Social Policy in Ontario

The cost of ignoring poverty

Posted on November 21, 2008 in Debates, Governance Debates, Inclusion Debates, Social Security Debates

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TheStar.com – Opinion/editorial – The cost of ignoring poverty
November 21, 2008

Thought about dropping a loonie or a toonie in a homeless man’s cup lately? What about giving him and the 905,000 poorest Ontario households up to $2,900 each?

You already are, a new report persuasively argues. The first-ever provincial analysis of the real economic costs of poverty – from increased health-care and crime costs to lost productivity and tax revenues – was released yesterday by the Ontario Association of Food Banks. It shows just how expensive the decades of talk (but little action) have been.

This report provides a welcome opportunity for politicians and taxpayers alike to look at poverty – and the urgency of alleviating it – in a new light. As TD Bank’s Don Drummond, one of the economists who worked on the report, says: “Poverty is not just about the homeless person on the sidewalk … It affects everybody.” The simple truth is that the poor are a drag on the economy, and by giving them crumbs instead of lifting them out of poverty, we ensure they will continue to live miserable, yet expensive lives.

It’s vital that Premier Dalton McGuinty’s government heed this message as it puts the finishing touches on its poverty reduction strategy. Since the downturn in the economy, McGuinty has said his government may not be able to move as quickly as originally planned on poverty reduction, but this report shows how backward that thinking is. Every day that we delay tackling the crisis costs us more. Poverty leads to social assistance costs, unhealthy families, children who do poorly in school, and untrained adults stuck in low-paying jobs, while high-skill jobs go unfilled.

Far better to spend government money to tackle the roots of poverty than to continue treating its devastating effects. The challenge, particularly now when the cupboard is rather bare, is that the investments come first and the savings later. By quantifying the total cost of poverty – it’s up to $38 billion a year, when all factors are combined – this report should give politicians the impetus they’ve been lacking.

A Campaign 2000 report today should give them another push by showing that two decades after Canada promised to end child poverty, there are nearly the same number of poor children.

If the government makes the proper investments, the costs of alleviating poverty will fall in the longer term, says the food banks’ report. “If it does not, those costs will increase.”

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