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Portraying Rural Canada Ray D. Bollman Statistics Canada Sylvie Michaud Statistics Canada

Portraying Rural Canada Ray D. Bollman Statistics Canada Sylvie Michaud Statistics Canada Presentation to the Senate Standing Committee on Agriculture and Forestry October 5, 2006. Outline. Definitions and measures of “rural” Definitions and measures of “poverty” Incomes

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Portraying Rural Canada Ray D. Bollman Statistics Canada Sylvie Michaud Statistics Canada

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  1. Portraying Rural Canada Ray D. Bollman Statistics Canada Sylvie Michaud Statistics Canada Presentation to the Senate Standing Committee on Agriculture and Forestry October 5, 2006

  2. Outline • Definitions and measures of “rural” • Definitions and measures of “poverty” • Incomes • Income inequality • Low income • Communities and low-income • Persistency • Characteristics • Farmers

  3. Definitions and measures of “rural”

  4. What is “rural”? • For this presentation, we have chosen the “Rural and Small Town” definition • “Rural and Small Town”refers to the population outside the commuting zone of centres with a population of 10,000 or more • A CMA (Census Metropolitan Area) has an urban core population of 100,000 or more and includes neighbouring towns and municipalities where 50 percent of more the workforce commutes to the CMA • A CA (Census Agglomeration) has an urban core population of 10,000 to 99,999 and includes neighbouring towns and municipalities where 50 percent of more the workforce commutes to the CMA • Thus, the“Rural and Small Town”population lives in a labour market outside of towns of 10,000 or more

  5. What is “rural”?

  6. Definitions and measures of poverty

  7. Measures of poverty in the world • No international definition of poverty • Depends on the country • Depends on the theoretical framework (basic needs, capability) • Absolute or relative measure? • Based on income or consumption?

  8. Measures of poverty in the world • Millennium Development goals • Extreme poverty $1/day • Poverty $2/day • US: Orshansky poverty thresholds • Based on the income after-tax needed to buy a basket of food (multiplied by 3) • the price of the basket is indexed through inflation

  9. Measures of poverty in the world • Europe: Laeken indicators • Relative low income measure (60% of adjusted income) • Other indicators such as persistence of low-income, long term unemployment • UK: 3 indicators • Absolute, relative income and measure of deprivation

  10. Low income measures in Canada

  11. Low income measures in Canada • Do not have an official measure of poverty • Two measures by Statistics Canada • Low Income Cut-Offs (LICO) • Low Income Measures (LIM) • One measure currently released by HRSDC : • Market Basket Measure (MBM) of low income

  12. Low Income Cut-Offs (LICOs) • Income level at which a family may be in strained circumstances because they have to spend 20% more of their income on necessities (food, shelter, clothing) • 35 cut-offs to represent 7 family sizes and 5 sizes of area of residence • Calculated on income before-tax and income after-tax

  13. Low Income Measure (LIM) • Relativemeasure • Based on income before and after-tax • Threshold based on 50% of adjusted median income • 1 for the first person, 0.4 for the second person, 0.3 for each subsequent person(s)

  14. Market Basket Measure (MBM) • Federal/provincial/territorial working group • Cost of a basket for a family of 4 • Food, clothing, shelter (2-3 bedroom apartment), transportation (public transit in urban and car in rural) and other • 47 thresholds • Uses a “disposable income” (income after-tax minus social contributions, out-of-pocket medical expenses…)

  15. Income levels: rural and urban

  16. Median incomes in rural and small town areas are about 10,000$ less than in larger urban centres Median after-tax income, Families 2+ (constant 2004$s) Note: Larger urban centres = CMAs (Census Metropolitan Areas) and CAs (Census Agglomerations) Rural and small town areas = areas outside CMAs and CAs Source: Statistics Canada, Survey of Labour and Income Dynamics / Survey of Consumer Finances, Custom Tabulation

  17. Income inequality

  18. Within rural areas, there is relatively less inequality of incomes GINI index of inequality, after-tax income Note: Larger urban centres = CMAs (Census Metropolitan Areas) and CAs (Census Agglomerations) Rural and small town areas = areas outside CMAs and CAs Source: Statistics Canada, Survey of Labour and Income Dynamics / Survey of Consumer Finances, Custom Tabulation

  19. Low income: thresholds, incidence (rates) and gap

  20. Thresholds vary significantly with the measure Note: (1) Rural excludes small communities classified as urban under 10,000 people. Larger urban centres = CMAs (Census Metropolitan Areas) and CAs (Census Agglomerations) Rural and small town areas = areas outside CMAs and CAs. Source: Statistics Canada, Survey of Labour and Income Dynamics / Survey of Consumer Finances, Custom Tabulation.

