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A PROFILE OF POVERTY
IN MID-SIZED ALBERTA CITIES

by Kevin K. Lee and Cheryl Engler

January 2000

     

Section 1: Study overview

Introduction

To many people, signs of poverty in Canada are becoming increasingly visible. These days, it is common for people to discuss how economically insecure they feel, and come to the realisation that they are but a few paycheques away from being unable to make ends meet. They have noticed increases in the number of unemployed people they know and how difficult it is to find affordable housing. They read in newspapers about the over-extension of food banks and temporary shelters.

This report is intended to bring to light the issue of poverty in five mid-sized communities in Alberta: Medicine Hat, Red Deer, Lethbridge, Grande Prairie and Wood Buffalo. The research examines poverty in communities that have not seen much locally focussed study on the topic. The report has two objectives, namely:

• to provide a profile of poor populations in the selected mid-sized Alberta cities
• to explore the differences in poverty rates among these cities.

National trends in poverty rates are mirrored in these cities. Figure 1.1 shows that poverty rates increased in four of these communities between 1986 and 1996. This figure shows that a significant proportion of the population in these cities has been living in poverty, and this proportion has been growing.

For the mid-sized cities selected for this project, the report examines and compares the local poverty rates by a number of variables. Poverty rates are examined for population groups by age and sex, Aboriginal status and disability status. As well, poverty rates by household type are explored, along with the depth of poverty experienced by different family types. The formal education and employment characteristics of populations are also examined. Finally, the housing tenure and shelter costs of the poor are explored.

 

Defining poverty

Throughout this report, poverty is measured using Statistics Canada’s Low Income Cut-offs (LICOs). In calculating LICOs, Statistics Canada begins by estimating the percentage of gross income spent by the average family on food, clothing and shelter. It then somewhat arbitrarily marks this percentage up by 20 percentage points, reasoning that if a family spends significantly more (20 percentage points more) than the average family on essentials, it is living in "straitened circumstances." The income cut-off levels vary depending on the size of the family and the size of the community in which the family lives (see Table 1.1 below).

While Statistics Canada does not treat LICOs as poverty lines, most researchers, analysts and editorial writers do, and they are treated as such here. As well, LICOs are good indicators of the public’s perception of poverty. Gallup Canada, administrators of the Gallup Poll, has surveyed Canadians on their views on income adequacy since 1976.¹ Gallup asks a sample of adults, "What do you think is the least amount of money a family of four needs each week to get along in this community?" Figure 1.2 shows that Gallup results (adjusted to reflect annual amounts) and the appropriate LICOs have been consistently close for more than two decades.

 

Table 1.1 shows the actual dollar figures for LICOs. As the poverty line for each household is adjusted for family size and community size, there are actually 35 LICOs. LICOs for households in the cities selected for this report primarily fall under the category "urban areas 30,000 to 99,999 in population" as these communities mostly consist of urban areas and have populations of this size. Phrases in this report such as "below the poverty line" or "below LICO" refer to households with incomes below the appropriately adjusted LICO.

The poverty rate, or incidence of poverty, is the primary measure of comparison among cities. This rate refers the to proportion of the population living in families or alone with incomes below the appropriate LICO. For example, the poverty rate in Alberta was 18.4 per cent in 1995. This means that 18.4 per cent of the population of Alberta lived in households with incomes below LICO that year.

Another measure of poverty used in this report is the depth of poverty, or poverty gap that households experience. Depth of poverty refers to the difference between a poor household’s total income and the appropriate LICO. If the incidence of poverty (poverty rate) measures whether or not a household is poor, the depth of poverty measures how poor they are. For example, a family of four lived in a community with a population between 30,000 and 99,999. If their pre-tax income was $22,046 and the appropriate LICO was $27,046, the depth of poverty this family experienced was $5,000.

Data Sources

Custom tabulations of Statistics Canada’s 1996 Census data were the primary source of information for this analysis. These data include persons in private households in private occupied dwellings. They do not include persons on Indian reserves or settlements, in institutions or in collective households. Tenure and shelter cost data also do not include farm operator dwellings. Income-related data, including poverty figures, refer to families and individuals’ 1995 income. Unless otherwise noted, all numbers in figures and tables are drawn from the custom tabulations of 1996 Census data. Some margin of error may exist due to rounding.

Geographic units

While Statistics Canada data is available in many different geographic units, a common unit was selected for this report to facilitate comparisons among cities: the Census Subdivision (CSD). The CSD is a provincially defined administrative territory commonly referred to as a municipality. As municipal governments were formed under similar legislation and have similar responsibilities, these geographic areas are a good basis for comparison. For this study, the geographic units compared include the City of Lethbridge, the City of Medicine Hat, the City of Red Deer, the City of Grande Prairie and the Regional Municipality of Wood Buffalo.² The mid-sized municipalities accounted for 8.8 per cent of the total population of the province.

 

     

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