Reducing Poverty: An Action Plan for Newfoundland and Labrador

1.1 Increased capacity within Government to support an integrated and coordinated approach Examples of actions to achieve this include: Continued guidance by the Ministerial Committee for the Poverty Reduction Strategy Establishing ongoing resources to oversee, monitor and coordinate the development of the strategy, including consultation with partners, research and policy development work Integration of poverty reduction into strategic planning processes and other accountability mechanisms such as annual reports

1.2 Improved access to existing programs and services for those with low incomes Examples of actions to achieve this include: Review of application processes for programs and services for those in low income to streamline and simplify the process Review eligibility criteria to bring forward recommendations and address any inequities in programs and services for those in low income Develop a guide to increase awareness of existing programs and services for those in low income 16 Goals and Objectives to Guide Action Reducing Poverty: An Action Plan for Newfoundland and Labrador

1.3 Development of tools for ongoing analysis of combined impacts of programs, including tax implications, to avoid unintended impacts Examples of actions to achieve this include: Analysis of combined impacts of existing and new programs Analysis of tax implications Working with the federal government to address any income-tax related issues and issues of unintended combined impacts with federal programs

1.4 Work with Aboriginal people to improve their quality of life While most of the initiatives outlined in this document will also benefit the Aboriginal people of the province, Government recognizes that Aboriginal peoples and their communities have particular needs and that the federal government has a special responsibility and role to play in addressing those needs. Examples of actions to achieve this include: Continue to settle and implement land claims and self-government agreements that will provide Aboriginal peoples with the tools and resources they need to develop healthy and self-reliant communities Continue to work with the federal government to ensure the Aboriginal peoples of this province receive maximum benefit from the initiatives arising from the meeting among First Ministers and National Aboriginal leaders in Kelowna in November 2005 Assist people of Aboriginal descent to gain full access to federal programs and services Goal 2 A stronger social safety net In our society there will always be those who at times cannot support themselves or their families. An adequate social safety net helps break the cycle of poverty and dependence by supporting people to develop to their full potential. It promotes social inclusion by supporting people to participate in their communities. We will continue to improve our social safety net and build on recent changes such as increases to the Newfoundland and Labrador Child Tax Benefit and the Low-Income Seniors’ Benefit, resulting from the indexation of these benefits. Goal 2 Objectives (2.1 - 2.5)

2.1 Increased disability supports to enable people with disabilities to participate fully in society Examples of actions to achieve this include: Work with the federal government and through federal/provincial/territorial groups to pursue a national Income Support program for persons with disabilities and other needed supports for persons with disabilities Goals and Objectives to Guide Action 17 Reducing Poverty: An Action Plan for Newfoundland and Labrador Continue to work with the federal government to ensure the tax system is responsive to the needs of persons with disabilities Review provincial programs for persons with disabilities to improve access to and appropriateness of benefits and services Expand services for those with mental health issues, including the extension of home support services to individuals with serious mental illness Enhance disability supports in our public post-secondary institutions to increase access for persons with disabilities

2.2 Enhanced justice system supports for vulnerable people Examples of actions to achieve this include: Increase in family law support services available, including increasing the availability of civil legal aid Enhance enforcement and compliance of court order support Continue to work with community partners to reduce violence through the Violence Prevention Initiative and through expanding services such as the sex offender and spousal abuse treatment programs

2.3 Increased availability of affordable housing Examples of actions to achieve this include: Implement Affordable Housing Agreement Phases 1 and 2 Continue to work with the federal government and community-based partners to expand the number of affordable housing units

2.4 Improved access to necessities for those most vulnerable to poverty Examples of actions to achieve this include: Implement Budget 2006 measures including expansion of the Newfoundland and Labrador Low Income Prescription Drug Program, elimination of school fees and materials charges, increased air foodlift subsidy to Labrador, and funding to Kids Eat Smart Review and improve access to essential services such as dental care and transportation to access medical services Better protect those who live in poverty from discrimination through changes to the Human Rights Code to prevent discrimination based on source of income, such as Income Support Through the wellness strategy and healthy food guidelines, continue to improve access to nutritious food

