Category Archives: Aboriginal peoples

Aboriginal peoples’ issues

U.N. Human Rights Council: Report of the Special Rapporteur on the right to food on his mission to Canada

Leave a reply

We have discussed the issue of food security here before, with a link to a report titled Spending Patterns in Canada, 2009 (PDF).

While a table in that report was referenced, that table’s data was not cited for a reason: it was from Statistics Canada’s  Survey of Household Spending (SHS). That table shows that Canadians in the bottom income quintile (lowest 20% of income earning households) spent 16.3% of their household expenditure on food, while the top income quintile (highest 20% of income earning households) spent only 7.5% of their household expenditure on food.

Those figures in and of themselves dispel the inane theory put forward by economists Michael Smart and Jack Mintz that the wealthy benefit more from the government not taxing food staples (they rely on the intellectually dishonest method of looking at gross instead of share of expenditure on food). That said,  the SHS data still doesn’t give an accurate picture of the disparity in terms of food security stemming from income inequality.

How come? While the referenced SHS table separates families by income quintile, it reports food expenditure as a share of total expenditure, not income. This is well-known, and the parameters of the SHS actually factors a significant difference, 30%, between income and expenditure into the data, as noted in the referenced Spending Patterns (PDF) report:

Response error
…This important quality control tool involves the balancing of receipts (income and other money
received by the household) and disbursements (total expenditure plus the variable Money flows—assets, loans, and other debts) for each questionnaire. If the difference is greater than 30% of the larger of receipts or disbursements, the record is considered unusable and therefore will not be used.

The variable that makes a significant difference in terms of share of income between the top and bottom household earnings quintiles: investment income. If one were to look at food (or any other current consumption items) as a share of income, and investment income was included, the increase in the denominator for the highest income households would significantly reduce their share spent on food and other current consumption items relative to the lowest income households.

Average household income before tax
This includes total household income received in the reference year, income from wages and salaries, self-employment, net rentals, interest and dividends, all pensions, workers’ compensation and employment insurance benefits, social assistance and income supplements, child tax benefits, goods and services tax credits, harmonized sales tax credits, provincial tax credits and miscellaneous regular income receipts. (Notably, capital gains are excluded)

For the purpose of the SHS, this means very wealthy households with a) household expenditure 30% less than reported income or b) whose primary revenue source is investment income (which isn’t counted) resulting in household expenditure appearing to exceed by more than 30% reported income,  are effectively excluded from the SHS. So it’s not really a comparison between the highest and lowest, but rather high middle and low-income households. The SHS methodology effectively masks income and food security disparity by excluding the highest income earners.

There are a couple of issues with counting investment income, the main one being the challenge of distinguishing wealth from income. Historically, there hasn’t been much of an effort to address the issue, at least not in Canada’s household survey programs. The 2011 Census would have asked Canadians to report capital gains for the first time, in addition to dividend and interest income. While the question was retained in the 2011 National Household Survey (NHS), households that had substantial capital gains and did not wish to report them could have opted not to respond to the NHS at all.

2011 NHS: data may not be released at all due to data quality, communities to lose vital data source

Leave a reply

A friend recently shared an interesting perspective on the perils of criticising the 2011 National Household Survey (NHS) before the data is even released. The thinking went something like this:

The current federal government had been signalling its intention to eliminate the long-form Census from the moment it took office in 2006. Unfortunately (for that government; fortunately for Canada), the process was too far along to stop, given it took office February 6 and Census day was May 16, 2006. The same government went on to cancel the 2011 long-form Census, replacing it with the voluntary NHS.  Inevitably, the data quality would significantly deteriorate, likely to the point of being completely useless in many areas. This deterioration in data quality would subsequently provide justification for the government to announce the cancellation of the long-form Census/NHS all together. It would be deemed too costly to maintain for the lousy quality data it produced. Not so long ago, this would have seemed a somewhat far-fetched conspiracy theory; it’s a pretty interesting theory given the current state of Canadian federal politics.
Continue reading →

FNSI, NCW, NRTEE eliminated: Neither first nor last advisories targeted by the current government

1 Reply

Budget cuts another victory in Tory war on information: opposition
Gloria Galloway, Globe and Mail, March 30, 2012

The First Nations Statistical Institute (FNSI), National Council of Welfare (NCW) and National Round Table on the Environment and the Economy (NTEE) are neither the first nor will they be the last federal councils or advisories on social, economic or environmental issues to be eliminated by the current government.

