Archived - Poverty is Costing All Canadians Too Much, Says The National Council of Welfare

Release of The Cost of Poverty

The National Council of Welfare released a report today showing that poverty is more expensive than Canadians might believe, and that everyone pays the price.

"We wanted to show the public and policy-makers that in addition to fairness and justice, there are good economic reasons why we need to make better investments to reduce poverty now" said Council Chairperson John Murphy of Nova Scotia. "The consequences of poverty for Canada are very expensive to remedy. In the case of children, an impoverished first few years may cause irreversible harm. It makes good economic sense to prevent the damage before it is done."

The report draws on studies in the areas of health, justice, human rights and human development, work and productive capacity and child development. The studies show that reducing inequality between rich and poor, and especially bringing those people at the very bottom of the scale up, has positive effects. It can help a society better manage health care costs, reduce crime, develop a productive labour force, advance human well-being and foster social cohesion and public confidence in governments and in the economy. Further, many of the programs designed to achieve these goals would actually pay for themselves and generate substantial returns on investment.

"We have not attempted to put a global or exact dollar figure on how much poverty costs. That may not even be possible," said Murphy. "What really matters is that we set clear goals, compare benefits to costs over the short and long term and evaluate our progress. Our current approach to poverty is clearly not enough and we need to find more innovative, lasting solutions. We must also understand that a high quality of life will not come cheaply, and that we get what we pay for."

The National Council of Welfare suggests a four-part strategy. First, government leadership and political will are necessary, especially at the federal level, because it is the role of responsible governments, not the market, to support the public good.

Second, comprehensive and holistic planning is needed to ensure that overall government policy direction from taxation to education helps reduce the gap between rich and poor, not just anti-poverty programs. We are faced with a difficult history of federal-provincial/territorial relations and growing disparity across the country. But this situation does not reflect what Canadians hold in common and the Council feels it is high time for a change.

The third element is building on success. There are examples in Canada and other countries of what works and universality and national standards have tended to work best. Canada's public pension system, public education and health care are prime examples, not perfect but they have made a real difference.

Fourth, starting with families with young children is critical because we risk losing so much if we do not act immediately. We need to provide more universal support for children from birth to age six, the way we provide education for all children, once they reach school age. We provide maternity and parental benefits to support newborns and parents who have relatively good incomes and labour force attachment and it makes sense to similarly support newborns and parents in less advantaged circumstances. And there is simply no escaping the need for a national program for affordable, accessible, quality child care and development.

The Council stresses that even when talking about the economy, we can't measure everything just in money. Human well-being depends on access to education and services, social inclusion, health, safety from violence, time for family and sleep as well as jobs, and autonomy to make decisions, develop individual abilities and best meet specific needs. Without these, a person's ability to contribute to the economy, through paid work and the unpaid work of raising families and building communities, is limited. Poverty in several of these areas can quickly turn into hopelessness and despair. This is why a holistic, enabling approach is so important.

"The cost of poverty is one that Canada can ill afford," Murphy emphasized. "I hope this report will challenge our assumptions about poverty and whom it hurts so that we can invest wisely now, for positive results that will benefit all Canadians."

The National Council of Welfare is a citizens' advisory group to the Minister of Human Resources Development.

Released Date 2002-02-05

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• The Cost of Poverty