Poverty

Wage negotiations, increasing government funding for sectors like health care and tough structural changes within the Canadian economy is making it difficult for governments to allocate social funding targeted at poverty removal.

We may still live in denial about growing poverty in Canada but statistics, however difficult to come by, paint a picture of marginalisation of some sections of Canadian society and an erosion of the Middle Class. Low wages is another factor contributing to poverty.
Into the future this segment is likely to increase in bulge devouring those that are impacted by permanent changes to the job market and the ability of governments to keep increasing minimum wages to match inflation. Increasing cost of food, speculation and most of all the vagaries of weather will each play its own role.
Average growth in Canadian incomes has been 1.3% each year, rising from $28,000 in 1981 to 39,914 in 2007. This many years has not even equalled inflation.
Meanwhile as recession, high energy costs continue to push people into bare subsistence levels; the nation still does not have an official government measure for poverty.
Here’s what Statistics Canada has to say: “Statistics Canada has clearly and consistently emphasized, since their publication began over 25 years ago, that the LICOs (Low Income Cut Offs) are quite different from measures of poverty. They reflect a consistent and well-defined methodology that identifies those who are substantially worse off than the average. In the absence of an accepted definition of poverty, these statistics have been used by many analysts who wanted to study the characteristics of the relatively worse off families in Canada.”.
What about the growing numbers of unemployed who don’t even make it in the LICO’s list? Many out there who are not even a blip on the radar of the official statistical grouping.
A few days back while interviewing Albertans on the impact of inflation, I was told the impact is just beginning to trickle down. Janice Melnychuk of Vibrant communities says, “People are going to have to choose between buying food and paying the house rent and this will complicate health issues and put burden on food banks. She says it is time for not just Alberta but the government of Canada to have a cohesive social policy”.
Small businesses are smarting under the impact of the recent recession as also inflation. A few grocery shops in Edmonton have had to close shop because it was difficult to pay for trucked food from the U.S and other countries.
An index of Canadian small business confidence fell to a six-month low in May as optimism, particularly in Ontario, slipped in the wake of high energy prices.

The question that keeps doing the rounds in my mind is when will there be talk about all inclusive economic strategies that lift people out of poverty, instead of social doles.” Social hand outs for a large percentage of the population are a clear indicator of the lack of economic progress of a society, however advanced. It is also reflective of a lack of planning in terms of preparing future generations for jobs of the future.
We want to be optimistic…who does not? Yet there is no sign that there is a plan to create more jobs over and above those that have been lost temporarily or forever due to structural changes in our economy. What is the incentive for small businesses or even large businesses to set up shop and bring back businesses that have been lost to other countries. Whenever I pick up the phone and dial customer service for existing telecoms services, I get transported to either the Philippines or India. This despite the fact that there are Canadians (refugees/ new Canadians) who may be desperate enough to work at lesser wages.Yet, we prefer to transfer these jobs to other countries and allow Canadians to fend poverty.
What is needed is not money kept aside for doles but economic policies specifically targeted at the poor. The doles can act as income suppliments.
The Human Resource Ministry needs to be pro-active and think of ways of re training Canadians to take up jobs which are parcelled out to temporary foreign workers. The excuse given out is that Canadians are either not willing or not trained enough in those jobs. Poverty and unemployment are also an outcome of the lack of  imaginative thinking of those in charge of our planning.
With government spending on health occupying 12% of GDP and growing and debt, both individual and government weighing down on expenditure the scope for social responsibility of governments is pretty much restricted. Even in oil rich Alberta, gap between the incomes of the richest 20% and the poorest 20% of Albertans has increased by 62.9%. In 1999, the top 20% earned 14.5 times more than the lowest 20%. Alberta now has the highest after-tax in-come gap between rich and poor of any province.
Statistics show that Alberta now boasts the biggest gap between the rich and poor of any Canadian province.
Those that are proponents of a free market economy and minimal government intervention should be alarmed that under the Conservatives, government bulge increased to 3.6 million in the third quarter, up 0.3% from the 4th Q of 2010. Statistics Canada says, “Public sector employees represented 10.6% of the total Canadian population in the first quarter, unchanged during the last year. This proportion had been rising slowly since the first quarter of 2001 when it was 9.7%.The three levels of general government (federal, provincial and territorial, and local) accounted for 38.2% of total public sector employment in the first quarter. Educational institutions represented 29.5%, followed by health and social service institutions (23.5%) and government business enterprises (8.7%).
Meanwhile economic data does not look that promising. Exports between the year 2000 and 2010 period dipped down into negative territory, roughly about ten percent. Consumer spending at about 64% and government expenditure at nearly 25% is moving the economy. With a huge rise in personal and government debt this is likely to see halt and then the real impact of the recession shows.
Foreign investment of Canadian securities has slowed down and investment in Canadian bonds seems to have shown a marked downturn.
Foreign direct investment, that had seen a near 10% plunge in 2010 saw a slight growth in 2011 but remains a far cry from levels seen in 2007.