Poverty Reduction Strategy – A Detailed Overview

In keeping with my commitment to more democratic involvement by party members, these ideas would be discussed, modified where appropriate, and passed at Party convention.

Poverty reduction contributes to equity and community well-being, two characteristics of Sustainable BC, a policy framework twice endorsed by NDP members at the Party’s Convention.

British Columbia is one of only a few Provinces or Territories without a plan on how to address poverty. This, despite having the highest rate of child poverty in Canada for many years. A poverty reduction strategy outlining timelines and measures should be developed within 6 months of the NDP leadership assembly. Our target should be to reduce the rate of poverty by 25%, and the depth of poverty by 50%, within five years. The poverty reduction strategy would see the rate of poverty reduced to less than 5% and the depth to less than 25% by 2020.

A plan to reduce poverty will require the following essential changes in employment standards, income supports, and the availability of social programs. An independent officer of the legislature would be designated to report annually on the successes and challenges of implementing the plan and achieving the targets.

Employment Standards

Increase the minimum wage to $12 by 2012 and link annual increases to the cost of living.
Increase the minimum daily hours of pay to four hours per day.
Eliminate the training wage.
Require that children under 15 get Employment Standards Branch (ESB) approval for work beyond light work.
Reinstating the capacity of the ESB to fulfill its education and enforcement roles.
Income Supports

Increase basic income assistance rates so that recipients can purchase the essential goods identified in the Market Basket Measure.
Provide additional income supports to cover the extra costs of those with a disability.
Change the welfare system from being a barrier to employment to a step towards employment.
Ensure proper linkage between provincial and federal income support programs and ensure that each is fulfilling its role.
Social Programs

Develop a comprehensive, universally accessible, quality system of early learning and child care for children 0-12 years of age within five years.
Develop 10,000 social housing units, with an average of 1,000 units built annually over the next 10 years.
Restore funding for legal aid services to at least the level available in 2001.
Each of these essential changes are described in some detail below. Other policies related to poverty reduction, such as proposals concerning education, health, and a sustainable economy, will be announced during the campaign.

The statistics show that First Nations people and recent immigrants have disproportionately high poverty rates. In addition to the above policies, expansion of English language classes over a longer time frame, along with an aggressive push to speed up recognition of qualifications earned in their home countries, would be required to reduce the poverty rates of recent immigrants.

Policies and programs that expand the opportunities for First Nations people must be developed in conjunction with First Nations people. Under my leadership, all policy related to health and social services will comply with Jordan’s Principle, which requires that services be provided to First Nations communities regardless of “jurisdictional responsibility”. This applies to health, as well as Social Services. A detailed approach to pursuing common goals with First Nations people -wherever they reside- will be outlined further during the campaign.

Poverty reduction is a first essential step in helping to reduce the inequalities in our province. But reducing inequality will require not only raising the bottom income groups, it also requires that we begin a mature discussion on how to make taxes more fair.

An In-Depth Explanation:
Employment Standards

Minimum wage

The legislation to set the minimum wage should ensure that a person working full-time, full-year does not fall below the poverty line. To achieve this, I have proposed that the minimum wage be raised to $12 per hour by the end of 2012 and then raised each year by the rate of inflation. I have proposed that the minimum wage be increased in increments of $1.00 per hour every 6 months to help reduce any negative employment effects.

Minimum daily hours

The minimum wage level is based on employees working full time. I would recommend that the minimum daily hours of work for an employee be increased to four hours from the current two hours. The four-hour minimum daily hours were in place until the government reduced them in 2002.

Eliminate the training wage

The $6.00 per hour training wage should be eliminated immediately. No good rationale, or research, has been provided that would justify 500 hours of training time for most of the jobs where the minimum or near minimum wage are the usual rate of pay.

Children under 15

Of particular importance is reinstating the requirement that children under 15 need to get Employment Standards Branch approval for work that goes beyond light work and/or that interferes with education as was the case prior to the changes made by the government in 2003. Reducing the work-start age to 12 has meant the BC has the lowest work start age in North America. Research has shown that there has been a notable increase in the number of injury claims accepted by WorkSafe BC for children 15 and under. The report “What’s Happening To Our Children?” shows 40 child-injury claims accepted in 2003 compared to 155 child-injury claims accepted in 2008 (see http://nochildlabour.org/ for additional information).