2.5 Increased Income Support rates Examples of actions to achieve this include: Implement Budget 2006 initiatives, including indexation of Income Support rates Undertake annual Income Support rate reviews in addition to those mandated by the Income and Employment Support Act 18 Goals and Objectives to Guide Action Reducing Poverty: An Action Plan for Newfoundland and Labrador Goal 3 Improved earned incomes If you ask most people who live in poverty why they are poor, they will answer because they do not have an adequately paying job. This may be because of low skill levels or lack of access to benefits and work supports. In addition to work Government is already undertaking to promote economic development and employment generation, an important component of addressing poverty is improving earned incomes. Goal 3 Objectives (3.1 - 3.5)

3.1 Fewer barriers to work and greater support for low-income workers Examples of actions to achieve this include: Continue to remove financial disincentives to work for Income Support clients and support low-income workers by: Implementing Budget 2006 initiatives (job start benefit, expansion of prescription drug program, changes in the way NLHC rent is calculated) and Reviewing earnings exemptions policy for Income Support clients

3.2 Greater supports for the development of employment skills Examples of actions to achieve this include: Continue to strengthen the focus in the Department of Human Resources, Labour and Employment on career, employment and youth services Continued implementation of the White Paper on Post-Secondary Education including increased access to literacy programs Increase exposure to the skilled trades as a viable post-secondary option for both males and females by implementing the High School Skilled Trades and Technology Program Work with the federal government towards a new Labour Market Development Agreement that is more responsive to the needs of our province

3.3 Greater supports for labour force participation and improved earnings from employment Examples of actions to achieve this include: Lessen dependency on Income Support through improved access to employment skills development Undertake policy development related to wages and benefits, including ongoing research on minimum wage to keep mandatory rates on par with the rest of Atlantic Canada Work to improve the labour market participation of persons with disabilities Improve results for women’s employment for medium and large scale development projects by strengthening requirements under the environmental approval process Goals and Objectives to Guide Action 19 Reducing Poverty: An Action Plan for Newfoundland and Labrador

3.4 Establish an alternative to Income Support for youth which allows for a coordinated service specific to their needs Examples of actions to achieve this include: Develop alternative models to address the needs of youth, including employment and training needs

3.5 Develop and expand employment skills programs for vulnerable groups whose needs are not currently being met Examples of actions to achieve this include: Work to address unmet employment skills needs, for example those of Aboriginal people, single parents, individuals with mental health issues and offenders Explore new approaches to support high risk youth to secure the skills they need to become attached to the labour force Analyse other gaps and develop responses Goal 4 Increased emphasis on early childhood development A growing body of research is demonstrating that the period from conception to age six has a powerful impact on human development and economic growth. Providing for a good start in early childhood is an important step to achieving optimal health, well-being and success throughout the lifespan. Living in conditions of poverty can compromise developmental opportunities for young children and in the long-term contribute to low educational attainment, unemployment and poor physical and mental health. Government recognizes the significance of the early years and will continue to support the role of families and communities in the care and provision of quality developmental opportunities for young children. Through the Ministerial Council for Early Childhood Learning, Government will continue to foster the development and coordination of programs and services that are designed to optimize child development outcomes and promote successful transition to school. Goal 4 Objectives (4.1 - 4.3)

4.1 Strengthen the regulated early learning and child care system Examples of actions to achieve this include: Continue to work with existing and new licensed child care settings to improve the quality of services and programs Continue to increase access and affordability of licensed early learning and child care services, including rural and other underserved areas Strengthen measures to improve recruitment and retention of early childhood educators 20 Goals and Objectives to Guide Action Reducing Poverty: An Action Plan for Newfoundland and Labrador Improve inclusive measures to further support children with special needs to participate in early learning and child care services Work with the federal government to support early learning and child care

