Poverty in Canada
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Poverty: A state of constant dread
One in six Canadians lives in poverty.
David Olive - January 13th 2007.

If the poor weren't so conveniently invisible, maybe we'd come to our moral senses and devise a national strategy for eliminating poverty.

But the one in six Canadians trapped in poverty are hidden in plain sight. They return from their minimum-wage work to a cot in a flophouse. They continue to live with an abusive spouse for lack of an alternative to the streets.

They live with fellow new Canadians, three or four to a room, in houses that should be condemned. They live in cramped quarters with parents or grown children. Some reside in cars or cube vans. Some get by on intermittent "Red Cross remittances" from distant relatives.

Even in Stephen Harper's minimalist Ottawa, it's hard to keep track of all the strategies. Canada has an Oceans Strategy, a Biotechnology Strategy, a Strategy to Combat Money Laundering, a Strategy to Protect Species at Risk, and a Georgia Basin/Puget Sound International Airshed Strategy.

But there's no strategy to lessen the suffering of the 5 million Canadians living in poverty, more than 1 million of them children. To reduce poverty to a mere memory for the 750,000 Canadians who rely on food banks, and for the 1 million working poor in Ontario alone who must find a way to raise their families on wages of less than $10 an hour, as calculated by the Ontario Coalition Against Poverty (OCAP).

In New Brunswick, the minimum wage is $6.70, lowest in the nation. But in the piecework factories in the Spadina Ave. garment district, hourly wages are even lower than that, due to lax enforcement of labour laws.

The remedies available to a wealthy nation determined to greatly reduce, if not eradicate, poverty are as plain as day. A higher minimum wage. Affordable housing. Skills upgrading. Pharmacare. Universal child care.

Increased social assistance payments, which by OCAP's estimate have dropped 40 per cent after inflation from their peak in the 1980s. Nothing you haven't heard about. All that's missing is political will.

And that will derives from public pressure, sadly lacking because impoverished people don't advertise their stigmatized plight. They don't have a ribbon campaign.

They are too busy working two jobs to organize, and to lobby politicians for a better shake the way recipients of corporate welfare do.

Peggy Nash, the NDP MP for Parkdale-High Park, hastens to say her private member's bill to raise the minimum wage to $10 for workers in banking, transportation, telecommunications and other sectors covered by federal labour law is no panacea.

"It's just a start, a renewed effort to get people talking about why a G-8 nation tolerates so much poverty and suffering," Nash says. "And with luck, it will encourage provincial governments to raise their minimum-wage levels."

Minimum wages affect relatively few people directly, but tend to lift incomes for tens of millions of people earning above the minimum wage since general wage levels move in tandem with them. "When you raise the minimum," says Nash, "you lift everyone, directly or indirectly," outside the Far North, at $8 an hour.

But the highest minimum wage in North America is Washington State's $9.33 (Canadian). In Israel, the minimum wage is $20.65 (Canadian).

Reliance on the minimum wage is higher in Canada, at 4.3 per cent of the workforce, than in the United States (1.4 per cent), but much lower than in France (15.6 per cent.).

There is a banality to poverty that works against urgent reform. Since few of us have as much money as we'd like, we think we know what it means to struggle to make ends meet. Somehow we manage, and expect others will as well.

Yet obviously that's not poverty.

"Poverty is fear, malnutrition, chronic bad health, loneliness, illiteracy and inadequate job skills and no time or money to upgrade them," Nash says.

"It's not knowing whether you and your kids will have a decent place to sleep next month."

Imagine yourself in a state of constant dread. That's poverty.

John Clarke, an organizer with the Ontario poverty coalition ever since OCAP was founded in 1990, believes, like many anti-poverty activists, that only a widespread sense of outrage will rid us of this social evil.

"When OCAP was launched, I couldn't imagine that over its history the conditions of drab misery for poor citizens would actually worsen rather than improve," says Clarke. "I believe Canadians are concerned about homelessness, for instance. But passive indignation is not enough.

"You have to challenge these injustices endured by our fellow citizens. Because only when politicians see that the public is acting on its discontent with the status quo will we see a difference."

It's a peculiar situation. Canada's economy has been booming for years, and employers are coping with skills shortages amid a 30-year low in unemployment.

