December 28, 2005

BC Progress Board's Social Condition Indicator

The BC Progress Board has come a long way since February 2002 when it first reported on British Columbia's record relative to other Canadian provinces on six core targets and 20 individual performance indicators. Its Fifth Annual Report, published December 15, 2005, reports in detail on 71 indicators.

The Report can be accused of having some bias, for instance it examines the ten year record on per capita GDP growth without commenting on how BC's population grew at more than twice the national average during much of that period and it treats the size of government as a negative indicator without commenting on the consequences of cutting services. As each year passes the Report's scope is expanding; it is a wealth of statistical information.

This year the Progress Board introduced a "social condition indicator" described as being derived from five performance indicators that are included in the Report: low-income cutoffs (LICOs), low birth weight, personal and property crime rate, income assistance and long-term unemployment. The social condition ranking is "the simple average of each province's rank on the five indicators". In 2003 BC finished in 10th place on LICO, 3rd in low weight births, 9th in personal and property crime, 5th on income assistance, and 10th on long term unemployment, resulting in a 9th place ranking for the overall social condition indicator. That's higher than BC's 10th place social condition rank in 2002 but a long way from its 4th place rank in 1995. Could it be that social conditions are deteriorating under the Campbell government, and the Progress Board is shining a light on that failure?

The Report states that its new social condition indicator is designed to replace the simple use of LICO as a performance measurement for its sixth goal: "Make BC a leader in Canada on social condition by 2010". The Board is critical of Statistics Canada's LICO as a measure of social condition because it can show an increased percentage of the population in the LICO even though all incomes are rising. The Low Income Cutoff is defined as the income thresholds, determined by analyzing family expenditure data, where low income families will devote a 20% larger share of income to the necessities of food, shelter and clothing than the average family would, for a total of 64% of spending on those basics. There are separate cutoffs for seven different family sizes and five different community sizes. By taking expenditure levels into consideration, it is more than a relative indicator such as the proportion of the population whose income falls under 50% of the median family income, but it is not as absolute a measure of poverty as a proposed "Market Basket Measure". Cynics might argue that the debate over measures of poverty is nothing more than an attempt to ignore poverty by defining it away. Human Resources Development Canada (HRDC) reported on the experimental market basket measure saying that using it in 2000 showed the incidence of low income for all children in Canada was 16.9%. That is very similar to the number using the pre-income tax LICOs (16.5%). The Progress Board Report noted that it cannot use the market basket measure because HRDC produced it for only one year.

This is the first year the Progress Board reported on inter-provincial comparisons of the percentage of the population in receipt of income assistance. Its report may surprise many British Columbians who think that the dramatic reduction in the number of people on welfare is a phenomenon unique to BC. The following graph taken from page 135 of the Progress Board's 2005 report shows that BC has closely tracked the Canadian average with respect to the percentage of the population receiving assistance. The question for the Campbell government is whether it is prepared to adjust welfare rates and perhaps consider indexing them, like MLA's pay (which are indexed to prices and wages). Only the LICO component of the Board's social condition indicator comes close to reflecting frozen welfare rates.