Poverty Reduction: The Saga Continues

by Terrance Hunsley


Premier Doug Ford did not waste time in getting rid of the Ontario basic income experiment. He slammed the door on hopes that advocates had for provincial action to reduce poverty in Ontario.  He simultaneously rolled back a decision by the previous government to increase disability benefits by about one percent more than inflation, thereby ensuring that people with disabilities will lose purchasing power from their sub-poverty line benefits. 

There may be slightly more hope in Quebec, where the Couillard government is implementing an improved minimum income for people with serious disabilities. As these people are not expected to enter or re-enter the labour market, their disability benefit will increase to about $18,000 by 2023. A small step but a good one because it is getting close to guaranteeing people with disabilities a right to live at a minimum community standard (poverty line). But there is an election coming up there as well, so even that may be in doubt.

When the Trudeau government was elected two years ago, Liberal and NDP parties were in power pretty much throughout the country, including the provincial powerhouses. There was a brief window in time when it may have been possible for a truly national commitment to reform inadequate, ineffective, needlessly complex and wasteful social benefit programs and discriminatory special subsidies. They could have been replaced by programs to fit the new economic era, simplify income assistance, incentivize work and make it result in a liveable income. Canada could have lived up to its international human rights commitments and provided Canadians with a right to live above the poverty line through a guaranteed minimum income, a universal basic income, or a combination of  work, training or wage supplementation, and disability and children’s subsidies. 

Then-Premier  Wynne kicked that possibility down the road with a pilot project, and despite some strong initial improvements in federal income supports, the federal government decided to study poverty for a year and a half.  So now the chance for political consensus is lost. The federal and provincial ships of state will sail on in separate and competing compartments. Piecemeal programs and overly bureaucratized transfers will likely continue to be the preferred model.  A shame.

The recently-announced federal poverty reduction strategy reflects the loss of momentum. It is entitled Canada’s First Poverty Reduction Strategy, despite previously-announced provincial and municipal initiatives. It does not encompass provincial and municipal strategies, nor does it invite their participation in committing to a bold 12- year objective of reducing poverty by half. It does say the federal government will work with them, but the overall approach is clearly federal, not national. And the provinces have primary constitutional authority over most of the antipoverty programs, even if the federal government spends the most money. 

The federal paper lists no new spending, except for an increase to a renamed workers tax benefit. So next year an individual working full-time for $15000 will get a $500 increase to $1100. Nice little bump, but it won’t get them above the poverty line which they estimate at about $19,000 for an unattached individual. The long term strategy seems to rely heavily on economic growth and tight labour markets. The study also finds that all existing federal antipoverty programs – at least 110 of them by my count, some of which are further subdivided in supporting provincial, municipal and charitable programs – should continue. On top of all the provincial, municipal, first nations, and community non-profit programs and services.  

So at ground level, looking up from impoverishment, disability, addiction, physical or mental health issues, dysfunctional family situations, homelessness and/or incarceration, as well as social exclusion and discrimination, a poor person sees a bureaucratic haze obscuring a mind-boggling morass of uncoordinated and often competing programs and organizations.  Managing your own poverty can be a full time job.

The federal strategy document tells us how much will be spent on all of their initiatives, as if this were a measure of their importance or performance.  A few billion here, many billion there, a hundred million there, 35 million over 5 years somewhere else. Unless you have an amazing knowledge of what our national income is each year, what the federal, provincial and municipal budgets are, how many people are theoretically eligible to receive each benefit,  how much benefit they can receive, how many of the eligible people apply, how many are turned down, you really have no idea how much help the poor people get. Statscan figures indicate that the bottom twenty percent of people on the income scale, take in 3.5% of primary income (before government transfers). We then transfer about 3.2% of our total income to them, bringing them up to 6.7% in total. But that money which trickles down to them is closely managed by hundreds of thousands of people and organizations, through an encyclopedia of programs, initiatives, subsides, benefits, all of which have their own governing structures, reporting procedures and incentives to continue and grow. The federal study did not find a single program which should be terminated or combined with another or made more effective.  

The poverty reduction strategy does propose a couple of important things. It creates an official measure of poverty, based on a basket of goods and services which an individual or family would need to buy, to live at a minimum level of dignity and health. It is an absolute measure, to be adjusted only by the cost of living where one lives, rather than being set as a proportion of average or median incomes. And the government will commit to regularly measuring progress on the achievement of their objectives. And because the chosen measure will not be internationally comparable, they have decided that Statscan will continue to monitor the relative measure, known as the Low Income Measure (basically half of median income adjusted for family size). Interesting that the poverty line will be higher in some rural areas than in the cities, despite the differences in housing costs. This may be because if you have public transit available, the cost of a monthly pass may be less than the measure chosen for rural and small communities, which is the cost to buy, maintain and operate a five year old car.

The federal government will continue and expand its efforts to study all the multivariate dimensions of poverty such as housing insecurity or core need, and food insecurity. It wants to know more about the mental health of the poor, so that a rationale can be built to support expanded services in the area. And while it steers away from too much discussion of the poverty/incarceration nexus, it is aware of that as well. Hence the number of topics which keep thousands of people studying the poor, grows. There have already been some increases in support for provincial programs, especially homelessness and housing. 

So what the new strategy really seems to amount to so far, is a recounting of some good initiatives undertaken to fulfill campaign promises from the past election, plus a bold objective, from which to develop promises for future elections. It suggests that promises will be made where the federal government can act directly and be seen to act. The most obvious, and probably most useful, would be to bump up the working tax credit to bring full time low wage workers to the poverty line, and also provide a declining boost to those just above. It would cost a few billion, but would be broadly popular. A key concern would be to ensure that provincial governments don’t take advantage of it to suppress minimum wages. If concerns should arise about this being an indirect subsidy to low wage employers, business taxes could be bumped up for low wage employers who do large volumes of business.

But what about a truly national commitment to an integrative and easily understandable way to guarantee people a right to live out of poverty?  Well, we didn’t get that. Could we? That will be the subject of a following article. 

One thought on “Poverty Reduction: The Saga Continues

  1. Right on. Poor folks, sick folks, etc., are the primary natural resource for endless programs, bureaucrats, consultants, and even journalists. It’s absurd and enormously sad and wasteful. Thanks for laying it out so clearly.

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