So for Nash, it doesn't make economic sense that the 15.5 per cent of us mired in poverty are held back from playing a bigger role in Canada's economic progress.

Nash is a former executive director of the Canadian Auto Workers union who was supervising elections in developing world nations before her own election to Parliament a year ago.

She makes no apologies for her social-justice motives. "Existing conditions are terribly punitive for the most vulnerable people in our society," she says.

But Nash also regards poverty as an economic crisis, not only a social one – a crisis of lost opportunity for a nation failing to make the best use of its existing and potential workforce.

"In the short term, a boost in the minimum wage is a stimulus for the entire economy, because poor people spend what little they have right away on food and clothing and books for their kids that they've been postponing in order to pay the rent," Nash says. By contrast, affluent recipients of windfalls tend to park them in the bank or a mutual fund.

And in the longer run, "the working poor are better able – with modestly higher incomes, decent shelter and affordable child care – to upgrade their job skills and obtain certification for better-paying work.

They become more social, they become more engaged citizens, and of course they start paying substantial taxes."

Clarke marvels that politicians with a laggard approach to poverty reform ignore the evidence that "poverty is simply not cost-efficient for the economy. Working people denied a decent living wage put extraordinary demands on the system.

"They turn to emergency wards because they can't afford preventive care. They help raise the costs of incarceration among poorly supervised kids whose parents are collectively working three or four jobs.

And they are a tax drain on the treasury in welfare payments to folks who could be paying taxes if they were provided some help in climbing out of poverty."

The minimum wage is suddenly a hot topic, with Ontario and Quebec recently announcing minimum wage increases.

And one of the few issues where U.S. President George W. Bush has agreed with the new Democratic Congress on the need for a minimum wage increase.

Last week, the U.S. House of Representatives voted to raise the federal minimum wage by a whopping 41 per cent, to $7.25 (U.S.) per hour, the first increase in a decade.

Much more is needed, though.

In November, Canada's food banks association released its HungerCount 2006 report, in which it noted that a major segment of food bank clientele are working people who complain of not being able to obtain more than 25 hours of work per week from any given employer.

That prompts them to take on additional jobs – "working night and day, graveyard shifts and no time for their spouse and kids, and still not getting ahead," says Clarke.

The conditions described in the food bank report angered John Murphy, chairperson of the National Council for Welfare, an advisory body to the federal government's Human Resources and Social Development department.

"The continued high numbers of people who use food banks make it abundantly clear that too many Canadians struggle with hunger and poverty," Murphy said.

He added that, "Welfare incomes in every province remain far below the poverty line."

Balky employers also figure into the crisis of underemployed immigrants, a significant segment of the working poor.

"I've had difficulty with some of the professional accreditation bodies, who've put up a fight over supposedly doubtful skills of immigrants from certain regions," says Mike Colle, Ontario's minister of citizenship and immigration.

"But my biggest problem has been with employers," Colle says. "There's a general reluctance among private-sector employers to hire new Canadians.

"They worry about language issues and cultural fit with their existing workforce. There's a lot of bias to overcome."

A plan for coping with those biases would be integrated into the "comprehensive national anti-poverty strategy" called for by the National Council for Welfare.

"Countries like Ireland and the United Kingdom have made fighting poverty a priority," said Murphy, "as have Quebec and Newfoundland and Labrador. Preventing and reducing poverty is essential if we are to have a strong and prosperous country."

For Hugh Mackenzie, a research associate on the Inequality Project at the Ottawa-based Canadian Centre for Policy Alternatives, three key elements of an anti-poverty strategy would be affordable housing, pharmacare and universal child care.

"Housing is fundamental to a decent standard of living," says Mackenzie. "A family's struggle to find housing sucks resources from nutrition and other essentials."

Almost 70,000 people in Toronto alone are on waiting lists for affordable housing.

Since going off traditional welfare means foregoing drug benefits, the absence of prescription drug coverage for working-poor families "keeps them from climbing the `welfare wall'," says Mackenzie.

"It's a barrier to mobility, to entering a workforce where drug coverage is so rare in retailing, restaurant, janitorial and other low-paying jobs."

And universal child care is essential "because we live in a society where as soon as kids are in school, parents are expected to work, almost always outside the home."

For single parents, of course, their status as sole breadwinner makes child care a necessity long before their children are of school age.

