Proceedings of the Standing Senate Committee on
Agriculture and Forestry
Issue 7 - Evidence - Meeting of October 5, 2006
OTTAWA, Thursday, October 5, 2006
The Standing Senate Committee on Agriculture and Forestry met this day at 8:11 a.m. to examine and report on rural poverty in Canada.
Senator Joyce Fairbairn (Chairman) in the chair.
[English]
The Chairman: Good morning, honourable senators and witnesses. Good morning to all of those who are watching our Senate Committee on Agriculture.
We are engaged in what we believe to be an extremely important issue facing our country. As all of you know, the last few years have seen the worst levels of Canadian farm incomes in our history. Farm families have suffered the most and the situation has had an impact on rural communities all across Canada. Recognizing the importance of the problem, the federal government announced last July the creation of a Canadian Farm Families Option Program, providing $550 million to help lower-income individual farmers and farm families.
Last May, this committee was authorized to examine and report on rural poverty in Canada. Until the end of the year, the committee will hear from a variety of different witnesses who will give an overview of poverty in rural areas. This work will then serve as a basis for the committee's planned travel to rural communities across this country next year.
Today, we are very pleased to have with us representatives from Statistics Canada. They are here to help us gain an understanding of the depths of poverty in rural Canada. With us are Sylvie Michaud, Director, Income Statistics, from Quebec City. We have Denis Chartrand, Director, Agriculture Division of Statistics Canada, from Lefaivre, Ontario, near Hawkesbury. We also have with us Ray Bollman, a research economist, coming from Manitoba.
We have a good stretch of witnesses today from different parts of Canada working on the same issue, but I am sure that as they work they are also thinking of where they come from.
Ray Bollman, Research Economist, Statistics Canada: We have a map on the wall so that I can show you where the cairn is for where Moline used to be. It is in southwestern Manitoba. There is a cairn there to say when the settlement started and ended.
The Chairman: It is no longer with us?
Mr. Bollman: There is no post office or postal code any more. I think the last building left a few years ago.
We are pleased to be here to portray rural Canada. My job within Statistics Canada is to work with a group that puts together the Rural and Small Town Canada Analysis Bulletins. There are 49 of them on Statistics Canada's website and they can be downloaded at no cost; you are invited to have a look at them.
Our presentation covers the definitions and measures of rural and of poverty; then we look at income inequality, low-income communities and farmers. I will start with definitions and measures of rural. What do we mean by ``rural?''
For this presentation we have chosen the rural and small town definition. ``Rural and small town'' refers to the population living outside settlements of 10,000 or more, outside the commuting zones of towns of 10,000 or more. That includes outside of census metropolitan areas. A census metropolitan area has a core of 100,000 or more. It includes all the surrounding towns and municipalities where more than 50 per cent of the workforce commute in to the census metropolitan area.
The census metropolitan area of Ottawa includes Arnprior to Merrickville to Casselman because, although there is a lot of countryside there, over 50 per cent of those people commute to downtown Ottawa. Those people are in a metro labour market. Those living in the countryside in that area might be called rural in terms of other issues, such as water quality, but in terms of labour market issues they are metro.
There are also census agglomerations, cities of 10,000 to 99,000 people living in the urban core and in the municipalities and towns around where people commute in to those areas.
Rural and small town then refers to outside the commuting zone of places of 10,000 or more people. Try to imagine taking your spouse to a place outside the commuting zone of towns of 10,000 or more and then trying to find a job in a town of fewer than 10,000 people. The whole population is out there, but it is conceptualized on a labour market. That is how I think of it from a labour market point of view.
As you can see in the graph on page 5 of our brief, from 1966 to 1971, there were 8 million people in rural and small town areas. Then there was some successful rural development, and some people were classified as urban, resulting in fewer rural people. However, with a growing population, the rural population increased to 8 million people. With more successful rural development it went down to 7 million people, then the population grew again. With the classification to urban, the rural population decreased to 6 million, and from 1981 to 2001 there were 6 million people living in rural and small town Canada. Right now 20 per cent of Canada's population is in rural and small town areas.
You can see that smaller cities, the census agglomerations of 10,000 to 100,000 people, are over 4 million in population in total; and the census metropolitan areas of 100,000 people or more are at over 19 million people.
Sylvie Michaud, Director, Income Statistics, Statistics Canada: Let us turn to the second set of definitions, measures of poverty. There is no international consensus on the definition in the measures of poverty. According to normal usage, poverty is the state of one who lacks a usual or socially acceptable amount of money or material possessions.
There are two important points here. First, poverty will be different at different times and in different societies. Second, that definition focuses on the ability to purchase goods and services or on their ownership.
Some frameworks define poverty as a minimum subsistence, while in recent years there has been a push towards enlarging the definition of well-being as the capability to function in society. In that sense, poverty is recognized as a multi-dimensional phenomenon.
Poverty lines can also be defined in two ways. First, as an absolute measure, how much does it cost to buy a certain basket of goods? Second, as a relative measure, the poverty line is a function of the standard of living of your country or your region.
Poverty lines for developing countries are generally based on consumption. The World Bank would argue that this is generally the better way of measuring poverty. However, in most of the developed countries we measure poverty in terms of income.
When we asked what was of interest to the committee, there were questions about which countries have a poverty line. We do not have one in Canada. I can spend a few minutes telling you about some of the countries that do have a poverty measure and how they define it. That is not required for the purpose of our presentation, so it is up to the committee.
The Chairman: I think we would like to know that.
Ms. Michaud: In September 2000, the UN Millennium Summit agreed to set some measurable goals and targets for combating poverty, hunger, disease and illiteracy. At the heart of the agenda are the Millennium Development Goals. They have measures to combat not only poverty but also illiteracy. They have defined extreme poverty as earning U.S. $1 per day per person and poverty at U.S. $2 per day. We have all seen commercials on television with well-known actors dressed in white, snapping their fingers and saying, ``every three seconds, a child dies.'' That statistic is drawn from the Millennium Development Goals.
In most developed countries, we assume that there are social programs that will put every family or person above that poverty threshold. All developed countries are assumed to have a zero poverty rate under the Millennium Development Goals. What is being done in developed countries?
The United States has had a poverty measure for a number of years. The threshold was established by Ms. Mollie Orshansky, who developed poverty lines in 1963-64. They were based on the cost of a basket of food. For this, four baskets of food were put together by the Department of Agriculture. They used the economy basket to determine poverty lines. They established 62 thresholds for non-farm families. At the outset, they developed different thresholds for farm families, assuming two things: one, that some of their consumption of food was from their own production rather than purchased; and two, that part of their cost of shelter was living on the farm, so the shelter costs were a bit lower. They had established some lower thresholds for farm families but, in 1981, they asked that those thresholds be abolished. Today, the same thresholds exist for farm families and non-farm families.
In 1963, Ms. Orshansky looked at what portion of the threshold was for food, because she argued that food was the only thing to be considered a necessity. She wanted to know what portion of the after-tax income was for food. How much is spent on food for an average family relative to their average annual income? It was one third. There is a multiplier of three, which is how they determine the poverty lines. Each year that line is adjusted for inflation. A number of committees have looked at revisions to the measures for determining poverty lines but it is a highly political issue and those are still the official measures used by the United States.
The European Union stated as an objective that by 2010 they want to be the most competitive and strategic knowledge economy capable of sustainable growth with more and better jobs and better social cohesion. In 2000, they agreed that the fight against poverty and social exclusion would be best achieved by coordination. They agreed on a common set of indicators with periodic reporting. In 2001, that led to the Laeken Indicators. There were 18 indicators at the time and today there are 21 indicators, 12 primary and 9 secondary. Five of the indicators are related to income. To make comparisons between countries, they developed relative measures to define below the poverty line as earning less than 60 per cent of an adjusted income. The adjusted income reflects the fact that it does not cost the same for all families because of the difference in the number of family members. Below 60 per cent of the adjusted median income is one of the indicators of poverty. There are other indicators, such as illiteracy, long-term unemployment or persistence of low income.
