Question Period Note: RELEASE OF STATISTICS CANADA’S WHAT WE HEARD REPORT FOR THE THIRD COMPREHENSIVE REVIEW OF THE MBM

On October 29, 2024, Statistics Canada released a What We Heard Report summarizing the feedback from stakeholder consultations completed as past of the Third Comprehensive Review of the Market Basket Measure (MBM).

• The Government welcomes the latest report from Statistics Canada describing the input collected by Canadians, non-governmental organizations and experts on how to update and improve Canada’s official poverty measure.

• A robust and up-to-date poverty measure allows the Government and civil society to design effective policy and to make informed decisions on how to best address the current needs of those who live in poverty.

• The Government remains steadfast committed to meeting its 2030 poverty reduction target.

Canada’s Official Poverty Line

• The Poverty Reduction Act (2019) established the Market Basket Measure (MBM) as Canada’s Official Poverty Line and requires it to be reviewed, on a regular basis as determined by Statistics Canada, to ensure it reflects the up-to-date cost of a basket of goods and services representing a modest, basic standard of living.

• The MBM establishes poverty thresholds based on the total cost of basket components, which include food, shelter, clothing, transportation and other necessities. These thresholds vary across different regions and can be adjusted to reflect families of different sizes. If a person’s or family’s disposable income is below their applicable threshold, they would be considered to live in poverty.

• Disposable income for the purposes of the MBM is based on total income (including government transfers) after deducting not only income taxes but also several non-discretionary expenditures such as EI and CPP/QPP contributions, child care expenses and direct medical expenses. It also takes into account the financial impacts of different housing tenure types such as mortgage-free home ownership and subsidized rental housing.

• The current MBM establishes thresholds for 53 different geographic regions in the provinces, including 19 major cities, and 13 geographic regions in Yukon, the Northwest Territories and Nunavut.
The Third Comprehensive Review of the MBM
• The Third comprehensive review of the MBM was jointly launched by Statistics Canada and Employment and Social Development Canada (ESDC) in June of 2023.

• The review and update of the MBM methodology ensures that Canadians can be confident that poverty is measured and reported using an approach that is up-to-date, transparent and informed by a diversity of stakeholder perspectives.

• The engagement phase of the Third Comprehensive Review of the MBM concluded in March of 2024. A series of engagement activities were completed during this critical phase of the review, including an initial call for expert input, the launch of an online survey, six public information sessions, and a weeklong series of thematic workshops targeting academic experts, officials from non-governmental organizations and federal, provincial, and territorial officials.

• Statistics Canada and ESDC have now completed the examination of input collected during the review’s engagement phase have consolidated stakeholder feedback in a report titled ‘What We Heard Report: Engagement activities for the Third Comprehensive Review of the Market Basket Measure (MBM)’. The input collected through consultations included the following:

o The shelter component of the MBM basket was identified as the component that required the most attention for the development of the 2023-base. It was argued that current market rental prices were not being captured properly under the 2018-base methodology. Furthermore, it was suggested that a future MBM methodology should account for the mobility of renters and the diverse characteristics of dwellings (e.g., duplexes, apartments, etc.) when estimating shelter costs.
o There was also general agreement that a separate communications services component be created and that the multiplier used for the other necessities component be updated to the most recent Survey of Household Spending data.
o Participants generally appreciated the accuracy and the overall simplicity of accounting for family-specific expenses (e.g., medical expenses, child care expenses) on the disposable income side of the MBM methodology. However, those benefits were weighed against perceived limitations, like the reduced public visibility from not having these expenses on the basket-side. It was also mentioned that the MBM’s disposable income definition and its underlying components made it difficult to apply the MBM income concept to other data sources or surveys.
o Some contributors stated that current income-based indicators do not adequately capture families’ experiences in poverty and recommended that non-income-based indicators (e.g., material deprivation) be developed to properly capture the experience of families and individuals.

• Following the publication of the “What We Heard Report”, the Third Comprehensive Review of the MBM will enter its final analytical phase. This phase will comprise a series of activities taking place between fall 2024 and fall 2025, culminating in the adoption of the new official 2023-base MBM.

These activities will include:
o The release of proposed changes to the MBM methodology and a provisional 2023-base MBM, anticipated for early spring 2025.
o The analysis of feedback received from the provisional 2023 MBM base and the finalization of the 2023-base, expected for late summer 2025.
o Statistics Canada and ESDC approving the 2023-base and working toward an official release of poverty statistics based on the new base, expected for the fall of 2025.

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