Capacity of the Employment Standards Branch

The capacity of the Employment Standards Branch (ESB) to enforce the legislation and regulations was severely compromised when the staffing levels of the Branch were reduced. The staffing levels need to be increased to those in place prior to the reduction in 2001/02. This capacity is essential if both the education and enforcement roles of the Branch are to be fulfilled.

Information about the current employment standards act and regulations is available at http://www.labour.gov.bc.ca/esb/

Income Supports

Increase basic income assistance rates

There is no documented rationale for how the government of BC sets income assistance rates. Research shows the current rates are far too low for recipients to meet the basic cost of a basket of goods and services to participate in the life of their community.

The baskets prepared by the Social Planning and Research Council of BC (SPARC) and the Market Basket Measure (MBM) prepared by Human Resources and Skills Development Canada (HRSDC) provide clear guidelines on how far BC income Assistance rates are from meeting the costs for various households.

Type of Household Income Assistance plus Tax Credits (2009) SPARC Basket (2008) MBM Basket (2009)*
Single person 7,778 16,344 15,032
Single Parent 1 child 16,899 21,936 19,542
Couple 2 children 21,179 31,404 30,065
*Estimated

Source: National Council of Welfare (NCW): Welfare Incomes 2009. http://www.ncwcnbes.net/ and SPARC BC: Still Left Behind http://www.sparc.bc.ca/

Basic income assistance rates should be set at the level of a basket of goods and services prepared and verified by external authorities. For example, both the SPARC and MBM baskets use the Nutritious Food Basket to estimate the cost of food and the costs of rental housing derived from data provided by Canada Mortgage and Housing.

Basic Income Assistance rates should be increased to at least the MBM thresholds for BC. The increase would be phased in over two years. Subsequent annual adjustments would be based on the cost of living.

Income supports for people with disabilities

Persons classified as having a disability receive the basic rates plus an additional amount that should cover the cost related to having a disability, and having fewer options in the labour market. Like Basic Income Assistance, there is no documented rationale or explanation on how the provincial government sets the rate. According to the National Council on Welfare, a single person with a disability in BC receives $11,392, still far below the estimated basket costs for a single person.

The rates for persons with a disability should be raised to the level of the MBM. Consultations would be undertaken with people with disabilities and umbrella organizations to develop mechanisms to address barriers to entering the labour market, and to determine actual costs associated with living with a disability.

Removing Barriers to Work

These two reports will serve as background material for the consultations:

Canadian Centre for Policy Alternatives: Removing Barries to Work
In Unison: A Canadian Approach to Disability Issues

Change the welfare system

The existing income assistance system is one that can perpetuate poverty and dependence. Rules governing eligibility, asset levels, earnings exemptions and crisis situations, along with unrealistically low rates of assistance, are components of what is often referred to as the welfare wall. The system needs to change from being one of last resort to one that helps to promote a longer-term solution.

Federal Role in Income Supports

The federal Child Tax Benefit (CTB) and the GST tax credit have had a role in helping to reduce the depth of poverty. While these improved benefits have also gone to families on income assistance, the provincial contribution to the total income has decreased dramatically since 1989 (BC Child Poverty Report Card Fact sheet #5)

The federal government however, still has a role to play in helping to reduce child poverty. I agree with the recommendation of Campaign 2000 and First Call that the child tax benefit for the first child be increased to $5,400 from the current maximum of $3,436.

Social Programs

Child care

Develop a system of affordable, accessible, high quality, community based early learning and child care for children 0-12 years of age. The system, perhaps similar to that in Quebec, should be fully implemented with a five-year time frame. While some universal early learning programs such as “Strong Start” are funded, a system of full-day, year-round child care needs to be developed to support parents who are in paid employment, who are going to school, or who feel that a full-day program will benefit their children.