4.2 Promotion of healthy child development Examples of actions to achieve this include: Continue to support community-based programs that focus on prenatal and child development, nutrition, healthy lifestyle, and parenting support Increase support for health promotion strategies through public health Further develop the Healthy Child and Youth Development priority under the Wellness Plan Continue to research and incorporate best practices on measuring and monitoring child development outcomes

4.3 Strengthen early intervention services and programs Examples of actions to achieve this include: Continue to support home and community-based early intervention services and programs that support children with developmental delays and other disabilities Continue to research and improve early identification, assessment and intervention methods and strategies Explore best practice models on infant attachment and home-based support programs that foster positive parent-child interactions Goal 5 A better educated population The best predictor of whether or not someone will live in poverty is their level of formal education. In order to have a strong economy, strong communities and for individuals to develop to their full potential we need a well-educated population. Our K to 12 system has a crucial role to play in preparing young people for the future and thereby in preventing poverty. Similarly, access to post-secondary education is an essential component in preventing poverty. Goal 5 Objectives (5.1 - 5.3)

5.1 A K to 12 system where more students graduate New initiatives to broaden the curriculum are intended to result in more students maintaining or developing an attachment to school, and staying until graduation. Examples of actions to achieve this include: In addition to the new High School Skilled Trades and Technology Program, new Health and Physical Education curriculum will be implemented as part of the Healthy Students, Healthy Schools initiative Goals and Objectives to Guide Action 21 Reducing Poverty: An Action Plan for Newfoundland and Labrador As part of the K to 12 Arts and Cultural Strategy, courses in fine arts, now a graduation requirement, will be revised and renewed A new mandatory career education course will give students in all communities high-quality information and experiences in a broad range of career options Increase high school graduate rates for NLHC tenants through such means as implementing the Budget 2006 initiative to provide an Educational Incentive Allowance to encourage high school students to remain in school

5.2 Increased responsiveness of the K to 12 system Examples of actions to achieve this include: Implement Budget 2006 initiatives to eliminate most school and course materials fees Provide exercise equipment to schools to support students’ participation in the Healthy Students, Healthy Schools curriculum Provide funding to enable students from rural communities to attend or participate in cultural activities and performances