The United Kingdom is also doing a great deal of research on poverty. They are proposing three measures of poverty. One measure is an absolute threshold based on the pound sterling whereby they use a relative income similar to the Laeken Indicators of below 60 per cent of the adjusted income. Another measure in the U.K. is deprivation, which is a new dimension. They ask people what it is they do not have or cannot do because it is not affordable.
Senator Tkachuk: Is that 60 per cent indicator relative to the American after-tax income?
Ms. Michaud: Yes. In the U.K. when they measure deprivation, they use below 70 per cent of the adjusted income and remove shelter costs and stipulate that a family has to be deprived of a certain number of items. Deprivation could be indicated by the inability to heat the home adequately or the need to use food banks or to use pawn shops to access cash. I do not think that the last indicator has been finalized because research is ongoing. However, that gives the committee an idea of what is being done.
Australia seems to be taking a similar path to that of the United Kingdom, although they have not officially defined their poverty line. They tend to look at what is happening at the bottom part of income distribution, especially the second and third decile. One difficulty is that some people have zero income or negative income, especially the self- employed. That might be because of a fiscal way of reporting for tax purposes. They found that looking at the second and third decile is a better measure for their purposes.
All of that being said, what do we have in Canada? We do not have an official poverty measure in Canada. The position of Statistics Canada has been that it is through the political process that democratic societies achieve social consensus in domains that are intrinsically judgmental. The exercise of such a value judgment is not the proper role of Statistics Canada.
Once government establishes definitions, Statistics Canada will endeavour to estimate the number of people who are poor according to that definition. That would be in line with our mandate but, in the meantime, Statistics Canada does not and cannot measure the level of poverty in Canada. That is the official position of Statistics Canada, which is reported our website.
However, we have developed two measures of low income: the low-income cut-off, LICO; and the low-income measure, LIM. As well, work has been done by Human Resources and Social Development Canada on a market- basket measure of low income. I will speak briefly to the third measure, but I will not report numbers on it today.
The low-income cut-off was developed in the early 1960s to represent an income level at which a family might be in strained circumstances because they have to spend 20 per cent more of their income on necessities than the average household has to spend. Necessities were defined as food, shelter and clothing.
It is usually recognized that the cost of living increases with the number of people living in the household, but there are economies of scale so it does not necessarily cost twice as much for a family of two compared to a family of one. Similarly, it was recognized that the cost of living might be higher in large urban centres than it is in some rural areas. The LICO is recalibrated for five sizes of area: large CMAs, which means a population of 500,000 or more; medium CMAs; small CMAs; and rural. As well, there are seven family sizes, from one to seven people. Thus, 35 thresholds are calculated on a before-tax income and an after-tax income. These calculations have been based on how much people spend, which used to be the family expenditure survey. The most recent base for that purpose is a 1992 family expenditure survey. The thresholds have been indexed for inflation using the Consumer Price Index, CPI. Under LICO, the thresholds are lower in rural areas than in urban areas.
The LIM is a relative measure. The thresholds are calculated and released every year but we do not feature it often as a main low-income measure because they do not tend to move much with changes in the economic cycles. During a recession, the rate using the LIM could go down because everyone might go down together, thus giving a counterintuitive effect. The LIM is used for international comparative purposes. The LIM rates over time tend to be fairly stable.
Our LIMs are slightly different than what is used in the Laeken indicators in that we use 50 per cent of the adjusted income rather than 60 per cent. Our equivalent scale is slightly different, being 1 for the first person and 0.4 for the second person. Therefore, it costs 1.4 to be in a family of two compared to a family of one. It is 0.3 for subsequent persons so a family of four would cost twice as much as a person living alone.
In the late 1990s, a federal/provincial/territorial working group developed a market basket measure or MBM of low income. This was meant to be an alternative to the LICO. Why did they want an alternative? They wanted more of an absolute measure.
The LICO is somewhere in between an absolute and a relative measure. They also wanted a measure that was between subsistence basic living conditions and the social inclusion polls — more than just subsistence, leaning toward social inclusion.
Another reason behind the MBM was to be more representative geographically. One criticism of the LICO as it currently stands is that while Montreal, Toronto and Vancouver are lumped together as cities that have 500,000 people or more, the cost of shelters is much more expensive in Toronto and Vancouver than it is in Montreal.
The basket is not based on expenditures, like we have with the LICO, but rather on the fixed cost of a basket. In this basket, there is food — a nutritious selection developed by Health Canada — clothing and shelter, which is the average of a median of two- and three-bedroom apartments. For a family of four, if you have children of the same sex, you can put them in the same bedroom; if they are different sexes, they should be in two different bedrooms. That is why they took the median of two and three bedrooms, to represent both types of families.
There is also a measure for transportation. We assume in larger cities that you can use public transportation; in rural areas you need a car. In addition, there is a general multiplier to cover other factors, such as personal care items, books and a few other things that would be too hard to cost individually.
There are 47 thresholds for a family of four. We used the same equivalent scale as we have for the LIM. For a family with seven members, we would have 329 thresholds instead of the 35 that we have under the LICO. There is much more geographical representation.
Measuring is still in development. Results have been released for 2000, 2001 and 2002; 2003 and 2004 should be released in the fall. They are released by HRSDC but we helped them with the methodology.
I will give you a few numbers, based on our survey of labour-income dynamics, on the income levels in rural and urban areas. We used the definitions of urban and rural that were presented by Mr. Bollman, which are slightly different than what you will see in our publications, where we do not tend to include rural with the small towns in the way that was defined for this presentation.
I should mention that the survey that was used to present these estimates was not done in the North. It also excludes Indian reserves, institutions and military barracks. This represents the income in the 10 provinces, minus those exceptions.
The Chairman: Can we ask why that is?
Ms. Michaud: In the North, we are currently talking to the territorial government to develop a strategy to conduct surveys. It is a response burden issue because it is a smaller population. If we conducted all of our current surveys in the North, we would be contacting every household very often. They have expressed an interest in having that survey done, and we are working with them to see what would be a viable option to balance against the response burden for people living up there.
Senator Tkachuk: And reserves?
Ms. Michaud: Reserves are difficult; we do not do many surveys on them. We have a census that is done on reserves, and also the post-census survey, but they are not part of the regular collection. Right now, there is some strategy about doing more collection on the reserves. If that happens eventually, we could do a similar survey.
On reserves, we would have to ask what income concept is appropriate. How much do you use in kind? How much do you transfer it, in terms of income? Some of the income is not taxable, so we would need to adapt and modify the survey. For now, we have the census and post-census surveys.
Over the last 20 years, the median income in rural and small towns has been about $10,000 less than in large urban centres. On the chart, the blue line represents large urban centres, the green line is rural and small town areas and the black line at the bottom represents the difference between the two. You can see that it has been fairly constant for the last 20 years.
To look at income inequality, one of the indexes we use is the Gini coefficient, which is constructed in such a way that it ranges from zero to one. A value of zero means that the income would be equally divided among everybody in the population; a value of one would mean one person has all the income and everybody else has nothing. You hope to have a lower Gini coefficient if you want to have more equality.
If you look at the inequality that has been happening between urban and rural areas, what we have seen is an increasing trend in both areas in terms of inequality. However, the trend has been more pronounced in the urban areas; inequality is still smaller in the rural areas. Therefore, the income distribution is more condensed in rural areas than in urban areas.
Senator Peterson: Do you have access to tax returns? Is that how you determine after-tax income?
Ms. Michaud: We ask the respondents' permission to give us access to their tax returns; in that case, they do not have to answer the 24 income questions. If they say no, we ask them the 24 income questions, so it is a mixed methodology.
Senator Peterson: You do not have access to the tax returns.