“Affordable” child care means that parent fees account for 20% or less and the province covers 80% or more of the operating costs.
“Accessible” child care means that all children, regardless of their abilities, geographic location or parental income have access to high quality, inclusive, and culturally appropriate child care.
“High quality” child care means that staff are appropriately trained and fairly compensated for their work, and that staff-to-child ratios meet, at a minimum, current regulations.
“Community based” child care means that the system is based in local neighbourhoods and that appropriate mechanisms exist to ensure its accountability as a publicly-funded service in the community.
Compared to most OECD countries, Canada ranks low when it comes to investing in child care. This, despite consistent research showing that proper funding of child care results in economic and social benefits. (see 15 by 15 A Comprehensive Policy Framework for Early Human Capital Investment in BC)

Housing

Affordable housing is a central element in addressing poverty. Safe and secure housing provides those living in poverty to foster resilience and stability for individuals and families. Long-term solutions include the promotion of co-operative housing, and a commitment from the Federal and Provincial Government to address our housing shortage.

Improvements have taken place in relation to emergency shelter beds for the homeless and the purchase and renovation of Single Room Occupancy (SRO) hotels. Homelessness is as much a rural issue as an urban one. There remains a need for more subsidized social housing throughout the Province. There are an estimated 10,000 applicants on the BC Housing Registry waiting list. The City of Vancouver alone estimates there are 450 people who are “street homeless” and another 1,800 homeless living in shelters or transient housing.

The goal of building 10,000 rent-geared-to-income social housing units over 10 years needs to be met. British Columbia has an impressive past track record of creating 1,000-1,500 units annually between the mid 1970s and the early 1990s.

This plan will stimulate the construction industry as well as ancillary businesses throughout the Province. Housing the homeless and ensuring there is adequate housing for families makes economic sense. The costs associated with caring for and supporting a homeless person is estimated to be $55,000 per year. It would cost $35,000 to house them with supports.

Legal Aid

I have seen an erosion of constituents’ access to judicial recourse. It is creating fundamental injustice in our society and causing hardship in families. Provincial government funding for the Legal Services Society, was reduce by 50% during the first term of the current government. This led to the elimination of legal aid for poverty law and assistance with human rights complaints as well as a 60% reduction in family law.

Since 2009, the Legal Services Society has reduced virtually all of its legal aid services outside of criminal law matters because of insufficient funding. Our court system is over-burdened with individuals who represent themselves because they cannot afford a lawyer.

Denying legal representation to the poor or disenfranchised does not reflect the values of British Columbians or Canadians. Legal aid funding must be restored to the 2001 levels.

The following outline provides a breakdown of the estimated costs involved in implementing the Poverty Reduction Program. These estimates are based on readily-available information.

While there are significant costs associated with implementing the Poverty Reduction Plan, there are also significant long-term savings. Reducing and ending poverty needs to be seen as a long-term investment.

Breakdown of Costs for Poverty Reduction Program:
The total cost for the proposed Poverty Reduction Program is estimated at $2 billion per year. This estimate includes the costs incurred once the childcare program has been fully implemented (after five years).

Employment Standards Branch (ESB)

Staff levels at the Employment Standards Branch were reduced by almost one third between 2001-2004. The number of ESB branch offices was reduced from 17 to 9. These cuts combined with other changes led to a 61% reduction in the number of complaints that were processed.

It is estimated that the cost to restore the Employment Standards Branch would involve a 40%-50% increase in the 2010/2011 budget. The estimated total additional cost is $3.5 – $4 million per year.

Income Assistance Rates

There are approximately 75,000 persons with disability on income assistance, and the majority (approximately 65,000) are single. The cost to bring current rates to the Market Basket Measure would be approximately $300 million per year.

There are also approximately 41,200 single people, 1, 360 couples, and 9,500 parents with children on income assistance who are not classified as being persons with a disability. The estimated cost to bring these people up to the Market Basket Measure would be approximately $337 million per year.

The total estimated cost to bring the current number of people on Income Assistance to the Market Basket Measure is an additional $637 million per year.

