This bulletin takes a closer look at what poverty looks like for some of the Hamilton groups most impacted by poverty.
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Measuring Poverty
Poverty data is complex – quantifying poverty’s impact is impossible with numbers alone. No poverty measure can summarize the ways that poverty deprives people of necessities, subjects them to dehumanizing experiences, and marginalizes them from everyday life activities in our communities.
In general, there are three methods to measure poverty or low income.[1] Low Income Cutoff (LICO) and Low Income Measure (LIM) are relative measures.[2] Market Basket Measure (MBM) is an absolute measure. LICO is the income level below which a family will devote a larger share of its income on the necessities of food, shelter and clothing than the average family. It varies by family size and the size of the community. LIM is defined as 50% of the median family income. It is adjusted for family size.
MBM measures a family’s disposable income to buy a basket of goods, including food, clothing, shelter, transportation, and other basic goods. The MBM thresholds vary by family size, community size and location. The MBM has been criticized for underestimating the cost of some items, such as housing.
More information about these measures and the poverty line levels for each is included in the SPRC’s 2019 report: Don’t Stop Now! Progress in Poverty Reduction.[3]
Each measurement method has its strengths and limitations, and there is no universally agreed upon ‘best method.’ Each method also generates different poverty lines/thresholds.
The federal government has decided to use the MBM to establish Canada’s official poverty line in its poverty reduction strategy. The Ontario government previously used the LIM (after tax) but now uses MBM to track progress in poverty reduction.
To consider the effect of taxes and government transfers on individuals’ income, after-tax (AT) income is used in the poverty rate calculation by both the LICO and LIM methods.
For context, Figure 1 provides a comparison of the income levels for MBM (used in this report) and LIM (after tax), compared to social assistance, minimum wage, living wage, and average incomes, for a single person.
Figure 1. Income Thresholds for Social Assistance, Poverty Lines, Wages and Average Incomes
For the 2021 Census, the reference period for low-income data is 2020. Due to the pandemic and the COVID Emergency Response Benefit (CERB), income data in 2020 was significantly different for most households in Canada that year. For this reason, comparisons of income data between 2020 and other years should be done with caution. This report focuses on differences between groups, all during 2020, not with other years.
The Faces of Poverty
Poverty has significant ramifications for human well-being. It negatively impacts equity and human dignity. Poverty limits an individual’s or family’s opportunity and access to affordable housing, healthy food, childcare, education, employment, and overall standard of living.
The World Health Organization (WHO) has declared poverty the single most significant health determinant.[4] Poverty can and does lead to illness (due to poor nutrition, inadequate shelter, more significant environmental risks, and lesser access to healthcare). Alternatively, illness can lead to poverty by reducing household savings, overall productivity, and quality of life for individuals and families.
The following sections highlight some groups in Hamilton that typically experience higher poverty rates. Within these groups, individuals hold intersectional identities, and many persons are part of one or more groups most affected by poverty. Figure 2 shows the poverty rate for the selected groups in this bulletin. While these are some groups that experience some of the highest rates of poverty, other groups may not be included due to insufficient data.
Figure 2. Poverty Rates (MBM) by Select Groups, Hamilton, 2020
Recent Immigrants
20,145 immigrants arrived in Hamilton between 2016 and 2021, which are described as recent immigrants. Recent immigrants include persons who have “landed” as immigrants, either economic class immigrants, family class immigrants, or refugees (government and privately sponsored refugees, as well as residents who have been successfully designated as “Protected Persons” after a Refugee and Immigration Board hearing). The newcomer population does not include non-permanent residents of Hamilton, for example, persons on foreign work permit, seasonal agricultural workers, international students, or persons seeking asylum who have not yet been accepted by the Refugee and Immigration board.
Figure 3 shows the number of immigrants and their poverty rates by period of immigration as recorded in the 2021 Census. As mentioned earlier, the COVID-19 government income supports and benefits have boosted the 2020 income of individuals and families, lowering poverty rates.
The recent immigrant population increased by 53% from the previous period (2011 and 2015). Their 2020 median after-tax income was $31,600, which is 14% less than the median after-tax income for all Hamiltonians.
In 2021, about 15% or 2,990 recent immigrants in Hamilton lived in poverty (Figure 3). Newcomers face many challenges, including language competency in French or English, level of professional and recognized accreditation, discrimination based on Canadian working experience, accent discrimination, over-qualification, de-skilling[5], and access to few social and professional networks.
Figure 3 also shows that many immigrants, once established in the community, overcome the challenges in language proficiency, work experience, and access to social and professional networks, thus improving their financial situation.