Ms. Michaud: There is a database of tax returns in Statistics Canada, but we would not link to the tax return if the people did not give us permission to do so to get their income information. We do it to reduce the response burden, but if they say no, we ask them the income questions.
Senator Tkachuk: When you say access, you mean get the income number and that is it?
Ms. Michaud: Absolutely. The questions are similar to our survey questionnaire. We would not look at any other information.
Denis Chartrand, Director, Agriculture Division, Statistics Canada: It is important to note that for the social survey, what Ms. Michaud described is correct. On the business side in the agriculture division, we do have access to the tax program and we do publish data on tax returns. They are data that are a bit later in time, but they are part of the public communications.
Ms. Michaud: When we want to study low income, we look at three things. The first is thresholds — what are the different thresholds we observe with different measures? We also want to look at incidence or rates of low income and at the gap — how far are we from that threshold?
You can see that the thresholds vary significantly with the measure. In this instance, the LICO is based on the after- tax income for 2004. I have talked about before tax and after tax. We tend to feature after-tax income because it is closer to disposable income. It takes into account the two mechanisms that government has to redistribute income, which are taxes and transfers. It is what you have left in your pocket; that is why we use that measurement for everything. However, we have before tax as well as another measure.
For a family of four in Montreal, Toronto or Vancouver, the threshold in 2004 under the LICO would have been $31,865. In rural Saskatchewan, for the same family of four, it would have been $20,844.
What I want to highlight here is that there is no geographical difference with the LIM. Whether you live in a rural or an urban area, it will be the same threshold under a LIM; you need the same amount of income to be considered below the low-income threshold.
For a family of two adults in Toronto, it would be $20,512, while in rural B.C. it would be $13,418. Again, the LIM is $19,741, which is the same in urban and rural areas. The LIM varies only with the number of people in the household. It does not vary by geography, while the LICO does. Usually, under the LICO, the threshold is lower in rural areas than in urban ones. That will have an impact on how the findings will look later on.
In the past 20 years, a lower share of rural and small town individuals have resided in families with income below the LICO. The rate of rural individuals living below the LICO in 2004 was 6.73, while it was 12.26 in large urban centres.
If we compare those figures against the LIM, the thresholds are now the same between urban and rural. As expected, the rate under the LIM for rural Canada would be higher. It was much higher from around 1984 up to 1990. Ever since then, the gap has narrowed. It is much closer to the low-income rate in large urban centres. In 2004, it was slightly higher at 13.3, versus 11.8 for large urban centres.
If we look at the third component dealing with how far one is below the low-income threshold, while the gap is smaller in rural and small town areas, in 2001 the figure was around $5,100. In large urban centres it was around $6,600. If we look at the LIM, that gap is similar, whether one is living in urban or in rural. The figures are around $6,300 and $6,100 respectively.
In summary, median incomes are lower in rural areas, and they have been that way within the past 20 years. Income inequality is lower within rural areas. However, the choice of the measure has an impact.
If we look at the LICO, which is the measure we often use for comparison purposes, the low-income rate in rural areas is lower. If he we look at the LIM, the incidence is slightly higher in rural areas. In the early 1990s it was much higher, but that gap has narrowed.
Mr. Bollman: Ms. Michaud has been talking about individuals and shares of individuals below the LICO, and now I will switch the observation towards communities.
I will define a low-income community as a community with 15 per cent or more of its inhabitants living below the low-income cut-off. Then we will find a persistent low-income community. If during the years of 1981, 1986, 1991, 1996, 2000 and 2001, more than 15 per cent of a population is living below the low-income cut-off in four out of five census periods, we call them a persistent low-income community.
This slide indicates that about one third of all communities in Canada have higher incidence or they are a persistent low-income community. About one third fluctuate back and forth, and another third have a lower persistence. That means that in four out of five periods, their incidence of low income is less than 15 per cent.
If we look at rural, non-metro-adjacent regions, 46 per cent of the communities are persistent low-income communities. You will notice that when moving from a predominantly urban to intermediate to rural region, a higher share of communities are persistently low income. Within rural areas, you will see that the communities in regions near metro locations have a lower incidence of persistent low income. However, if you look at a community away from a metro area, you have a higher chance of being a persistent low-income community.
We are counting communities. Forty-three per cent of the communities are persistent low income. We are not talking about people in this case.
Let us look at a map to determine where these persistent low-income communities are located. On the table to the side we have a wall map that you can put up in your research office to show where these communities are.
The colour blue represents the persistent low-income communities. Those include a few of the valleys in southern B.C., the north part of the grain belt through the Prairies, a bit south of Algonquin Park in Eastern Ontario, many communities in Southern Quebec, Northern New Brunswick, the tip of Nova Scotia and many communities in Newfoundland.
The colour orange represents communities whose persistence of low income is less than 15 per cent. In other words, in four out of five periods, less than 15 per cent of their population lived in low income.
This map indicates the locations of the persistence of low income. The colour orange also represents where the persistence is increasing between 1981 to 2001. There is a lot of orange through many of the valleys in British Columbia, a bit scattered in Saskatchewan, certainly a lot scattered throughout Southern Quebec and there is a patch in Northern New Brunswick.
We have combined the change and the persistence so that the deep red is high persistence — blue on the first map — and growing persistence — orange on the second map. Strong red appears in some of the valleys of B.C. in the sense of high persistence and growing incidence of low income. There are a few communities in Eastern Ontario and a number of communities in Southern Quebec showing red, and there is a bit in Northern New Brunswick.
These maps indicate where the high persistence of low-income communities occurs and where the incidence of low income is increasing.
The next part of the presentation looks at some of the attributes associated with this community characteristic. In this chart, the left-hand column indicates whether this attribute is at a high level or a low level. When you look across here, there is a higher or a lower level of this attribute associated with a higher or a lower incidence of individuals living below the low-income cut-off.
This chart indicates labour market performance. The first row represents employment growth from 1991 to 2001. If you have a community with a higher growth of employment from 1991 to 2001, the incidence of low income in 2001 is lower in all communities including rural communities.
If there is a community with a higher rate of male labour force participation, the incidence of low income is lower in rural communities and urban communities. The same holds true with female labour force participation rates: communities with a higher female labour force participation rate result in a lower incidence of low income in all communities, both rural and urban.
If there is a higher rate of unemployed males, not surprisingly there is a higher incidence of low income. A bit surprisingly, the female unemployment rate is not statistically significant.
This graph indicates that stronger and more dynamic labour markets result in a lower community share of individuals living below the low-income cut-off. The variables indicating earnings make the same point. Not surprisingly, if there are higher earnings per household in your community, there will be a lower incidence of low income. If there is a higher share of workers earning less than $10 an hour, there will be a higher share of individuals living below the low-income cut-off.
All of these labour market indicators suggest that the stronger the labour market, the lower the share below low- income cut-off. I do not think anybody would be surprised by that, but I am a bit surprised that all of these variables are coming out so strongly, because they are all included in the regression model.
We have two or three other charts indicating other factors that we wanted to hold constant to see how strong the labour market items were. This one, for example, looks at the industrial structure. Here it shows that if you have a community with a higher share working in complex manufacturing, there will be a lower share of the population living below the low-income cut-off.
I was interested in this manufacturing topic because a colleague of mine, David Freshwater, has suggested that in 10 years or 20 years a successful rural community will likely have a manufacturing base, unless it has Whistler or Niagara Falls beside the town.
If one wants to be proactive in creating jobs for the community, Mr. Freshwater argues that those jobs are more likely to be manufacturing and less likely to be web design services, accountants, lawyers and that sort of thing. We can deliver some of those services via the Internet, but often face-to-face interaction is needed.
Senator Oliver: How does farming fit into that?
Mr. Bollman: At the top of this chart, the percentage of people employed in agriculture is indicated, and it is not significant. If we take out the variable of growth, agriculture would have picked up low growth. Given the level of growth, the share of the work force in farming did not raise or lower the incidence of low income relative to the average.
