A tale of two provinces: a case for action against poverty

Flags of B.C., Canada and NewfoundlandBritish Columbia & Newfoundland and Labrador have more in common than being our country’s coastal bookends. Twelve years ago, they shared the distinction of having some of the highest poverty rates in the country: BC’s was the highest at 15.1 per cent while Newfoundland was a not too distant fourth place at 13.2 per cent (Low-Income Cut Off – After Tax).

Fast forward ten years, however, and a much different picture emerges. As the recently released Statistics Canada low-income data for 2010 reveals, Newfoundland now has one of the lowest poverty rates amongst the provinces, with 6.5 per cent of the population living in poverty. BC, on the other hand, still has the distinction of having, by far, the highest poverty rate amongst the provinces at 11.5 per cent. The rate in BC dropped, but less than it did in Canada as a whole over the same period (and certainly far less than in Newfoundland, which led the way with a 50.8% decrease).

So what made the difference?

A number of factors are possible explanations: general economic growth, labour market conditions, population trends, or government policy. But we can likely attribute a significant part of Newfoundland’s progress to the existence of a provincial poverty strategy.

In 2006 Newfoundland’s Progressive Conservative government implemented a comprehensive poverty reduction strategy after an extensive community consultation process. Involving more than 14 government departments and agencies, the strategy has included the expansion of a prescription drug program for low-income residents, reduction in income tax rates for low-income earners, a program to assist people transitioning from social assistance to paid employment, the development of education and training programs for people with disabilities, and partnerships with community-based organizations.

This has all taken significant government investment and resources. The total budget for Newfoundland’s poverty reduction initiatives in 2011/12 is $139.5 million dollars (including new and existing spending). While this is no small figure, the cost of doing nothing would likely be many million dollars more in increased public health care and justice system costs, lost productivity, and foregone government tax revenues (and that’s just the economic cost). Poverty reduction efforts have paid dividends in Newfoundland, and the province is on it way to its goal of becoming the province with the least poverty by 2014.

Back out in BC, anti-poverty advocates estimate the total cost of poverty in the province to be as high as $8-9 billion annually. Yet they say it would cost significantly less – $3-4 billion a year (less than 4% of BC’s GDP) – for the province to build an effective poverty reduction strategy. It’s more expensive to not address poverty.

Despite the fact that it has the highest poverty rate in the country and that nearly all the other provinces and territories have implemented or are developing comprehensive poverty reduction plans (Saskatchewan is the only other exception), the BC government’s approach has been piecemeal at best.

Numerous groups, including the CPJ co-led Dignity for All campaign for a poverty-free Canada, have called on the BC government to consider the cost of poverty in the province and the need for action. In advance of last year’s BC-hosted Council of the Federation meeting (the council of the premiers of Canada’s thirteen provinces and territories), Dignity for All sent a letter to BC Premier Christy Clark asking that she and the Council discuss the need for coordinated leadership and strategies against poverty.

It seems Premier Clark is starting to listen. Maybe it’s the continued pressure from concerned citizens. Maybe it’s the looming provincial election. Maybe it’s the fact that Alberta, which until recently was the third remaining province without a poverty reduction plan, has just announced the development of a bold new strategy.

As CPJ has previously mentioned, the BC government launched a community-based poverty reduction strategy pilot project at the end of April (the day after Alberta Premier Alison Redford’s election promise for a strategy in that province, in fact). A joint-initiative with the Union of BC Municipalities, the project will launch in seven municipalities over the next few months, with plans for all of the province’s 47 municipalities to have strategies in place by 2015.

With measureable targets, cross-ministerial involvement and community involvement, it’s a step in the right direction, but the province’s strategy is missing some key components. Focusing at the local level acknowledges that there are no one-size-fits all solutions but it does little to address the root causes of poverty. Nor does the strategy include any new provincial policies or resources.

The fact of the matter is that the causes of poverty go beyond the community level. In this case, big problems require big solutions. For continued progress to be made against poverty, we need all levels of government to work together. We need strategies for affordable housing, accessible childcare, job creation, better education and training, improved social assistance programs, increased minimum wage, stronger labour standards, and a better health system. And that means we need not only all of the provinces, but just as importantly, the federal government at the table as well . BC isn’t the only one that could learn a thing or two from Newfoundland.

Simon is CPJ's former Socio-Economic Policy Analyst.


Submitted by Del Anderson on
Governments (Federal, Quebec, Alberta and soon Saskatchewan) have grant programs to assist lower income families with their RESP. TD Canada Trust has restrictions regarding these grants (punitive IMO), that are far more restrictive than the other Banks. TD Canada Trust mandates these grant moneys be placed into a TERM GIC account, whereas the other banks allow the RESP Subscriber to choose which investments (Mutual Funds, Bonds, etc) they wish to place these funds into. rant regarding TD Canada Trust's RESP policy I have been a TD/Canada Trust customer since the early 1980's, both personal and business. I recently opened a RESP for my Grandson and was blindsided when I was told that I needed TWO RESP accounts - one for the self-administered individual mutual fund and one for a term GIC. The policy is that all grants other than the CESG must go into the Term GIC account and remain in that account until he withdraws the funds or the account is collapsed! In this case, the GIC account would start with $1,100.00, gain $100 per year (CLB) and another $300 (A-CESG) over the next 14 years - not insignificant to me. Tell TD the policy needs be changed. Beware of TD Canada Trust RESP Unless you want your RESP, and Government Grants to be invested in a Term GIC, beware of TD Canada Trust’s RESP ! If you want your RESP invested in mutual funds, if you want to receive Government Grants that are available (beyond the CESG), and, do not want a RESP account plus a Term GIC account (yes, two accounts!), look at either Royal Bank of Canada, Scotia Bank, CIBC or Bank of Montreal and not TD Canada Trust! TD Canada Trust’s policy dictates that if you wish to receive Government Grants such as the a-CESG, the Canadian Learning Bond, Quebec Education Savings Incentive, or the Alberta Centennial Education Savings Grant, they will only process the applications if the funds from these Grants are placed into a Term GIC. And, these funds cannot ever be rolled into your mutual fund RESP or transferred. You have no choice in this ! With TD Canada Trust, if you wish your TD Canada Trust RESP be invested in Mutual Funds, and, you also wish to receive Government Grants beyond the CESG, you must have two RESP accounts (imagine the headaches for you the subscriber, and also the problems when the beneficiary begins his or her post-secondary education) with this. You have no choice with TD Canada Trust. Royal Bank of Canada, Scotia Bank, CIBC or Bank of Montreal do not have such a restrictive policy.

Add new comment

Latest Tweets