Understanding poverty
In its resource manual for service providers working with families and children living in poverty, Best Start Resource Centre emphasizes that it's important to recognize that the experience of poverty is more than not having enough money.
Poverty also includes a lack of basic human needs and access to the necessities of life such as health care, education, and social services. In addition, poverty can contribute to isolation and prevent meaningful participation in society for families through financial barriers (e.g. lack of affordable transit or child care) as well as social barriers (e.g. encountering classist attitudes and experiencing impostor syndrome).
It's also important to understand that – in addition to low wages, high costs of living, and unemployment – structural discrimination and systems of oppression like colonization and racism contribute to family poverty. Because systemic inequities impact some groups more than others, there are populations who are more vulnerable to poverty. In Ontario, families disproportionately affected by poverty include Indigenous families, racialized families, newcomer families, families living with disabilities, and/or families led by female lone parents.
Poverty is also often generational: as there are many challenges and barriers to leaving poverty, children who are born into poverty often live in poverty as adults too.
Measuring poverty
Because the experience of poverty is complex and multifaceted, there is no single way to measure poverty.
However, the Low-Income Measure (LIM) is a commonly used measure and the one most reported on in this guide.
The Low-Income Measure (LIM)
Based on LIM, a family is considered to live in poverty when their income is below 50% of median income (LIM-50).
The low-income measure after tax (LIM-AT) uses median-adjusted after-tax income where 'adjusted' indicates that the number of people living in a household was taken into account (recognizing that a family's need increases, but at a decreasing rate, as the number of household members increases).
Data considerations
When reviewing data, you should always consider the methodology of calculations uses for determining low-income rates. For example, there are methodological differences between the 2016 census and taxfiler (T1 Family File) data; while both use LIM-AT, the census typically uses the household as its statistical unit, while taxfiler data uses the census family. There are even differences within the 2016 census; sometimes, the household unit is reported on; sometimes the economic family unit is reported on.
While income-based measures are the main way of measuring poverty, they do not provide a nuanced understanding of poverty (for example, that takes into consideration access to and availability of social services). Some poverty reduction initiatives, such as the Ontario government's poverty reduction strategy (PRS) use multiple indicators to try to capture the various dimensions of poverty. Ontario uses 10 indicators of poverty, including birth weight, school readiness (measured using the Early Development Instrument), and the Ontario Housing Measure (which looks at the percentage of households with children under 18 that have incomes below 40 percent of the median household income and spend more than 40 percent of their income on housing). Ontario also uses an adapted form of LIM as an indicator for child poverty.
