Conservative Party of Canada Conspiracy Theories: Statistics Canada Edition

Over the last few days, members of the Conservative Party of Canada (CPC) have floated what amounts to glorified conspiracy theories of the dreaded federal Liberals controlling Statistics Canada. It is important to remember that Statistics Canada is an arm’s length body that, under the Fundamental Principles of Official Statistics, must remain strictly neutral with regard to political matters. In particular, Statistics Canada’s operations are to be kept free of intervention from the political side of government and must be fully free to compile and publish statistics.

The first event occurred on Monday when the CPC Twitter account tweeted this doozy:

What is not true? All of it. What is true? Statistics Canada, under its own mandate with no meddling or direction from the Liberals, the Minister, or otherwise, had been working on a pilot, with the knowledge (though apparently not full) of the Privacy Commissioner, to collect better data to improve its statistics on spending and debt by obtaining the personal banking information of 500,000 Canadian households directly from the banks. The pilot was designed because Statistics Canada’s usual methods of obtaining information to develop its statistics are no longer yielding the rich and detailed data it needs, you know, to develop official statistics.

Was any data provided by the banks? No. The banks took their concerns to the Privacy Commissioner and the Privacy Commission paused the pilot in its tracks until the privacy concerns raised by the banks were addressed. This was also reported on by the media as well.

There was information provided to Statistics Canada by the credit agencies, information that was released under the permissible purposes rules of access to individuals credit reports. (Financial institutions, other lenders, and companies with what’s called “permissible purpose” can access a copy of your credit report in order to make certain types of decisions about you.) If you, like me, access your free credit report every year, you will see them listed on your report. I can say that my credit report shows that my credit information was given to Statistics Canada. I was more than pleased to be included in their sample because when it comes to data privacy, Statistics Canada has my full trust. The other companies listed as accessing my information under the permissible purpose rules do not.

Was the Minister of Industry, Minister Bains, involved? No. Was Cabinet involved? No. Was it at the expense of Canadians? No, it is for their benefit that we have accurate official statistics as they are used for policy design and implementation.

So there is literally nothing true in the CPC tweet.

The second conspiracy event came about on Wednesday when Lisa Raitt tweeted this:

Did the Liberals lowball costs like rent to move the poverty line lower? No. The Liberals did not. Did Statistics Canada on their own develop the measure and definition for the MBM? Yes. So let’s get into the history here, because it matters.

The ‘best’ measure we have a poverty right now is the Market-based Measure (MBM). The market-basket measure of poverty began to be developed in the early 2000’s due to concerns with the two existing measure of poverty: the Low income measure and the low income cutt off. The MBM, developed by Employment and Social Development Canada (ESDC), attempts to measure a standard of living that is a compromise between LIM/LICO, a compromise between subsistence/social inclusion. Here is a quote from Miles Corak’s piece:

The poverty rate derived from the Low Income Measure is the fraction of the population with an income lower than one-half of the median income in that year. If an individual has an annual income (appropriately adjusted for family size) that is less than half as much as someone half way in the income distribution, then that individual is considered to be in low income….

The Low Income Cut-off is a bit more complicated. It is different both in nature, and more crucially in the way it is updated. In this case the poverty line is tied to the proportion of income the average household spends on food, shelter and clothing. Like the Low Income Measure, it is adjusted annually for changes in inflation, but it has been updated only four times in a more fundamental way to reflect changes in family spending patterns.

These two measures though produce very different stories about poverty:

Capture

As described by Miles:

The patterns in the two statistics can be understood in this way. The median income for an individual was relatively constant from the mid 1970s up to the mid 1990s. In essence the threshold associated with the Low Income Measure did not change that much, and was in the range of the Low Income Cut-Offs, which in turn was anchored at its 1992 base. So the two poverty rates moved together, but the Low Income Measure being less cyclically sensitive because the poverty threshold falls as median incomes fall during recessions.

After about 1996 the two poverty rates diverge because, on the one hand, the poverty line derived from Low Income Cut-Off stays fixed, but that derived from the Low Income Measure rises in step with the annual increases of the median income that started at this time, and more or less continued through to 2014.

