Countless articles on $52 million, but silence on Calgary Poverty Reduction Strategy
One would imagine that an ambitious plan to help Alberta from losing $7.1 to $9.5 billion per year would trump the issue of where $52 million of uncommitted education taxes, but that’s not the case in 2013. The Calgary Poverty Reduction Strategy was adopted by Calgary city council this week as a very ambitious and cost-effective method of reducing poverty in the city, yet some media outlets chose not to report on it. They instead chose to discuss where $52 million should go, and some supported the idea that it should be returned to the taxpayers. Oddly enough, one of the arguments was that this return, which roughly averages out to $127 per household, would help those who are in poverty, low income, or fixed income. Yet, without reading the “Enough for all” report, those who do support returning $52 million to the taxpayers would be surprised that the poverty reduction strategy doesn’t ask for much money at all, if any. Some have unfortunately used the argument that a return of the $52 million back into taxpayers’ hands will help those who have low or fixed incomes and can help them buy groceries, but then have decided to neglect much of what the Calgary Poverty Reduction Strategy says. The Enough for All proposal states that “research and experience demonstrate that income alone is not enough to substantially change an individual’s or families’ economic well-being. What’s even better about the strategy is that “it requires very little additional spending; rather, it intends to reorganize, spend smarter” as stated by the Globe and Mail.
Perhaps this viewpoint isn’t enough to persuade some into thinking about whether there is a better or more effective strategy than returning $52 million back to the taxpayers dollars. What if the thought of property taxes as being archaic or the very idea of a property tax is ludicrous to begin with was the starting point? The argument for returning $127 per household to reduce poverty or help low-income families fails to address the core issues: is a property tax regressive, or do we need to adjust property taxes based on household incomes? A report by Chawla and Wannell states that “homeowning families below the low-income cutoff (LICO), both elderly and non-elderly, paid property taxes that were, on average, higher than their income tax bills” and that “the progressive nature of income taxes and regressive nature of property taxes are evident throughout the income distribution, but the steepest gradient for both types of taxes is at the lower end of the income distribution.” The underlying problem that Chawla and Wannell have stated is the tax regime itself is hurting the lower end of family incomes, and combine that with the Enough for All report stating that income alone isn’t enough to help families get out of poverty should make one think more about how we think about taxation.
If there was a real outcry on a 13% increase in property taxes, one should look at the compounding capital debt that the city has (pegged at around $3.4 billion). Assume the city has to pay 3% interest on its outstanding debt, that amounts of $114 million a year alone in interest payments on top of the capital debt repayment. Most Calgarians haven’t even raised the idea of what to do with this debt in the midst of our growing pains.
The poverty reduction strategy is a must read for those interested in helping seniors and low income families. It offers insight into how the city will reorganize its spending and efforts, and some of goals it wants to reach. They include (but are not exclusive):
- Poverty rate of 30% or less in all communities by 2023. Based on the report, there were 9 communities in 2006 had had a poverty rate of 30% or higher.
- Calgary will have the highest Employment Quality in Canada by 2023. While no there are no statistics online for Calgary, Alberta still has the highest Employment Quality in Canada as of 2012 according to CIBC.
- 95% of Calgarians will be paid at or above a living wage by 2023. Using 2011 numbers from Statistics Canada, the low income cut offs before tax in a census metropolitan area of more than 500,000 inhabitants for 1 person was $23,298. For two people it was $29,004.
- Calgarians will have the lowest credit risk score in Canada by 2023.
- All Calgary households will have a three month emergency savings fund.
- Calgary food bank usage is significantly reduced by 2023. According to the Calgary Food Bank, there has been a 52% increase in visits since 2008.
- Homeless shelter utilization is significantly reduced by 2023. As the year 4 annual 10-year plan to end homeless report was being finalized, emergency shelter use was starting to rise again as migration to Calgary increased.
- Aboriginal poverty rates are identical to Calgary’s overall poverty rate. The report shows that the Aboriginal poverty rate was double that of all Calgarians in 2006.
- Aboriginal workers will earn an income equal to that of the rest of the Calgary workforce.
Calgary is growing, and there are many challenges along its journey even if it is a prosperous city. The Calgary Poverty Reduction Strategy is showing the side of Calgary that isn’t mentioned a lot in the media, but its an inevitability that the city must deal with. It’s highly encouraged that Calgarians discuss about where taxation needs to go, it shouldn’t be the only conversation dominating the water cooler, and those conversations need to be thought out and informed. It’s a shame that an issue like poverty isn’t being discussed but it’s an issue with the most economic damage.