The Cost of Poverty in BC by Iglika Ivanova. Co-published by the Canadian Centre for Policy Alternatives BC Office, the Public Health Association of BC and the Social Planning and Research Council of BC.
Poverty is the result of circumstances in which an individual has fewer resources for food and shelter. People living in poverty are also more likely to suffer from illness, to become criminals or victims of crime, and economically inactive. According to a study by the Organization for Economic Cooperation and Development (OECD), Canadas poverty rate is higher than in other developed countries. According to Statistics Canada, the province with the highest poverty rate is British Columbia. Half a million people in the province (12% of the population) suffer from poverty, including single mothers, new immigrants, refuges, and disabled persons.
In The Cost of Poverty in BC, Ivanova argues that the cost of implementing effective social programs that address poverty is lower than the amount of money the government is forced to spend on dealing with the consequences of poverty. The report shows that the provincial government chooses not to fund programs that help address poverty, such as social housing programs, a more generous welfare program and child care programs. Because the government does not implement these programs, tax payers have to pay for the consequences of poverty. They include increased crime rates, poor health, lower literacy levels, lower-than-acceptable school performance for children and an increase in stress on family members. As a result, the provincial government has to increase funding for health care, policing, and other crime-related programs. Poverty also decreases productivity, which has a negative impact on the economy. This reduces the amount of tax money that government can collect, which is used to fund social programs that the public relies on.
According to the report, a persons health is greatly influenced by poverty. People facing poverty are exposed to a variety of environmental factors that can negatively affect their health, such as hazardous jobs, living in a neighbourhood that suffers from high levels of criminal activity and the inability to access nutritious food. They also tend to experience elevated level of stress created by other factors such as a lack of access to prescription drugs, oral care, and therapies. This leads to an increase of low-income individuals using the health care system. Therefore, government has to increase funding to provide additional services to low-income individuals so their health problems can be addressed. The BC government could save $1.2 billion in health spending by raising the income of the provinces poorest 20%.
Poverty is also closely related to crime. Poor performance of children at school may increase their chances of becoming criminals when they reach adulthood. A report from Statistics Canada has shown that prisoners tend to have lower literacy rates than the rest of Canadians. The cost of crime in Canada, by the estimation of Statistics Canada, is $99.6 billion. This includes direct and indirect costs such as policing, justice system, and pain and suffering as a result of crime. In British Columbia, the cost of crime is $18.6 billion.
When low-income individuals experience lower literacy rates and are involved in criminal activity, they often have fewer employment opportunities and contribute less to labour market than individuals in other income brackets. This places a burden on society and government. A wage increment and reduced unemployment in BC would push low-income families into a higher income-tax bracket and would increase overall income to $6.2 billion. This would increase income tax revenue and would lead to a reduction in the amount of money spent on social assistance.
In addition to the poverty-related costs created in the areas of health care, crime and economic inactivity, the report also looks at costs that will be imposed on the next generation- children. Children in lower income families have a reduced ability to contribute to society because of behavioural outcomes and lower literacy. Canadian studies have shown that there is a 20 to 25 % chances for children in poor families to experience poverty in their adulthood, creating a huge burden on government and society in the future.
To wind up the discussion, the report argues that the total cost of poverty in BC is around $8.1 to $9.2 billion per year. It is recommended that half of this spending can be used to fund comprehensive poverty reduction programs. Such programs would provide low-income individuals and families with affordable housing, increased access to food, improved pay scale, better child care facilities and reachable educational and training facilities.
Reviewed by Kinza Gul