The Cost of Poverty: An Analysis of the Economic Cost of Poverty in Ontario

Ontario Association of Food Banks

Year: 2008

As a fi rst step towards fulfi lling the Ontario Government’s election pledge to tackle poverty in the province, the new Cabinet Committee on Poverty Reduction will outline its strategy sometime in early December. The moral necessity for this strategy is simple: it is wrong that so many Ontarians live in poverty. But there is also a strong economic case for reducing poverty.

To help shape the government’s strategy, the Ontario Association of Food Banks has collaborated with a group of eminent thinkers to produce the fi rst ever estimates of the costs of poverty to all Ontarians. The focus on these costs leads naturally to a review of the kinds of policies necessary to bring them down.

Poverty in Ontario has a big price tag. Poverty costs the residents of Ontario a staggering $32 billion to $38 billion a year – the equivalent of 5.5 per cent to 6.6 per cent of provincial
GDP. As one would expect, most of this cost is borne by the 1.9 million households with the lowest incomes.