Nash is troubled by "an increasingly polarized society" in which the 100 highest-paid corporate CEOs in Canada are paid an average of $9 million a year, and the $22,000 raise that Ontario MPPs recently voted themselves exceeds Ontario's $19,032 in annual welfare assistance for a couple with two children (a 17.5 per cent drop since 1989).

Indeed, welfare recipients are the only income group in Canada that has suffered a decline in income.

Between 1989 and 2005, combined provincial-federal welfare assistance – even before adjusting for inflation – has declined by an average of 4.4 per cent.

"We have working-poor people deprived of a reasonable standard of living for the time and energy they give their employers," Nash says, "and we have CEOs treated like royalty.

That's not a recipe for social cohesion.

"Our market economy is marvellous at creating wealth. But there's so little fairness in how that wealth is distributed.

"These huge and growing extremes in wealth and poverty are not in anyone's interest."

There are government funds that exist to help Canadians in some respects - for example, an RESP, which assists with post-secondary costs - and though these require some input from the family in order to grow, they do provide a certain measure of relief.

Tackling poverty benefits all society
Editorial - January 13th 2007.

As Canadians, we like to think we live in a just society, one that gives fair treatment and opportunity to individuals and groups and a rightful share of our common wealth. But how just and inclusive is a society where children go hungry, some working people cannot earn a living wage, and the homeless crowd into shelters because they cannot afford a place to live?

Is it just that single mothers must live on social assistance payments that are below subsistence levels with no access to affordable daycare? Or that a disabled person who cannot work receives even less? Or that working people lose their jobs and cannot collect Employment Insurance?

A society is judged by how it treats its most vulnerable citizens. But in Canada, after more than a decade of economic prosperity, the gap between the richest and poorest grows ever wider. It has become a national shame. That is why the Star is running a series of editorials, news reports and feature articles on poverty and what can be done to address it.

But if reducing poverty is a moral obligation, as the millions of Canadians who donate faithfully to charities readily accept, it is also a matter of sheer national self-interest. Ultimately, the grinding, persistent poverty that afflicts far too many Canadians affects all of us. It forces up our tax bills, depresses the economy, increases health costs and can breed alienation and crime. That is good for no one.

Stark poverty indicators show some 6.7 million Canadians now eke out an existence on less than $20,000 a year, half the average income.

Some Canadians, the richest one-fifth, have close to 50 per cent of all income in the country and hold three-quarters of the wealth. The poorest fifth get by on 4.6 per cent, have no net wealth and are falling behind.

Indeed, Canada's poorest are no better off today than they were 25 years ago. Social assistance incomes are so low they now "bear no relationship to the actual cost of even subsistence living," warns the National Council of Welfare, the federal government's own advisory body.

The results are sadly evident: A total of 14,150 Canadians were living in homeless shelters at the time of the 2001 census, the first time they were ever counted, and their numbers are growing. In Toronto, a survey last year found more than 5,000 homeless, by far the most of any city.

Here are just a few of the impacts of this poverty, all of which have been documented by credible domestic and international studies:

Higher health costs: People living in poverty often suffer from poor nutrition and chronic ill health, including coronary artery disease, Type II diabetes, respiratory disease and some cancers. They have more health issues, disabilities, lower birth weight babies and high rates of infant mortality. All this drives up health-care costs, which are borne by every taxpayer. It also diverts medical resources from other areas.

A less productive economy: Healthy, well-educated people tend to be more productive and contribute more to the economy over their working age years, benefiting each and every one of us. Conversely, poor nutrition, ill health and a poor start in life are all drags on school performance, achievement and workforce productivity. Investing in children, particularly, pays off. American studies show that society reaps $3 or more in benefits for every $1 invested in early childhood development. Children who have a good start do better at school, have higher earnings, pay more taxes, have fewer health problems and are less dependent on welfare.

Social problems: Dire poverty puts a terrible burden on families and individuals. Poor parents suffer from increased stress as they struggle to get by. Some fall into depression or other ill health. Some families disintegrate under the strain. Children too often suffer the consequences. And at the extreme, poverty can breed desperation, alienation and crime.

