September 14, 2013

How much would eliminating Aboriginal child poverty cost?

Graphic by the CCPA
This summer the Canadian Centre for Policy Alternatives released a report about child poverty concluding that "to bring all children in Canada up to the poverty line would cost $7.5 billion." We reprint the introduction of the report with the note that some estimates for the new F-35 fighter jets now being discussed put the price tag at up to $71-billion.

Despite repeated promises from federal and provincial governments to address the issue — including a 1989 commitment by all Parliamentarians to eliminate child poverty by the year 2000 — Canada ranks 25th among the 30 countries in the Organization for Economic Co-operation and Development with regard to child poverty. Recent modest declines in rates cannot hide the fact that over a million children in Canada still live in poverty.

More troubling, however, is the reality facing Indigenous children in Canada.

Based on data from the 2006 census, this study found that the average child poverty rate for all children in Canada is 17%, while the average child poverty rate for all Indigenous children is more than twice that figure, at 40%.

Three tiers

In fact, even among children living in poverty in Canada, three distinct tiers exist.

The first tier, with a poverty rate of 12%, excludes Indigenous, racialized and immigrant children. This is three to four times the rate of the bestperforming OECD countries.

The second tier of child poverty includes racialized children who suffer a poverty rate of 22%, immigrant children whose poverty rate is 33%, and M├ętis, Inuit and non-status First Nations children at 27%.

Most shocking, however, is that fully half — 50% — of status First Nations children live below the poverty line. This number grows to 62% in Manitoba and 64% in Saskatchewan. Some of these differences in child poverty appear to be a matter of jurisdiction.  The provinces provide social services to all but status First Nation children on reserve, children who fare considerably better than their counterparts under federal responsibility.

Funding caps

For status First Nations children living on reserves, the federal government is responsible for funding social services, health care, education and income supports. Transfer payments for these social services on reserve have increased by a mere 2% per year since 1996, unadjusted for population growth or need. The removal of this cap on funding growth and an adjustment of transfers for need could reduce the alarming rate of status First Nations households living in poverty. It is a matter of choice.

The federal government can also have an impact on child poverty rates among children under provincial jurisdiction. Increasing the National Child Benefit Supplement (NCBS) so that the total benefit from the NCBS and the Canada Child Transfer total $5,400 for the first child would reduce that child poverty by approximately 14%.

To bring all children in Canada up to the poverty line would cost $7.5 billion, $1 billion of which is required for Indigenous children. Of that, $580 million would be required to lift status First Nations children to the poverty line, which equates to 11% of the budget of Aboriginal Affairs and Northern
Development Canada for the comparable year.

Cost of neglect higher

Although these investments are significant, the cost of continuing neglect is higher, both to Canada’s economy and to the children. The Royal Commission on Aboriginal Peoples estimated “the cost of doing nothing” — representing lost productivity and increased remedial costs — at
$7.5 billion annually back in 1996, a figure that would be much higher today.

And a study by the Centre for the Study of Living Standards projected a $115 billion cumulative benefit (2006–26) for federal and provincial governments from equivalent educational attainment and labour market outcomes for Indigenous people.

Indigenous children trail the rest of Canada’s children on practically every measure of wellbeing: family income, educational attainment, poor water quality, infant mortality, health, suicide, crowding and homelessness.

Crisis situation

For example, Status First Nations children living in poverty are three times more likely to live in a house that requires major repairs compared to the non-Indigenous children of families with similar income levels, and five times more likely to live in an overcrowded house.

The failure of ongoing policies is clear. The link between the denial of basic human rights for Indigenous children and their poverty is equally clear.

Failure to act will result in a more difficult, less productive, and shorter life for Indigenous children.

The choice is ours.

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