5.3 Greater access to post-secondary education, literacy and adult basic education Examples of actions to achieve this include: Implement Budget 2006 initiatives to maintain a tuition freeze, invest in post- secondary infrastructure, programming and resources for skilled trades and adult learning Implement Budget 2006 initiative to provide an incentive for NLHC tenants who enrol full time in post-secondary studies Address low literacy rates through investing in and promoting ABE programs and researching best practices for workplace based literacy training and alternative literacy delivery methods Facilitate access to post-secondary education through expansion of the GED preparation program and the Comprehensive Arts and Science College Transition Program at the College of the North Atlantic Increase women’s participation in training areas where they are under- represented, through means such as ensuring recruitment strategies to support the participation of women in engineering, applied science, technology and skilled trades and working with the federal government, business and industry to enhance apprenticeship employment opportunities for women Promote and support Aboriginal enrolment in post-secondary education, including supporting the requests by the members of the Federation of Newfoundland Indians and Labrador Métis Nation for access to the federal Post- Secondary Support Program and other federal Aboriginal programming Promote access for students with disabilities through enhanced support services, equipment and resources Continue to monitor use of the student loans program and work with the federal government to make post-secondary a viable choice for students from low-income families 22 Goals and Objectives to Guide Action Reducing Poverty: An Action Plan for Newfoundland and Labrador Measuring Success In order to track progress and make changes as necessary, it is essential that we can measure success. This is also an important aspect of being accountable. While our overall key directions are long term, our goals do have measurable outcomes which will be tracked over time. A priority will be working to improve our capacity to measure and track progress along the way. If you ask most people who live in poverty why they are poor, they will answer because they do not have an adequately paying job. This may be because of low skill levels or lack of access to benefits and work supports. In addition to work Government is already undertaking to promote economic development and employment generation, an important component of addressing poverty is improving earned incomes. Shorter-term indicators include measures such as the percentage of Income Support clients with employment earnings, the percentage of the population in receipt of Income Support, the percentage of people under 30 in receipt of Income Support, the number of subsidized licensed child care spaces, the high school graduate rate, and the post-secondary participation rate. Already established processes, such as the regular evaluation and monitoring of programs, and the reporting of outcomes in departmental annual reports will form a critical part of our ability to assess how we are doing. As we move forward, other indicators will be added as necessary. Several reporting processes will be used: The Minister of Human Resources, Labour and Employment will give a statement of progress each year to the House of Assembly. Every two years a report will be published outlining progress by reporting on indicators, including approaches for addressing gaps. Departmental annual reports and other accountability mechanisms will document the success of departmental initiatives, including coordination and integration efforts. Goals and Objectives to Guide Action 23 Reducing Poverty: An Action Plan for Newfoundland and Labrador Conclusion: Moving Forward to Reduce Poverty This strategy represents an overall framework for meeting Government’s commitment to reduce poverty. Implementing the strategy will involve extensive work across Government and with our partners. Budget 2006 and other initiatives highlighted in Appendix A are a significant first step in this process. Government is committed to implementing long-term solutions and looks forward to an ongoing collaborative process to ensure that all Newfoundlanders and Labradorians can develop to their full potential and share in the prosperity of our province. 24 Conclusion: Moving Forward to Reduce Poverty Reducing Poverty: An Action Plan for Newfoundland and Labrador Appendix A What Government is Doing Budget 2006 Budget 2006 represented a significant investment to reduce poverty and increase self reliance. As part of Government’s integrated and comprehensive approach and focus on prevention, 20 initiatives were funded, representing an annual ongoing commitment of $64 million to reduce poverty. In addition, in May 2006 the Government of Newfoundland and Labrador announced an additional $5.5 million for regulated early learning and child care. These initiatives represent a large first step towards achieving our goals and a solid base upon which to move forward. A range of integrated initiatives will be launched in 2006/07. Main focus areas include: ■ Supporting low wage workers and their families ■ Supporting the development of employment skills ■ Supporting Income Support clients to work both through removing financial barriers and providing other needed supports ■ Supporting the K to 12 system to be more responsive ■ Strengthening the social safety net ■ Supporting early learning and child care ■ Improving access to post-secondary education Appendix A: Key Budget Initiatives for 2006/07 25 Reducing Poverty: An Action Plan for Newfoundland