Poverty status quo costs twice as much as ending it: CCPA

TheTyee.ca – Blogs/TheHook/BC-Politics
July 14, 2011.   By Crawford Kilian

Accepting the present state of poverty in B.C. is costing British Columbia an estimated $8.1 billion to $9.2 billion yearly, says the Canadian Centre for Policy Alternatives. A serious poverty-reduction plan would cost a third to a half as much.

Those are the findings of a report released today by the CCPA. The Cost of Poverty in BC argues that “The bottom line is that poverty in B.C. represents a direct cost to government alone of $2.2 to $2.3 billion annually, or close to 6 per cent of the provincial budget.”

The cost to society overall is considerably higher—$8.1 to $9.2 billion, or between 4.1 per cent and 4.7 per cent of B.C.’s GDP (Gross Domestic Product, or the size of our economy).

That is as much as $2,100 for every man, woman and child in B.C., or $8,400 for a family of four, every year. In contrast, the estimated cost of a comprehensive poverty reduction plan in B.C. is $3 to $4 billion per year.

In health care, the report says, poverty-related health needs put a burden on the whole system:

Research shows that the lower your income, the more likely you are to use public health care resources. B.C.’s poorest 20 per cent, or “quintile,” of families use a greater share of health care resources than any other group on the income ladder.

• If poverty reduction initiatives reduced health care use for families in the poorest 20 per cent to that of the next quintile, it would save B.C.’s public health care system 6.7 per cent of total spending each year.

• These potential savings are equivalent to $1.2 billion in annual provincial health care spending, or 0.6 per cent of B.C.’s GDP.

• These savings represent the costs of our current high poverty rates; in other words, the costs of inaction are $1.2 billion in health care spending.

Other poverty costs: $745 million of the $18.6 billion that crime costs us, and $6.2 billion in lost productivity and forgone earnings.

Our findings suggest that B.C. is spending between $8.1 and $9.2 billion per year to maintain the status quo of poverty. That’s more than double the $3 to $4 billion needed to implement a comprehensive poverty reduction plan.

Purely on economic grounds, it makes more sense to tackle poverty directly than to continue to pay out year after year for its long-term consequences. The real question is not “Can we afford to reduce poverty?” but “Can we afford not to?”

Crawford Kilian is a contributing editor of The Tyee.

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