Fight poverty to spur recovery
Published On Sat Jul 24 2010. Laurel Rothman, Trish Hennessy
Two years ago, most Canadians were enjoying the peak of a 10-year economic growth phase that helped rank Canada among the 10 biggest economies on the planet.
Then, in the fall of 2008, the global economic meltdown came crashing down on Canada, knocking hundreds of thousands of workers into unemployment. According to Statistics Canada, child poverty in this country stood at 9 per cent in 2008 — down slightly from 9.4 per cent the previous year but certainly no harbinger of what was to come.
That’s because recessions have a history of being hardest on the poor. They fall the furthest and they take the longest to recover, as opposed to the richest 10 per cent, who spring back far more quickly after a recession.
Since our national statistical agency is always two years behind in reporting income data, the reality that has unfolded for many Canadians living in poverty since recession hit here in 2008 has yet to show up in the numbers. To make a tough situation worse, Canadians entered the recession financially exposed:
• They had the weakest system of protection against unemployment since the 1940s.
• Their personal savings rates were comparable to those of the 1930s.
• They also had record-high level household debt.
We can choose to stand idly by waiting for the poverty statistics to catch up with reality and force us into action. Or we could act now, while so many children and their families are hurting.
Acting now would be a very Canadian thing to do. Recall that in November 2009, the House of Commons reaffirmed — unanimously — its commitment to end poverty in Canada. That commitment came just five months after the recession became official.
There is no doubt that the recession is still on the minds of Canadian families, particularly those who now find themselves in low-income situations.
As many as 500,000 workers have now exhausted their employment insurance benefits. Welfare caseloads have increased in all provinces. Rental affordability has declined in 11 major urban centres in Canada. In 2009, food banks experienced the largest increase of hungry Canadians coming to them on record.
The real question remains: Is poverty elimination still on the minds of those in government as we try to recover from this recession?
There is no way to get around it. Poverty elimination must be at the forefront of any recession recovery plan. In these times of economic uncertainty, good public policy and spending prevents and reduces poverty. It also makes good economic sense.
The Ontario Association of Food Banks estimates poverty costs Canadians up to $30.5 billion in terms of health-care spending, crime and lost productivity.
Now is the time for action. This fall in the House of Commons there are two tangible opportunities to make good on the federal resolution to end poverty in Canada.
The first is a private member’s bill by MP Tony Martin (Sault Ste. Marie), an Act to Eliminate Poverty in Canada. If Parliament says yes to this bill, the federal government would be obligated to develop a strategy for poverty elimination.
While many provinces have poverty reduction strategies, federal leadership would get Canada closer to eliminating poverty at a time when we need to ensure all Canadians have the opportunity to contribute to what we hope is a rebounding economy.
The second bill before the House is an Act to Ensure Secure, Adequate, Accessible and Affordable Housing for Canadians. It would compel the federal government to develop a national housing strategy with the provinces, territories, municipalities and civil society. This strategy is desperately needed: private market rental units are increasingly out of the reach of low- to modest-income earners.
In addition to these policy opportunities, programs such as the National Child Benefit are prime examples of how income supports can positively impact poverty. This benefit prevents 78,800 families with 171,100 children from living in low-income conditions (according to the market basket measure). Let’s increase the benefit and lift even more children and their families out of poverty.
Do we wait a few more years for the statistics to jar us into doing the right thing? Or do we act now and do right by all Canadians? How will history judge this, the most prosperous generation to have ever lived in Canada, if we fail to act? The choice is ours.
Laurel Rothman works at Family Service Toronto where she is national coordinator of Campaign 2000. Trish Hennessy is director of the Growing Gap Project at the Canadian Centre for Policy Alternatives.
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