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The End of Poverty

Posted on October 22, 2019
By James Hughes

Jim Hughes - End of PovertyWhat an audacious title - The End of Poverty. Everyone in this audience has given remarks on reducing poverty in Canada, poverty alleviation, the costs of poverty, strategies to address poverty and, of course, what is poverty? But the End of Poverty? As in actually ending it. Jeffrey Sachs wrote about it on an international level but I’ve never done it before. And I probably never would, NOT because I don’t yearn for it – like you – but because I’m somewhat more cautious than Paul Born, optimist extraordinaire, who told me to go for it. He told me, find the optimist within you; cast aside the cautious former civil servant and nonprofit manager, and reveal the path that ends poverty. My remarks today are the product of a reflection on the best case forward. Not the expected case or the worst case – the best case. We could all talk ourselves into one of these less ambitious roads but why not consider what could be the dream scenario. Before doing so - knock on wood, twist your ring, blink three times or do whatever you do so we don’t jinx this whole thing.

Last year, I was at a presentation by former Astronaut Dave Williams who told the audience that, when faced with what appears to be an impossible challenge, NEVER say, “well, it’s impossible.” Ask, “under what circumstances might it be achievable?” Space flight and a lunar landing were deemed impossible until they weren’t. Someone in the audience asked, “But human travel at the speed of light is impossible.” To which Dr. Williams said, “Are you sure? Under what circumstances might humans be able to travel at that velocity?” The audience was hushed as the thinking had begun. The focus on impossibility was reframed as something possible provided the right circumstances were created. Let’s think about “The End of Poverty” in the same way.

Let me start by suggesting we presently have an unusual amount of momentum in the poverty file prompted largely by a federal government that is taking the poverty file seriously and a generally strong economy. Some stats:

  • The overall poverty rate in Canada has dropped to under 10% for the first time ever in Canadian history.
  • The median after-tax income for 2017 was $59,800, also the highest in Canadian history up over 3%.
  • With the help of programs such as the Canada Child Benefit and the top-up to the Guaranteed Income Supplement, there were 825,000 fewer Canadians living in poverty in 2017 than there were in 2015. 
  • In 2017, 622,000 children under 18 years of age, or 9.0%, lived below the poverty line, down from 11.0% (755,000 children) in 2016.
  • There were 238,000 (3.9%) seniors living in poverty in 2017, down from 284,000 (4.9%) in 2016. This decline was concentrated among unattached seniors, where the poverty rate fell from 11.0% in 2016 to 8.4% in 2017.
  • People in lone-parent families recorded among the largest decreases in poverty in 2017—the proportion of people in these families living below the Official Poverty Line fell from 29.2% in 2016 to 22.7% in 2017.
  • According to the latest Canadian Income Survey, Alberta managed to cut its child poverty rate in half between 2015 and 2017 — from 10 per cent to 5 per cent.

Poverty reduction truly seems to have become a movement in Canada. Most provinces have a plan, most cities now have a plan in large part thanks to Tamarack and even the federal government has a plan. Having a plan is important. It creates political expectations and is a basis for public accountability. The adoption of a platform commitment and governmental plan greatly focuses the political mind….and in doing so creates momentum for results. I’m going to come back to this.

We’ve had momentum before. In 1961, the family poverty rate was almost 30%. Then the amazing combination of a minority Liberal government pushed from the left by Tommy Douglas and Stanley Knowles from the new federal NDP created a wave of welfare state programs that dramatically improved the lot of low-income people. The Guaranteed Income Supplement, the Canada Pension Plan and federal Medicare all came to life in the mid 60s. By 1980, the family poverty rate had declined to 13.2%. Then the federal government got confused about its mandate. The Mulroney government was no longer sure reducing poverty was part of its core mandate. It started clawing back benefits and freezing increases. Then, in the early 1990s, as we all knew, the Chretien government implemented an austerity program cutting transfers to the provinces, the affordable housing program and benefits under Unemployment Insurance. The provinces said they didn’t have any fiscal capacity to pick up the slack. Cities said it wasn’t their business at all….as they always had in the past. Paralysis on poverty had occurred and momentum had stopped. The rate of family poverty was still 13% in 2001. It could have been worse, but it wasn’t any better.

CRP Gathering - End of Poverty

Then the economy started to boom, and the poverty reduction plans started to flow. The current cycle started with Quebec introducing the first plan in the late 1990s followed by Newfoundland and New Brunswick. As I said before the rest fell into place over the next decade or so. With more fiscal room, activated advocates at their heels, including Tamarack, and an angry population tired of belt tightening, governments began to re-invest in  seniors’ benefits, welfare reform, minimum wage hikes, daycare and post secondary education. Then came the current Liberal government in 2015 and the introduction of the Canada Child Benefit, possibly the greatest contribution to Canada’s social safety since the 1960s and certainly since the introduction of  semi-universal childcare in Quebec in 1996.

Now that the CCB is in full swing, the child poverty rate has dropped overall to 9%. The senior rate of poverty is under 4%. If we can keep the momentum, we could end poverty in Canada in a decade. How do we do that?

Let me propose to you a 5-point strategy to get this done, two parts “defense” to protect our gains to date, three parts “offense” to propel us forward. These are the conditions under which the impossible becomes possible.

