In 1989, a federal government all-party resolution set a goal seeking to end child poverty by the year 2000. One year shy of the millenium, with the goal no closer, they have decided to change the rules, thereby moving the goalposts.

Human Resources Development Canada (HRDC) is promoting a new poverty measure which asks Canadian low-income children to lower their expectations. Their new poverty line joins a crowded field ranging in generosity from the Fraser Institute's "Basic Needs Measure" to the Statistics Canada's "Low-Income Cut-Off".

At one extreme, the Fraser Institute's "Basic Needs Measure" estimates the money sufficient for food, shelter and clothing to keep the family alive, and is limited to physical necessities. It excludes non-essentials like books, toys, hair-cuts, dental services and school supplies. The food budget illustrates their eagerness for subsistence (for others to live on); $25 per week for an elderly woman.

The widely used Low-Income Cut-Off (LICO) is set by Statistics Canada by comparing the spending on necessities of low-income families to typical families. These relative lines increase over time with over-all income levels. This attracts the wrath of neo-conservatives because the moving lines create upward pressure on supports for low-income families.

Many in the political elite consider LICO's just too generous. However, no federal politician has to live on the $23,000 that is considered "excessive" for a single mother.

Instead, the government's new measure HRDC's Market Basket Measure limits our obligations to low-income children to a particular basket of goods - not a share of Canada's wealth. It acknowledges that children living on their budget will feel excluded from Canadian society because there will not be funds for thngs that many Canadian kids take for granted, like vacations and school field trips. Children living at the government's line will, over time, fall progressively further behind the Canadian norm, but will not officially be poor.

Should our poverty measure increase over time by the cost of living only, or should it also reflect increasing real wealth? How should our poverty measure react to increasing average incomes?

Over the last 20 years, the LICO has increased, not only to reflect inflation but also by an additional 46 per cent to reflect changes in consumption. What if we had been increasing it for prices only? The current (1997) poverty line for a family of three in a large town is $23,213, while indexed to prices only it would be $15,864. These lower poverty lines would have reduced our poverty rate by about 50%. These lower poverty lines would have virtually eliminated poverty for seniors and rendered old age security increases unnecessary. Lower poverty rates would have encouraged complacency about child poverty. The government admits that its Market Basket Measure reduces poverty immediately by about a third - without improving the standard of living of a single child. But this is only the starting point. Each year the spread will grow between a poverty measure, adjusted for prices, and one adjusted for average income.

The label "poverty" is irrelevant to the lives of children - it's deprivation, and their real and perceived life chances that matter. Low-income children have always been at greater risk of a range of outcomes which we claim to be concerned about. These include low birth-weight, school problems, low self-esteem, hindered psychological and social development. These outcomes will clearly remain if the government ceases to label them poor, but the impetus to address the problem will be reduced.

In other contexts, indexation has been a very effective tool for political sleight-of-hand. The deindexation of income taxes in 1986 preordained, largely hidden, regressive tax increases. Similarly, deindexation erodes the Child Benefit, thus freeing up funds for mythical pre-election "increases for poor children" mostly replacing the funds removed by inflation.

Indexation could now do for the poverty debate what it already has achieved for the Child Benefit and in the income tax system - the illusion of fairness, where advertising of progress and compassion drowns out the slowly eroding standard of living of children.

The poverty line should reflect social goals for Canada. The MBM will be preferred by those who see our obligation to children as a basket - like a Christmas hamper. Those who seek equality of opportunity for children will want a relative measure which compares low-income children to the norm.

The new government measure implies a new, more limited social contract. A country as wealthy as Canada is lowering its expectations not because we can't afford social supports but to make inequality acceptable. This will end Canada's traditional ideal of equality of opportunity.

Is this what the House of Commons had in mind in 1989, when it passed the unanimous resolution seeking to end child poverty by the year 2000?

Richard Shillington
Jan. 29, 1999

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