We Need a Plan to Make Poverty History

Submitted by Ravi on October 4, 2010 - 2:14pm

Submission to the Standing Committee on Finance Pre-Budget Consultations from Make Poverty History.

1. Introduction

Over 1 billion people live on less than $1.25 a day with nearly half the world’s population (2.8 billion) living on less than $2 a day.¹ Everyday, around the world, fifty thousand people die unnecessarily because of poverty.² 1.2 billion people will go to bed hungry tonight.³

637,000 Canadian children or 1 in 10 are living in poverty.⁴ And due to the impact of the recession in 2008, it is estimated that the over-all poverty rate in Canada increased to 11.7% in 2009.⁵

1 in 4 First Nations children live in poverty and the unemployment rate in First Nations communities is four times the national average.⁶

Poverty is a violation of human rights on a massive scale. It doesn't have to be this way. Collectively we now have the resources, technology and knowledge necessary to end poverty, both globally and here at home. If we choose - if we have the will to act - we can Make Poverty History.

2. Global Plan to Make Poverty History

There is a global plan to reduce extreme poverty by half by the year 2015. In 2000, world leaders adopted the Millennium Development Goals (MDGs) and promised to “spare no effort” in the fight to end poverty. The MDGs are minimum standards that are attainable by the target date of 2015.

In the decade since these goals were adopted, significant progress has been made. The United Nations’ Millennium Development Goals Report 2010 reports that big gains have been made in improving child health, combating AIDS and malaria and in getting children into primary schools in many poor countries, especially in Africa.⁷

But with only 5 years left before the target date of 2015, progress to date is now threatened by the food price crisis, climate change and the global financial and economic crisis. Unless we significantly scale up our efforts, we will not achieve these goals —with tragic consequences for the world’s most vulnerable people.

Make Poverty History released a report this June that found Canada has made a positive contribution towards the global effort to achieve several of the Millennium Development Goals since they were adopted by world leaders at the United Nations in 2000. Canada has contributed to the eradication of hunger by increasing its food aid and directing more aid towards agricultural development and food production in poor countries (Goal 1). It has played a leadership role in promoting gender equality (Goal 3). Canada also helped to establish the Catalytic Initiative to save children’s lives (Goal 4). And Canada has been giving its fair share of funding for the Global Fund to Fight AIDS, TB and Malaria (Goal 6).

But our Canadian Millennium Development Report 2010 concluded that Canada’s contribution falls short of what is needed on achieving universal primary education (Goal 2), improving maternal health (Goal 5), and ensuring environmental sustainability (Goal 7). On its contribution to global partnership for development (Goal 8), Canada also compares very poorly with other developed countries on its foreign aid spending as a percentage of its national income. It currently ranks 14th out of 23 donor countries and is stuck at less than half way to the UN 0.7% aid target. The Report warns that the announced freezing of aid at the 2010 level will worsen this situation.⁸

There is strong public support for Canada to do more to make poverty history globally. Over 300,000 Canadians have signed-on in support of the Make Poverty History campaign’s call for more and better aid, trade justice, debt cancellation and an end to child poverty in Canada.

An Angus Reid poll conducted for Make Poverty History and released June 23, 2010, found that 61% of Canadians believe their country should increase the amount of money spent on international aid. 62% of Canadians also think it is not realistic for Canada to freeze its aid budget and still expect to keep its international commitments. ⁹

3. Plan to Make Poverty History in Canada

Success in domestic poverty reduction also requires that we have a plan. That is why the Make Poverty History campaign in Canada is calling for the federal government to implement a plan to reduce and ultimately eliminate poverty in Canada. Specifically we call for the government to:

Design a federal poverty reduction plan that complements provincial and territorial initiatives in consultation with those living in poverty.

Adopt a federal anti-poverty act that ensures enduring federal commitment and provides accountability for results.

Commit sufficient federal funding to programs that would ensure a decent standard of living for all Canadians.

A majority of provinces have now adopted comprehensive poverty reduction strategies. But provincial governments do not have jurisdiction over all of the policy tools required to reduce and eventually eradicate poverty. That is why governments at all levels, provincial and territorial as well as municipal and First Nations, need to be engaged. But we need leadership from the Federal Government to engage all level of government in the development of a comprehensive poverty reduction strategy for Canada.

