Reducing taxes not the way to fight poverty

Opinion

Hey there, time traveller!
This article was published 01/05/2018 (2708 days ago), so information in it may no longer be current.

The Winnipeg Chamber of Commerce got a few things right in its pitch to the province to reduce poverty (Poverty reduction requires bold plan, April 25). Manitoba needs a “bold plan” and the province needs to take advantage of the current federal government’s interest in poverty reduction.

After 10 long years with the Harper government showing no interest in developing a national poverty reduction plan, the Liberal government introduced the Canada Child Benefit (CCB) in 2016, followed by a commitment to a National Housing Strategy and Canadian Poverty Reduction Strategy. So, the timing is right for Manitoba to work collaboratively with the federal government.

Anti-poverty experts in Manitoba have long argued for a comprehensive plan involving all levels of government with broad support from business, labour, civil society and the electorate. We definitely need to be bold. But what does that really mean? For its part, the Pallister government will need to take leadership on some of the ideas the chamber recommends, as well as the many other ideas it received during its consultations this year.

A bold plan includes targeted programs such as the chamber’s suggested increased investment in the Manitoba Scholarship and Bursary Initiative for low-income students. But it also includes significant increases to colleges and universities, so that they can maintain reasonable tuition rates and offer a greater number of course options in a range of disciplines to ensure that Manitoba students are the “best and brightest” they can be.

It includes the strengthening of breakfast and lunch programs for children, especially those in our most disadvantaged neighbourhoods, for all the reasons the chamber cites.

But it also means that we increase — rather than decrease — funding to education to ensure teachers are equipped to deal with the complex issues playing out in our classrooms.

It means, as the chamber suggests, that the province “work with” the growing social-enterprise sector, recognizing the broad social and economic benefits that this sector provides. But this, too, requires investment as well as strategic procurement.

It might mean regulatory and tax regime changes to encourage development of affordable housing. But more important, it means scaling up investment in social, rent-geared-to-income housing to ensure housing security for the lowest-income households.

It means expanding, rather than retracting as the current provincial government has, innovative programs such as RentAssist.

Here, the province should be dovetailing with the proposed national housing benefit, so that there is a joint and seamless transition to supports that keep people from falling into core housing need.

It means trying innovative approaches such as “mincome,” but not because they might, as the chamber proposes, “save administrative costs of the current myriad of social supports.” We need those social supports, too. And we also need increases in the minimum wage.

A basic income scheme should not be used as a means to subsidize employers who don’t want to pay a decent wage.

Being bold also means having an honest conversation about how we pay for all of this and why we should. If we believe growing poverty and inequality is detrimental to all of us, then we all need to participate in implementing the bold measures required.

This will require critical changes on both sides of the ledger — poverty will not be alleviated without significant spending and we will need revenue to cover the costs. But this should be an easy sell given the growing evidence that large scale investment makes a difference.

For example, the most recent Statistics Canada data show a considerable reduction in the percentage of persons — and in particular, children —across Canada living in poverty in 2016 compared with 2015.

Poverty reduction in Manitoba was particularly significant in 2016 registering the biggest improvement in the child poverty rate among all provinces. The Market Basket Measure (MBM) shows a 27.4 per cent reduction in child poverty in 2016, moving Manitoba from dead last in 2015 to fifth place in 2016.

The Low-Income Measure (LIM) also shows poverty to be down significantly in Manitoba — from 22.4 per cent in 2015 to 17.1 per cent in 2016. While we can’t know for certain with a single year of data how and why this decrease occurred, or if it will be sustained, we know Manitoba children benefitted from two important programs.

The federal Liberal government implemented a $22-billion Canada Child Benefit beginning in July 2016. The previous NDP government fully implemented its RentAssist program with an investment of $72.9 million by 2016.

Each of these programs provide significant financial assistance for low-income households.

They are examples of two big and bold policy moves that we should now build on through intergovernmental collaboration. And we need to look for other creative ways to redistribute wealth through taxation and invest in initiatives aimed at creating greater equity.

Being bold will require us to move away from the mindset that reducing taxes is the way forward.

There is no evidence that large scale tax cuts will reduce poverty. What they do reduce is our ability to invest in the kinds of programs that make a difference.

Kudos to the Chamber of Commerce for putting poverty reduction on their radar. We now need to recognize the scale of what needs to be done and boldly do what is necessary to make poverty reduction a priority.

Shauna MacKinnon is associate professor and chair, Department of Urban and Inner-City Studies, University of Winnipeg.