Building pathways to poverty reduction

Joan Burke, Minister of Human Resources, Labour and Employment, said today that several Budget 2005 measures help lessen poverty in Newfoundland and Labrador, including funding for the development of a strategic plan on addressing the issue of poverty.

"Community advocates and those who work on the front-lines of delivering social programming recognize that poverty is an extremely complex issue and cannot be viewed as simply the result of a lack of financial resources," said Minister Burke. "To transform Newfoundland and Labrador from a province with the most poverty to one with the least will require an in-depth understanding of both the people at risk of poverty as well as the social and economic factors that keep them in poverty."

"I am very pleased to announce that government is taking an integrated approach to the issue of poverty that will engage community partners," said Minister Burke. "As a first step, government will invest $200,000 towards the development of this strategy. This is being done in conjunction with other significant initiatives to address barriers for those most often affected by the impacts of poverty, including children, single parents, women and persons with disabilities."

Key commitments include:

• $1.8 million to increase income support rates for couples and single clients without children by one per cent effective July 1, 2005 and one per cent effective January 1, 2006;
• $350,000 for an improved earnings exemption for working income support clients that will allow them to keep an additional 10 per cent of their earnings beyond the current level;
• An additional $411,000 under the Labour Market Development Agreement for Persons with Disabilities;
• $250,000 to increase the 1st child benefit of the Newfoundland and Labrador Child Benefit; and,
• $180,000 to implement a second pilot to assist single parents in receipt of income support prepare for, find and keep employment.

Other initiatives announced in Budget 2005, such as funding for the creation of a High School Completion Incentive and a greater focus on youth at risk, will also help alleviate and reduce poverty. "These are all examples of sound social programming that will ensure our clients continue to receive appropriate support," said Minister Burke. "However, such measures alone are not enough to achieve long-term poverty reduction. We must have a clear understanding of who lives in poverty and why, and we must look at the issue from all angles including gender, education, housing, health, tax measures and financial supports. This will all be done as we develop a strategy on poverty reduction."

Media contact: Jacquelyn Howard, Communications, (709) 729-4062, 689-2624

BACKGROUNDER
Addressing poverty - A strategic approach

The Department of Human Resources, Labour and Employment (HRLE) will support government�s goal to reduce poverty in Newfoundland and Labrador by leading the development of a strategic plan. The department will take a consultative approach in this effort as any plan to reduce poverty in a meaningful way must involve the work of departments at the provincial and federal levels in addition to community involvement.

Researchers and advocacy groups have come to view poverty not simply as a lack of financial resources, but as both the cause and consequence of social exclusion. A lack of money prevents individuals from fully participating in the social and economic activities of their communities. Poverty remains a persistent challenge for Canada and Newfoundland and Labrador. It is directly related to poorer outcomes in health, education and employment, and it increases women�s vulnerability to violence. These outcomes limit people�s ability to fully participate in their communities and to contribute to a productive and prosperous society.

It is difficult to put a dollar figure on how much poverty costs, but there are many indicators of the human cost of poverty, such as increased illness, more violence against women, lower labour force participation and more family disintegration. Poverty also results in increased costs to the health care, education and justice systems. Groups most impacted by persistent poverty include women, single mothers and children, persons living with disabilities and aboriginal persons. For many, poverty is temporary and may be linked to periods of study, job loss, divorce or flight from a violent partner. Some people living in poverty, such as university students, will likely move out of poverty quickly because they are developing skills and knowledge to help them earn good incomes. On the other hand, people living in poverty who have minimal education and great difficulty accessing education or training are likely to suffer prolonged periods of poverty.

For these reasons, HRLE, on behalf of government, is pursuing a comprehensive, integrated approach that will make the connections between poverty and gender, education, housing, employment, health, social and financial supports, and tax measures and the link between women�s poverty and their increased vulnerability to violence. In addition, it is also necessary to consider how different policies may relate to each other and impact the person they are designed to assist. For example, supports to reduce poverty are often income-tested. That is, the benefit reduces, as income rises. When support programs are viewed in isolation of each other, they may appear to be operating reasonably well. However, when considered collectively, the phase out of benefits may actually create a barrier to employment. Therefore, it is important that steps to reduce poverty be made in an integrated manner, not piecemeal.

Government�s strategic plan will include a profile of those living in poverty in the province, and will incorporate initiatives to reduce the depth and level of poverty, alleviate its negative effects and help break the cycle of inter-generational dependency over the mid- and long-term. A significant gap currently exists in the data available to build accurate profiles of poverty in the province. The development of the strategic plan will include research to further understand the dynamics of those living in poverty, including geography, gender, duration, family type, and attachment to the labour market. After tax incomes and comparisons to the cost of living throughout the province will be considered as part of this analysis.

The strategy to reduce poverty in the longer-term will look at the roles of various stakeholders and such programs and areas as income support rates, the tax system, child benefits, access to prescription drugs, education and training supports, housing supports, initiatives to enhance economic development in the province and incentives to improve compliance with support enforcement orders.

Initiatives by HRLE announced in Budget 2005 are the result of an extensive review of all the department�s programs and services leading to a focus on youth at risk, and enhancement of employment and career services. All measures are inter-connected and have been developed keeping in mind government�s goal to reduce poverty, help our province�s most vulnerable gain long-term meaningful employment and enable them to participate fully in their communities.

The development of a strategic plan will build on the work already undertaken by an inter-departmental working group on poverty. Representation included Education, Health and Community Services, Innovation, Trade and Rural Development, Finance, Women�s Policy Office, Rural Secretariat, the Labour Relations Agency and the Newfoundland and Labrador Housing Corporation. The next step will be to engage other stakeholders.

2005 03 21                  3:15 p.m.