and Labrador Key Budget Initiatives for 2006/07 A brief overview of the 2006/07 initiatives is presented here. Low Income Prescription Drug Program $8.3 million in 2006/07 (to start early in 2007); $32.8 million annually thereafter One of the consistent messages expressed in Government’s consultations and a reoccurring theme in research on poverty, is that the lack of prescription drug coverage creates the biggest financial barrier to work for Income Support clients and significant hardship for those who work for low wages. Over the long term this can also result in negative health outcomes when individuals are forced to choose between purchasing necessary medications and other basic necessities. The Government of Newfoundland and Labrador is addressing this issue through expansion of eligibility for the Newfoundland and Labrador Prescription Drug Program (NLPDP) to include more low-income people. The annual investment to expand the program is $32.8 million. ■ The expansion of the program will provide prescription drug coverage, with a small client contribution, to approximately 37,000 individuals, as well as partial coverage to an additional 60,000 individuals, all of whom currently do not have access to public or private drug coverage. Families with children with annual incomes up to $30,000, couples making up to $20,000 annually and single individuals making up to $19,000 per year, will be eligible for varying degrees of coverage. ■ Expanding eligibility for the NLPDP to support low-income people who have no alternate drug coverage will help to reduce the financial burden from drug costs thereby making it less likely they will fall into poverty. Providing them with affordable access to needed medications will contribute to improved health status for this vulnerable population and will remove what we know is a barrier for Income Support clients to work. The necessary infrastructure, process and data-sharing agreements are currently being developed and the expansion will be implemented in January 2007.  This program currently covers prescription drug costs for Income Support clients, and for six months after they leave Income Support, Income Support clients who go to work, individuals and families with exceptionally high drug costs relative to their income, and seniors eligible for the Guaranteed Income Supplement. 26 Appendix A: Key Budget Initiatives for 2006/07 Reducing Poverty: An Action Plan for Newfoundland and Labrador Several other initiatives have also been developed to further support low wage workers and remove financial barriers to work for Income Support clients. These include: Lower Rent for Newfoundland and Labrador Housing Corporation (NLHC) Tenants with Employment Earnings $750,000 annually NLHC provides rental housing for low-income people and the rent is calculated based on the level of earnings in the household. ■ The income base on which rent is calculated for NLHC working households will be changed to exclude Canada Pension Plan, Employment Insurance and Income Tax deductions. This will support NLHC tenants to work and remove the current disincentive of a large increase in rent. The benefit provided will be approximately $50 per month for 1,200 households. This will allow households to retain a greater portion of their income and will alleviate the affects of poverty and increase the financial incentive to work. Support for Income Support Clients Who Find Work (Job Start Benefit) $430,000 in 2006/07; $570,000 annually thereafter ■ When Income Support clients go to work, they are often without income while waiting for their first pay cheque. This is at a time when there are often new expenses associated with working. To help ease the transition, a job start benefit will be provided (additional $250 family; $125 single) when clients begin working in order to help them meet their financial obligations in that critical first month. ■ Studies show the current policy can impact success in maintaining employment as clients face such intense financial pressure in the first month of work that it is difficult to maintain employment, and also acts as a disincentive to others in similar circumstances who see the struggles faced by family and neighbours who leave Income Support for work. Offender Employment Skills Programs $24,000 in 2006/07; $47,000 annually thereafter ■ Offenders often have limited employment skills such as job interview skills, resume preparation, interpersonal communications and problem solving. Currently such skills programs are available only in St. John’s and on the west Appendix A: Key Budget Initiatives for 2006/07 27 Reducing Poverty: An Action Plan for Newfoundland and Labrador coast. This initiative will see broadened access to this program to include Central Newfoundland and Labrador. ■ Employment is the best path out of poverty and an important way to reduce repeat offending behaviour. Education is the key to employment and the best predictor of the economic and social well-being of individuals. The early focus of the strategy includes initiatives to assist “at risk” youth and works to prevent poverty by increasing inclusiveness and attachment of children and youth to their schools and communities. The aim is to increase educational achievement levels. Specific initiatives include: Increase Instructional Grant to Schools and Cover Prescribed Workbooks and Other Consumable Materials $6.3 million annually The increase in the instructional grant to school boards (from $80 to $150 per pupil) will: a. Eliminate school fees for items commonly referred to as “school materials”, including student agendas, student IDs, accident insurance, locks and locker rental. b. Eliminate all photocopying fees. c. Eliminate