Determining a "low income" in Canada is complex, as it depends on various factors, including location, household size, and age. However, a common measure is the Low-Income Cut-off (LICO), calculated by Statistics Canada. This measure identifies income thresholds below which a family is considered to be living in "low income."
Here's how LICO works:
- Based on Spending: LICO is calculated based on the percentage of income a family spends on basic necessities like food, shelter, and clothing.
- Varying Thresholds: The LICO threshold varies depending on family size and location. For example, a family of four in Toronto will have a different LICO than a single person in a rural area.
- Relative Measure: LICO is a relative measure, meaning that it changes over time with the overall income levels in Canada.
Here are some examples of LICO thresholds in 2021:
- Single person: $23,992 in Toronto, $21,260 in Calgary
- Family of four: $45,189 in Toronto, $40,592 in Calgary
Note: These are just examples, and the actual LICO thresholds can vary depending on the specific location and year.
Beyond LICO:
While LICO is a widely used measure, other indicators can also be used to assess low income in Canada, such as:
- Market Basket Measure (MBM): This measure estimates the minimum income needed to meet basic needs, considering local food prices, housing costs, and other necessities.
- Poverty Line: This measure is often used in international comparisons and is based on a fixed percentage of median income.
Understanding low income is crucial for policymakers and social service providers to address poverty and inequality in Canada.