Here is what Miles writes further in the piece about these two measures:

If you have a tendency to see poverty as being subsistence, tied to basic needs, and absolute or fixed in nature, then you will be inclined to believe that poverty has fallen, and that there really is not much need for public policy to do more. Though it still has to be explained why your notion of subsistence is tied to spending patterns of the average household in 1992. Why not 1986, 1969, or even 1959?

If you have a tendency to see poverty as an aspect of inequality in the lower part of the income distribution, tied to a continually evolving median income and relative or moving in nature, then you will be inclined to believe that there has been no progress in the battle against poverty, and a government strategy is desperately needed. Though it still has to be explained why your notion of relativities should be adjusted so regularly, and even during recessions when the income of the median household might also fall.

Both of these perspectives are based upon extreme judgements of what it takes to participate normally in society—something never changing, something always changing—and for this reason I would suggest that they are both wrong, have misled our understanding of how Canadians have lived their lives, and are likely to lend confusion to public policy discussion on the need for and design of a national poverty reduction strategy.

So if the LIM and LICO are so poor at measuring what we really want to know, what do we do. We create a new measure called the market-basket measure. The MBM involves costing out a basket of goods and services associated with a modest standard of consumption. The MBM then more closely reflect what those with lived experiences of poverty describe. The MBM was designed in close discussions with experts in the area, and experts are closely involved with updates to the MBM. The MBM was also chosen by the current Government to set legislative targets related to poverty reduction because of the expert advice they got not only from experts but also those with lived experiences in poverty.

And here is the previous graph reproduced with the MBM added. Here you see the MBM appears to be a compromise between the LIM and the LICO, as it was intended.

Capture

Is the MBM perfect. No. Notice above that the word modest is bolded. What does it mean to have a modest standard of living? Statistics Canada does not define their modest standard of consumption based on Government direction. In fact, if it did, we could argue the CPCs were the ones who directed that since the MBM was first publicly released for the year 2006 Instead, this requires that expert Statistical agency choosing items in the basket that accord with that definition.

Well, in one category that Ms. Raitt focused on was housing.  Here the MBM uses a measure not everyone agrees with. Michael Bliss wrote this well circulated piece at the time last year about this topic. You will notice that other categories of costs are discussed, but with respect to housing, is the median rental price of a one bedroom posted on the chosen website by Bliss a modest standard of consumption? That we can discuss and, in fact, are discussing. Statistics Canada is just finishing off a comprehensive review of the MBM measure of poverty and all the details can be found here. It is not the first review of the MBM and it won’t be the last.

So now I have to ask, what measure of poverty would Lisa Raitt then suggest?

Ah I see, it would seem she wants the poverty line to be higher so that would be the LIM. Interestingly enough, when the CPCs talk about their own progress on poverty they do not use the LIM. If they did, you can see from the above, under the Harper Conservatives little to no progress on poverty was made. Actually, when talking about their own record on poverty, they use the LICO. Under the LICO, poverty was reduced from 11.5 to 9.2 under the CPC, compared to 13.4 vs 14.2 using the LIM.

But when it comes to looking at results regarding poverty in Canada since the Liberals took over, the trend is quite clear regardless of the measure used, poverty has been reduced regardless of which measure you pick.

LIM-AT LICO-AT MBM
2015 14.2 9.2 12.1
2016 13 8.1 10.6
2017 12.7 7.8 9.5

Poverty  in Canada is a serious matter. We need to do more for people to help them escape poverty. This should be a matter all parties agree on, but they don’t. Poverty has devastating affects on people and their children and it impedes our economic progress.

Further, the reputation of Statistics Canada as the best statistical agency in the world is at risk when politicians pretend that it faces interference by politicians. Stop it, stop using our expert statisticians and producer of our official statistics for your political fodder. After all, we would not want people to think we are, say, like China with regards to suspect official statistics.

 

4 thoughts on “Conservative Party of Canada Conspiracy Theories: Statistics Canada Edition

  1. Great report. Keep it up.

  2. […] in order for the Liberals to claim that they lifted more people out of it, which is not only untrue, but it’s dangerous […]

  3. […] by Services Canada, not CRA (UPDATE: for all those bitching to the contrary, please see Part II of Bill C-13 that defines the Minister as the Minister of Employment and Social Development). While you could […]

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s