Canadians cover $24-billion a year in poverty costs: Report

Posted on September 28, 2011 in Social Security Debates

Source: — Authors: – news/Canada
Sep 28, 2011.  By Jordan Press, Postmedia News – Ottawa

The federal government should make a billion-dollar investment to eradicate the root causes of poverty, or face billions more in ongoing expenses, a new report says.

Poverty costs taxpayers more than $24-billion a year, said the report, which was released Wednesday from a federal government advisory board, the National Council of Welfare.

The federal government should take the lead and create a sustained, Canada-wide poverty investment program that co-ordinates resources at all levels of government, the report says.

The initial investment could be in the billions of dollars, the report suggests, which says it would be worth the expense in the long run.

A large cash investment today would reduce poverty costs to taxpayers in the ensuing years, the council says.

“In an investment model, the more resources devoted to preventing poverty and directly lifting people out of poverty, the greater the payoff would be for all Canadians in reduced health-care and other indirect costs,” says the report, titled The Dollars and Sense of Solving Poverty.

“An investment model is geared towards the longer term. It may require larger initial resources and may take time, but there will be a far greater and more permanent payoff.”

Governments should focus public spending on prevention programs such as income supplements and affordable housing, which are cheaper than reactionary measures such as emergency shelters, the council says.

For example, the cost of keeping one person in a shelter in Calgary for one year can be as much as $42,000, the report says. A one-year stay in a prison or psychiatric hospital can cost as much as $120,000, the report says.

Supportive housing, where residents can access services, costs as much as $18,000 a year per person, the report says, while affordable housing can cost government as much as $8,000 a year per person.

Investing in prescription-drug plans to make medicine more affordable could improve the health of those with low incomes, the report says, and reduce visits to emergency rooms, which eat up greater portions of taxpayers’ dollars.

“An approach based on short-term spending to help people in poverty get by can often carry indirect costs. It does not do a good job of reducing poverty itself,” the report says.

“In medical terms, this is like getting half a dose of antibiotic and having your infection ease up for a little while, only to return worse than it was before.”

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