Eliminating poverty makes economic sense

TheStar.com – comment – Eliminating poverty makes economic sense
January 11, 2008
Ann Decter

When Canada’s First Ministers meet over dinner tonight in Ottawa, they’ll sit down to the unusual opportunity to chew on an issue that has support from premiers of all political stripes. Along with dinner, they can take a big bite out of poverty.

Any meeting focused on the economy and labour force requirements should take a hard look at the statistic that almost 12 per cent of Canadians under 18 are living in poverty. Meeting labour force requirements will mean ensuring all Canadian youth are prepared for the working world, and none are left behind with inadequate skills.

Contrary to popular belief, reducing poverty is good for economies, as is maintaining a strong social safety net to prevent poverty. Denmark, Sweden and Finland are three of the five most economically competitive nations in the world. They have the lowest child poverty rates and strong social safety nets.

Poverty is expensive. Just as it is much more costly to treat a disease than prevent one, it costs more to provide emergency hostels than affordable housing, more to take a child into the care of child welfare agencies than to make sure families have adequate incomes and more to cope with school dropouts than to train our youth for the jobs Canada needs to fill in the coming years.

As Torontonians are aware, letting neighbourhoods sink deeply into poverty has costs that reverberate across the city. Reversing that decline won’t happen overnight, and requires resources from all levels of government and sectors of the community.

Polls continue to show that most Canadians believe concrete government action can drastically reduce poverty, and poverty reduction now has momentum across Canada. Quebec’s 2004 action plan has given that province a nation-leading decline in child poverty rates. Quebec has far and away the best child-care program in the country, a key component of poverty reduction strategies internationally.

Conservative Premier Danny Williams has followed a 2006 promise to make poverty rates in Newfoundland and Labrador the lowest in the country with an ambitious and well-funded plan. The Ontario Liberal government is currently developing targets and measures. Nova Scotia has appointed an inter-ministerial and inter-sectoral working group to recommend a strategy. Manitoba’s NDP government recently raised the minimum wage, also key to poverty reduction.

The time is right for Prime Minister Stephen Harper to outline a clear, national poverty reduction strategy with targets and timetables. As the U.K. has shown, setting realistic targets for poverty reduction puts progress within reach. In 1999, Tony Blair set a target of 25 per cent poverty reduction in five years and opened the door to impressive gains.

Canada should follow suit by setting minimum targets of a 25 per cent reduction in the child poverty rate over the next five years, and a 50 per cent reduction over 10 years.

How do we get there?

The cornerstone would be to ensure everyone working full-time, year-round does not live in poverty. This alone would achieve the minimum 25 per cent reduction in five years, because 40 per cent of all children in poverty live in families where a parent has worked full-time all year.

The real opportunity tonight lies concerted action. Achieving poverty reduction goals will require a co-ordinated strategy between the federal and provincial governments.

At the federal level, the strategy should include increases to the Canada Child Tax Benefit, an expansion of the Working Income Tax Benefit, and major federal investments in early learning and child care and social housing. Employment Insurance needs expansion and is an easy win. This self-funded program maintains a large surplus while covering less than 40 per cent of unemployed Canadians.

Provinces will have to do their part by raising and indexing minimum wages to a poverty reduction standard of $10 an hour, raising and indexing welfare rates and investing provincial revenues in affordable housing initiatives, extended drug and dental coverage, and early learning and child-care programs.

Federal savings from lower debt charges can finance a national strategy. Those who have argued that high levels of public debt are a burden for future generations of children should now delight that the savings can be invested in the next generation of children. Finance Canada predicts public debt charges will decline from 2.3 per cent of GDP in 2007-08 to 1.9 per cent of GDP in 2011-12, providing $7 billion in savings in 2011-12 for priority public investments.

Simply put, Canada can afford to include everyone in prosperity.

It’s time for the First Ministers to take the next step and make 2008 the year Canada resolved to become a global leader on poverty reduction. There are economic, social and human benefits to reap in the years ahead.

Ann Decter is national co-ordinator of Campaign 2000, a coalition working to end poverty in Canada, and interim director of social reform at the Family Service Association of Toronto.

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