No silver bullet to ‘solve’ poverty

In response to “Generosity doesn’t solve poverty” Winnipeg Free Press article December 17

Mary Agnes Welch is right when she says charity is “not fixing the province’s most serious problem.  However, her critique of provincial anti-poverty efforts falls short. Complex problems, like the kind of poverty that exists and persists here in Winnipeg, require multi-faceted responses. We need to build on what’s working in Manitoba if we are to solve the problems of poverty here.


There is no reason for anyone to go hungry in our country; the persistence of poverty in Canada is an issue of the distribution of wealth. A recent study found that the richest 20 percent of Canadians own 70 percent of the wealth, and the poorest 20 percent own no share of the wealth – nothing. This income gap is growing – in the past 10 years the wealth of the top 10 percent of Canadians increased by 42 percent. Some of this vast wealth has to be redistributed in the name of fairness and in order to meet real needs. Redistributing wealth is the key to addressing poverty. This means implementing a fairer taxation system.

The impact of years of federal changes—reducing taxes for the wealthiest among us; reducing public spending for the rest of us—is being borne by most of us, but is felt especially harshly by low-income people. Program spending under the federal government is the lowest its been since the 1950s. The federal government has offloaded all types of social programs to the provinces, from health care, to education, training and housing. On top of this, changes to the equalization formula mean resource-rich provinces like Alberta receive a higher share of transfer payments than provinces with flatter economic growth like Manitoba. These changes mean, for example, that the federal government is transferring $132 less per capita to Manitoba today than in 2009. This has not resulted in the economic stimulus the federal government promised. Federal tax cuts are associated with lower rates of business investment, slower productivity growth, and stagnant wages.

Aboriginal people are among those disproportionately affected by all of this and they, to their credit, are fighting back. Two years ago Idle No More was front and centre, and yet little has changed, because the federal government continues to restrict needed funding to reserves. New AFN Chief Perry Bellegarde explained in his acceptance speech that “We were never meant to be poor in our own homelands.” He has his work cut out for him: connecting with the grassroots while mobilizing the chiefs to deal with an array of difficult issues for Aboriginal people. Whether he is successful in doing this or not, Aboriginal people are organizing and are demanding, among other things, a fairer distribution of Canada’s wealth. We should all support them in this, because a fairer distribution of wealth would benefit the vast majority of Canadians, including those at the bottom of the income and wealth scales.

The provincial government has sought to keep taxes low in the midst of federal off-loading. The 2013 PST increase is a relatively recent effort to increase provincial revenues in the face of calls to rebuild infrastructure while retaining revenue for important public services like health care and education. While the provincial can and should do more, they have taken important steps to address poverty that cannot be ignored, like building social housing, creating child care spaces and creating Rent Assist.

One of the most important steps the provincial government has taken is investing in community-based development. Through long term funding to neighbourhood renewal organizations, important initiatives are initiated where otherwise problems would persist. One example is the Merchant’s Hotel on Selkirk Avenue. Once a magnet of criminal activity, it was a symbol of what was wrong in the North End. Residents and community organizations organized, and brought a plan to the province, which provided $9 million dollars to purchase and renovate the site, which will be transformed into student housing, a community space and an innovative educational centre aimed especially at providing opportunities for low-income people. Any visitor to inner city Winnipeg today will see neighbourhoods similarly changed by provincial dollars – once derelict houses transformed into homes, community gardens where abandoned lots used to be and community-run businesses bringing services to local people. Poverty still exists, at far too high a level. But changes are happening and progress is being made.

Welch’s characterization of non-profit organizations working with those in poverty as a “poverty industry” is unfair and inaccurate. Research shows that people struggling with poverty need resources that build on their assets and strengths, located close to where they live. A woman experiencing domestic violence requires counseling and support. A man who’s been in jail needs access to training and help finding a good job to turn his life around. A young adult sleeping on couches of friends requires access to safe housing, education, training and employment. These require public investment.

There is no silver bullet to solve the problem of complex poverty. Welch suggests the Guaranteed Annual Income (GAI) will do it, this is something we should work towards, on its own it won’t solve poverty. There are no quick and easy fixes for a problem we have allowed to persist for far too long. But there are some really sound developments underway in Winnipeg’s inner city today, and if we were to continue to build on and invest in these, poverty can be beaten.

Molly McCracken is the director of the Canadian Centre for Policy Alternatives Manitoba office

First published in Winnipeg Free Press December 26, 2014

1 Comment

Filed under Aboriginal issues, colonialism, inequality, poverty, racism

One response to “No silver bullet to ‘solve’ poverty

  1. James Mulvale

    Mary Agnes Welch’s column “Generosity doesn’t solve poverty” was in my view accurate and insightful. Canada must engage in the ongoing work of telling the truth and working towards reconciliation with Indigenous peoples, if poverty and the other negative effects of colonialism and racism are to be effectively addressed through the Treaties and other means. As well, if we are to lower and eventually eliminate poverty in Canada, we must undertake a fundamental overhaul of our income security system at both the national and provincial levels.

    There is growing political support and research evidence that point us in the direction of guaranteed or basic income. In addition to the successful Mincome project that was conducted in Dauphin MB over thirty years ago, there are also more recent examples of basic income programs from diverse locations (such as Brazil, Namibia, India, and Alaska) that have had very positive effects.

    This evidence suggests that providing all people with a guarantee of a basic cash income is a necessary condition if we are to significantly lower or eliminate poverty. Other components are also required in this quest, including strong and sustainable health care, a comprehensive social housing strategy, early child development and care, economic and social development at the community level, and effective social supports for individuals and families. Advocates of basic income on the left do not present it as a magic bullet or simple solution. But in the absence of a decent income for all, regardless of their status in the labour market, it is doubtful that we will make significant progress towards eliminating poverty in Canada.

    In fact we currently have targeted ‘basic income’ programs that are built into our tax and transfer system. The Old Age Security / Guaranteed Income Supplement program has significantly reduced poverty among seniors. The Canada Child Tax Benefit / National Child Benefit program keeps our child poverty rates from being worse than they already are. These and similar programs at the federal and provincial levels could be made more generous, broadened in scope, and ‘stitched together’ into a more unitary whole. In this way we could move towards an adequate and comprehensive basic income system for all in Canada.

    James Mulvale
    Faculty of Social Work, Univ. of Manitoba

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