It is evident from studies such as these that even a country as rich as Canada pays a steep price for turning its back on the neediest, especially the children who are our collective future. Recognizing that, Canada ratified the United Nations Convention on the Rights of the Child more than a decade ago. It obliges us to provide a decent standard of living for all. Yet children comprise 40 per cent of those who use food banks in this city. And breakfast programs are so pressed for funds that they must turn away hungry children. That is wrong. It is also short-sighted.

We must consider what kind of society our children stand to inherit, if we continue to neglect the very poorest.

It will be a less just society, to be sure. It will also be a less productive one, saddled with higher taxes, damaging social problems and needlessly high health costs. That is how poverty affects us all.

St John's Mission
David Walsh, President of Carrot Common Corp., Toronto.

While it is true that governments must step up to the plate to re-establish a leadership role in combating poverty, it is important to value the contributions of small community organizations as well.

A case in point? Carrot Common, a small shopping centre on Danforth Ave., is a short distance from St. John the Compassionate Mission. The Carrot has supported St. John's over its 20 years of operation because of its effective way of giving people who benefit from its services the opportunity to also contribute. The Big Carrot sells breads that are baked at St. John's and, in turn, helps to fund the mission's new bakery next door.

The mission is a beehive of activity and serves 2,000 meals a month to the marginalized, the addicted, the homeless and others who are disadvantaged through no fault of their own. And it operates a very successful apprentice program with both its bakery and thrift store. The mission has been successful in giving work to people and hiring people at higher than minimum wage. Nonetheless, there are many people who come to St. John's and will never be job ready and the mission is there for them.

In spite of its success, the mission continuously deals with on-again, off-again policies of government whose rules and regulations seem contrary to supporting community partnerships that actually work for the disadvantaged. St. John's has seen government support reduced or eliminated without consultation or notice.

Amazingly, while governments remain short-sighted or simply turn a blind eye, St. John's story is also marked by "drive-by generosity" in the form of an unsolicited cheque from a bank president and an unannounced visit and cheque from representatives of a private foundation simply catching the mission "doing things right."

The key question here is, "how do we give people who often travel difficult roads the opportunity to contribute and share of themselves toward the goal of a more vibrant city?" The experience of St. John's says that we need both the leadership of government and more friends in the community to do this.

Rich-poor gap becomes a chasm
Carol Goar - January 10th 2007.

Churning out cogent new studies on poverty wouldn't work, the research team decided. Canadians already knew how bad the problem was.

Making the case for fair wages, affordable housing, decent welfare rates and universal child care wouldn't turn the tide, they agreed. Dozens of advocacy groups were doing that with negligible success.

What was needed was a catalyst to turn awareness into action.

It was the summer of 2006. The Canadian Centre for Policy Alternatives had just received a generous donation to wake people up to the alarming rise of inequality in Canada.

The three lead researchers – Armine Yalnizyan, Hugh Mackenzie and Trish Hennessy – were brainstorming about how to get the message out, how to make it relevant to Canadians and how to get governments to move.

"We had to take it beyond poverty," Yalnizyan recalled. "We had to give everybody a stake in the issue.

"We had to show what's happening to us as a society. We had to get people talking about how disconnected the winners have become from the rest of us. This is the central economic and social issue of our day."

On Nov. 20, the centre launched its "Growing Gap" project. Its aim is to convert people's unease about the concentration of wealth into an active conviction that something is wrong when the economy is doing better than most of the population; when families are working longer and harder to stay in the same place; and when governments sanction this arrangement.

To kick off the initiative, the think-tank sent out pollsters to find out how Canadians are doing after a decade of strong economic growth. After interviewing 2,021 randomly selected adults, the pollsters came back with sobering – but not surprising – news:

  • Fifty-one per cent said their standard of living had either dropped or stayed the same.
  • Forty-nine per cent said they were one or two missed paycheques away from being poor.
  • Sixty-five per cent said the benefits of economic growth had gone to the richest Canadians.
  • Seventy-six per cent said the gap between rich and poor had widened.

    "What's clear in this poll is that Canadians are worried about their personal future and equally worried about the direction their country might be going," the think-tank said.

    Next, it backed up these perceptions with facts. It released a series of statistical sketches of inequality.

    The research team was hampered by a scarcity of up-to-date figures (the census, the best source of information on wealth and income, is now 6 years old), but sifted through earnings reports, employment numbers, housing data, consumer debt, economic trends and the 2001 census.

