I am a newly minted senior citizen. I have lived in Scarborough for the past 37 years.
I am a proud resident of Scarborough but I see a problem. I see the problem of poverty in Toronto.
I think that we can and should do more to eradicate poverty in our city
Toronto is the largest and richest city in Canada
- Our economy comprises almost 11 per cent of Canada’s GDP,
And in recent years Toronto has been ranked:
- The world’s most tax-competitive major city (KPMG Competitive Alternatives 2014: Focus on Tax)
- The 2014 Intelligent Community of the Year (Intelligent Community Forum)
- Fourth on Price Waterhouse Coopers’ Cities of Opportunity (PwC, 2014); and
- The world’s most resilient city (Grosvenor Group, 2014)[1]
But there is another side to Toronto.
- Toronto houses Canada’s highest concentration of working poverty.
- Toronto also remains the child poverty capital of Canada, with 28.6 per cent of children living in low-income households.[2]
- Toronto’s child poverty rate remains virtually unchanged with more than one in four, or 144,000 children, living in households with incomes below Statistics Canada’s After-Tax Low-Income Measure.
Informed taxpayers demand that money spent by government should go to effective use and achieve clear results supported by concrete evidence. Poverty reduction is not often seen as meeting that standard.
But there are hard benefits to alleviating poverty.
The problem is that the methodologies that show these benefits tend not to be used in traditional budgeting.
1. We tend not to look at Direct and Indirect Savings
Government balance sheets typically do not explicitly highlight the basic offsets that will result from poverty reduction initiatives.
These offsets can be both direct, where an initiative eliminates another public expense; or indirect, where an initiative creates the conditions where another public expense is lessened.
TTC tickets for under 12’s are a good example of a direct saving to other programs while social procurement can succeed in getting people off of public assistance. This also produces savings.
2.We seldom count the costs of Inaction (Cost of Poverty)
There have been a number of recent analyses that have estimated the cost of poverty (or the economic cost of inaction) in the fight against poverty.
These analyses, one of which was completed by the Ontario Association of Food Banks in 2008[3], quantify the consumption of public services by different ‘income quintile groups’ in order to notionally estimate how costs would be reduced if individuals moves up from the fifth (lowest) quintile to the fourth quintile.
A group of us will soon report on the cost of poverty in Toronto and the amount we will show will be in the billions of dollars.
3.We almost never do Cost Benefit Analysis
Cost-benefit analysis (CBA) has been used by some to realistically estimate the economic long-term benefits of social interventions.
We don’t have the time right now (for this Budget process) but using a cost benefit approach to poverty reduction could apply to the following poverty reduction initiatives:
- increasing minimum wages
- the creation of a living wage in Toronto
- community benefit agreements
- social procurement
Each of these different types of analyses offers a different way of looking at poverty reduction. By ignoring the offsets, savings and benefits that could be estimated using these methods, decision-makers otherwise miss out on the chance to understand the economic returns related to investment in poverty reduction efforts.
The creation of a broader balance sheet can refute the incorrect conclusion that poverty reduction only relates to those low-income residents who are directly impacted. Reducing poverty has positive impacts for all Torontonians.
In closing, when we moved to Scarborough in 1978, our property taxes were about $100 a month or $1,200 a year.
With inflation (CPI) increases of 235% since then, those taxes would now be about $4,000 a year.
But here we are in 2016 and our property taxes are about $2,900 a year – I got my assessment in the mail today. I estimate that my spouse and I have paid $15,000 less than what we should have paid since the turn of the millennium.
Our property taxes are now 28% below where they should be but we just can’t seem to get the message that things are not free.
We have to pay for things and we continue to choke ourselves while saying it is impossible to pay for them.
I expect my property taxes to go up with inflation along with everything else.
If they don’t, I just keep paying less, pocketing more but throughout it all, expecting more and more.
I believe we should get more and it makes sense that we pay for it.
Let’s stop being delusional. Let’s pay for stuff!
And let’s eradicate poverty.
John Stapleton
Revised January 14, 2016
[3] The Cost of Poverty, http://www.oafb.ca/assets/pdfs/CostofPoverty.pdf, 2008.