Senator Oliver: Does that include future projections?
Mr. Bollman: I do not have that particular data. My guess would be yes, but I cannot produce evidence for that.
If you look at the maps where some of these persistent low-income communities appear, there is lots of agricultural production and there are lots of farmers in communities with a low persistence of low income.
This particular chart focuses on demographic structure. If there is a community with a high share of individuals less than 15 years of age, there will be a lower share of the population living below the low-income cut-off. I think that is because young families move to where there are jobs.
This chart focuses on mobility and some other factors.
The next chart focuses on social demographics. A variable percentage of families in the community are lone-parent families. Communities with a higher share of lone-parent families have a higher incidence of low income, a higher share of individuals below the LICO.
Education is important if a community has a high share of individuals with less than a grade 9 educational attainment. In those urban communities, there will be a higher share of individuals living below the low-income cut-off. At the other end of the spectrum, if a community has a higher share of individuals with some post-secondary education, there will be a lower incidence of people living below the LICO.
This chart indicates urbanization variables and community history variables. If a community was persistently low income in 1981, 1986, 1991 and 1996, not surprisingly there will be a higher incidence of low income in 2001. Some communities switch around, but it is hard to fight off that history. If a community has a history of low income, there will be a high incidence of low income in 2001.
There are a couple of charts on farmers, to anticipate questions. Here we focus on farms distributed by the size of the gross revenue. It focuses on family incomes from everyone in the household — that is, income from all sources. The black line represents data in the year 2000 as reported in the 2001 census.
Household incomes are slightly smaller in the middle of the farm-size distribution and are bigger for larger farms. There is not much of a swoop down and a swoop up here. Back in the 1980s, that hollow was much deeper. I think what happened is that farms became smaller and farmers had time to work off the farm, or farms became larger and farmers collected more income from the farm. Therefore, the middle is balancing out here.
This line represents the income for the average household in Canada. The black line and columns represent the year 2000. For farm families in any of these size groups, the family income on average is the same as the average family income in Canada.
We can tease this out a bit. We may want to compare families of two or more people. This line at $58,000 represents all households. If we referred to households with two or more, the figure would be $68,000. Therefore, maybe I should draw the line up here, and then there would be a gap between the farm families and the non-farm families. We would have a bit of a gap if I made a few adjustments to create a more fair comparison.
A simple comparison between the average household on farms and the average household off farms shows that, even in the middle of the farm-size distribution where the incomes are a bit lower, it is about the same as the average Canadian household.
This chart focuses on the incidence of low income. The dark bars represent the year 2000. At the middle of the farm- size distribution, a higher share of farm households reports their total family income below the low-income cut-off.
Looking at farm families associated with a farm of gross revenue equalling $50,000 and $99,000, 12 per cent of those households were living below the low-income cut-off in 2000. At the Canada level, 16 per cent of those people were living below the low-income cut-off. The rate is higher for farm families appearing in the middle of the farm-size distribution, but the share living below the low-income cut-off is less than for the average family in Canada.
In conclusion, we have talked about our definition of rural. This presentation was mainly focused on rural and small town versus census metropolitan area and census agglomeration. Ms. Michaud defined some measures of poverty and we looked at income levels.
There is a gap in median incomes of about $10,000 between rural and urban areas. Rural areas have a tighter or more equal distribution of incomes than urban areas. We looked at low-income rates in rural and urban areas. There are fewer rural people living below the low-income cut-off than urban people. About 7 per cent of people in rural Canada live below the low-income cut-off, but 13 per cent are living below the LIM. It depends on your measure. I summarized some of the community factors associated with low-income communities, and there are a couple of charts representing farmers.
Senator Callbeck: Thank you very much for your presentations. You have certainly given us a lot to think about.
When you referred to households associated with census farms having gross revenue of $50,000 to $99,000, what does that mean? In order to be considered for the farm census, one must have $50,000 gross in earnings?
Mr. Bollman: In the middle of that chart, there is one bar that says the farm has a gross revenue of $50,000 and $99,000. Therefore, it is a household with an operator of one of those farms. The census farms with less than $10,000 gross revenue are on the left side of the chart.
Senator Callbeck: I did not know whether part of that household income came off the farm.
Mr. Bollman: Yes, part of it comes off the farm. The height of the bar is the income from all sources in the household.
For families on farms with less than $50,000, a very small share comes from the farm, and most of the net revenue for the household comes from off the farm by the operator, the spouse and maybe the children. It includes the whole household.
Senator Callbeck: I understand. The median income for rural and small towns is about $10,000 less. Are you referring to a net income there?
Ms. Michaud: That refers to after-tax income.
Senator Callbeck: The low-income measure is based on income before and after tax. If that is the case, why are the thresholds the same for rural and urban areas?
Ms. Michaud: Because it is exactly that; it is based on income, not on how much you spend or the necessities. The LICO looks at the percentage of spending in relation to income; the LIM just looks at the income and does a distribution of the income in the whole population. It adjusts it for family size and says okay, if you are below the median income divided in half — if you are below that threshold — whether you live in an urban city or a rural city, we give you the same threshold.
The only thing that will make differences in the LIM is the number of people in the household. It does not matter where you live and what the cost of living is. That is why the threshold is the same for rural and for urban. It will be the same in Vancouver, Toronto and Montreal as it is in rural Manitoba.
Senator Callbeck: I have one other question that was not in the charts this morning. I saw it the other day and I think it was from the parliamentary library. There is a chart here based on Statistics Canada's 2001 census. At the top, it says ``percentage of predominantly rural regions to total population by province.'' Prince Edward Island is 100 per cent. Being from that province, I find it hard to understand that it is completely rural. Back in 2001, Charlottetown's population would have been around 32,000 people, and it has grown since. Summerside would have been around 15,000 people and it too has grown.
Mr. Bollman: There is a long story and a short story. I might have to go to the long story.
The objective was to try to compare Canada to OECD countries. Most countries could not report data for small communities, but they could report it for counties or census divisions or commuting zones. I knew they classified regions at a fairly big level, so each county in Prince Edward Island got classified as predominantly urban, intermediate or predominantly rural.
We ran the algorithm, which is part of the long story. Within each of those counties, we looked at whether the community was urban or rural. We looked at all the people living in those communities. If more than 50 per cent of the people lived in a rural community in Queens County, then the whole region got classified as predominantly rural. That is what happened to Charlottetown.
We overwrote it in a few cases. For instance, when Edmonton had Wayne Gretzky, it was classified as an intermediate area and we thought we should role it up to an urban area. However, for OECD comparisons, Charlottetown is very rural. If we want to compare regions in Canada to the OECD, I think it is a fair comparison. However, I would not want to walk the streets of Charlottetown and say they were a rural city, so I understand your point.
Senator Callbeck: I find it very misleading.
Mr. Bollman: In my view, it is not misleading for international comparisons. This presentation compared CMA/CA areas versus non-CMA/CA areas and there was a social demographic gap in all the indicators. It is interesting that looking at predominantly urban regions, intermediate regions and predominantly rural regions, that gradient is even steeper. We have Prince George, Brandon and Charlottetown in rural and we are still getting a very steep gradient.
It is what you would expect in terms of where the Ph.D.s are versus the people without Ph.D.s, where the medical specialists are and are not — the high incomes and the lower incomes. If I showed you the chart, it would make sense. If I showed you the map, you would complain.
Senator Tkachuk: Statistics have never been my strong point. I think some of my questions may have been answered and I just missed it, so bear with me.
What percentage of people that you classified as farmers relied on off-farm income to survive? Perhaps I should start off by asking what percentage of farmers had off-farm income.
Mr. Bollman: If you start with that question, almost every farming family would have some off-farm income because they get a bit of interest from their money in the bank. Then if you ask how many farm families or farmers have off- farm work or off-farm earnings, we have to agree on what we call a farmer.
