Poverty: Canada's real "brain-drain"

The Standing Committee on Finance, Pre-budget Consultation of the Government of Canada held a "pre-budget consultation in Halifax on November 4, 2003. All kinds of so-called big names participate in this process originally created by Paul Martin as Finance Minister to mystify everything under the sun so as to create the impression that they are concerned about society and its progress and that the final budget represents a "national consenus" rather than the financial fat cats of Bay Street. Shunpiking Online is posting the presentation by Katherine Reed for the information of our readers*.

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Thank you very much for inviting me to present this morning. My presentation will focus on poverty. For the past 14 years I have worked at the Antigonish Women's Resource Centre, assisting women who are poor. I have personally experienced poverty, so I understand the issues from the dual perspective of theoretical learning and lived experience. I understand the damage that poverty does, especially when it is prolonged.

Poverty is a complex problem but the solutions to it are fairly simple and obvious. In order to mitigate the damage poverty is doing to Canadians and to the country as a whole, some straightforward policy measures are required. These measures would involve investment of public funds, but in the long run public money would be saved, or at least redirected from self-defeating damage-control, to more productive and proactive areas.

I will not make any emotional appeal today for compassion for the poor, nor will I moralize about the responsibility of well-off Canadians to help the less fortunate. This approach has never worked for me in dealing with policy-makers. Instead, I will attempt to make the rational case that poverty is costing Canadians a lot of money, and that we can change this.

I brought with me some material that helps make this rational case for social investments. This material is just a small part of the huge mountain of evidence, carefully researched, analyzed, and written and collected in homes and offices in every corner of the country. It quite logically and, I would argue, powerfully, makes the case for improved policy responses to poverty and investments in social and human development. It details the shocking growth of poverty and wealth in Canada, and the way the Government of Canada has responded to, and steered this evolution. It shows the very costly consequences of maintaining, mainly through government policy, the poverty we have in Canada and what measures we could be taking to address this situation. I find the material compelling. What does it say?

- It says that poverty is destructive and costly to individuals and to our larger society.

- It says that there are areas of public policy which, were they designed and managed properly, could virtually eradicate poverty in Canada almost instantly.

- It says that there are government policies and practices which are trapping Canadians in poverty -- policies like low minimum wages and disqualifying single mothers for social assistance if they enroll in university.

- It says that certain groups of people are more vulnerable to poverty, mainly women, visible minorities, First Nations Peoples, and people with physical and mental disabilities.

- It says that the wealthy in Canada are getting wealthier and this is partly due to income tax cuts, deferrals and write-offs for wealthy individuals and businesses.

I would like to quickly read some key excerpts from this material and make a few points of my own: (To save time I won't read out the citations as we go through this.)

"The refusal by the politicians to improve food security in Canada has led to a 90 per cent increase in the use of food banks over the past 15 years."1

"17 per cent of Nova Scotians experience some form of food insecurity."2

"As for the feds' commitment of $680 million toward low-rent housing, this amount, spread over five years, is only a small fraction of the estimated $2-billion-a-year cost of a comprehensive national housing strategy. So, lack of affordable housing -- a key factor linked to hunger and food insecurity -- remains a serious problem for many low-income Canadian families."3

Changes to Nova Scotia's social assistance system are a good example of the hardened approach to the poor that is afoot in Canada.

As of August 2001, children's allowances have been eliminated. Parents are now told to find the money to feed and clothe their children in their federal-provincial child tax benefits -- money that was intended to lift those families out of poverty. The monthly social assistance "personal allowance" for adults is $180. This is to pay for food, clothing and miscellaneous personal needs (hygiene products, cleaning supplies, newspapers, haircuts, over-the-counter medicines, co-pay for prescription drugs, transportation, etc.). The allowance is not adequate by any reasonable measure. The only other regular monthly allowance is the shelter amount, which for most parts of the province, is grossly inadequate, particularly for Halifax Regional Municipality, Antigonish and Kentville. A lot of poor people are living in very unhealthy housing and that is going to be very expensive for all of us in the long term.

When I have occasionally raised these concerns to Paul Martin he invariably has replied that he shares my feelings about poverty and would like for the federal government to do more about it, but the country simply cannot afford it. This rings hollow in light of annual budget surpluses in the billions of dollars (and estimated $193 billion between 1995 and 2000). Tax cuts which mainly benefit the wealthy also raise big questions about the we-can't-afford-it argument. According to Murray Dobbin, the tax cuts announced in 2000, were a $100 billion gift to Canada's wealthiest citizens, with 77 per cent of that money going to the wealthiest 8 per cent of the population. The last thing I will mention that discredits Mr. Martin's response is the practice of paying down the federal debt at an accelerated rate. You don't pay the mortgage off early when you are too poor to send the kids to school. That is not responsible financial mangement.

Alternatively, if some sensible investments were made in poverty alleviation we probably would see the transformations that took place a few years ago during some research involving welfare-dependent single mothers in Southern Ontario. These women were provided with a variety of extra supports and became living examples of the benefits of social investments. This is from the National Council of Welfare's description of that research:

"After two years in the study, researchers found that the depression rates of mothers dropped to only 20 per cent from almost half. The social adjustment scores of mothers improved. Each of the services offered to the families resulted in an increased departure from welfare. The researchers estimate that the increase in parents who leave welfare is worth $300,000 a year for every 100 mothers. The savings in reduced use of the public health care system are additional. As well, all the costs of providing these services were completely offset by the reduction in the costs of the parents' and children's use of the services of physicians, other professionals and the child protection system. Providing child care and recreation services -- even without the combination of other services -- proved to be the most effective, and the most cost-effective."4

From study on poverty and health:

"Low-income women aged 40 to 60.... are 92 per cent more likely to be hospitalized than their non-poor peers. One study found that lower-income groups use 43 per cent more physician services than upper-income groups. Poverty, in short, costs the health care system money -- hundreds of millions of dollars every year."5

Before I finish I would like to make a few general recommendations:

- Increase investments in the community organizations that assist the most vulnerable Canadians -- women's organizations, and organizations that assist immigrants, visible minorities, First Nations Peoples and people with disabilities.

- Increase investments in affordable housing and provide support to the community groups working to address housing need.

- Increase transfer payments to provinces so they are able to create affordable housing, improve social assistance benefits, provide the poor with access to post-secondary education, and deliver quality health care.

- Reform the Employment Insurance program so more unemployed people can access it and so it no longer discriminates against women and people who are insecurely employed.


We must re-orient our approach to dealing with poverty in Canada. If we continue to take the same old bad-tasting medicine of tax cuts and social spending cuts, strangling the poor with our bean-counting approach, we will never be a fully productive nation that is able to compete in and navigate this global economy. As long as 16 per cent to 18 per cent of Canadians live in poverty, (and an even higher proportion of children -- 18 per cent to 21.6 per cent)6 we are stuck with limited productivity, high health care and education costs, chronic and intergenerational welfare dependency, social decay, and a terrible, lamentable waste of the human potential of Canadian citizens -- what I refer to as Canada's real brain-drain.

Thank you for your attention.

*Katherine Reed is Project Coordinator of the Antigonish Women's Resource Centre, Antigonish Nova Scotia; 219 Main St., Suite 204, Antigonish, NS B2G 2C1. Katherine may be reached at 902-863-6221, email antig.women@ns.sympatico.ca