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Poorest to Pay for Campbell Plan?

BC already has highest poverty rates in Canada. The premier's new economic program does nothing to change that.

By Marjorie Griffin Cohen and Seth Klein 28 Oct 2008 | TheTyee.ca

Marjorie Griffin Cohen and Seth Klein are co-directors of the Economic Security Project, a five-year initiative between the Canadian Centre for Policy Alternatives and Simon Fraser University to study the implications of B.C.'s public policy on vulnerable populations.

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A few points short of a full plan.

Gordon Campbell's 10-point economic plan will have no impact on B.C.'s most serious problem -- persistent and extreme poverty in this province.

Despite years of economic growth, B.C. has the highest poverty rates in the country (by any measure used). Thirteen per cent of the population is living in poverty, and for five years running, B.C. has had the dubious distinction of having the highest child poverty rates (16 per cent) in the nation. The problem of poverty risks getting worse with a recession unless focused action is taken

Poverty rates for certain groups are stunning: female-headed, single-parent families, 40 per cent; aboriginal population, 36 per cent; people with disabilities, 30 per cent; and immigrant families with children, 46 per cent. In addition, as a recent SFU study found, the province has about 11,750 people with mental illness or severe addictions who are absolutely homeless.

The depth of poverty is extreme: the average poor person in B.C. has a yearly income that is $7,700 below the poverty line.

Why fighting poverty pays off

Taking action on poverty is a collective responsibility and should be a government priority -- just because it is a moral imperative. But recognizing that morality is not usually what makes governments act, the following argument for change will be couched in political and economic terms.

First, poverty reduction is a smart political move. People, in general, deplore poverty and support government poverty reduction plans. The U.K., for example, has moved 600,000 children out of poverty and is well on its way to cutting child poverty in half by 2009. Closer to home, both Newfoundland and Quebec have comprehensive anti-poverty strategies. Newfoundland, which previously had poverty rates similar to that in B.C., introduced a bold action plan to reduce poverty. It now has the highest social assistance benefit rates in the country and is the first province to index welfare rates to inflation. Both Ontario and Nova Scotia are in the process of developing poverty reduction plans. Evidence shows that strong political leadership on poverty reduction produces significant reductions in poverty levels.

B.C. does not have a poverty reduction plan and none appears to be on the horizon. Premier Gordon Campbell's 10-point plan to "improve economic competitiveness and reduce costs for families and business" will not address even one aspect of B.C.'s most serious problem. Reducing taxes may be a populist political move, but the tax reductions probably won't even be noticed the next time we all do our income tax. The tax cuts also give greater benefits to those in higher income brackets. Those making $40,000 a year will get $56, but those making $70,000 and more will get $140.

Surplus could erase poverty

The $144 million going to individual tax reduction would go a long way if it were instead directed towards low-income families and people who now live on $610 a month (the rate for a single person on social assistance). Bringing all of B.C.'s poor up to the poverty line would cost about what B.C. had as a surplus in its last budget. Even using some of the surplus each year toward poverty reduction would be better than doing nothing.

Neither tax reductions nor more spending for roads and bridges, such as Campbell has announced, will have as much of an economic stimulus in B.C. as would using an equivalent amount of money toward poverty reduction. Poor people spend everything on food, housing, and other necessities, most of which is locally based. The impact on their spending would be immediate within a community. This is less the case for people with more money, who are more likely than the poor to buy imported items, spend outside the country, or simply save. Similarly, large infrastructure programs are often undertaken by companies from outside the province with at least a proportion of the labour force and materials imported from elsewhere.

Now's the time for a poverty plan

B.C. is still a wealthy province and a looming recession is precisely the time when poverty reduction needs to be a priority. This would include measures to raise the minimum wage and focus building efforts on low-income housing and public transit. But above all, the government needs to introduce a bold poverty and homelessness reduction plan with clear and legislated targets and timelines.

Premier Campbell's 10-point plan is vague about some issues. We do not know what he means by acting "immediately to rein in avoidable government spending." If this means what it has meant in the past, it would be the poor who would take the brunt of the cost of the government tax reductions. This should not happen again through reductions in social services. Rather, the poor should be the object of government attention and support.

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