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A silver lining on Canada’s economic horizon

Fewer number of Canadians – who display a high level of community engagement – are in low-income jobs than ever before, according to a new study.

A new study by the Fraser Institute found that only 1.5 per cent of Canadians were stuck in low-income every year between 2005 and 2010 (latest period of available data).

This number is down from the 3.6 per cent from 1993 to 1998. According to the study, An Introduction to the State of Poverty in Canada, the vast majority of Canadians who experience living in low-income do so for short, transitory periods.

“The perception that there is a large and growing portion of Canadians trapped in low-income is thankfully not borne out by the data,” said Charles Lammam, Fraser Institute director of Fiscal Studies and co-author of the study.

For example, the study finds that more than one-third of the Canadians experiencing low-income in 2009 were no longer in low-income by 2010.

“This more transitory experience with low-income can be the result of unexpected but nonetheless temporary, loss of employment,” Lammam said.

The analysis is based on Statistics Canada’s Low-Income Cut Off (LICO) measure, which is not specifically a measure of poverty. It does, however, allow for the tracking of people over time, which is critical to assessing the difference between persistent and transitory low-income.

“The policy responses for dealing with persistent versus transitory low-income are markedly different so it’s important to understand the nature and causes of people’s exposure to low-income,” Lammam said.

The study also highlights Statistics Canada research detailing characteristics of people at a higher risk of being persistently stuck in low-income, such as being physically or mentally disabled, belonging to a single parent family, and having less than a high school education.

“If we truly want to help Canadians who are stuck in poverty year after year, we need to better understand the various root causes of persistent poverty,” Lammam said.

The Fraser Institute is an independent Canadian public policy research and educational organization with offices in Vancouver, Calgary, Toronto, and Montreal and ties to a global network of think-tanks in 87 countries. Its mission is to improve the quality of life for Canadians, their families and future generations by studying, measuring and broadly communicating the effects of government policies, entrepreneurship and choice on their well-being.

To protect the Institute’s independence, it does not accept grants from governments or contracts for research. Visit www.fraserinstitute.org.

Posted: Feb 29, 2016

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