Study Finds Poverty Costs Ontario Billions of Dollars Every Year

According to a recent study, poverty costs Ontario 10.8 to 16.6 percent of the provincial annual budget.

According to a recent study, poverty costs Ontario 10.8 to 16.6 percent of the provincial annual budget.

On Tuesday, the Ontario Association of Food Banks, in collaboration with a group of researchers, advisors, supporters, and funders released a study entitled: “The Cost of Poverty” that focused on examining poverty in Ontario.

The study found that poverty affects people on disproportionate levels in Ontario—people with disabilities, children, single parents, new Canadians, and Aboriginals are all hit hardest by poverty. In 2001, 35.8 percent of new Canadians in Ontario lived below the poverty line, compared to the national average of 15.6 percent.

The study found several reasons on a micro and macro level for why certain people are impacted more than others by poverty. On a macro level, some of these reasons include: our system of social assistance, skills and credential recognition, and cultural barriers; on a micro level, some reasons include: lack of skills, education, and/or literacy.

While some people might assume poverty only impacts the people directly affected by it, the reality is it impacts the entire province, as the provincial government loses between $10.4 billion and $13.1 billion per year due to poverty.

These costs show up in the form of the cost to the healthcare system, the cost of crime and criminal proceedings, the cost of social assistance, and the lack of income tax dollars.

The report also examined the possibility of reducing poverty through targeted policies, some of which yielded positive results. One such study with positive returns was investing in childcare for low-income areas, which yielded a return of $4 to $16 for every dollar invested—this makes sense considering many low-income families are single-parent and the cost of childcare can inhibit the adult’s ability to work.

The study was intended to determine the root causes of poverty, in order to begin implementing a strategy to combat them.