The Cost of Poverty in Ontario 10 Years Later October 2019 Celia R. Lee and Alexa Briggs In This Report Authors: Celia R. Lee and Alexa Briggs Contributors: Amanda King, John Stapleton Editing: Amanda King, Carolyn Stewart, Ashley Quan Executive Summary 4 Design: Ashley Quan Reference as: Lee, C.R. and A. Briggs. 2019. The Cost of Poverty in Foreword - Chair, Feed Ontario Board of Directors 5 Ontario: 10 Years Later. Feed Ontario: Toronto, Ontario. You Can’t Shrink The Economy Bigger - John Stapleton 7 About Feed Ontario Poverty Reduction, a Decade Later 10 Feed Ontario (formerly the Ontario Association of Food Banks) is a network of 130 direct member food banks and over 1,100 affiliate hunger-relief What is the Cost of Inaction? 14 agencies that are united in their work to address and prevent hunger and poverty. Through emergency food support, innovative programming, and a commitment to investigating long-term solutions to poverty, the provincial Can We Reduce Poverty? 20 food bank network works tirelessly to improve the health and well-being of the adults and families it serves. Conclusion 24 To learn more about Feed Ontario’s work and other research, please visit www.feedontario.ca. 10th Anniversary The first analysis in Canada of the cost of poverty was produced by Feed Ontario (formerly the Ontario Association of Food Banks) in 2008, to help shape the provincial government’s strategy to tackle poverty. Since then, it has been replicated in several other provinces including Alberta, British Columbia, Nova Scotia, Prince Edward Island and Saskatchewan, towards similar efforts. Cost of poverty analyses for cities as large as Toronto and as small as Grand Prairie have also been undertaken. While 2019 brings a new context, different social and economic challenges, and a changing political landscape, the crux of the message remains the same: investing in people, through good times and bad, is not only socially responsible but also financially sound. The opinions and recommendations in this report are those of the authors, and do not necessarily reflect the views of Feed Ontario. Executive Summary Foreword When looking at poverty in Ontario, ased on our analysis, the very single day there are even incrementally, would only our research tells us that while cost of poverty in Ontario adults and families in increase these costs as time moved overall poverty rates have in 2019 is conservatively Ontario that have to make on. Perhaps more importantly, the decreased, particularly for B estimated at $27.1 - $33 difficult choices between report demonstrated that it costs children and families with children, E billion per year. meeting their most basic needs. Do our society and economy, in the unattached adults and single person I put gas in my car — or do I pay my longer term, more to keep people households are experiencing hydro bill? Do I buy the medicine in poverty than it costs to eliminate Many governments estimate the both greater and deeper levels of that I need — or do I heat my home? it. costs associated with poverty by poverty than before. calculating the dollars spent on Do I pay my rent — or do I put food programs and services for the poor. on the table? There has never been As a result, when governments are This is supported by food bank use data, which shows that single a greater need for this trying to balance budgets, this In 2018 alone, over 507,000 adults, action than there is can lead to cuts or disinvestment person households are not only the children, and seniors accessed a in the social safety net that fastest growing group of food bank food bank in Ontario, visiting over today. these individuals and families are users in the province, but access 3 million times throughout the year. accessing. food banks more often than other This statistic is deeply troubling Now, more than a decade later, we demographics throughout the year. and reflects a growing trend continue to see high levels of food This report, however, understands in the province: it is becoming bank use as more and more families the cost of poverty in a very This report concludes by examining increasingly more difficult for low- turn to our hunger-relief network 2019 different way. Instead of looking at a number of case studies that income individuals to afford even for support. Further, we continue to program costs associated with low- illustrate the economic benefits their most basic necessities each see the lasting impact of inaction income individuals, it locates the of reducing poverty, and how we month. on our communities, with poverty might build on the proven success coming at an even greater cost to ntario cost of poverty in the loss of tax of investments that ultimately the province and its residents. O revenue and in the increased health While food banks work hard to result in cost savings and economic IN and justice system expenses that address hunger, a symptom of growth for the province. Y economies, provinces, and nations poverty, they have long advocated We believe that our vision of ending incur by maintaining people in for investments that address its root poverty and hunger in Ontario is ERT poverty. causes. In 2008, Feed Ontario, then shared by all levels of government, known as the Ontario Association of but that this vision will not be POV Further, this report argues that Food Banks, released its first Cost of achieved without the committed OF Poverty report. This report revealed intention to take action against when a government fails to T reduce poverty, when it shrinks that not only does poverty come at poverty. And further, that there has S a financial cost to the province, but never been a greater need for this O expenditures, or makes cuts, it can C actually deprive the economy of its it comes at a cost to communities action than there is today. ability to grow, and deprive itself of and the health and wellbeing of the the means to balance the debt and people who live there. This report Michael Maidment deficits that it originally set out to also issued a warning that failure Chair, Feed Ontario Board of address. to take action against poverty, Directors FEED ONTARIO 4 5 You Can’t Shrink the Economy Bigger John Stapleton Determining the cost of poverty It holds that if debts and deficits requires an analysis of the are reduced — which require less consequences of maintaining a to be spent on programs that portion of the population in a alleviate poverty (among other state of poverty. By making this things) — wellbeing is enhanced determination, we focus less on because less money is ultimately the individual, community, or spent on servicing the debt while societal advantages of reducing governments ‘live within their or eliminating poverty. Instead, we means’. fixate on the economic costs of maintaining people in poverty. Two arguments are given to support this dominant narrative. The first is This is a different starting point from that money spent by government the usual ‘balance sheet’ approach on poverty alleviation is money that that restricts the economic costs is lost to the economy. It is thought associated with poverty reduction to go nowhere while increasing to the costs of programs that debts and deficits. It goes from the reduce or eliminate poverty. As plus side to the minus side. most of these costs are borne by governments, people living in The second assumes that a national poverty are seen as those who are or provincial economy is the same incurring these costs. Accordingly, as a household economy. In a the poor are often seen as our most household, a family will borrow expensive residents, and those who money to house itself in its early are better off are seen as having years and will pay off its deficits less call on government resources. and debts in its later years. This household will then spawn new This ‘balance sheet’ approach to households that do the same thing understanding the cost of poverty over many generations. generates the dominant narrative in Canada and in Ontario. It uses The problem is that the balance the metrics of debt and deficits to sheet and household narratives are Background understand economic wellbeing. false. 7 In the first instance, dollars are And economies, unlike families, Put simply, an economy cannot work In the end, it is impossible for an agnostic to how they are spent. need to continually grow over like a household without going into economy to “shrink itself bigger”. However consumed, dollars spent many lifetimes. Households simply economic recession and ultimately add to GDP. Money paid to alleviate do not. A household can tighten its Depression. The household that Trying to do so is known as poverty adds to GDP. belt, reduce its deficits and display tightens its belt does not put a ‘disinvestment’, and disinvestment a positive balance sheet without family member out of work. But an is usually practiced in the form of Dollars may be spent efficiently having an adverse economic effect economy that tightens its belt puts reducing resources to the poorest in or inefficiently, but money spent on the household. It can pay off legions of men and women out of our society. Disinvestment locates assisting people in poverty does all its debts and can shrink its size work. the problem of poverty in the not disappear. The only dollars and live within its means within the consumption of the poor and sees that truly disappear are those that wider economy. It can do this, for that consumption as a negative are unspent or deposited offshore.