Harper’s embarrassment of riches a golden opportunity to solve poverty

Stephen Harper has a problem, or rather two problems. His first problem is an embarrassment of riches. His second problem is entrenched poverty and a growing income divide. What he decides to do about the first problem will demonstrate whether he has the will to solve the second.

Media coverage of the $13.8 billion budget windfall focused on the irony of Stephen Harper’s running up the kind of surpluses he lambasted the Liberals for, but overlooked a troubling trend that signals a deeper problem for Canada.

Only a few Canadians are sharing in the prosperity that is swelling federal coffers. The rest of us are being left behind. The latest issue of Statistics Canada’s Perspectives on Labour and Incomes documents the problem. The top five percent of households saw their incomes rise “substantially from 1992 to 2004. In contrast, individuals in the bottom 50% to 80% generally saw little improvement in constant dollar income.” To make matters worse, most Canadian families are putting in more hours at work just so they don’t fall further behind.

The simple solution to the budget surplus is to cut taxes: choke off the revenue generating those surpluses.  But that will do nothing to solve Canada’s growing inequality and entrenched poverty. Indeed, across the board tax cuts are likely to deepen the growing divide. Even tax cuts aimed at middle and modest income families deliver meager gains. The reality is that direct transfers to individuals and investments in social infrastructure do far more to help ordinary Canadians than tax cuts could ever do.

Solving poverty is key to addressing other issues like health and safety. Reducing poverty and inequality is essential for improving the health of Canadians and reducing the costs of health care.  The Harper government is prepared to spend millions of dollars to tackle crime. A comprehensive anti-crime strategy, though, has to address the root causes of crime. That means ensuring that all Canadians can live with dignity and have real opportunities to contribute to their communities.

Taking leadership to make sure no one is left behind and to ensure that everyone has a chance to participate fully in the life of Canada is one of the responsibilities of government.

Now is the time for the federal government to show leadership. October 17, the day after the Throne Speech, is the 20^th anniversary of the International Day for the Eradication of Poverty. A Throne Speech commitment to create a Canadian poverty reduction strategy would be a good way to mark that anniversary.

The situation in other countries demonstrates what Canada could do. In the late 1990s, the Blair government in the U.K. laid out a plan to substantially reduce child and family poverty. By 2004, it had cut child poverty by 23 per cent. Ireland, too, has made strides in cutting poverty rates as a result of its plan to fight poverty and social exclusion.

There are some made in Canada examples, too. The citizens of Quebec mobilized to craft a law to combat poverty and social exclusion, which was passed unanimously by the Quebec National Assembly in 2002. Even before that law was passed, Quebec made major investments in child care, child benefits and maternity and parental benefits. As a result, child and family poverty rates dropped about 40% between 1997 and 2005. In 2006, the Government of Newfoundland and Labrador launched an official poverty reduction strategy, a result of strong political commitment and broad community consultation.

But achieving deep and lasting reductions in poverty requires political leadership at the federal level as well as at the provincial and territorial levels. It is time for the federal government to take leadership in reducing poverty across Canada. This means setting clear targets and timelines and creating an action plan backed up by budget commitments.

The federal government has multiple tools for strengthening income security. The Work Income Tax Benefit could supplement the incomes of workers with too few hours of work to exit poverty. Employment insurance should provide concrete benefits for all those who pay into it, helping them access new, well-paying jobs. Budget 2007’s commitment to fund training for those who are not eligible for employment insurance should give more people the chance to upgrade their  skills.

Access to affordable early learning and child care is a cornerstone of Quebec’s efforts to reduce child and family poverty. It is essential if parents are to have real choices in early childhood development programs. While Budget 2007 committed $250 million for child care, the massive federal surpluses demonstrate that we have ample resources to do more.

We are still a long way from ensuring that everyone has a place to call home. Too many people are sleeping in church basements and homeless shelters. The federal government has more work to do with provinces to meet the housing needs of those Canadians.

Stephen Harper’s embarrassment of riches represents a golden opportunity to make an historic difference, to achieve real progress in reducing poverty and closing the income divide in Canada. The question now is whether his government has the will to get the job done.