A vibrant economy that
provides sufficient income to meet basic needs is critical for the well-being
of individuals and families. Inadequate household income is associated with
physical and mental health problems, increased reliance on social assistance
and charity, and lower levels of education. Those at the lowest end of the
income scale may earn income or receive social supports that do not meet
basic needs. These people and families might struggle to find affordable
housing, might require the use of food banks, and may face living on the
streets.
| Productivity
Growth |
|
GETTING
BETTER -Average
after tax income has grown 8% from 1995-2004 and was 3rd highest in
Canada in 2004. |
| Unemployment |
|
POOR/GETTING
WORSE
- BC has the
highest rates of Low Income Cut-Off (18.4%) and the least improvement
in Canada. |
| Economic
Diversity |
|
FAIR/MIXED
RESULTS -
Best in the GVSS and Fraser Valley regions and worst in the Cariboo-Chilcotin
region. |
Due to limited availability of current data, many of the
indicators have been analyzed at the provincial level. Provincial data are
more current (2004 or 2005) than data otherwise available specifically for
the Fraser Basin (2001).
Real Average After-Tax Income of Families and Unattached
Individuals (1995-2004) 3
Real average after-tax income of families and unattached individuals in
BC has increased 8% between 1995 and 2004. In 2004, BC had the third highest
average real income in Canada, with an average after-tax income of families
and individuals of $47,800.
Income Inequality (1995 -2004)
3
Income inequality can be assessed by looking at the income gap - the difference
in average income between the top 20% of the population and the bottom 20%.
The income gap has widened (by $13,200) between the lowest and highest income
groups between 1995 and 2004. Families and individuals in the top 20% have
gained the most, with incomes increasing 12%, while those in the lowest
20% have had their incomes decrease by 16%. In 2004, the top 20% of income
earners had an average after-tax income of $104,700 and the lowest 20% had
$9,800.
Proportion of Families and Unattached
Individuals Living Below the Low Income Cut-Off (1996-2004) 3,
4
The Low Income Cut-Off (LICO) is a measure produced by Statistics Canada
to determine income thresholds at which a family would typically spend 20%
more of its income than the average family to meet basic needs (food, shelter
and clothing). The following table includes some examples of LICO rates.
2004 Low Income Cut-Off (Constant
$1992) After Tax 3
|
Size
of Family Unit
|
Rural
areas
|
Population
30,000 to 99,999 |
Population
500,000 +
|
| 1 person |
$11,025
|
$14,075
|
$16,853
|
| 4 persons |
$20,844
|
$26,613
|
$31,865
|
BC has the highest proportion of people living below the
LICO of any Canadian province. In 2004, 18% of families and unattached individuals
were below the after tax LICO, compared to the Canadian average of 15.2%.
In Vancouver, the situation is even worse (20.5%). In BC low income rates
have decreased by only 1.6% over a 10-year period, compared to decrease
of 18.3% for Canada as a whole.
The National Council on Welfare released a study that reported
social assistance rates in BC in 2005, adjusted for inflation, reached the
lowest value since 1986. Welfare rates are not nearly sufficient to meet
household needs. A couple with two children on social assistance receives
income that is 48% of the LICO. A person on disability receives income that
is only 51% of the LICO4.
(See
Housing)
Economic Hardship (2005)
5
An index of economic hardship, produced by BC Statstistics, considers a
number of indicators, including the percentage of the population on income
assistance, average household income and income inequality. The index shows
varying states of economic hardship in the eight regional districts within
the Fraser Basin. The Squamish-Lillooett region had relatively low rates
of economic hardship, while the Cariboo, Thompson-Nicola, and Fraser Fort-George
regional districts experienced high rates of economic hardship.
What is being done?
The Economic Security
Project (ESP) is working to analyze recent policy changes in BC and their
effects on the economic well-being of vulnerable populations, and to present
workable alternative solutions. It is a joint initiative between the Canadian
Centre for Policy Alternatives and Simon Fraser University, which brings
together 23 community organizations and four of BC's universities.
CommunityLink
provides funding to school boards and other community programs and services
that support at-risk children and youth.
The Vancouver Agreement
is a partnership between the City of Vancouver, the BC government and the
federal government to work together with communities and business in Vancouver
to support sustainable economic, social and community development in an
area considered to be the "poorest postal code in Canada".
What else can de done?
Businesses can provide
employees with a living wage.
Governments and community
organizations can support the provision of affordable housing, childcare,
and other social services for low income people.
Individuals
can donate volunteer time, money, or food, to food banks or homeless shelters
to help alleviate the impacts of poverty in the short-term.
Governments
can ensure that tax reform does not disproportionately burden low-income
households.
REFERENCES
1. Human Resources and Development Canada. When Working
Is Not Enough to Escape Poverty: An Analysis of Canada's Working Poor (2006).
2. Canadian Association of Food Banks. Hunger Count (2004,
2005).
3. Statistics Canada. Income Trends in Canada (1995-2004).
4. National Council on Welfare. Welfare Incomes (2005).
5.BC Statistics. Index of Economic Hardship (2005).
FOOTNOTES:
i. The definition of poverty is based on the Market Basket
Measure, which estimates the cost of basic goods (e.g., shelter, food and
clothing) for each city in the country.
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