Low Income Cut-offs

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Low income cut-offs (LICOs) are intended to convey the income level at which a family may be in straitened circumstances because it has to spend a greater portion of its income on the basics (food, clothing and shelter) than does the average family of similar size. The LICOs vary by family size and by size of community.

This publication provides a brief explanation of how the LICOs are derived and updated annually. In addition, it provides on a historical basis, LICOs for different family sizes by size of area of residence. LICOs are calculated based on the spending patterns of families on basic 'necessities' - food, shelter and clothing - as collected from the Survey of Household Spending (formerly referred to as the Family Expenditure Survey (FAMEX)).

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([B] = Bilingual; see "Bilingual products" below )

Content note

Recently, there has been extensive and recurring media coverage of Statistics Canada's low income cut-offs (LICOs) and their relationship to the measurement of poverty. At the heart of the debate is the use of the LICOs as poverty lines. Statistics Canada has clearly and consistently emphasized, since their publication began over 25 years ago, that the LICOs are quite different from measures of poverty. They reflect a consistent and well-defined methodology that identifies those who are substantially worse off than the average. In the absence of an accepted definition of poverty, these statistics have been used by many analysts who wanted to study the characteristics of the relatively worse off families in Canada. These measures have enabled Statistics Canada to report important trends such as the changing composition of this group over time.

For further information, please refer to "On Poverty and Low Income" on Statistics Canada's web site (www.statcan.ca). The menu path is "Concepts, definitions and methods", then "Discussion papers or new surveys".

Commencing with 1998, the Survey of Labour and Income Dynamics (SLID) will produce the annual cross-sectional income estimates, in addition to producing longitudinal labour and income data. Integration of the cross-sectional and longitudinal income statistics programs will promote consistency among income estimates.

History note

Prior to 1997, this publication was only available in paper format. From 1969 to 1995 this publication was unnumbered.

Replaced by 75-202, Income in Canada in 2000.

Subjects

Keywords

comparisons, family size, household expenditures, low income cutoffs, rural areas, urban areas.

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Bilingual products

Some bilingual products have changed to separate English and French products. In these cases, back issues are bilingual and the more recent issues are unilingual.

Contacts

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85400 - Income Statistics Division
Client services - Income Statistics Division 613-951-7355 (income@statcan.gc.ca)