Real cost of poverty

Posted on May 19, 2012 in Inclusion Debates

Source: — Authors: – business
May 19, 2012.   By Jody Percy, The Windsor Star

The cost of doing nothing is often greater than the cost of doing the right thing.

Such is the case when we talk about addressing the very real social, economic and health care costs of poverty in Ontario.

The real cost of poverty to Ontario is immense. According to the Ontario Association of Food Banks, the cost of poverty to Ontarians amounts to 5.5 to 6.6 per cent of Ontario’s GDP. In real terms that equals $2,299 to $2,895 annually for every Ontario household.

Poverty-induced health care costs alone amount to $2.9 billion each year, and the World Health Organization states that income is the single largest determinant of health. These expenditures are real and represent a substantial portion of the economic output of our province. If a concerted effort is made to eliminate poverty, the savings can be passed along to taxpayers, used to reduce our debt and also to improve our health care and education system.

Statistics from 2010 show that nearly one in 10 Ontarians lives in poverty. That number increases to one in four for First Nations children. In Windsor-Essex, there are more than 38,000 people living in poverty.

In a province with such vast wealth these numbers are absolutely appalling and inexcusable. We pull from the ground billions of dollars of natural resources. Our banking system is the envy of the world. Ontario has the economic capacity to eliminate poverty, and in the long term this will make us even stronger.

In 2009, all provincial parties agreed to make poverty reduction a priority. Some progress has been made. Many groups are working in collaboration to identify causes, track statistics and develop strategies to overcome barriers in all of our communities. However, without sustained commitments from senior levels of government, the work done thus far will have been in vain, and poverty will become an increasing cost we cannot afford to bear.

The economic meltdown of 2008 has left many areas in Ontario reeling from job losses and reduced tax revenues. However, we must not let these challenges prevent us from tackling meaningful poverty reduction.

As the province reviews our finances line by line, the temptation is to make sweeping cuts to social programs in an effort to bring the books into balance. Indeed, the easy way may be to simply forget about the commitments made to tackle poverty. This would be short-sighted and result in an increasing burden on future provincial budgets, particularly in the areas of health care and reliance on social assistance.

It would be a travesty to allow poverty reduction efforts to become a victim of short term political expediency. Our former majority government launched an extensive review of social assistance in Ontario. This review has yet to be re-leased, but any recommendations have now been potentially rendered moot in the wake of the Drummond Report and the 2012 provincial budget.

Drummond’s recommendations failed to see poverty reduction as a net positive for Ontario’s finances. Drummond recommended capping increases for the envelope of social assistance funding to 0.5 per cent each year.

The Ontario budget delays a planned increase to the Ontario Child Benefit and includes a mere one per cent increase in social assistance rates. After inflation, these proposals amount to a net decrease in income for those on assistance.

It is imperative that we remind Ontario’s political parties of their commitments to take meaningful action on poverty reduction.

We should not be questioning whether we can afford to eliminate poverty in Ontario. The answer is clear. We can’t afford not to.

Jody Percy is chair of Pathway to Potential’s Income Working Group.

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