Figure 3. Number of immigrants and poverty rate (MBM) among immigrants by period of immigration, Hamilton, 2021
Racialized Persons
As a population group, Hamilton residents belonging to racialized groups[6] earn less than the non-racialized population. The 2020 median total income for the racialized population aged 15 and over was $33,200, 18% less than the income of the non-racialized population.
In 2020, about 12% or 16,590 racialized people in Hamilton lived in poverty. As previously stated, government income supports and benefits related to COVID-19 increased individuals’ and families’ incomes in 2020, leading to lower poverty rates.
As a racialized group, Chinese had the highest poverty rate at 20.7%, followed by Arab (18.5%) and Korean (16.1%) in Hamilton. The Black population had a poverty rate of 11.5% and accounted for 20% of racialized people living in poverty in Hamilton. (Figure 4).
Figure 4. Racialized population living in poverty and poverty rate (MBM, Hamilton, 2020)
Single persons ─ with and without children
Unattached individuals, who are persons not living in a census family, either living alone or with roommates, are particularly vulnerable to poverty in Hamilton. In 2020, 20.7% of single persons not living in census families were living in poverty. This is nearly three times higher than the rate for the general population in the city. By comparison, the overall poverty rate for all individuals in Hamilton was 7.7%, highlighting the disproportionate poverty burden faced by singles. Figure 5 shows both the number of single persons living in poverty in Hamilton, as well as the poverty rate.
The high rate of poverty among unattached individuals underscores the need for targeted supports, particularly around affordable housing, employment opportunities, mental health services, and income supports like ODSP or Ontario Works. For many single adults in Hamilton, especially those in rental housing or on fixed incomes, meeting basic needs remains a daily challenge.
Single-parent families are led by persons who were separated, divorced, widowed, or never married, and have one or more children living with them (the children may be minors, or single adults).
Single parenthood can bring added pressure and stress to the job of raising children. With no one to share day-to-day responsibilities or decision-making, single parents must provide greater support for their children.
In 2021, there were 23,985 single-mother families, representing 80% of single-parent families in Hamilton. Over half (57.5%) of single-mother families have one child, 29.4% have two children, and 13.1% have three or more children. In total, about 60,345 individuals lived in single-mother families in Hamilton in 2020, while about13,700 individuals lived in single-father families. Using the MBM measure, in 2020, approximately 13% or 7,845 individuals in single-mother families lived in poverty, and 11.9%, or 1,625 individuals in single-father families lived in poverty, as seen in Figure 5.
Figure 5. Single persons, with and without children, living in poverty (MBM), Hamilton, 2020
Seniors
As seniors (65 years and over) retire, their income sources change. In 2020, about half of the senior’s income came from investment income and private retirement income (retirement pensions, superannuation, and annuities, including those from registered retirement savings plans [RRSPs] and registered retirement income funds [RRIFs]). About 30% came from government transfers such as Canada Pension Plan (CPP), Old Age Security (OAS) and Guaranteed Income Supplement (GIS), and 20% from employment.
In 2020, the majority (98.5%) of seniors received government transfers. Over half (54%) of seniors had investment and private retirement incomes, and 29% reported employment income. In 2020, the average total income for seniors in Hamilton was $46,120, $54,650 for senior men and $38,880 for senior women. The Census recorded that about 4.2% or 4,165 seniors lived in poverty in 2020, in comparison to 7.1% or 6,140 seniors in 2015.
Hamilton has a poverty rate of 4.2% for seniors. In 2020, about 57% of seniors in Hamilton in poverty were women. This proportion is higher than the provincial average of 56%. Although more women are entering the labour market, they are often paid less compared to their male counterparts. Disruptions to employment such as pregnancy, parental leave, and elder care can also impact how they progress and promotion opportunities in the workforce. These circumstances negatively affect their employment income, ability to save and pension contributions. Figure 6 shows the difference between senior men and women, with the poverty rate for senior women significantly higher as they age.
Figure 6. Senior’s poverty rate (MBM) by age group and gender, Hamilton, 2020
Children and Youth
As of 2020, approximately 4.7% of Canadian children under 18 lived in poverty, while in Hamilton, the rate was 8%. Several factors were at play in 2020, including pandemic-related benefits, such as improvements to Employment Insurance along with Canada Emergency Response Benefits (CERB). As well the Canada Child Benefit (CCB), introduced in 2016, provides tax-free monthly payments to eligible families to assist with child-rearing costs. Nationally, the CCB has been instrumental in lifting about 300,000 children out of poverty, contributing to a 40% reduction in child poverty between 2013 and 2017.