course materials fees associated with the prescribed curriculum. ■ The vast majority of schools currently charge parents for the prescribed, consumable workbooks required for the K to 12 curriculum and this initiative will end this practice. This measure will reduce the burden of education-related costs borne by parents. It will be of particular benefit to smaller schools and those located in socio-economically challenged regions. A universal grant to school districts avoids stigmatizing students from families that cannot afford to pay and supports access of all children to education. Continued Support for the Partnership with the Canadian Tire Foundation for Families on the Jumpstart Program $250,000 annually ■ The Jumpstart Program supports children in low-income families to participate in sports and recreational activities. It was developed by the Canadian Tire Foundation for Families (CTFF) and is delivered through 10 local chapters across the province. 28 Appendix A: Key Budget Initiatives for 2006/07 Reducing Poverty: An Action Plan for Newfoundland and Labrador ■ This program allows a greater number of children in low-income families to participate in activities and programs, increasing their sense of belonging in their communities and their chances for life success. Funding Grant to Kids Eat Smart $500,000 in 2006/07 ■ To support their work in partnering with communities and schools to provide nutritious food, a grant to the Kids Eat Smart Foundation was provided. High School Skilled Trades and Technology Program $1.5 million in 2006/07; $2.0 million annually thereafter ■ Many educators say that skills and technology training is beneficial to students, particularly those who wish to pursue a career in the skilled trades and technology sectors. In recent years, high school and school board administrators have highlighted a need for practical hands-on courses for students, particularly those with varied needs and interests. ■ The implementation of a new high school skilled trades and technology program is evidence of government’s commitment to providing current, relevant curriculum. Courses in this program not only address gaps in the curriculum but also provide more career choice opportunities for students, including those who might not otherwise persist in the secondary school system. The program also aims to attract females and encourage them to see a career in skilled trades as a viable option. Implement School Food Guidelines $250,000 in 2006/07 ■ Building on the Healthy Students, Healthy Schools initiative, and linked to the Provincial Wellness Plan, Government will complete the implementation of the School Food Guidelines. Healthy food choices are essential to healthy growth and development, prevention of obesity and ability of students to learn and develop to their full potential. Education Incentive Program for NLHC Tenants $500,000 annually ■ A $25 monthly rental reduction incentive will be provided for every adult member of a tenant household in full-time attendance at a post-secondary Appendix A: Key Budget Initiatives for 2006/07 29 Reducing Poverty: An Action Plan for Newfoundland and Labrador institution. A $25 monthly rental reduction incentive will also be provided for tenants’ children remaining in high school. This long term poverty prevention measure is designed firstly to encourage an increase in education levels, which are much lower among NLHC tenants than for the general population; and ultimately to increase employment opportunities for this at risk group. Literacy and Transition Programs $1.850 million annually Education is key to increasing self-sufficiency and over-coming poverty and these two initiatives contribute to improving education levels and literacy of adults: ■ Expand the number of Adult Basic Education (ABE) offerings, particularly Level I (Literacy), at College of the North Atlantic (CNA) campuses. ■ Expand the Comprehensive Arts and Science Program at the College of the North Atlantic to provide high school and ABE graduates lacking either the academic courses or required grades to meet the College’s admission requirements an opportunity to upgrade and make the transition to other College programs While education and employment are key to preventing poverty, it is also essential to support those who are most vulnerable in our society. Improvements that build upon our social safety net are an important element to addressing poverty. Initiatives include: Raise Income Support Rates by Five Percent $5.562 million in 2006/07; $7.416 million annually thereafter ■ Income Support rates have not kept up with inflation over the last decade or more. Current rates make it difficult to make ends meet. A 5 percent increase in rates will help alleviate the negative affects of poverty. Index Income Support Rates Approximately $3 million annually ■ Starting in 2007/08, this initiative will tie Income Support rates to the Newfoundland and Labrador Consumer Price Index for a test period of six years. ■ Income Support rates have not kept up with inflation over the last decade or more. The five percent increase in 2006/07 is designed to help bring rates in line with the cost of living. Indexing rates will ensure that clients become no worse off over time as increases in subsequent years will be tied to increases in the cost of living. 