If I have 10 cows out behind my house in Lefaivre, am I a farmer or a full-time civil servant? If I had 10 cows out there, I would be on the census of agriculture, but 100 per cent of my income would be from my job working for Statistics Canada.
If we go to bigger operations — $50,000, $75,000, or $100,000 gross revenue — you find that most of the operators have their main job being on the farm. Many of those spouses also claim their major job is on the farm. It really depends on how big of a farming enterprise you have to be before you say I am interested and this is a farm.
Some of the statistics include everyone, including the people with 10 cows. Then you get 70 per cent or 80 per cent of the family income coming from off the farm. Looking at the people with larger enterprises, you will find that less than 50 per cent comes from off the farm, because the operator and the operator's spouse are both working on the farm. They might have a small off-farm job driving a school bus, but they have many hours on the farm. They may have some pension or other income, but more than 50 per cent of the family income comes from operating that enterprise when it comes to the bigger farms.
Senator Tkachuk: You say over $50,000 in revenue, which is not that big, but you are probably right — that is probably pretty close.
Mr. Bollman: I might have to go to $250,000 gross revenue to get there. If you ask me the specific question, I can dig them out and give you a specific answer.
Things have changed the last 15 or 20 years. You could support yourself on $50,000 — maybe not your family, but yourself and hoping the other family members supported themselves — but I think that has gone up a lot. The net- gross ratio has gone down; the margins are tighter so you need a bigger gross revenue to give a level of net income. I think it is more than $50,000 gross revenue now to get the things I am talking about.
Senator Tkachuk: How does social welfare fit into these numbers?
Ms. Michaud: It would be part of the total income. It would be included in transfers.
Senator Tkachuk: When you are talking about average income, does it include people who are on social welfare?
Ms. Michaud: Yes.
Senator Tkachuk: Are all of those people below the cut-off line on social welfare or are they a mixture of social welfare, low-income pensioners, et cetera? Who are those people?
Ms. Michaud: I do not know specifically about rural in the area that has been defined here. Some of them would be there, but some could be students who are studying and have a limited income. Some people could be pensioners living in large urban centres.
I can get the exact numbers for you but I think that the thresholds, if you live in rural areas, would put you above the LICO; that is definitely not the case in urban areas. Some pensioners living by themselves could be in that mix and there could be a variety of others. I could look at that.
Senator Tkachuk: I saw the numbers from the gentleman at the research table last week. When you looked at the national average of people who fell below what we would consider the poverty line, it was around 13 per cent. Farmers were just slightly above that, but rural Canada was slightly below that number. They were actually better off than the urban areas. Would that be right?
Ms. Michaud: Yes. The low-income rate in rural areas was lower than in large urban centres.
Senator Tkachuk: Everyone should get out to the country.
Ms. Michaud: It goes to a more fundamental question. This is based on the low-income cut-off methodology, which has a predefined methodology, but it is not a poverty measure. If you wanted to include a larger definition of poverty, it would include not just income but a number of things. If you are interested in social well-being, and even poverty, it is more than just income; it is access to services.
Senator Tkachuk: That was my next question. I come from Saskatchewan. I am sure that my province is no different from others, but governments have imbued themselves with the feeling that if they centralize things, those things will be cheaper. I have never bought into that but, nonetheless, that is what is happening. In my province there are no hospitals in rural areas. For a rural person, all this comes into consideration. If you live in Naicam, Saskatchewan and you are looking for health services, you have to go far. You have to go to Saskatoon. If you want an x-ray and you live out in the country, you have to go to Saskatoon. We have all of those features that used to be in the small schools. Everything now is centralized and these services are being removed from the rural areas and put into urban areas, so that there is two-tier medicare in this country. If you live in Saskatoon, you walk across the street down to the local building with a number of doctors; you go in and you get the hand you broke looked after, but if you live in Melfort, it is not that easy.
Are those factors in these numbers or are they listed in other academic works that we could look at? Are there witnesses we could call who would talk about these issues that are important to us in studying rural poverty?
Ms. Michaud: This is income and income only. We have a Canadian community health survey that would be able to provide you interesting findings in terms of health and access to services and waiting lines, but that would be a separate group.
The Chairman: This is a little trickier than some of our other issues.
Mr. Bollman: The devil is in the detail. The low-income cut-off measures food, clothing and shelter; those are the major factors to set the low-income cut-offs. The market basket measure to which Ms. Michaud referred was food, clothing and shelter, plus transportation. Transportation is a major issue in rural areas, because rural is distance and distance is rural. If you have to have a car, the cost of a car was calculated in that market basket measure. The cut-off for rural was therefore higher, in order to meet the requirements to pay for the car.
If you move from this low-income cut-off idea to the market basket measure idea, you are bringing in some of that cost of transportation, but all the other issues you are talking about, when talking about poverty, are multi- dimensional. The Minister of Agriculture and Agri-Food made that point several days ago. We are just talking about the level of income here.
Senator Tkachuk: Even in a small city like Prince Albert, public transportation is weak. My father is a senior; he is 88 years old and he drives a car, which is a miracle in itself, but if you take away that car, he is a lonesome person. There is no bus. There is no way to be mobile. When he is no longer able to drive he will have to live close to services because he will not be able to buy groceries. This is a serious issue.
Senator Peterson: I am from Saskatchewan, as is Senator Tkachuk. I have trouble dealing with revenue only as an indicator of poverty, because I would guess that 95 per cent of farm income is earned off of the farm and that most farmers are living off a declining equity base. They will have to decide whether they bail out of farming while they still have some equity base left or let it go down to zero in the hope that this industry will turn around. I have a little trouble with that as an indicator because I do not know where it leads us.
Talking about poverty and after-tax income at the same time sounds to me like an oxymoron. Is it taxes that are driving people below the poverty line? How do we get there? That seems to me a strange combination.
Ms. Michaud: It is not poverty, it is low income. However, if you want to compare all families and the distribution of income, some pay income taxes and some do not. We know that among the lowest-income quintile, a high proportion, more than 50 per cent or possibly 70 per cent, do not pay taxes. To compare to the average, where the average does pay taxes, we want to see what they have in their pockets to be able to purchase necessities. That is why we feature income after tax.
International standards recommend not even using income after tax but using disposable income, which would remove further not just the income taxes but the social contributions we do not have the choice whether to pay, such as EI, CPP, QPP, those contributions that are removed from your pocket. It would also suggest removing quasi- mandatory obligations such as support payments for children in the case of a separation with joint custody. International standards would push us even further towards disposable income rather than the income after tax, to compare the income situation.
Mr. Chartrand: The first part of your question is related to off-farm income.
Senator Peterson: Yes.
Mr. Chartrand: We know from our data that more and more farmers depend on off-farm income to make necessary revenues for a good living. You can see in our last data series that more than half of the farms with $100,000 to $500,000 in gross revenue now must get off-farm income. That was a development with the last series. More and more farmers have to rely on other sources in order to be able to operate.
Senator Peterson: If we are talking about rural poverty, at least in my province, we have to drill down deeper to find out some of the underlying causes so that we have a better understanding of what these statistics mean.
Senator Mahovlich: I am from Ontario. I have not had too much experience in farming. It seems to me that most of the farmers around the Toronto area in the rural parts are gentlemen farmers. They are wealthy before they get into farming. I see in Ontario that there are farmers who need help. I am wondering how that could be. Most of the farms look as if they are doing fairly well. Do you have a statistic here that shows how successful the wealthy farmers are in that area?
Mr. Bollman: We could figure out how to tabulate our data to answer that question. We could look at how many farmers maybe have arrived recently in the community or how many farmers have a big expensive land base but who may not be producing very much because they just moved out from the city, and so on. However, you are right: mixed in there will be people who have been farming for 10, 20 or 30 years who may not be able to expand or who have lower management skills, and their families have lower incomes. Off the top I cannot tell you what the mix is as you move out from Toronto, but if we drew some lines on a map and did some simple calculations with the data, we could answer that question.
