Easier said than done

Hey there, time traveller!
This article was published 23/03/2019 (2443 days ago), so information in it may no longer be current.

University of Winnipeg urban and inner-city students know more about poverty than many Manitobans. Some live it every day. Others have not experienced poverty, but they have been learning about its many layers, the obstacles it creates and how public policy might better respond. They are learning from scholarly content, but also from classmates who share their personal experiences.

The department of urban and inner-city studies, located at Merchants Corner in Winnipeg’s North End, takes an experiential learning approach to education. So, when our class learned that the provincial government would release its new poverty reduction strategy followed by the 2019 budget, we thought it would be a good opportunity to review the strategy and assess how the budget will contribute to achieving the strategy’s goals.

Students made several observations as they reviewed the 82-page Pathways to a Better Future strategy. They questioned the use of 2015 statistics as a baseline to measure progress — if this is a forward-looking strategy, why would the government not use the most recent poverty data? Is it because there was a significant decline in 2016 it could not take credit for? It is unlikely that the current government’s policies contributed to the decrease — it had been in government less than a year. Using statistics that precede its tenure seems disingenuous.

Related to this, we found the table comparing income assistance rates in 2014 and 2018 misleading. It shows a significant increase in income supports ranging from 16.2 per cent to 31 per cent, depending on family size. We looked at Employment and Income Assistance (EIA) dating back to 1990 and found that EIA has been relatively stagnant except for an increase in 2015, which can be attributed to the previous government’s Rent Assist program.

This led us to question why the government didn’t include 2015 in its report given the significant effect of Rent Assist. While far from perfect, Rent Assist has made a difference for many low-income renters and is an example of a program that should be strengthened and expanded. It is especially needed in the absence of a sufficient supply of social housing, which led us to a discussion about the strategy’s statement on the importance of collaboration at the same time as government refuses to sign a bilateral agreement that would see millions of dollars flow to the province for much-needed affordable housing.

After reviewing the strategy, students turned to the budget. We agreed that strategies are important, but the real test of a government’s commitment to alleviating poverty is reflected in how revenue is raised and spent.

The current government believes the best way to address poverty is to “leave more money on the kitchen table.” The Progressive Conservatives campaigned on a promise to decrease the PST by one percentage point and a commitment to raise the basic personal amount (BPA) — the income level at which we begin to pay taxes.

Students understand that by implementing these measures, the government is making good on its promises, but they wanted to know: how much money is left on kitchen tables in low-income homes? And at what cost to government revenue and the ability to support other important initiatives? Students were surprised by what they learned when comparing the government’s claims of “kitchen table savings” with their personal circumstances.

For example, some students are single parents who scrape by to make ends meet. We estimated that a reasonable amount they might spend annually on PST taxable goods and services is $3,000. A one-percentage-point cut in the PST will leave $30 on their kitchen table this year — a far cry from the $500 the government claims an average family will save. We also looked at the effect of the increase in the BPA.

The budget papers show that those in the lowest income bracket will save $16 in 2019 and the second bracket earner will save $83. The budget doesn’t go beyond that bracket, which left students wondering how much higher-income earners will save in comparison. While this information is not available to us, we know for certain that high-income earners will benefit far more from the increase in the BPA than low-income earners in greatest need. We agreed this is not equitable.

Students then looked at the effect on revenue. In 2019 alone, the government will have $36.4 million less to spend on important services as a result of changes in the BPA plus the loss of an additional $325 million over 12 months as result of the one-percentage-point sales tax reduction. These losses in revenue are offset by an increase in federal transfers of $324 million — money that could go a long way to fighting poverty.

Students admitted that they had not previously thought to “do the math” to assess the effects of tax cuts. They wonder if other Manitobans fully understand who benefits and at what cost to the public good.

When examining expenditures, students looked at several areas of concern, but here we focus on a few: income, housing, post-secondary education and reconciliation.

Aside from the Rent Assist program, the poorest Manitobans have seen an erosion in income supports. Some in our class have had first-hand experience with EIA and remind us that it is extremely difficult to live on an EIA budget and the program’s punitive approach makes it near impossible to get off EIA.

Safe affordable housing is the foundation of an effective poverty reduction strategy. Students shared many stories about unsafe housing, slum landlords and the challenges that result from the lack of decent housing.

There is nothing in Budget 2019 to address these concerns. To our knowledge, the province has not funded the construction of a single new social housing unit since 2016 and the budget for capital borrowing for Manitoba Housing has been cut in half since 2015. The government has sold nearly 1,000 publicly owned housing units, cut investments in the maintenance of its existing stock and made social housing less affordable by increasing rents from 25 per cent of a tenant’s income to 30 per cent. With more than 50,000 households living in substandard housing and more than 2,000 households on the wait-list for public housing, Budget 2019 fails miserably.

One thing students have in common is that they have chosen post-secondary education as their “pathway to a better future.” Any small gains made from the PST cut and the BPA changes will be more than offset by increases in tuition.

The University of Winnipeg receives a 0.9 per cent cut in funding again this year and full-time students will pay an additional $250 in tuition in 2019-20. Students are told that education is the key to a better future, so making a university education more difficult to attain makes no sense to them.

The budget describes a targeted approach to post-secondary accessibility and makes mention of a new Indigenous bursary. But students say accessing bursaries and scholarships is an onerous process. While students don’t agree bursaries are the best approach, they suggest access would be improved if discounts were automatically applied when registering for classes.

First Nations-funded students reminded us that the increase in tuition may not affect those already approved for funding, but fewer students will receive funding. Decreases in funding to universities and rising tuition contradicts the spirit of a poverty reduction strategy that says it aims to clear a “pathway to a better future.”

It is no coincidence Indigenous people are overrepresented among those living in poverty. The Truth and Reconciliation Commission clearly describes the damaging effects of colonial policies and programs, including residential schools. The Manitoba poverty reduction strategy acknowledges this as well. Yet there is no significant increase in funding to program areas that would most benefit Indigenous people. Students want to see far more in the budget to demonstrate the government is committed to its Path to Reconciliation Act.

Our overall assessment?

Budget 2019 will make the “pathway to a better future” more difficult to navigate for people living in poverty. The most encouraging statement we found in the documents we reviewed was made by the co-chairs of the poverty reduction committee, who said: “Reducing and preventing poverty is achievable and essential for a thriving Manitoba.” Unfortunately, there is little in the budget that shows the province plans to do much about it.

This article was written by Shauna MacKinnon, associate professor and department chair, University of Winnipeg urban and inner-city studies, in collaboration with students in the urban poverty and policy class.