30 Appendix A: Key Budget Initiatives for 2006/07 Reducing Poverty: An Action Plan for Newfoundland and Labrador Increased Funding to Address Specific Needs for Income Support Clients $2.085 million in 2006/07 and $2.780 million annually thereafter ■ Today many Income Support clients with specific needs such as a disability, large families, and high rental rates in urban areas have difficulty finding accommodations and have to resort to using food money to pay for rent. This funding will allow the Department of Human Resources, Labour and Employment to provide additional support on a case by case basis to respond to these specific needs. Increase Supports for Children and Adults with Disabilities $2.75 million annually Supports for families with children with disabilities will be increased through expanding access to the Special Child Welfare Allowance (SCWA). ■ The SCWA program assists families to offset some of the costs of additional services/supports incurred when looking after a child with developmental and/ or physical disabilities at home. The intent of the program is to help minimize additional financial costs which may be present when a family cares for a child with a disability at home. ■ This initiative will remove the Registered Educational Savings Plan and the Registered Retirement Savings Plan (RESP/RRSP) from the Liquid Assets Category and revise the Basic Living Allowance Section of the Financial Needs Assessment to ensure that all families are allowed the maximum funding available for children under the Child Tax Benefit and associated allowances. Additionally, support trusts for persons with disabilities will be promoted. ■ In 2001, HRLE introduced a policy to allow parents and caregivers of adults with disabilities to create a trust that would be exempt from Income Support income calculations. This policy is not widely known. ■ Parents are reluctant to make their adult children with disabilities beneficiaries of insurance policies or wills for fear they will be no better off. Promoting this policy will help improve the lives of adults with disabilities after the death of their parents or primary care-givers. Supports for post-secondary students with disabilities will also be enhanced. ■ Additional funding has been provided for support services, equipment and resources at the College of the North Atlantic to enable students with disabilities to attend post-secondary education. Appendix A: Key Budget Initiatives for 2006/07 31 Reducing Poverty: An Action Plan for Newfoundland and Labrador Sex Offender and Spousal Abuse Treatment Programs $70,000 2006/07; $100,000 in 2007/08 ■ The cost of interpersonal violent behaviour is high for individuals and families as well as society as a whole. Lost productivity and separation from the workforce can be chronic issues for many offenders, victims and their children who as a result grow up in poverty. Treatment options will be expanded beyond St. John’s and the West Coast into Central Newfoundland and Labrador. ■ This will help break cycles of violence which often link to cycles of poverty. Increase Air Foodlift Subsidy (AFS) $100,000 annually ■ Under the AFS program, a subsidy is paid to grocery retailers to offset the high cost of flying perishable foods into communities on the North and South Coasts of Labrador, as well as the Labrador Straits. ■ Since the program was introduced, shipping costs have increased significantly. Funding will be increased to ensure grocers can offer residents of coastal communities, despite the high cost of living, the opportunity to purchase nutritious food at a more reasonable price. Enhance Civil Legal Aid Services $250,000 annually ■ The enhancement of civil legal aid will enable more family legal aid services to be delivered throughout the province. Currently, those in low income are often at a disadvantage in family law matters. ■ Enhancing civil legal aid and providing representation in appropriate cases will help those in low income to access services and options across the spectrum of the justice system. In addition to these initiatives, it is necessary to address the greater vulnerability of women to poverty, and in particular the greater depth of poverty experienced by women. Specific initiatives include: Family Justice Services $617,000 annually ■ Traditional legal services and court approaches can be financially onerous for the resolution of disputes associated with family law matters. Currently less 32 Appendix A: Key Budget Initiatives for 2006/07 Reducing Poverty: An Action Plan for Newfoundland and Labrador adversarial alternatives involving counseling and mediation are offered in an extremely limited capacity. Low-income earners, particularly those in rural areas, often cannot access lawyers and when they can, use up their limited financial resources and assets to do so. ■ This initiative would provide more family law support resources throughout the province, leading to a resolution of family law disputes in a less adversarial and more “family friendly” way. Increase Funding to Women’s Centres $80,000 annually ■ The annual grant to each of the province’s eight women’s centres is being increased so they can better meet the demand for the services they provide. ■ Women’s Centres provide counselling, support, and education services to women throughout the province to help reduce women’s poverty by assisting them to access government programs and supports, and helping them gain self- sufficiency. What do the Budget 2006 Initiatives Mean for People? Poverty has many faces in our province. While many initiatives for 2006/07 have a preventive focus (for example increasing high school graduation rates and skill levels of graduates through implementing the High School Skilled Trades and Technology Program), others are designed to alleviate and reduce poverty. The following examples show the combined difference the 2006/07 initiatives will make to families with different circumstances. Mary and John have two children, one in grade 8 and the other in Level 2. Mary works year round while John works seasonally and