Iglika Ivanova: Poverty comes with a high price tag in B.C.

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      It’s no secret that British Columbia has a problem with poverty. Many of us do our part and contribute to food drives and other worthy causes. But how many British Columbians realize that poverty is costing us—all of us—a lot more than a few cans of non-perishable food and a new toy donated at Christmas?

      A new study released by the Canadian Centre for Policy Alternatives has, for the first time, quantified the economic cost of poverty in B.C. We estimate that poverty costs the average man, woman and child in B.C. as much as $2,100 each, every year.

      The economic cost of poverty to society as a whole adds up to between $8.1 and $9.2 billion per year. That’s a lot of money—close to 5 percent of the total value of our economy. Our analysis shows that failing to address the root causes of poverty is very expensive, both in terms of current and future costs.

      Study after study has linked poverty to poorer health, lower literacy, more crime, poor school performance for children, and greater stress for families. Poverty takes an enormous toll on the people who struggle with it, no question about it. But at the end of the day, it’s society at large that is paying a very high price.

      British Columbians pay approximately $1.2 billion per year in higher public health care costs linked to poverty. We spend another $745 million annually on policing and criminal justice costs driven by poverty-related crime. Higher costs of income supports and lost tax revenues that come with inadequate earnings account for over $900 million per year.

      Poverty also acts as a significant drag on our economy. B.C.’s prosperity is undermined when people are excluded from the workforce because they don’t have access to the supports or training they need to do better, or when they are stuck in low wage jobs in our polarized labour market. Underutilizing all the talents and human potential of poor British Columbians to contribute to society and to our economy is among the biggest costs of poverty ($6.3 to $7.2 billion per year).

      This is a conservative assessment of the cost of poverty in B.C., as our estimates do not capture all of the costs. Notably, we exclude the costs that child poverty imposes on future generations by perpetuating the cycle of poverty. We also do not measure many of the less tangible costs, such as the impact of high poverty levels on social cohesion and our feelings of safety in our communities. Nor do we include the direct cost of providing frontline social services to those in poverty.

      B.C. government’s current approach to poverty is to deal with negative consequences as they arise. This is akin to handling a leaky roof problem by repeatedly mopping the floor. It makes things look passable when the guests arrive, but it does nothing to address the root causes of the problem. And like a leaky roof, poverty’s consequences only get harder and more expensive to fix the more we put off dealing with them.

      The high cost of poverty in B.C. gives us a purely economic reason to be concerned about our poverty levels, which are the highest in Canada.

      Seven Canadian provinces and two territories have recognized this and implemented poverty reduction strategies (or are in the process of developing them). In fact, poverty reduction has emerged as an issue that transcends party politics and ideology to receive all-party agreement in most provinces.

      It’s time for the B.C. government to rise up to the challenge and commit to a comprehensive plan to systematically tackle the root causes of poverty in B.C.

      We estimate that once fully implemented, such a plan for B.C. would cost between $3 and $4 billion per year. That’s less than half of what poverty is costing us now.

      Making poverty reduction a priority is the right thing to do. And our report shows that it’s also the fiscally responsible thing to do.

      The biggest challenge that lies ahead is that upfront investments are needed to bring savings down the line. The four-year election cycle hardly encourages long term thinking or investments. What’s needed is leadership, vision and a willingness to do the right thing for B.C.’s future.

      Iglika Ivanova is an economist and public interest researcher at the B.C. office of the Canadian Centre for Policy Alternatives. The Cost of Poverty in B.C. is available at www.policyalternatives.ca/costofpovertybc.




      Jul 19, 2011 at 7:34am

      Yawn, another blame society piece from the poverty pimps at CCPA. Being poor isn't the cause of societal ills claimed in this article. Many Canadians have risen from poor beginnings to successful lives. As long as we perpetuate the victim mentality there will always be people willing to blame society for their circumstances.

      Immigrant to Canada

      Jul 19, 2011 at 10:27am

      I came to Canada a bit over a decade ago with basically no money, and now I have a great life. Not a single person that I know that came here with nothing is still struggling for money to cover basic needs after a few years in Canada. I find it to be a place of equal opportunities, practically no discrimination, enough space for everyone, a variety of ways to improve and grow, and a lot of social programs. It seems to me that the main reason for poverty in BC is not the shortage of opportunities, but demographic/psychological limitaions: traumas, low self-esteem, substance abuse, bad examples from parents, lack of motivation and lack of encouragement to study. So in order to address the poverty issue, we should focus on the psychlogical causes of lack of trying rather than helping with financial support and more free career training programs. The causes for poverty are different here than, for example, in Africa, and so the solutions should be of a different nature as well. In order to be sucessful in overcoming psychological bareers we have to focus on children with unhealthy situations at home, as it's nearly impossible to transform fully formed adults.


      Jul 19, 2011 at 3:20pm

      A lot of what you said is true. But the goverment needs to look where the problem is and fix it. Example there used to be a rehab facility based on a herb called ibogane. The govberment shut it down. This can be a 80% cure for those with addiction problems. Rehab and methadone does not work that well. I used to be a contributing factor to our society as a youth leader, business owner and artist. Then I was hit by a bus, over four years now and my lawyer is still dealing with ICBC while I live in a shelter on the east side. Mental illness, addictions, helth problems are 90% of our cost, problem which could be solved when delt with at a proper level. Not just a band-aid which keeps putting money into the pockets of the rich