Senator Mahovlich: When I drive up to Barrie, 60 miles north, there are developments where farmers have sold their properties. We are losing a lot of farms. Is that included in your statistics?
Mr. Chartrand: Every census.
Senator Mahovlich: Every census we are losing farms and more people are moving into the cities?
Mr. Chartrand: Correct.
Mr. Bollman: There are two aspects to losing farms. In Canada as a whole, the number of farmers may be going down, but the farmland is basically still there, and production on that land is going up. Agriculture is a growing industry in terms of outputs and also buying more inputs in the non-farm sector, but they are doing it with fewer people. You might call it jobless growth.
Around Toronto some good farmland is being paved over, and one of our rural bulletins gives a number on how much class-one land in Ontario has gone to urban usage.
Ms. Michaud: We had a survey of financial security that looked at that question as well. The last survey was done in 1999. At that time, the people who had farms but who were below the low-income cut-off still had a net worth that was fairly high. The median net worth was $243,000, so it was a high net worth. However, maybe we should differentiate between having some farm self-employment and being the owner of the farm; maybe that would help us to understand some of the issues. If you own and operate a large farm you may be in a very different situation than if you have farm self-employment but you are working for a farmer. Perhaps we could do for the committee and it might shed a bit of light on what is happening.
Mr. Bollman: The other issue driving out of Toronto is that a lot of the landscape is still agriculture and farming, but the people-scape is not. A very low share of those households have farms. Most are working somewhere else and are living there, but they will not get into the farm statistics because they do not have even one cow out back. It looks like an agricultural landscape, and it is, but the people-scape is not agriculture.
Senator Mahovlich: It is a hobby.
Mr. Bollman: It is not even a hobby. They are living and watching other people's farms but they are not involved in farming at all.
Senator Cordy: Thank you very much. I am not a statistician either. I looked at the statistics and tried to understand, so if I am making errors feel free to correct me. I am wondering whether you have done any studies or have any statistics on the demographics of the rural areas. I am from Nova Scotia, and when we talk about rural areas in Nova Scotia we talk about fishing communities in addition to farming communities.
Recent studies have shown that the population of Nova Scotia has dropped minimally, but that does not tell the whole story, because what seems to be happening is that, while certainly there are people moving to Alberta, there are also many from the rural areas who are moving to Halifax. Therefore, we are not getting as clear a picture of the changing demographics as one might get just by saying the population of Nova Scotia has reduced insignificantly.
Mr. Bollman: We have our 49 Rural and Small Town Canada Analysis Bulletins, and we try to put a provincial table in the back of each of them, whatever we are talking about. There is some information there. Also, the federal Rural Secretariat is in the process of publishing a rural profile for each province. I think all of the Atlantic Provinces are on the website, so there is a fat profile for rural Nova Scotia on the Rural Secretariat website: www.rural.gc.ca. Obviously more research is required. There are many different ways we could profile rural Nova Scotia.
The biggest sector in rural Nova Scotia is manufacturing. Some of it is fish processing, some of it is sawmills, but a lot of it is in factories making things. They are not just making boats, they are making everything.
In fact, in four provinces — Nova Scotia, New Brunswick, Ontario and Quebec — and in Canada as a whole, the biggest sector in rural Canada is manufacturing, not agriculture.
Senator Cordy: That is interesting. I am not sure everyone realizes that; I did not. I am wondering about the demographics. It seems that when there is an exodus of people from the rural areas it is the young people who are leaving. Do you have statistics on the percentage of seniors remaining behind in rural areas? My gut feeling tells me it is mainly seniors who are staying behind in the rural areas, and that brings a whole myriad of services that we need in rural areas. Transportation is a major one. Many seniors in their 80s are not able to drive cars anymore, yet there are no transportation services available to them, and there are no children remaining in the community to drive them where they need to go. Many services, including health services, are not available for seniors in rural areas.
Mr. Bollman: In every province, rural areas lose people from the ages of 15 to 24 years, and then rural areas in every province gain people from the ages of 25 to 69 years, and then lose people 70 years and older. Rural is competitive. They gain more people 25 to 69 years of age than they lose. That is a good-news story if you are talking to rural communities.
I think that the young adults do not move to Yarmouth; they move just outside of Halifax and make the long commute back in. Rural areas closer to bigger cities can gain young people. Rural areas also can gain early retirees, who move to where their cottages are, or to water and trees. In every province early retirees are moving; more people move from urban to rural than from rural to urban. After 70 years of age there are more people moving from rural to urban than moving from urban to rural. That is the general pattern.
We could prepare some maps and more detail, but these are the general demographics: rural areas can attract young adults 25 years of age and over; they can attract early retirees, age 55 to 69 years; and they can attract a few in the middle. They lose the young people and those 70 years of age and older, on average.
I happen to live in the middle of Saskatchewan. We are probably losing everywhere, but statistics suggest that the young folks are moving out of Regina and Saskatoon and commuting back in.
Senator Christensen: Thank you for being here. Statistics are wonderful tools, because they will tell you anything you want to find out, from whatever point of view you want to come at it from.
I am interested in the North, of course, being from the Yukon. I know that getting statistics from the three territories has been a problem because of the very small population bases.
I am not sure about the Northwest Territories and Nunavut, but the Yukon does publish quarterly statistics that are quite comprehensive. Is it the policy of Statistics Canada not to use other people's statistics, or could those be used and integrated into the national statistics? I know they are very comprehensive. I used to be chair of the board.
Ms. Michaud: Honestly, I have not looked at their statistics on income. We have the census that is done once every five years; we would have statistics there. Before putting them together and seeing if we could do something, I would like to see for one of the census years whether the statistics are comparable and whether there are data definitions or other elements that are different. That kind of study could be done.
Senator Christensen: The information is there, and they use the protocol required in taking statistics. With only 30,000 people in the territory, we do not fall into one of these areas. They complete statistics for food baskets, cost of living, transportation, housing, you name it.
You have been showing us statistics that allow us as a national government to be able to do national and international comparisons. We are not focusing on the details, and the statistics you have provided will help our committee to zero in on the details. We will likely ask for more statistics in order to get a finer point on some of the information.
Do you have information on the kinds of jobs that people in farming communities do off the farm? The ability for them to obtain jobs off the farm is certainly very different than if they were in an urban setting where there is a much wider selection of jobs.
Ms. Michaud: We could provide that sort of information, although I do not have it with me today.
The survey we use to provide official income statistics asks about the labour market and provides space to describe up to six jobs one had in a given year. Therefore, you could look at the information for people who had self-employed income from a farm and determine what the other jobs were, how long they worked at them and so long. We could provide that information for you.
Mr. Bollman: I looked at that information a long time ago. People who are operators of farms tend to have much the same profile of jobs as the rest of us. That is partly because some of us end up moving out to a farm. All of the sudden, you will see a civil servant or professor or high school principal who also runs a farm.
Therefore, there are some white collar jobs out there. However, farm operators are more likely to have blue collar jobs than the rest of society, for example in manufacturing, because there is often a manufacturing plant nearby. There is also the common truck or school bus driving.
I have not recently looked at those numbers, but we could look at the information again and determine what other jobs farm families are involved in.
Senator Christensen: We are hearing that farmers are not able to make a living on farms. Therefore, the husband, wife or adult children are leaving the farm in order to help subsidize it. These are bona fide farms, so very often they are away from urban centres. Unless one is going away for a whole week and returning only on weekends, the selection of employment is really very limited.
It would be interesting to be aware of the problems they face in order to earn that off-farm income. Some of the males will work on the oil rigs and perhaps spend the winter away from home. That poses a whole new problem with respect to family break-up and that type of thing.
Mr. Bollman: You may want to talk to my colleague, Alessandro Alasia. I have not read his paper recently, so I cannot recall it.