    What emerged was a picture of widening disparity. The top 20 per cent of families held 75 per cent of the nation's wealth and were rapidly accumulating more. The bottom 20 per cent had no net wealth (their debts exceeded their assets) and were sinking deeper into poverty. The middle 60 per cent were struggling to hold their ground.

    "Economic insecurity is now a fact of life for most workers, regardless of where they fit into the income spectrum," the think-tank pointed out.

    Shortly before Christmas, the research team issued a year-end review suggesting – hopefully rather than confidently – that the growing gap would be the "sleeper issue" of 2007.

    "This is a problem looking for political leadership. Will 2007 be the year our political leaders take it on?"

    To usher in the New Year, Mackenzie did a bit of number crunching and came up with an attention-grabbing comparison.

    He showed that by 9:46 a.m. on Jan. 2, the country's 100 highest paid chief corporate executives would make $38,010 – the same amount the average Canadian worker could expect to earn in the entire year.

    In the coming months, the think-tank will explore what happens to a society when its privileged minority gets so far ahead of the rest of the population that there is no shared experience to draw on, no common set of goals and no basis for democratic dialogue.

    The debate has already begun in Toronto, partly because of an alarming spike in gun violence in the summer of 2005 and partly because of the leadership of Frances Lankin, president of the United Way. She has been warning for three years that Toronto is developing enclaves of extreme poverty, social tension and urban decay.

    The timing of the Growing Gap project could be auspicious. Neo-conservatism seems to be on the wane. Canadians are rethinking the trade-off between big tax cuts and threadbare social safety nets.

    On the other hand, fate could play a cruel trick. Just as the initiative takes hold, it could be swamped by the environmental wave coming down the pike.

    Yalnizyan and her colleagues are ready for either scenario.

    They'll fight as long and hard as it takes to convince Canadians that a strong society is one in which everybody moves ahead together.

    More information is available at www.growinggap.ca.

    No New Year’s hangover for top CEOs

    By 12:13 pm on New Year’s Day, while many Canadians were still nursing a hangover, Canada’s 100 highest paid CEOs had already pocketed what will take minimum wage workers the rest of 2007 to earn.

    The clock keeps ticking. By 9:46 am Jan. 2, as most Canadians begin another year of labour, Canada’s 100 highest paid CEOs will have reaped, on average, $38,010 in pay.

    “That equals the average annual earnings of workers in Canada,” says Hugh Mackenzie, research associate with the Canadian Centre for Policy Alternatives (CCPA). “And it will take them all of 2007 to earn it.”

    By the time Canadians tune into the 6:00 news Jan. 2, Canada’s 100 highest paid CEOs will have pocketed nearly $70,000. The highest paid CEO will have pocketed more than $570,000.

    “If time is money, are Canada’s 100 highest paid CEOs really worth more in a day than most Canadian workers are in a year?” asks Mackenzie.

    “People wonder what the growing gap between the rich and the rest of us looks like. This provides us with a pretty good snapshot of how unevenly the Canadian workforce is valued these days.”

    Struggling on $1,008 a month
    McGuinty government has raised assistance rates 5.3%, gains wiped out by jumps in the cost of living
    Rob Ferguson - January 15th 2007.

    Back in 1995, after a brand new Progressive Conservative premier named Mike Harris cut welfare rates 21.6 per cent, a single mother with one child was getting $957 a month in social assistance.

    Almost 12 years later, the payout is now $1,008 under the Ontario Works program. That's an increase of 5.3 per cent after two modest raises from Premier Dalton McGuinty's Liberal government.

    But as single mother Elita McAdam knows all too well, the cost of living has far out-paced her welfare income.

    "You pay most of your money toward rent and then you suffer," says the 37-year-old, who spends 80 per cent of her cheque on her east-end apartment and utilities. There's not much left over for her and son Liam, 7.

    Costs have gone up dramatically since 1995, when gasoline was 49 cents a litre. Now it's 80 cents, down from recent highs closer to $1. And a loaf of bread that was $1.69 in 1995 today costs upwards of $2.29.

    Overall, a basket of goods and services worth $100 in 1995 now costs $124.16, according to the Bank of Canada's inflation calculator, an inflation rate of 24 per cent that dwarfs the welfare rate increase.

