Trudeau’s numbers on poverty are mostly true — but it’s complicated

As part of our federal election coverage, CBC News is assessing the truthfulness and accuracy of statements made by politicians and their parties.

The Claim: “Nine hundred thousand Canadians have been lifted out of poverty, including 300,000 children.”

— Liberal Leader Justin Trudeau on his commitment to “people working hard to join” the middle class.

The Facts:

Last February, Statistics Canada reported that the number of people living below the poverty line dropped from 4,238,000 in 2015 — when the current Liberal government formed its majority — to 3,412,000 in 2017, the most recent year for which data is published.

That’s a total decrease of 826,000.

Those figures include children, of which the number living in poverty declined from 900,000 to 622,000 in the same period. 

Jennifer Robson, an associate professor of political management at Carleton University, described the reductions as “real progress.” Robson previously worked as a political staffer in the Jean Chrétien government and then as a public servant during the Stephen Harper years.

Speaking to reporters, Trudeau credited his government’s Canada Child Benefit (CCB) as a key factor in lifting low-income families out of poverty.

The CCB was implemented in 2016 and is tied to a person’s income. It replaced a mix of three previous federal child benefits that often left tax filers confused. What’s important is that, in the end, it “resulted in higher incomes for families with children,” Statistics Canada said.

The connection between the simpler, income-adjusted CCB and falling poverty rates was not surprising to tax and inequality experts, according to Robson.

“Let me put it clearly: when you give poor people more money, they are less likely to be poor.”

For those following the math, though, we are still short of 900,000 — the figure touted by Trudeau on the campaign trail.

That’s because it includes at least 74,000 people that the Finance Department projects will be raised out of poverty by the new Canada Workers Benefit (CWB).

Rolled out earlier this year, it’s meant to help low-income workers keep more of their money.

Its predecessor, known as the Working Income Tax Benefit, was introduced by the Harper government in 2007.

But the 2019 tax year will be first that the credit is assessed automatically by the Canada Revenue Agency. 

Previously, candidates needed to fill out a relatively complex form that proved to be a barrier for some low-income workers, Robson said. Finance reported in 2016 that 15 per cent of workers eligible for the predecessor credit did not apply for it, even though they filed a tax return.

Robson would not speculate on the accuracy of the Finance Department projection, but did say that the revamped credit would likely increase the number of Canadians living above the poverty threshold.

Whether it will raise 74,000 more people out of poverty remains to be seen.

Measuring poverty is tricky

Measuring poverty rates in Canada is difficult because they depend largely on how poverty is defined. Last year, the Liberal government adopted an official definition known as the Market Basket Measure (MBM).

Under this definition a person lives in poverty if they cannot afford a “basket” of goods and services in their own community. Included in the basket are basic things like healthy food, shelter and clothing. 

Therefore, the threshold for poverty will depend on where a person lives. The official poverty line in Prince George, B.C., will not be the same as in St. John’s.

Economic and Social Development Canada, a non-partisan federal agency, developed the MBM and dictated what is included in the basket for any given region. Statistics Canada, also a non-partisan agency, collects the data.

Canada’s official poverty line is determined by the Market Basket Measure, which measures whether a family can afford a basic standard of living that includes things such as shelter, clothing and healthy food. (Adam Carter/CBC)

As a result, any given government is hard pressed to manipulate data on poverty rates in their favour. 

That said, the MBM is not perfect. It requires frequent updating to provide an accurate reflection of the costs of living in areas across the country. 

Statistics Canada, along with Economic and Social Development Canada, are currently completing a major reassessment of what kinds of costs should be included in the basket of goods and services

An updated benchmark poverty line could mean that trends change in coming years, but by how much is impossible to know now. 

“We will have to live with the fact that it’s not going to show these steady, smooth progressions. There will be jumps in the pattern,” said Robson of overall poverty rates.

“Some of that will be because we are measuring better, and that’s a good thing.”

Verdict: Mostly true

Sources: Canadian Income Survey, 2017, Statistics Canada; StatsCan data for 2017 shows poverty is declining — especially for children, CBC News; Market Basket Measure (MBM), Statistics Canada; 5 things to know about the new Canada Child Benefit, CBC News; Report on Federal Tax Expenditures – Concepts, Estimates and Evaluations 2016, Department of Finance Canada; An update on the Market Basket Measure comprehensive review, Statistics Canada; 

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