The real cost of poverty in Ontario

The Ontario Association of Food Banks released a fascinating report today on the real costs of poverty to Ontario. The study, the first of its kind for Ontario, pegged the cost of poverty in Ontario at a minimum of $32 billion, and possibly as high as $38 billion per year. That is equivalent to more than 5% of Ontario’s GDP.

The study is important, because it looks beyond the costs of social assistance and other social programs to look at health care costs, crime, and lost tax revenues. These social costs are very significant. For instance, the study estimates that Ontario pays $2.9 billion a year on poverty-related health care, while $7.6 billion of spending at the national level can be attributed to poverty-related health issues. Meanwhile, at least $8.6 billion is being lost per year because people don’t have enough income to pay taxes.

The timing of this report is very important, as Ontario is set to announce its poverty reduction strategy next month. Hopefully the Ontario government takes note that even though times are tough, Canadians cannot afford to keep paying the costs of poverty.