Child Poverty in Canada: Recasting the Issue

Speaking Notes

April 1998

Child Poverty in Canada: Recasting the Issue

David Ross' speaking notes, April 1998, Toronto

Purpose of this talk:

to address the debate between right wing and progressive voices about the actual measure of child poverty in Canada
to reframe the discussion of child poverty beyond considering minimal survival needs, to considering how we can equalize life chances for children

Each year Statistics Canada releases figures on the numbers of people living below its low-income cut-offs [LICOs]. These low-income lines are broadly understood as Canada's poverty lines. So we see headlines stating that 1.5 million children lived in poverty in 1996. But there appears to be growing criticism of this interpretation. Critics, such as the Fraser Institute, deny that these kids are living in poverty since they have access to basic food and shelter, and they don't resemble the Third world children we see on TV. According to the Right, the definition of need stops at food and shelter.

Are the current LICOs too generous? To answer this, let's consult Canadians. Since 1976, the Gallup poll has asked the following question:

"Generally speaking what do you think is the least amount of money a family of four needs each week to get along in this community?"

As Chart #1 shows, the amounts of money that the public thinks a family needs to get by on [annualized] continually track the LICOs. At the beginning of 1997, the annual amount the public thought a family of four needed to survive was $26,000. This suggests that while Canadians accept a fair amount of inequality of opportunity -- average family income in 1996 was close to $57,000 -- they do not agree with some of the harshest critics of the LICO. The Fraser Institute, for example, states that about $15,000 for a family of four is all that is necessary for survival. Nobody above that income level should be considered poor.

The Fraser Institute is just one of many groups today attempting to redefine poverty. Most of these attempts involve rejigging existing poverty lines. Researchers involved in this activity are trying to establish an objective formula that will create a specific income cut-off -- a point at which children, for example, have adequate basics--an adequate "market basket" of goods. But without identifying the desired outcomes that we have for children, how can we define the adequate basics? What separate items go into the market basket? What should these basics accomplish?

At the CCSD, we are doing some new research [a fuller report is forthcoming] intended not so much to redefine a poverty line, but to recast our discussion about poverty. Exactly what does being poor mean in Canada? What is the objective of providing a certain level of family income? Why should we care?

To begin to answer the critics who are proposing that poverty be measured according to the bare minimum needed for survival, first, Canada is not a Third World country. It is a complex, advanced and democratic society. And to participate fully in Canadian society requires more than the physical basics of food and shelter. Canadians prize their safety, cohesion, civility, population health, and economic and cultural prosperity. We like our #1 world ranking. We are not anxious to create a large underclass of desperate people.

In our research at the CCSD, we are trying to determine how we can "roughly equalize" the chances for kids to become successful adults. How can we provide provide children with the opportunity to succeed, not just to be fed and sheltered? Ours is a "poverty of opportunity" as opposed to a "market basket" approach. In this approach, we begin by identifying what makes a successful adult, as opposed to trying to define what expenditure items belong in a basic market basket to keep a body alive [**N.B Equalizing opportunities does not necessarily mean equalizing family incomes. Opportunities are very much affected by the provision of public services such as public education, kindergarten, health care, and recreation. The more there are of these, the less an individual family's income limits a child].

How do we define a successful adult?

good health--physical, mental, emotional
good social skills--getting along with family, friends, classmates, neighbours, workers
good learning skills--formal education and cultural and recreational skills
good earning skills--good preparation for and entry into the labour market

These are the same outcomes that we measure each year in The Progress of Canada's Children -- the CCSD's annual report on how well Canada's kids are faring.

In order to provide these ingredients, children need more than basic food, clothing and shelter. They need:

economic resources
adequate shelter
access to health care, including dental;
secure and attentive parenting;
quality child care;
schooling, with its growing list of costly items such as computers;
recreational and cultural opportunities;
physical safety--pollution, traffic safety, crime;
concerned and nurturing communities

The ability to provide access to these services and living conditions varies considerably among families, in large measure because of the inequality of incomes in Canada. It becomes even harder for families as public services get cut back. Because families are the primary caregivers in society, ultimately our attempt to define poverty will consider what level of family income, combined with a given level of public services, is necessary to roughly equalize the life chances of all children. We haven't finished our research, so I can't offer you that formula today. But I can tell you about some very relevant findings that we have uncovered so far.

For the first time in Canada, hard statistical evidence is now both abundant and compelling that family income has a major effect on child well-being. There are two new national longitudinal surveys [National Longitudinal Survey of Children and Youth; and the National Population Health Survey] that we are using at the CCSD to examine the linkages between income [and other factors] and the well-being of children. To date, we have examined 31 outcomes and living conditions, and in each case we have found a statistical association with family income levels. I will show you only seven today. The remainder will be included in the fuller CCSD report when completed.

These tables leave us with a dilemma in choosing a "poverty line" or income cut-off. There really isn't one if the criteria is maximizing children's life chances. As family incomes rise, children's chances for success increase. There is no magic point, below which kids are doomed to fail, and above which they are guaranteed to succeed. A combination of family income and access to outside resources affects how well our kids do.

My view is that without a discrete cut-off, any decision about a poverty line is based on how much inequality and downstream social costs a society is willing to tolerate. In determining the cut-off, two factors must be considered.

First, there is morality and social justice. How much inequality do people think is fair and just? How much do we want to help children living in poor conditions and circumstances not of their own doing?

Second, there is the weighing of the costs of doing something today to equalize opportunity against the later costs of not doing much. The lower the cut-off, the greater the inequality of outcome, and the larger the economic and social costs tomorrow as fewer children make successful transitions to adulthood. A dollar saved today by not maximizing opportunities is simply a dollar of spending delayed until later. It is ironic that while we piously speak about the need and urgency to bring down the fiscal deficit because we do not want to burden future generations, we don't consider the "social deficit" we are passing on as services and programs, and social assistance benefits are slashed. One child in neo-natal intensive care costs the health-care system $8,400 a week. If the child is there because the mother was malnourished and the baby was low birth weight, how much money did we save by depriving the mother of a level of social assistance adequate to feed her properly during her pregnancy?

Our research using the statistics shows clearly that the 1.5 million children living below the LICO in 1996 are at a disadvantage. Their opportunity to succeed is signficantly lower than children in higher income families.

So what does it take to address this problem? The CCSD believes that it must become an important collective endeavour to better equalize the opportunities for children to succeed. To level the playing field. A child's chances for a successful transition to adulthood should not depend so heavily on family income.

I am not suggesting that we ignore the Low Income Cut Off. It is an important indicator of serious deprivation in Canada. But nor should we assume that once family income rises above the LICO, successful child outcomes are guaranteed.

We need to put together our practical knowledge about how kids succeed, with a study of the data which indicates why kids don't succeed. This means taking a good, hard look at the slashing and burning of social expenditures today, in light of a growing gap in income equality in Canada. We need to set the discussion of child poverty within the context of successful child development, and remove it from the context of how many grains of rice a day it takes to keep a body alive.

This is the approach that will help us to meet our collective responsibility. That is, to design a prosperous society in which downstream social, economic, criminal costs are minimized--and productivity, tax revenues, social cohesion and civility are maximized.

David Ross is the Executive Director of the Canadian Council on Social Development. The Canadian Council on Social Development is an independent, national, non-profit organization focussing on issues of social and economic security.

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