Figure 7 shows both the number of children and youth in poverty for Hamilton, as well as the poverty rate. While the poverty rate for children in the 0 to 5 and 6 to 17 age groups is below 10%, we see it rise to 12.5% for youth aged 18-24. It should be noted that at the age of 18, the Canada Child Benefit (CCB) is no longer available.
While significant strides have been made in reducing child poverty in Canada and Hamilton, ongoing efforts are essential to sustain and further this progress. Collaborative initiatives between government programs and community organizations are crucial in ensuring that all children have the opportunity to thrive.
Figure 7. Children and Youth (Aged 0 to 24) living in poverty (MBM), Hamilton, 2020
Working Poor[7]
In addition to the Census data presented earlier in this report, this custom dataset offers a unique perspective on poverty. Based on Taxfiler data, it focuses on the working poor and uses the Low-Income Measure After Tax (LIM-AT), an alternative indicator of poverty.
According to Statistics Canada, the working poor are individuals with an after-tax income below the Low-Income Measure (LIM- AT) for a one-person household and earning an annual individual working income[8] of over $3,000.
The income threshold of $3,000 reflects the federal government’s Working Income Tax Benefit (WITB) refundable tax credit intended to provide tax relief for eligible working low-income individuals and families who are already in the workforce and to encourage other Canadians to enter the workforce.
These individuals are more likely to experience unstable employment, irregular work hours, limited access to benefits, and increased health issues.[9] In 2022, a working poor individual earned over $3,000 but less than $28,863 (LIM-AT for a single person).
The working poor are Canadians who struggle to keep up with increasing living costs. In 2022, there were about 17,250 working poor individuals in Hamilton, representing 4.9% of the population between 18 and 64 years of age. Figure 8 shows the working poor population and their poverty rates from 2016 to 2022 for Hamilton.
It is clear the impact that pandemic income supports had on the number of working poor in Hamilton. There was a significant decline in 2020 and although 2021 had an increase in working poor, it was still well below the 2016-2019 period. By 2022, the number of working poor had increased to its highest number in the past seven years, while the percentage had reached pre-pandemic levels.
Figure 8. Working Poor Population (18-64) in Hamilton, 2016-2022
Conclusion
Progress has been made in some areas, but continued advocacy for adequate income supports remains crucial for those experiencing poverty in Hamilton.
COVID-19 government benefits temporarily raised incomes, lowering poverty rates and reducing income inequality in 2020. However, national and provincial data from the Canadian Income Survey[10] show poverty rates rising again in 2021 and 2022, highlighting the temporary nature of these supports.
Families with children, particularly single mothers, saw the greatest increases in median household after-tax income during this period. While these supports improved financial stability and child well-being, long-term progress depends on addressing systemic issues, such as income inequality, affordable housing, and access to childcare.
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[1] Low-income concepts and statistics, 2021 Census of Population (statcan.gc.ca)
[2] Absolute poverty is defined by a lack of basic necessities like food, shelter, and clothing, while relative poverty focuses on a person’s income compared to the average income within their society, highlighting social exclusion and inequality.
[3] Don’t Stop Now! Progress in Poverty Reduction: Analysis from Hamilton and Ontario, 1996-2016 – SPRC Hamilton
[4] World Health Organization, Health topics, Poverty and Social Determinants.
[5] De-skilling occurs when individuals are unable to utilize their skills and experience in their new environment, leading to a gradual erosion of their abilities. This is particularly common among immigrants who face barriers to employment in their field of expertise.
[6] While this bulletin uses the term racialized population or persons, the data and charts are based on Census data collected using the visible minority term and are still measured using the detailed “visible minority” variable. However, it is still measured using the detailed “visible minority” variable. Visible minorities include people, who are non‑Caucasian in race or non‑white in colour. The visible minority population consists of the following groups: South Asian, Chinese, Black, Filipino, Arab, Latin American, Southeast Asian, West Asian, Korean, and Japanese, as outlined in the Employment Equity Act. These data, however, do not include Indigenous residents.
[7] Working poor are defined as tax filers living in a census family in low-income based on the LIM after tax; have earnings of $3,000 or more; do not claim full/part-time postsecondary education deductions for themselves, are not child taxfilers and non-taxfiling children (children could be of any age) and are not parents who are less than 18 years of age.
[8] Working income is the total amount of an individual’s income for the year from employment and business excluding losses
[9] Public Health Agency of Canada. Key Health Inequalities in Canada: A National Portrait. Ottawa: Public Health Agency of Canada; 2018.
[10] The Canadian Income Survey (CIS) is an annual cross-sectional survey developed to provide a portrait of the income and income sources of Canadians, with their individual and household characteristics.