Child Care Program

Studies on the cost estimates for introducing a 0-12 child care system show that the system will require a net increase of approximately $1.2 billion per year.

Affordable Housing

The capital cost to construct 1,000 housing units is based on an estimated average construction cost of $200,000 per unit, for a total of $200 million. This cost estimate is based on the assumption that the land used will be government (federal, provincial, or municipal) owned land.

Legal Aid

The Legal Services Society (LSS) had 442 Full Time Equivalent (FTE) employees. This was reduced to 145 FTE’s by 2004. The Legal Services Society lost an additional 96 staff members with the most recent changes to its budget. Legal representation on family law cases decreased from over 15,000 in 2001 to just over 6,000 in 2010. Legal representation on poverty law issues went from over 40,000 in 2001 to none as poverty law representation has been eliminated. The remaining legal aid budget is almost exclusively for criminal matters.

The Provincial government grant to the LSS budget for 2009 was approximately $70 million. Restoration of services would likely require an additional $140 – $150 million per year.

Total Additional Annual Expenditures (upper end) in $Million
Employment Standards Branch $4
Income Assistance Rate Increase $637
Child Care $1,200
Housing (construction) $200
Legal Aid $150
TOTAL $2,191
The Cost of Poverty
Estimates on the economic cost of poverty have been generated in the US, the UK and in Ontario. These costs generally include the additional expenses of health services and criminal justice that can be linked to poverty as well as an estimate of lost productivity. The costs are estimated as a percentage of GDP and have ranged from a low of 2% of GDP for the cost of child poverty in the UK; to 4% for the US estimates of the cost of child poverty. Ontario estimates that the cost of poverty for all age groups is 5.2%.

The BC GDP is estimated to be approximately $200 billion for 2010/2011. Based on the above figure, the cost of poverty in BC could range from $4 billion to $10.4 billion per year. Reducing poverty makes good economic sense.

Sources:

Changes to employment standards: http://www.policyalternatives.ca/publications/reports/eroding-worker-protections

Current caseload on income assistance:
(Average for 2010 used in calculations)
http://www.hsd.gov.bc.ca/research/index.htm

Cost of child care: Cost and accountability model http://www.cccabc.bc.ca/cccabcdocs/index.html and 15 by 15 report http://www.earlylearning.ubc.ca/research/initiatives/social-change/15-by-15-smart-family-policy/

Housing: Calculated on $200 per sq foot average construction cost for one million square feet of construction per year

Changes to legal aid: http://www.policyalternatives.ca/publications/reports/legal-aid-denied and http://www.policyalternatives.ca/rights-based-legal-aid

Cost of Poverty: Bibliography of resources http://www.ncw.gc.ca/[email protected]?ttlsrchtp=2&ordrby=3+desc&lttl=cost+of+poverty. Cost estimates for Ontario with note of estimates in UK and US: http://www.oafb.ca/indexstudies.html

Nicholas Simons Supports John Horgan

Nicholas Simons, MLA for Powell River-Sunshine Coast is throwing his support behind John Horgan, MLA for Juan de Fuca for Leader of the NDP.

“I believe that John Horgan is an exciting politician who is emerging just when the NDP needs an extra boost. He’s smart, engaging, passionate, and says what he thinks –and I don’t even always agree with him. But I think he will be the best leader for the NDP, and the best Premier for the Province.”

Simons says the meetings and debates throughout the Province were energizing, and that people are excited about the Party.

“We had large and enthusiastic crowds. It has been a privilege for me to share my ideas and speak to members around the Province about how we can make British Columbia a better home for all of us. I am proud of my team of volunteers, the policies I have proposed, and the principles I have supported.”

Simons’ platform included a comprehensive anti-poverty strategy, ideas on climate change, protecting water, the promotion of arts, and included bold policies on education. He made his decision last night after the final official debate in Terrace.

“I spoke to Mike and Dana last night, and to Adrian this morning. All the candidates are my friends, and that’s not going to change. But I think John Horgan will surprise and impress a lot of people, as he has impressed me.”