There is growing support for a national poverty reduction plan. Over 350 organizations have signed on in support of the Dignity for All campaign which calls for federal plan for poverty elimination in Canada.¹⁰ We were encouraged that the House of Commons unanimously passed a motion on November 24th, 2009 calling on the Government of Canada to develop an immediate plan to eliminate poverty in Canada for all.¹¹ And the most recent meeting of provincial and territorial leaders at the Council of the Federation called for continued efforts at reducing poverty.¹²

Poverty reduction strategies need to include a range of social and economic policies, including community economic development and job creation strategies, education and training programs, tax policies, as well as improvements to social programs.

Key parts of a poverty reduction strategy where the federal government could provide leadership include:

implementing a national housing strategy that would involve building a minimum of 25,000 social housing units per year (this will likely require expenditures of $1.5 billion annually);
implementing a national child care and early childhood education program, which will especially help low-income single parents in their ability to get jobs;
improving the Employment Insurance program so that more of those who become unemployed can qualify for benefits and are prevented from falling into poverty, from which it can be difficult to escape;
reinstating a federal minimum wage and setting it at $10.25 an hour and indexing it to inflation to ensure that someone working full-time will be able to escape poverty;
creating a national pharmacare plan that would provide first-dollar coverage for prescription drugs, removing a major barrier to employment for those on welfare.
Implementing a plan to reduce First Nations and Aboriginal poverty.

Investment in poverty reduction and supporting participation in the labour market through positive incentives will yield many economic and social benefits, including boosting productivity, improving population health and lowering the costs of health care, and boosting the labour market supply to help address labour shortages that could arise from an aging workforce.

4. Don’t Make the Poor at Home and Abroad Pay for Deficit Reduction

Governments in developed countries have spent trillions of dollars in response to the Global Financial and Economic Crisis that began in 2008. This has led to large fiscal deficits, including in Canada.

If deficit reduction is pursued primarily by spending cuts, especially for social programs and international aid, this could further harm the poor in Canada and the poorest and most vulnerable people in the developing world, who have already suffered most from a financial and economic crisis that they did nothing to cause.

The Canadian government’s plan to reduce its deficit announced in last year’s Federal Budget relies for 25% of its over-all reduction on freezing its aid budget over the next 5 years. This is unjust as it puts an unfair burden on the poorest people.

Relying on austerity alone to reduce deficits also risks increasing unemployment and poverty in Canada. This could in turn reduce tax revenues, thereby undermining the chances of restoring the fiscal balance.

Deficit reduction strategies, if they are to be successful, also require measures to increase revenue. While increasing personal income taxes on middle and lower income Canadians could also undermine the weak economic recovery, there are other innovative tax measures that deserve consideration.

The Financial Transaction Tax, or the Robin Hood Tax as we have called it, could raise hundreds of billions of dollars that could be used to reduce deficits in developed countries as well as provide financing for poverty reduction and climate change adaptation in developing countries which donor countries seem increasingly hard pressed to come up with. By imposing a very small fee (0.05%) on financial market transactions, the global financial sector, which benefitted most from the bail-outs and rescue packages, and who now pay far less taxes than other business sectors, will be made to contribute their fair share to a global recovery effort. The FTT would have the added advantage of discouraging excessive speculation.¹³

5. Recommendations

The 2011 Federal Budget should:

Include a timetable of 15% annual increases for official development assistance to reach the UN aid target of 0.7% of GNI within ten years so that Canada can contribute its fair share to achieving the MDGs by 2015.
Commit to designing a federal poverty reduction plan that complements provincial and territorial initiatives in consultation with those living in poverty.

Adopt a federal anti-poverty act that ensures enduring federal commitment and provides accountability for results.
Commit sufficient federal funding to programs that would ensure a decent standard of living for all Canadians.
Support the Financial Transaction Tax as a way to recover money spent by governments on bail outs and stimulus programs and for generating badly needed funds globally to achieve the Millennium Development Goals and help developing countries cope with climate change.