Methods of Defining and Calculating Poverty:

There is actually no official measurement of poverty in Canada, as there are many
arguable issues to deal with when defining and calculating poverty. Poverty is actually an
arbitrary concept, as different people have different opinions of what it is, in definition.
However, it is important to define poverty in order to make it possible to do research on poverty
and so that comparisons can be done. To understand and to make assumptions regarding the
poor, it must be decided which concept of poverty will be used, the absolute concept or the
relative concept. In the absolute concept, poverty is the deprivation of the economic resource
required to meet food, shelter and clothing needs for physical well being. On the other hand, the
relative concept defines poverty as the deprivation of the economic resource required for
dignified participation in society. Where psychological and social well being is also considered,
determined in relation to a specific society’s norms. It is quite obvious that these two concepts
are extremely different, therefore, determining which is the best concept is the first and most
important step to defining and calculating poverty.
Statistics Canada and the Fraser Institute are two of the most country’s best-known
organizations that attempt to measure poverty in Canada. The Fraser Institute uses the absolute
concept, and arrives at their measurements by considering the poor as only those that lack any
item required to maintain long-term physical well being. However, Statistics Canada’s research
reflects the relative concept of poverty. They develop a measurement of poverty in their
‘Annual Survey of Incomes’ by uncovering an average proportion of income that is spent on
essentials, marking it up by 20 percentage points, and then setting that as a low income cut off.
The standard cut off for Canada is 54.7 percent, therefore, any person who spends more than this
income cut off on essentials is considered to live in poverty. As stated before, there is no official
measure of poverty in Canada, however, the survey result of Statistics Canada is the most widely
accepted study, as all other research in this field is based on this study.

Welfare Rates

Welfare is an extremely important service provided by the Canadian government to assist
those members of society who are in desperate need financial help. People have many distinct
and diverse reasons for requiring assistance. Statistics on reasons for assistance show that 45
percent of the welfare cases were job-related, 27 percent were related to disabilities, 14 percent
gave single parenthood as the reason for assistance, and the remaining 14 percent had "other"
reasons for needing this assistance. Nevertheless, the welfare system and its dependants are
widely criticized and greatly misunderstood. It is commonly thought that most people on
welfare are young people, without an education, who should be out working. However, only 4
percent of the heads of welfare cases in March 1997 were under age 20, and another 12 percent
were between 20 and 25. Education does not offer absolute protection from welfare. Eleven
percent of the people on welfare have attended some form of post secondary education. Lack of
work is the largest single reason people are on welfare, they do not choose to be jobless, yet
unfortunately find themselves in that situation. Another misconception is that unmarried
teenagers with lots of children make up most of the single-parent mothers on welfare. In fact
only 3 percent of the single parents on welfare are under age 20, and more than half of all single-
parent families on welfare had only one child and another 31 percent had only two children.

Public scrutiny and budget cuts have resulted in Canada reducing its welfare rates as
well as its shelter allowances considerably since 1995. This has made it increasingly difficult
for people to live a ‘normal’ life if forced to rely on the welfare system. However, it is
extremely important for social assistance to remain in tact and to be improved as the future of
many Canadians depends on it. Nearly 1.1 million of the people on welfare in March 1997 were
dependent children under the age of 18. This is a considerably large percentage of Canada’s
population, and in order to reduce the chance of the cyclical affect of poverty, these children
need to be helped while on welfare to allow them the chance to lead a life off of assistance.

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