It seems to me that as you get further away from cities, there are fewer and fewer people without off-farm jobs. The people out there have organized their lives between their farm work and their off-farm work to sustain their families. There is no indication that there is more off-farm work as you get closer to cities, partly because there are different types of farms close to cities, such as greenhouses and nurseries. There are many factors at play.
If you do your own research or speak with Mr. Alasia and I read the paper again, we could be clearer on this. There is information floating around about access to the city type of off-farm work in which people are participating.
Senator Mitchell: I actually like statistics and the math of them.
I think there is no relationship in these statistics between levels of income and levels of asset. One farm family could make $20,000 a year and have almost no net assets because of debt and other things, while another farm family could $20,000 a year and have $2-million worth of assets. I am not saying that the poverty involved is any less grinding in the latter than in the former. However, there is a qualitative difference in the poverty. Do you have statistics that relate income by rural census area to level of farm assets?
Ms. Michaud: We complete a survey once in a while that relates wealth and income as well as indicating equity and business. The last one was in 1999. The problem is that it is a fairly small sample size. I would have to see the geographical breakdown.
We could provide you with information relating to income and assets of people who own a farm as well as people who have self-employment income from a farm. They may not be the owner of the farm, but they may have farm self- employment income. We can produce numbers on that.
Mr. Bollman: The advantage of this survey is that the households are comparable for farm and non-farm comparisons.
The agriculture division has a farm financial survey that asks farmers to outline their debts and assets, so it is slightly different than this survey. It indicates farm sector as compared to non-farm sector. The specific question involves high debt, low debt, high income and low income. In that regard, we can set up a little grid.
Senator Mitchell: Other factors include own farm, rent farm, work on farm, et cetera.
Mr. Bollman: It does not include own and rent. We can complete some of these tabulations if the grid is set up to reflect high debt, low debt, high income, low income, how many families have high income and low debt and high income and high debt and so on. If we can set that grid up, I think we can do a calculation.
Senator Mitchell: I am looking for a net worth: low net worth, high income, high net worth and that kind of thing.
The other thing that interests me is the relationship between incidence of low income, incidence of poverty and the nature of farming. There are so many variables that go into the outcome of a farm: the quality of soil, the nature of the environment, the capital involved, the skill, the management skill and so on. Therefore, it is difficult to solve for different variables. However, would it be possible, for example, to complete a comparison between areas where there is a high incidence of supply-managed farms and income and areas where there is a low incidence of same?
Would it be possible to complete a statistical study of the relationship between farm rural income stability and the degree of diversification of farms? Earlier, we heard an observation made by an expert that the more diversified you are the more there is the likelihood of greater success. Maybe that is difficult to complete, but is that kind of analysis possible?
Mr. Chartrand: I think so. It would be a matter of linking the rural definitions to where the types of farm are located. We do have information on the locations and types of farms. It is just a matter of tabulating the information.
Senator Mitchell: Finally, while this may seem obvious, it would be interesting to relate level of farm incomes to the size of farms. There may not actually be a direct relationship.
Mr. Bollman: The charts we presented looked at that question by size of farms. Farms in the middle had lower incomes on average. However, size can be measured differently. Maybe one would want to see the same size according to net worth. Gross revenue is one measure of size.
In terms of whether the type of farm matters, for the operator of a poultry or egg farm, the incidence of low income is less than the average.
Senator Mitchell: That is because it is supply managed.
Mr. Bollman: However, for the operator of a dairy farm, the incidence of low income is the same as the average for farm families.
Senator Mitchell: That is interesting because it is supply managed, too.
Mr. Bollman: That is why I pointed it out; we could argue why.
The other observation, looking at rural poverty but looking at farms, is that the landscape is agricultural, but very few of those households have farmers in them. The people-scape is not farming. If you are thinking rural poverty, you have to remember what share of rural is agriculture. In Canada as a whole, it is maybe 12 per cent. In the middle of Saskatchewan, it is higher; around Toronto, it is much lower. It matters, but on average, across rural Canada, 12 per cent of the workforce works on farms.
The Chairman: Just before we start the second round, I wanted to ask about one issue that is of concern. Certainly, where I come from, there has been a great deal of concern because of what has happened in the last few years with the cattle industry and everything else. The farms are obviously critical.
Has Statistics Canada looked at the effect on the viability of towns and villages, which is touched by whatever is happening on the farms, whether that is urban people moving to the rural area or rural people leaving? In the Province of Saskatchewan, over the years some communities have disappeared. There is a great anxiety not just on the farm, but also in the small surrounding communities. Obviously, those communities help the farmers, but the farmers are the foundation for the existence of those communities.
Mr. Bollman: Natural Resources Canada is interested in vulnerable communities, such as the mining and logging communities. The Rural Secretariat and Agriculture Canada are interested in agriculture-dependent communities. Again, your researcher should talk to my colleague who has developed software to say what the probability is that a community will decline in the future, given the patterns in the past.
Of course, farming communities have been declining. Machines have gotten bigger, fewer and fewer people are working on the farms and those communities have not found something new to export. It is simply a result of fewer people working in agriculture. More wheat, pigs and commodities are going out, but it takes fewer people.
If you are in the middle of Saskatchewan, what can you do for a job that is not in agriculture to maintain your employment base? If I knew that, I would be richer than I am now because everybody would pay me big bucks for my ideas.
Looking at the maps and the ``what ifs,'' if the share of agriculture fell by 1 per cent, which communities would be impacted? If you increased the number of people graduating from high school by 1 per cent, how would that look in projections of employment growth or population growth?
The start was looking at vulnerable communities — where they are and how sensitive they are to those factors. It is not exactly answering your question, but I point to what is on the shelf now.
I could show some charts, and the answer is 30 per cent. If a region or a community has more than 30 per cent of its workforce in agriculture, it will decline. It has always declined from the 1980s to 2000. Any region with more than 30 per cent of its workforce in agriculture on average has declined over that period.
It is a major issue in agricultural regions to find ways to have other jobs given that there will always be bigger machines with fewer workers on them in agriculture — as well as in sawmills and below ground in nickel and other mines.
Senator Tkachuk: In table 21, you say that between 6 per cent and 8 per cent of the rural population have incomes below the LICO. As stated earlier, poverty is not only income; it is also a matter of access to services.
We have had other numbers thrown around that indicate it is much higher than that — it is 30 per cent — but I do not really know. Is it much higher than that, when you take into account those other considerations?
Ms. Michaud: We do not have another measure that takes those considerations into account. What we can give you is the rate before tax and after tax.
Senator Tkachuk: The rate you gave us, which was 6 to 8 per cent.
Ms. Michaud: That is correct. If you were using the LIM, you would have a slightly different rate. If you were using the MBM, you also would have a different rate. We do not have a composite index that would look at health and a multitude of indicators to give you a fuller picture.
Senator Tkachuk: There is always a question of what others think is poor and how the poor see themselves.
Ms. Michaud: That is why we do not define poverty.
Senator Tkachuk: Sometimes you just have to ask people. They may look poor to someone from Rosedale who is travelling around the countryside wanting to see the same kind of affluence that they have, but they are not; they eat well, their kids are in school and they are a happy household.
We talked about how services were declining in rural Canada, but there must be some advantages to rural Canada too. I am not sure whether you cross-index crime statistics, for example, to those areas that you consider poor versus what would be considered poor in the city. My subjective view, just from reading about these issues, is that there would be less crime in rural areas. However, I do not really know that or how much there would be compared to urban areas in those areas you call persistently poor. That would be interesting stuff for us to have a look at — the difference between single households, crime and gangs. Perhaps it is better to be poor in a rural area than in the city; maybe it is safer. Usually, you have better families, better community and all those other things.
Also, concerning home ownership, I would think that in the urban areas, most of the people who are poor would rent — they have no money so there is little equity. Could you supply any of those kinds of social measures against the areas you have blocked off on the map? I think we would all find that interesting, because quality of life is also important. You do not have to answer that question unless you have the information at your fingertips. If you do not, that is okay.
