Deep poverty in New Brunswick: A description and national comparisons | UNB

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Deep poverty in New Brunswick: A description and national comparisons

Author: Daniel J Dutton
Year: 2020
Category: Social Policy

The persistence of poverty – especially deep poverty – in Canada is an important topic for researchers across various disciplines. Deep poverty refers to those living far below the poverty line, which serves as a particularly important measure for government in regard to planning and population health. However, measures of poverty vary across Canada, and it has been suggested that the choice of poverty line is important for tracking poverty and deep poverty over time.

In New Brunswick, income poverty is measured using a number of key indicators, including the Market Basket Measure and the Low-Income Measure after tax (LIM). Deep poverty is measured as having an income at 50% or less of the Low-Income Measure (LIM) in a given year. The Canadian poverty line is defined by the Market Basket Measure (MBM). By examining levels of poverty according to both measures (LIM and MBM), we are able to show the impact the choice of definition can have on poverty outcomes – which, in our comparisons, is quite small.

We use Census data to map out ten-year trends in poverty (2006-2016) with limited success, as consistent deep poverty measures are not available. The choice of poverty line matters in this comparison. Trends based on the LIM (a relative measure of poverty, which grows with increases in median incomes) imply that poverty in New Brunswick increased over the study period in question. However, trends based on the MBM (an absolute measure of poverty, which grows with inflation) imply that poverty has been decreasing. This difference in outcomes is particularly evident for seniors, whose poverty levels have been increasing according to the LIM and decreasing according to the MBM. These findings suggest that using the LIM as a benchmark implies that deep poverty in seniors may increase simply due to rising median incomes; this does not necessarily indicate a meaningful change in living conditions for the poor. 2016 Census data on immigrant poverty also shows that poverty among immigrants is approximately double that of non-immigrants, with the difference between the groups increasing over time.

We find similar correlations between deep poverty and certain variables, regardless of the poverty measure used. Using data from the Canadian Income Survey (CIS) for the years 2012 to 2016, we are able to construct a consistent picture of who is living in deep poverty in New Brunswick. In any given year, there are approximately 100,000 people living below the poverty line in New Brunswick, and approximately 18,000 of them live in deep poverty. Deep poverty is relatively rare for those below the poverty line – affecting close to 1 in 5 people. Over time, the number of people living in deep poverty in New Brunswick has been declining, driven by a notable decrease in 2016. The prevalence of deep poverty also shows a decrease from 2012 to 2016, with most people below the poverty line being quite close to the line.

Our findings show that those in deep poverty are more likely to be single, living alone, middle aged, and on social assistance. Having children or being over the age of 65 are both protective of deep poverty due to the additional government transfers that target these households. There seems to be no relationship between sex, geographic region, or education and deep poverty. Finally, French and English speakers show a similar poverty prevalence. Overall, it seems that the definition of poverty used (LIM vs. MBM) is not important for studying the correlates of deep poverty, but it is important for estimating the prevalence of deep poverty.

New Brunswick is typical of the Atlantic Region1 in terms of deep poverty characteristics and trends. The Atlantic region in turn is similar to the rest of Canada. Thus, New Brunswick’s challenges are not unique. However, while being on government transfers (e.g., social assistance) and being single are both correlated with deep poverty across the country, this relationship is strongest in the Atlantic provinces, implying a potential avenue for policy intervention.

If social assistance, by design, provides a level of support that pushes singles into deep poverty to preserve work incentives, single social assistance recipients will likely continue to live in deep poverty. One government solution to deep poverty would be to raise single social assistance payments to a level above 50% of the LIM. For reference, the 2016 deep poverty threshold is $11,328 for a one-person household. Those who work in our sample are rarely in deep poverty; therefore, those who persist in deep poverty are possibly not transitioning off social assistance for systematic reasons, such as disability.

1The Atlantic region consists of New Brunswick, Newfoundland & Labrador, Nova Scotia, and Prince Edward Island.