To deny that child poverty exists in Canada would be foolish. No matter how rich a nation gets, there are always going to be some people (individuals and families) who will be seriously deprived. The sad reality is that there are still children in Canada who are hungry, ill-housed and have little hope for a better life. However, well publicized reports that one in five children in Canada suffer poverty and that the number of poor children is growing are simply not credible. It is a myth that we have a child poverty crisis in Canada.

Campaign 2000 is a coalition of social advocacy groups (among them, the Canadian Academy of Child Psychiatry, the Canadian Association of Food Banks, the Canadian Auto Workers, the Canadian Council of Churches and the Canadian Council on Social Development) that is tracking Canada's progress regarding child poverty. The coalition was formed after an all-party resolution in 1989 committed Canada to ending child poverty by the year 2000. This organization has clearly helped to put the issue of child poverty front and centre as a major policy problem. While the goal of ending child poverty and tracking our progress in achieving that goal is admirable, the approach of Campaign 2000 is something of a sham. The tool they use to measure poverty (Statistics Canada's Low-Income Cut-Offs, or LICOs) was never intended to be used in this way.

LICOs were developed in the 1960s as a way of determining how many Canadians were in "straightened circumstances." In 1961, Statscan found that about 29 percent of Canadians were "low-income." Since that time, Statscan has rebased LICO several times so that the lines have risen as living standards have increased. Recently, documents obtained by Southam News from Statscan under the Access to Information legislation reveal the extent of the agency's own uneasiness with the LICO measure. In reviewing the agency's 30 year experience with LICO, Statscan states:

One could argue that had Statistics Canada known that those original LICO measures would be used so widely as poverty lines, it is doubtful that the agency would have published them as extensively as it has since that time.... While Statistics Canada has always maintained and continually stressed that the LICOs are not a measure of poverty, little attention has been paid to these cautions.

With this admission, Statscan goes farther than it has ever gone before to discourage the use of LICO for the measurement of poverty. Indeed, given this statement, it is hard to imagine how anyone or any group could justify using LICO to measure poverty. If Statscan doesn't believe it is a measure of poverty, why should anyone else? But the use of LICO, especially within the social welfare community, continues unabated. And it's not hard to figure out why.

As I pointed out in Poverty in Canada, published by The Fraser Institute, LICOs are relative measures in the sense that the lines rise along with living standards. A relative indicator may be useful for measuring inequality, that is, the extent to which some are below most others in society economically, but it won't tell us anything about poverty per se, which always has conveyed a sense of real material deprivation. While it is of interest to know how many Canadians live on incomes below half the average income, it is more important to know how many Canadians cannot afford to acquire all of their basic needs. However, most people in the social welfare community regard inequality as the main problem, so it is easy to understand their affection for relative income measures.

A fundamental problem with relative measures is that a general rise in living standards will do nothing to reduce poverty. As long as everyone remains in the same relative position (no matter how well off they are in absolute terms), there is no less poverty. This confounds our common sense.

In addition to LICOs being relative measures, they also are too high to be credible poverty lines. Let's examine the latest values. For 1997, the LICO lines in a major metropolitan area by family size are: $16,318 for one person; $22,117 for two persons; $28,115 for three persons; and $32,372 for four persons. While these are not by any means extravagant amounts, living somewhat below these incomes should not condemn people to poverty as it is commonly understood. For example, consider a single mother with two small children—an often cited case in the poverty literature—and suppose that this family resides in the city of Toronto, which has, along with Vancouver, the highest housing costs in the country. The average annual rental cost of a two bedroom apartment in 1997 is about $10,000. Food costs can vary depending on the age and size of the people in the household. However, using the latest national Family Expenditure Survey (FAMEX) data and updating the food expenditure of single parent families of three to 1997, the estimate of annual average food costs is approximately $5,850. This value includes $1,575 spent in restaurants. It is important to stress that both the shelter and food cost estimates are for the average family, without regard to income. It is likely that low-income families will be spending somewhat less than the average on these basic needs. Census data consistently confirm this conjecture.

Nevertheless, the total of shelter and food—$15,850—is still a long way from the LICO line. Even if the family has an after tax income of $26,000, this leaves them with $10,000 to cover such items as clothing, telephone, transportation, household supplies, additions to furnishings and appliances, and hygiene items. While a family in this circumstance is by no means well-off, it would be hard to credibly label them "poverty stricken." There is certainly no reason for children to be hungry on incomes in this range. The term I have used for households in this situation is "socially deprived." That is, they have their basic needs covered, but are lacking many of the social amenities that most other people enjoy. This is a useful distinction.

My own approach to measuring poverty is to preserve the more traditional definition by focusing on basic needs. An individual or family is poor if they are unable to acquire all of their basic physical necessities. This definition has universal applicability. A family in Canada that cannot afford its basic needs is no less poor than a family in the same situation in India or Haiti. It is a reasonably fixed standard by which to gauge progress over time. The study of poverty should primarily focus on those in our country who are unable to afford basic needs. I can't understand why those in the social welfare community would not want this information to be publicized.

Using this approach, I recently estimated the incidence of child poverty in Canada in 1973, 1984, and 1994. These three estimates, separated by about a decade each, give us a useful and important measure of progress in the material well being of families with children. Figure 1 shows that the rate of child poverty (in the sense of basic needs deprivation) is falling in Canada. Indeed, it has fallen by 38 percent since 1973. The number of poor children is down as well, from 650,000 in 1973 to 392,000 in 1994. While there are still too many children living in poverty in Canada, some progress is being made. This picture is in stark contrast to the reports by Campaign 2000 of massive child poverty.

While poverty rates have declined over the past two decades, the rate of "near poverty" has been fairly stable. Near poverty includes those who live on incomes that are above the poverty line, yet are below twice the poverty line. People in this circumstance have basic needs covered but lack many social amenities. Most of the people living below LICO lines would be near poor. This is a very important distinction. Children living in near poor households should not be hungry or ill-housed.

Defenders of the LICO lines often point out that numerous studies indicate that children living in homes with below LICO incomes have significantly more difficulties—from learning and behavioral disorders to more serious anti-social behaviour. However, these pathologies will show below any low income cut-off. Indeed, we would expect even more significant problems below the basic needs poverty line than below LICO.

Although there are fewer "poor" children now than ever before in the most meaningful sense of that term, in one sense children are indeed becoming worse off. High divorce rates are having a detrimental impact on children. According to child advocate Dr. Paul Steinhauer, there are 14 times as many divorced Canadians as there were 30 years ago. [Paul Steinhauer, Fact Sheet Number 1: Families (Ontario: Voices for Children, [1996]).] Children whose parents separate are twice as likely to have problems at school, and children in blended families have more than their share of emotional and behavioral problems. Another part of the problem, according to Stein-hauer, is that children in two-income families are more likely to be neglected because of the impact that both parents working has on those parents' time and energy. As well, high rates of child abuse have been the focus of considerable recent concern by the Children's Aid Society. The point is that many children in Canada are having real problems, but these have little to do with inadequate incomes.

Child poverty is an important issue. We need good information about the dimensions and the trends of the problem in Canada. It does no good to exaggerate and ultimately trivialize it by using an indicator that was never intended to measure poverty. In order to get a better understanding of the extent of child poverty, we need to start with a realistic and informative definition of poverty.