Ms. Michaud: We do not, but we can get it.
Senator Tkachuk: That would be great.
Senator Callbeck: You mentioned that 12 per cent of the workforce work on farms. What percentage was that 10 years or 20 years ago?
Mr. Bollman: A bit higher, but I do not remember how fast that line has been coming down.
Senator Callbeck: Perhaps you could supply that information.
Mr. Bollman: It is probably on this computer. I cannot remember but I can dig it out.
Senator Callbeck: I would like to know about employment figures in the food-processing industry in rural Canada. Are they going up or down?
Mr. Bollman: Food-processing employment in rural Canada is going up just a wee bit. I do not think it went up by 1,000 jobs; it went up by 400 or 600 jobs over the five years from 1996 to 2001. I will leave a paper for the researchers with some of those numbers. It is in this pile.
Senator Callbeck: You talk about households associated with census farms. You say gross revenue up to $1 million. That includes everything; that is the household income. In order to be considered in there as a census farm, does a certain percentage of that total income have to come from the farm?
Mr. Bollman: Not in that graph. Everybody on that graph who filled out a census of agriculture questionnaire must have some products for sale. If there are three cattle in the pasture and they were products for sale, the person would fill in a census questionnaire and write down ``three cattle.'' So everybody with an agricultural holding is in there, and then we distribute them by the size of the gross revenue of holding. We could do other tabulations that look at people who say their major occupation is farming or people with their major source of income from farming, but particular graph shows everybody with a census farm.
Senator Callbeck: You do have those figures?
Mr. Bollman: Yes.
Senator Callbeck: Thank you.
Senator Tkachuk: The people who depend on farm income are not just the farmers, but all the auxiliary businesses and enterprises around that farm, including the bulk dealer, the farm machinery guy or the guy who sells fertilizer. I am not interested in the numbers of someone who own a grocery store in the area, but I am interested in people in direct farm-related industry around the farm who are not farmers but who depend on the farm industry to survive. Are there numbers there, or am I putting too fine a point on this?
Mr. Bollman: Yes and yes. Yes there are numbers there and, yes, it becomes a fine point. We have a code for agricultural machinery manufacturers. However, bulk fuel could be for trucks in the oil patch, for hauling agricultural products, or for other things. We do not know whether we should say bulk fuel dealers are connected to agriculture, hauling logs or hauling oil. We do not know how to code those.
Senator Tkachuk: Do we have national numbers for those who depend on the farm? For example, there are manufacturers of rock pickers and cultivators.
Mr. Bollman: With the agricultural machinery equipment coming in there is an agricultural fertilizer code, I think. While agricultural fertilizer may be consumed for lawns too, it is an agricultural product so companies manufacturing it go into that code. In one of these papers, for some of these codes the numbers are distributed between urban, intermediate and rural, so you can compare them. For the detail of whether bulk dealers are not in, agricultural fertilizer dealers are in, farm machinery equipment dealers are in and so on, if you like our coding we have our numbers. You might say I have not got it all, and you would be right, just because of the detail.
The Chairman: When the sugar beet industry went down in Southwest Alberta back in the 1980s, the impact was felt all the way back in town by the person who was selling boots. There were no farmers to buy the boots anymore because the industry was down. Not just big companies but also small stores are affected, and we are concerned about that as well.
Senator Mahovlich: There was a great American by the name of Vince Lombardi who stressed that statistics were for losers. He became a great man.
You say that 12 per cent of the work force here in Canada is farmers. How would that compare with our competition, like the Americans or France?
Mr. Bollman: Twelve per cent of the work force work on farms. Most of those people are farmers, but a good number are paid farm workers, and a very small number are still unpaid family members. How does that compare with the U.S.? We would be very similar. If we go to France, a higher share in rural would be farmers.
Senator Mahovlich: There is a greater percentage of farmers in France?
Mr. Bollman: Within rural areas. I am sure I have the number here; I should probably just pass you the paper.
Senator Tkachuk: If I had their farm subsidy I would be a farmer too.
Mr. Bollman: In rural France, maybe in rural Germany, certainly in rural Greece, a higher share of rural people work on farms than in Canada.
Senator Mahovlich: I drove through France last year, and I was amazed at the beauty of the countryside and their farms, which are so well-manicured. People lived on their farms and they work their farms.
Do you think Canada will have to look at subsidizing some of our farms eventually?
Mr. Bollman: That sounds like a question I should ask my boss.
Senator Tkachuk: Is that so city people can have something nice to look at when they leave the city?
Senator Mahovlich: We are part of the world now and we have competition out there and it is difficult for farmers to compete if other countries are subsidizing their farms, so we will eventually have to look at that, I would think.
Mr. Bollman: I think there are good professors and experts around. I have personal opinions on that but I cannot bring any data to it, so I must duck the question.
Mr. Chartrand: I do not think we have that information. I just want to make the point that 12 per cent of the rural farm population are farmers. That is what it is.
Mr. Bollman: Twelve 12 per cent of the rural population are farmers.
Mr. Chartrand: It is not of the national population. That is a point of clarification.
Mr. Bollman: We are talking about 2 per cent to 3 per cent of the national population. If you go to rural areas, only 12 per cent are on farms, the other 78 per cent of the people in the countryside are not working on farms.
Senator Mahovlich: How are we doing compared to our competition? We must make farming more attractive for people. When immigrants came to Canada back in the 1920s and the 1930s, many of them went to the farms. Now they are going to the cities.
Senator Cordy: Just a quick supplementary question. You talked about the farm owners and the people who would work on the farm and the unpaid workers. When you are calculating your statistics in regards to income, do you consider unpaid workers?
Mr. Bollman: If we are talking about family income, the unpaid workers are included in their family. Does that answer your question? You knew that.
Senator Cordy: Okay. I knew that, but I was wondering, because if you calculate people who are making zero, it will bring the amount of money down, but you would calculate it in terms of a family income.
Ms. Michaud: Exactly.
Senator Christensen: Do we have statistics on the rate of loss of farms and farm land that is under cultivation? Are we losing our farms or are they changing in the way they are being farmed from small family farms to very large farms?
Mr. Bollman: One of our bulletins examines the trend, and the total land in farming is not going down at the national level; I think it might be going up. It is going up in Northern Alberta and going down around Toronto, but the total land in agriculture is increasing in Canada as a whole.
Senator Christensen: Therefore we are not losing agricultural lands.
Mr. Bollman: As long as the land in the Peace River is the same quality as the land around Toronto I would say yes; otherwise, ``maybe'' is the answer. What is happening is that it takes fewer people to operate the land because the machines are bigger.
Senator Christensen: Do we have statistics on the food supply at any one time in Canada? How many days' food supply do we have from our agriculture? It used to be something like 45 days, but I do not know what it is now. I think it might be something like 25 days.
Mr. Bollman: We have data on how much meat and frozen peas are in cold storage in Canada, but so much is coming across the border and moving around that I do not know if people look at those numbers anymore.
Senator Christensen: In terms of Canada's capacity to feed its people at any one time, do you have data?
Mr. Bollman: In terms of that capacity, we have data for each commodity, whether lentils, beef or milk, including how much we produce, how much we import, how much we export, and how much is consumed in Canada. If we are exporting more than we are importing, we are in a net surplus, which is the case with wheat. If the border is closed we will have lots of bread.
That data for each commodity is available on a food statistics CD-ROM from Statistics Canada. You can make those calculations from the data on that CD-ROM, or you can talk to some of my friends down the hall at Statistics Canada who can help you.
The Chairman: Thank you very much. This has been an extremely interesting and beneficial discussion to have at the beginning of our study. We are having hearings here in Ottawa on these fundamental issues that people like you have worked on, and then we will take to the road in the new year to visit the areas that we are talking about today. As we do that we may come back to you to share our thoughts and we will likely have even more questions then.
The committee adjourned.