Living Standards Publications

This report provides the technical background information that would be required to produce a report assessing the health costs associated with poverty for Canada. As such, it reviews methodologies used in previous studies to assess: the broad social and economic costs of poverty in Canada (Calgary), the United States, and Europe; methodologies used in socioeconomic health disparity studies with an emphasis on studies from New Zealand and The Netherlands, as well as general cost of illness studies; basic information on Canadian and international poverty measures; and evidence for the association of poverty with various health indicators. In addition, it briefly reviews several groups that are especially vulnerable to the health impacts of poverty, and other social issues that influence the relationship between poverty and health.

The emphasis of this report is on the information and data that would be required to assess the external health costs of poverty, rather than the private costs incurred by those living in poverty. These external health costs, which all have major policy implications in terms of government decisions to invest in poverty reduction programs, include costs to the health care system that result from the association between poorer health outcomes and low income. There are, however, other costs, which result from the effects of poverty on society in general. These include costs related to the criminal justice system, social assistance programs, educational systems, and to employment and productivity. In addition, other social issues that result in social exclusion, such as homelessness, food insecurity, and environmental problems also register as costs. Due to time and resource limitations, these social costs are explored only briefly in this report.

The review is intended as a useful starting point for further work in this area—in particular the eventual development of a full-fledged study assessing the health and other social costs of poverty for Canada and the provinces that will hopefully make a significant contribution to advancing work in the field of social and economic determinants of health. In the short term, it is hoped that even this modest first step of summarizing key results from the existing evidence can raise the profile of this important issue and facilitate the practical application of this information to decisions made in the policy arena and in this field of research.

This report examines trends in household wealth since the 1980s—in Canada as a whole and in the Atlantic region. In particular it looks at trends in wealth distribution, including Atlantic Canada’s share of national wealth and in the portion of wealth owned by the top, middle and lower wealth groups.

The report examines financial security and trends in total household debt, and assesses how many Atlantic Canadians are so seriously in debt that they could not pay off their debts even if they sold everything they owned, including their homes. It undertakes a detailed examination of household borrowing patterns and of the different kinds of debt, including mortgages, student loans, vehicle loans, lines of credit, credit card debt, and payday loans, and looks at their implications for financial security. The report also includes additional sections on trends in bankruptcies and government debt.

Financial security is a key measure of progress and wellbeing in the Genuine Progress Index (GPI) because adequate wealth enables households to weather the unexpected financial crises that can result from job loss, sickness, or loss of an income-earning partner. They can also provide a reserve for house or car repairs that are suddenly required, or for other unanticipated financial outlays that would strain normal income.

Conversely, financial insecurity can seriously compromise wellbeing and cause a range of other problems including stress, anxiety, illness, and (in extreme cases) even crime and suicide. As well, sharp wealth and income inequalities can threaten social stability and cohesion, and undermine productivity and health. For these reasons, financial security is one of the 20 core components of the Nova Scotia GPI.