A few years ago there was another, which was likewise eliminated by the current government.  It was the National Council of Visible Minorities (NCVM) , and its mandate was… well, one would be hard-pressed to learn what it was exactly, since its federal government website was taken down.  Obviously it advocated for more equitable representation and treatment of visible minorities in the federal public service.

Trick question:  What did NCVM and NCW have in common? Both were eliminated a couple years after tabling reports critical of government policy, NCVM of the government’s visible minority hiring/staffing practices (in 2008) and NCW of the government’s policy (or lack thereof) addressing poverty (in 2010).

PS ordered to hire more minorities
Ottawa Citizen, August 16, 2008

Welfare rules forcing people into destitution, report finds
Laurie Monsebraaten, Toronto Star December 13, 2010

The message could not be clearer:  If a federal council or advisory takes its mandate seriously and acts independently in the public interest, it shouldn’t expect to be around much longer.  And just in case it wasn’t clear to some:

Government isn’t obliged to bankroll its critics
Andrew Coyne, Postmedia News May 4, 2012

How to make the labour picture not look so bad: change the metric

3 Replies

A fast way to lower jobless rate: Use U.S. metrics
Miles Corak, Globe and Mail Blog Friday, May. 04, 2012

Where to begin.  Mr. Corak’s post is ill-informed/timed/advised, and simply irresponsible given the context in which it was written.  A less-informed reader would be left with the impression that the Canadian unemployment rate is being overstated.  Given Mr. Corak’s statement that his blog (intentionally unlinked here) “is intended for an audience of engaged citizens who have a curiosity (but not neccesarily an in-depth knowledge) about economics and how it can inform public policy”, one cannot help but assume that was the intent.

Aside from the fact that the LFS numbers are a crapshoot from month to month for numerous reasons (seasonal adjustment, questionnaire/self-reporting issues, quasi-cohort effect, etc.), a post like this misses the point of an unemployment rate: to measure underutilisation in the labour market in particular and the economy in general.  Every person not working who is available to should be counted. Defining the unemployed as only those who respond a certain way to a question regarding the scope of their job search effort is absurd. Discouraged workers start to look for work when they sense they can secure employment, their resumed search triggered by new-found confidence in the overall economic outlook.  That is why there is usually a lengthy lag between general (real) economic recovery and a decline in the unemployment rate: the labour force number (the denominator) begins to swell as previously discouraged workers rejoin the labour force.

That is not the situation in the Canadian economy, where the gap betweeen the official unemployment rate (R4) and the rate that includes discouraged workers (R8) is practically unchanged from the worst of the recession in mid-2009.  Yet the rate that includes discourages workers is never reported by Statcan in its Daily, nor by the media, which largely relies on the Statcan Daily releases for economic news.

Simply changing metrics to make things look better is a disturbing recent trend in Canada.  A few economists’ blogs have written about the federal government tinkering with the CPI, but it has largely been un(der)reported in the media.   Troubling are what appear to be the more recent low-income measures, which appear to serve no purpose other than undercounting the poor.

To further muddy the waters, the federal government defunded and effectively eliminated the National Council of Welfare in the recently tabled 2012 budget, a source for data on poverty used by this site and countless others.  The same budget also eliminated the First Nations Statistical Institute and National Round Table on the Environment and the Economy.  The National Council of Visible Minorities was eliminated a couple year ago.  Add to these the long list of social, economic and environmental survey programs eliminated over the last five years and the intent seems obvious.

Canadians are entering the disinformation age.  In this new age, Mr. Corak’s post suggesting “a fast way to lower jobless rate” makes sense, at least as much sense as taxing food staples because “more affluent Canadians are actually deriving a greater benefit than the poor”.