  21. A lower share of rural and small town individuals reside in families with incomes less than the LICO After-tax LICO, percentage of population below Note: Larger urban centres = CMAs (Census Metropolitan Areas) and CAs (Census Agglomerations) Rural and small town areas = areas outside CMAs and CAs Source: Statistics Canada, Survey of Labour and Income Dynamics / Survey of Consumer Finances, Custom Tabulation

  22. The share of rural and small town individuals with family incomes less than the LIM has declined and converged with that of those in larger urban centres After-tax LIM, percentage of population below Note: Larger urban centres = CMAs (Census Metropolitan Areas) and CAs (Census Agglomerations) Rural and small town areas = areas outside CMAs and CAs Source: Statistics Canada, Survey of Labour and Income Dynamics / Survey of Consumer Finances, Custom Tabulation

  23. The average income gap (LICO after-tax) is smaller in rural and small town areas Average income gap, LICO after-tax (constant 2004$s) Note: Larger urban centres = CMAs (Census Metropolitan Areas) and CAs (Census Agglomerations) Rural and small town areas = areas outside CMAs and CAs Source: Statistics Canada, Survey of Labour and Income Dynamics / Survey of Consumer Finances, Custom Tabulation

  24. The average income gap (LIM after-tax) is similar in larger urban centres and rural and small town areas Average income gap, LIM after-tax (constant 2004$s) Note: Larger urban centres = CMAs (Census Metropolitan Areas) and CAs (Census Agglomerations) Rural and small town areas = areas outside CMAs and CAs Source: Statistics Canada, Survey of Labour and Income Dynamics / Survey of Consumer Finances, Custom Tabulation

  25. Highlights • Median incomes are lower in rural areas • Income inequality is lower within rural • The choice of the measure has an impact on the levels; especially for rural • LICO: rural incidence is LOWER • LIM: rural incidence is slightly higher

  26. Communities and low income

  27. Low income communities • We defined a low income community as having 15 percent or more of its inhabitants living in households with income less than LICO

  28. Persistent low income communities

  29. About one third of communities have persistent HIGHER incidence of low income between 1981 and 2001 (LICO measure)

  30. In rural non-metro-adjacent regions, 46 percent of the communities had a high persistence of individuals with income below LICO, 1981 to 2001

  31. Attributes associated with low income

  32. Stronger and more dynamic labour markets LOWER the community share of individuals living below LICO Note: n.s. indicates “ not statistically significant”. Source: Statistics Canada, Census of Population, 2001.

  33. Rural manufacturing communities tend to have a LOWER incidence of low income Note: n.s. indicates “ not statistically significant”. Source: Statistics Canada, Census of Population, 2001.

  34. A higher share of junior and senior population LOWERS the community share of individuals living below LICO Note: n.s. indicates “ not statistically significant”. Source: Statistics Canada, Census of Population, 2001.

  35. More lone parent families means HIGHER share of individuals living below LICO Note: n.s. indicates “ not statistically significant”. Source: Statistics Canada, Census of Population, 2001.

  36. More education means LOWER share of individuals living below LICO Note: n.s. indicates “ not statistically significant”. Source: Statistics Canada, Census of Population, 2001.

  37. Larger communities and communities with a history of persistent disadvantage have a HIGHER share of individuals living below LICO Note: n.s. indicates “ not statistically significant”. Source: Statistics Canada, Census of Population, 2001.

  38. Farmers

  39. Households associated with census-farms with gross revenue of 50-99 thousand had the lowest average income from all sources in 2000 Average Canadian household income in 2000

  40. Households associated with census-farms with gross revenue of 50-99 thousand were most likely to have income from all sources less than LICO in 2000 Percent of Canadians below LICO in 2000

  41. Portraying Rural Canada Ray D. Bollman Statistics Canada Sylvie Michaud Statistics Canada Presentation to the Senate Standing Committee on Agriculture and Forestry October 5, 2006 Questions / Discussion

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