Cost of Poverty in Ontario 2019

Summary

Based on our analysis, the cost of poverty in Ontario in 2019 is conservatively estimated at $27.1 – $33 billion per year.

Many governments estimate the costs associated with poverty by calculating the dollars spent on programs and services for the poor. As a result, when governments are trying to balance budgets, this can lead to cuts or disinvestment in the social safety net that these individuals and families are accessing.

This report examines the cost of poverty in a very different way. Instead of looking at program costs associated with low-income individuals, it locates the cost of poverty in the loss of tax revenue and in the increased health and justice system expenses that economies, provinces, and nations incur by maintaining people in poverty.

Report Highlights and Trends

The Cost of Poverty in Ontario looks at heath care, justice system, and opportunity costs – expenditures that are proven to be impacted by those living in poverty – and estimates how much might be saved if we increased the income of the lowest 20% of the population to that of the second-lowest 20% (or quintile).

Justice System Costs$1.1 billion
Health Care System Costs$3.9 billion
Opportunity Costs: Lost Income$19.4-25 billion
Opportunity Costs: Lost Tax Revenue$2.7-3 billion
Total Cost of Poverty in Ontario$27.1 – $33 billion

In addition, the report notes some poverty reduction trends in Ontario since the original Cost of Poverty:

  • Decreased poverty rates, but increased income disparity: Between 2000-2016, the proportion of Ontarians under the Low Income Measure (LIM) decreased by 11%, but the income gap between the poorest and richest Ontarians grew by 10%.
  • Families with children improving: The poverty rate for families with children has declined, likely due to key investments like the Ontario Child Benefit, Canada Child Benefit, and full-day kindergarten.
  • Families without children doing worse: Poverty rates have increased for single people and couples without children, who now represent 72% of households experiencing low income
  • Food bank data is in line with these trends: The proportion of single-person households accessing food banks has increased by 45% since 2007. The overall depth of need has grown tremendously, with visits to food banks growing three times faster than unique individuals.

10th Anniversary

The first analysis in Canada of the cost of poverty was produced by Feed Ontario (formerly the Ontario Association of Food Banks) in 2008, to help shape the provincial government’s strategy to tackle poverty. Since then, it has been replicated in several other provinces and cities towards similar efforts.

While 2019 brings a new context, different social and economic challenges, and a changing political landscape, the crux of the message remains the same: investing in people, through good times and bad, is not only socially responsible but also financially sound.

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Get Involved

With the Government of Ontario considering changes to social assistance, it is more important than ever that we communicate that disinvestment in poverty costs Ontario billions of dollars. You can #FeedChange by telling others about the findings of Cost of Poverty in Ontario: friends, family, co-workers, political representatives, and your social media networks!

How Can I Help?

  • Contact: Call, email, or visit your MPP
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We strongly encourage the Government of Ontario to consider our recommendations for change, which include social assistance reform, increased access to affordable housing, and the creation of secure, well-paid employment opportunities.