DEFENSE:

  1. Index all existing benefits. We all know that senior poverty was almost wiped out 20 years ago but gradually saw it rise back to double digits 10 years later because of lack of indexation. The same fate awaits the CCB and other benefits if we don’t legislate indexation.
  2. Legislate poverty reduction on a bipartisan basis (if possible). I had a hand in developing the New Brunswick plan. It included the enactment of the Economic and Social Inclusion Act which itself includes a 5-year review and renewal, the creation of the Economic and Social Inclusion Corporation, a Crown agency responsible for overseeing the implementation of the plan whose board of directors is multi-sectoral and inclusive of people with lived experience following the Tamarack collective impact approach and entrenchment in law of the Community Inclusion Networks across the province to work on local poverty reduction plans also following the Tamarack collective impact methodology. This kind of machinery keeps poverty at the top of the agenda of whichever party is in power. The original plan was adopted at a final forum that was chaired by former Premier Graham who invited the Opposition leader David Alward to attend and participate as a full member. The plan was adopted unanimously in 2009 as was the proposed legislation to enact it 5 months later in 2010.

    Later that year, David Alward became Premier but the plan didn’t change because he and members of his caucus had been part of its development and adoption. Does this matter in the end? According to the School of Public Policy at the University of Calgary it does. In their March 2019 report entitled Social Policy Trends, they said, “In 2007, the prevalence of poverty was highest in Nova Scotia and New Brunswick and BC at 16.3%. By 2017, the prevalence of poverty had fallen in all provinces but still remained highest in Nova Scotia. The biggest fall in the prevalence of poverty was in NB where it fell by a 6.6 percentage points.” I put to you that is because of the machinery of poverty reduction in the province and how it continuously kept and keeps attention on poverty reduction. It focuses the political mind. This is why Tamarack’s work is so important. Its Cities Reducing Poverty activities and Deepening Community networks keep the pressure on the decision makers to ever improve the safety net in their province and community.

OFFENSE

  1. Boost Market wages. The number of people working at minimum wage has doubled. We need a consensus campaign to get to $15 per hour minimum wage across the country and then ensure it is legislatively indexed thereafter. We will slide back if this is not done.
  2. Implement BI. It’s time. The estimated cost of Basic Income is $43 billion which is a big number but we know from the research by the Canadian Centre for Economic Analysis on the CCB, which is a Basic Income for families at annual cost of $24B, that a fully implemented BI will overcome the welfare wall for millions thereby filling massive job needs in the economy, increase GDP and return, on average, 55 cents on the dollar to government in the form of combined federal and provincial tax revenues. It will mostly pay for itself. This is so important because poverty is highest among unattached people and single parents, a great many of whom are racialized and from minority communities.
  3. Work on the Determinants. Poverty is lowest in Alberta at 6.8% but homelessness is rising in some parts of the province (and not falling in others). This is because housing is unaffordable to many despite rising incomes. And not just in Alberta. In other words, as we all know it’s about income but not only about income. To make poverty reduction truly sustainable and computed for success, we need proactive policies to complement aggressive income assistance programs. We might debate on our priorities here but the top 5 for me are universal access to post secondary university, where we’re already world leaders, universal prescription drug coverage, home care for all, income tested portable federal housing benefits, which is in the works, and national daycare modelled roughly on Quebec.

We do these things and we’ll attain the speed of light.

My conclusion is this. Solving poverty is a moral end in and of itself and needs never be framed as part of a greater strategy or the means to another end. Except that the circumstances we find ourselves in make it so. It has never been more important than now to end poverty for three more reasons all to do with climate change. The first is that climate change disproportionately affects poor people. For example, it’s too often poor people who need to live near emissions-spewing freeways and can’t afford medication to fight the resulting asthma.  Secondly, saving the planet requires all of us to do our part. People struggling to get through the day, feed, clothe and educate their children, fight mental illness and addiction, and get to appointments are often not able or have time to march to save our planet, join political processes or a local non-profit. At this critical juncture in human history, we need everyone on the field of play. The third reason is that we need politicians and the political class fully focused on preventing climate disaster. This should be an election dominated by which party has the best and most effective climate mitigation and adaptation plan. Except it’s not, in part because of lingering “affordability” issues which are understandably so front and centre. Politicians usually follow the crowd and, while I was proud to march two Fridays ago in Montreal with my son and friends and 500,000 others, there are other bigger crowds worried about making ends meet and getting through the day that politicians need to listen to as well.

So if we solve poverty, we take a big step towards solving climate change. Let’s do it all in the next decade! Mission Possible.

Topics:
Poverty Reduction, Cities Reducing Poverty, Poverty Reduction Strategy


James Hughes

By James Hughes

James Hughes is the Executive Lead, Government and Partner Relations, at the Montreal-based McConnell Foundation. He was previously Deputy Minister of Social Development in New Brunswick where he led the development of the Province's Poverty Reduction Strategy. He is also the former Director General of Montreal's Old Brewery Mission, the largest homeless-serving organization in Quebec. James Hughes is the author of Early Intervention (James Lorimer Press, 2015) and Editor of Beyond Shelters (Lorimer, 2018).

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