict two measures anchored in time. The green line represents the market basket measure, as mentioned by Mr. Fedyk. Generally speaking, the market basket measure is used by Statistics Canada and tracks the same trends over time. There is a difference in the levels reported. The market basket measure was approximately 2 percentage points higher than the low-income cutoff used by Statistics Canada.
The pink line shows the measure that changes every year, but that does not necessarily follow the economic cycle. It reveals more constant low-income levels. By looking at the trends since 1980, we see that low-income rates in 2006 fell by approximately 2 percentage points as compared to 1980.
Moving on to the next slide, we see that Canada sets itself apart from other countries as regards low-income rates for persons aged 65 years or older. The blue line is our official low-income cutoff. There is the relative measure, and the market basket measure for the last five years. The absolute and relative measures from 1976 show that the low-income levels were constant and that low-income cutoffs were very high for older people. Implementation of the Old Age Security Program and the Guaranteed Income Supplement Program substantially reduced the low-income cutoff.
I will now move on to the following slide, which focuses on provincial differences.
Under the measure used by the Department of Human Resources and Social Development, there are provincial differences.
I am on page 7.