Saturday, July 19 The celebrations were muted last month after it was announced that Canada had once again placed first on the United Nations' human development index, for the fourth year in a row. Whatever national pride this might have excited was soon extinguished by media reminders of our dismal record in tackling poverty, especially child poverty, where, as a typical news story pointed out, "Canada lags far behind other industrial countries." The government was properly chastened. An unnamed MP from the Toronto area was quoted declaring, "you can't have the number one country four times and at some time not say we have destitute conditions for a huge part of the population." Oh well: It was a swell party while it lasted. Still, it seemed a point worth checking: how does Canada's record on poverty compare with that of other industrial countries?

Until lately, it was difficult to make any definitive international comparisons of poverty rates. Very few countries even keep such statistics. Where the data are available, they must be converted to some generally agreed standard before much use can be made of them. The most comprehensive attempt to date is widely agreed to be the Luxembourg Income Study (LIS), headed by the American economist Timothy Smeeding. It was Smeeding, indeed, who prepared the background paper from which the UN's numbers on poverty were drawn.

What do the LIS figures show? Sure enough, Canada does score poorly when it comes to the number of people living in relative poverty -- in this case, defined as those with disposable incomes of less than one-half the median in each country. This is broadly similar to Statistics Canada's Low Income Cut-Off, the most widely-used "poverty line" in this country: both measure poverty relative to the living standards of the middle class.

On this definition, the LIS puts Canada's poverty rate at 11.7 per cent of the population, as of 1991. That was the second highest among 16 rich countries surveyed, behind only the United States, at 19.1 per cent. Compare these to the Scandinavian or Benelux countries, where a relative poverty rate of 6 per cent was typical.

Of course, the median income will vary greatly among countries: what is measured here is really inequality, rather than any common standard of deprivation. So the LIS also compares rates of absolute poverty, using as its yardstick the official U.S. poverty rate of US$14.40 a day in 1985 dollars.

National currencies were converted using purchasing power parities, to reflect local prices. Here the results are rather different -- intriguingly so.

Once again, as you'd expect, the lowest poverty rates were turned in by countries like Norway (2.6 per cent), Finland (3.8 per cent), Luxembourg (4.3 per cent) and Sweden (4.6 per cent). But there, right behind them, is Canada, at 5.9 per cent -- fifth-lowest among the countries surveyed. (The United States comes in at 14.1 per cent, third-worst after Ireland and the Netherlands.) So Canada can hold its head a little higher. We may have one of the highest rates of relative poverty in the industrialized world, but we have one of the lowest rates of absolute poverty.

This is not to say that we should ignore relative poverty. A society divided by a huge chasm between the haves and the have-nots will find it hard to reach any sort of social consensus. But, really, which would you prefer: to starve, knowing that everyone else is starving, too, or to live decently, even if some others in society live better? If you had to choose, surely it is absolute poverty that should be a society's first concern.

Perhaps there are few absolutely poor people in Canada. But how poor are the poor? The LIS compares the disposable incomes of individuals one-tenth of the way up the income scale in each country. The real income of a poor person in Canada, on this definition, was equal to 45 per cent of the U.S.

median. Once again, this was comparable to the Scandinavian-Benelux average of 47 per cent, and well ahead of countries like France (40 per cent), Australia (38 per cent) or the United States (36 per cent). To be relatively poor in Canada is to be relatively rich compared to other countries' poor.

Why, then, given our success in reducing absolute poverty, do we have so many poor in relative terms? Simply put, because our middle class is so rich.

Where median incomes in the Nordic countries were typically huddled around 80 per cent of the U.S. median, Canada stood alone at 95 per cent. If our median income was as low as the others', we'd have the same relative poverty rate, too.

This is an extraordinary achievement: an average standard of living comparable to that of the United States, combined with Scandinavian-level incomes for the poor. Maybe we are the best country on earth, after all.