    Critics say the McGuinty Liberals talked a good game in opposition. But the Liberals didn't promise much in the last election, other than to index welfare rates to rise with inflation and to end the partial clawback of the federal National Child Benefit Supplement to low-income parents, set at $162 per child.

    But welfare increases haven't kept up with inflation and the clawback of the child supplement remains – about $122 is deducted from parents on welfare.

    The Liberals have struggled with a deficit they've been trying to slay since coming to power in 2003 to find the government's books $5.6 billion in the hole.

    But anti-poverty activists note Statistics Canada defines low income in the GTA as below $32,500 a year for a family of four.

    "People on welfare are worse off now than they were under Harris and (former premier Ernie) Eves," says New Democrat MPP Cheri DiNovo (Parkdale-High Park).

    Adds Jacquie Maund of the Ontario Campaign 2000, an anti-poverty group: "There has been some disappointment and frustration that the Liberals have not acted faster to end the clawback and improve social assistance rates, but there continues to be hope for their last pre-election budget in the spring."

    The minister of community and social services acknowledges the Liberals have fallen short on indexing but maintains the government has taken steps to make life better for people on social assistance, with rate increases of 3 per cent in 2005 and 2 per cent late last year, almost keeping up with inflation.

    "We're not too far behind," says Madeleine Meilleur, noting the Liberal increases were the first in a decade. In its three years, her government, she says, could not "correct everything that was done by the previous government."

    Other improvements include allowing social assistance recipients to keep taxpayer-funded basic medical and dental benefits for at least six months after finding work – removing one impediment to leaving welfare – and letting recipients keep half of any extra money they earn in part-time jobs to supplement their income. Recipients can also keep RESP money so their children can get a better chance at a good education.

    As for indexing rates to inflation and ending the clawback, "we'll have to wait until the next budget to see," says Meilleur. "We have done a lot but we know we need to do more. And we will do more."

    It can't come soon enough for the McAdam household.

    Fresh fruit is a rare treat. McAdam would like to put Liam in sports but can't afford it. When school photos are taken, she doesn't buy any. As for taking Liam to a movie, forget it.

    "He says, `I want to go and see Charlotte's Web.' What do you do? I try to think of fun things to do," by picking up movies or books at the library, says McAdam, on social assistance since she had her son. The boy's father left the scene years ago.

    Liam is getting old enough to realize the limitations of the family budget.

    "I tell him I am going to school so that one day we can have a car, we can live in a house and go on a nice trip," says McAdam, who is in a bridging program at the University of Toronto that will qualify her to begin to begin studying for a bachelor's degree in sociology in the fall.

    Across Ontario, there are about 420,000 people on welfare, not including dependent spouses and children. Benefits cost about $3 billion a year.

    There are two welfare programs, Ontario Works, which aims to help people get back to work, and the Ontario Disability Support Plan, for people who can't work for medical reasons. Typically, people get off Ontario Works within two years, while the average stay on disability is between six and 10 years.

    Zane Boyd has been on the disability program since 1992.

    "It's become harder and harder to make ends meet," says the 57-year-old, who lives on a monthly cheque of $979 he receives for severe chronic depression and anxiety.

    "I'm wondering why being disabled condemns me to poverty because it just adds stress that makes my problem worse," adds Boyd, a well-spoken man who is in regular treatment. He stopped drinking 18 months ago and hopes to return to the workforce after computer training.

    He describes a meagre existence, spending $450 a month to rent a room in a house, with another $250 for food, leaving the rest of his cheque to cover daily living expenses.

    Yet Boyd describes himself as one of the fortunate ones, because the room he rents is in the home of a university professor in the field of mental health and he gets a free Metropass to get to and from his many medical appointments and Alcoholics Anonymous meetings.

    When people on welfare have to think twice about whether they can afford a TTC fare, that often leaves them housebound, isolated and depressed with little else to do but watch TV, says Boyd, who had his first breakdown at 19.

    Meilleur says the government is doing what it can to help – even letting people on the disability plan keep health and dental benefits indefinitely if they can find a job that doesn't pay benefits – but can only go so far in raising monthly cheques.

    The danger is that welfare will be more lucrative than finding a job. "We have to be careful, ... we always have to watch the welfare wall."

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