Thank you.
Good morning. On behalf of the Ontario Association of Food Banks and our 120 members, thank you for the opportunity to speak today. The necessity of your work and the need for your leadership is as important now as it has been in at least a generation.
We are faced with the devastating effects of the economic downturn on the front line. The demand for our services is rising sharply. Since last spring, the number of Ontarians turning to food banks has spiked by over 20%. We already serve over 320,000 Ontarians every month. Unfortunately, poverty in Ontario is almost certain to grow both deeper and more widespread until robust and sustained recovery takes hold. If unemployment and poverty rates follow the same trends as in previous recessions, as many as an additional half million Ontarians will be living in poverty in the next two years.
In the past, we had better mechanisms to support our neighbours in times of economic crisis. Unfortunately, vital programs such as employment insurance will not protect the vast number of Ontarians who are forced out of work. In the last recession, two-thirds of all Ontarians qualified for EI; this time around, only 32% qualify for supports. As a result, tens of thousands have been forced to turn to more tenuous means of support, from charity to social assistance.
It is fundamentally unjust that so many Ontarians go without food and that many more will join their ranks in the near future. There is not only a moral imperative for reducing poverty; there is also a powerful economic case for action.
Poverty has a staggering price tag. As a function of increased remedial costs of health care and criminal justice, intergenerational costs, and lost productivity, the combined public and private cost of poverty in Canada ranges between $72.5 billion and $86.1 billion every year. The combined loss of provincial and federal tax revenues is $25 billion. Accordingly, investments in poverty reduction measures generate a significant rate of return.
Direct income transfers to low-income Ontarians and Canadians is a wise investment, because they're more likely to spend their money and spend it on local Canadian goods and services. For example, the relative impact on GDP of direct transfer payments to low-income Canadians is 35% greater than a transfer to the wealthiest Ontarians. Similarly, investments in the construction and repair of public housing, child care, and early intervention programs such as Pathways generate significant economic returns.
There is a very powerful case for poverty reduction; therefore, we believe it is time for the federal government to develop and implement a national poverty reduction strategy with a bold target for reducing poverty. We believe it should be our universal goal to cut poverty in half by 2020, with a focus on reducing the deepest poverty. This universal goal would be measured according to the low-income measure, also known as the LIM.
In addition, the federal government should establish supportive goals aligning sectors, including housing, education, financial inclusion, employment and enterprise, energy, and health, as well as supportive goals aligned to place and population, including neighbourhoods and communities, new Canadians, single parents, first nations, Ontarians with disabilities, and children. These supportive goals could be modelled on the UN millennium development goals and measured according to income, social inclusion, and deprivation.
Furthermore, this national strategy should focus on robust and improved universal programs affecting all persons living in poverty, through income supports, public housing, and child care. This represents a horizontal approach, targeting the breadth of poverty. Income support reforms should include adequacy increases to federal child benefits and the working income tax benefit, the development of a national system of disability income supports, and a more equitable and accessible system of employment insurance.
Beyond these basic building blocks, you should also consider a number of innovative solutions as a vertical strategy to target poverty where it is deepest, including public housing bonds, opportunity zones, and community food centres.
Modelled on programs in the U.S., the federal government should give public housing providers financial supports to issue bonds to obtain the necessary upfront capital for new building projects. The government should also agree to finance interest that would accrue on these bonds to finance them over the long term. The housing provider would then issue the bond for the public housing market and pay back the principal through the sale of units or rental income obtained over the bond period. This would significantly reduce the public cost of housing and speed up construction.
In addition, this strategy should also include investments in opportunity zones for struggling communities with high rates of poverty and unemployment, modelled after the renewal community and empowerment zone model in the United States. The federal government could offer enterprises the needs-selected opportunity zones, with wage credits for hiring new employees as well as capital deductions for the purchase of equipment or construction of buildings.
Finally, this strategy should include investments in the development of community food centres for remote reserve communities to help preserve local culture, provide hunger relief, increase the affordability of healthy non-traditional foods, and promote food enterprise export development. We're currently supporting the development of a similar model in Sandy Lake First Nation.
This community has the third highest rate of diabetes in the world, alarmingly high food prices, terrible rates of poverty and unemployment, and among the harshest housing conditions in the country. However, this community's resilience, its knowledge, its leadership, and bountiful supply of local food provide both potential and hope for a better future.
We believe we have a very strong case and a number of bright ideas to help reduce poverty in Canada. It is now a matter of marshalling the necessary political will to act.
Thank you.