collects Employment Insurance for the remainder of the year. Their combined annual income is $24,000 and they live in a Newfoundland and Labrador Housing Corporation unit. No one in the family has a particular medical problem, however like most people they at times require prescriptions for various illnesses that occur throughout the year (e.g. pain reliever for a sprained ankle, antibiotic for an ear infection). This family will benefit by about $2,500 per year. Jill is a single-parent of one child and the family is on Income Support. Her son Andrew has asthma and has struggled with this condition. They had to leave their basement apartment to find an above ground carpet-free apartment as the dampness and mildew in their apartment was a trigger for asthma attacks. Jill has had to spend less money on food and other necessities in order to be able to afford this apartment. Andrew’s asthma medications average about $900 per year, plus he is susceptible to ear infections and at times requires other prescription medications such as antibiotics. Jill is generally healthy but like most people sometimes requires prescriptions for illnesses. While on Income Support, this family would benefit by about $450. Jill Appendix A: Key Budget Initiatives for 2006/07 33 Reducing Poverty: An Action Plan for Newfoundland and Labrador has had opportunities to work in the past, but has had to turn them down because she was worried if she lost her prescription drug coverage she would not be able to afford Andrew’s medication. Given the package of initiatives, if she again has the opportunity to work, at an annual salary of $17,000 per year, the family would benefit financially by about $1,800. Mike is a 56 year old single person who rents privately and is employed full time in a job that does not provide any health benefits such as a prescription drug plan. He earns about $13,000 per year. He has diabetes, requiring insulin and supplies to monitor his blood sugar, which cost about $1500 per year. He will benefit financially by about $1200 per year. Early Learning and Child Care $5.5 million in 2006/07 In addition to the Budget 2006 commitment of $64 million to reduce poverty, on May 24, 2006 Government released its new plan to enhance early learning and child care services. The new plan is funded through a bilateral agreement-in-principle signed by the Government of Canada and the Government of Newfoundland and Labrador in May 2005. Key directions of the new plan build on existing services and are in keeping with government’s commitment to ensure quality, affordable and accessible child care support for families. ■ Beginning in June 2006, the eligibility threshold for a full child care subsidy for families increases from $20,280 to $25,000 (net income). For those earning higher than $25,000, a sliding scale will be used to determine the amount a family will pay. The daily rates of subsidy fees for spaces in child care services on behalf of families will also increase. ■ Government will introduce changes to the Educational Supplement Program by: ■ providing an income enhancement for eligible child care providers earning less than $25,000 annually, with a phase-out rate for eligibility up to approximately $35,000. ■ extending eligibility for the existing Educational Supplement Program to family child care providers who have Level I or higher family child care certification. ■ providing eligible entry-level providers with $500 per year. ■ One-time funding will be provided to the College of the North Atlantic to enhance the Early Childhood Education Program; and 50 students per year from 2006 until 2009 will have access to training bursaries of $5,000. ■ The plan will support short-term cultural, linguistic and professional development needs as measures to improve resources and program enhancements to the benefit of children’s development. ■ Work will start in 2006 on the development of several new community-based child care sites that will build on existing programs such as family resource programs, schools and other community organizations. 34 Appendix A: Key Budget Initiatives for 2006/07 Reducing Poverty: An Action Plan for Newfoundland and Labrador ■ The plan also provides funding to enhance staffing in child care services to support inclusion of children with special needs and will support a provincial conference on inclusion during 2006-07. Other Initiatives for 2006/07 As part of the comprehensive approach to poverty reduction, a number of additional initiatives have been designed for 2006/07 that do not have a direct budgetary impact either because they involve redirecting existing funds or involve policy, program or legislative changes that do not result in new expenditures. Simplifying the Process for Income Support Clients with Employment Earnings ■ Currently, Income Support clients who work find the system for reporting earnings onerous and complicated. This initiative will simplify the process and provide dedicated staff to assist and support working clients, increased options for reporting income, and a simplified process with shorter wait time for benefits. Accessing employment is the best way for families and individuals to avoid poverty. In addition to removing financial barriers, supports are also necessary. Initiatives include: Increased Access to Career, Employment and Youth Services Programming ■ A range of employment interventions has proved successful in helping individuals in finding, obtaining, and maintaining employment. These interventions lower dependency on income support programs and contribute to poverty reduction. ■ The Department of Human Resources, Labour and Employment will increase the number of Income Support clients participating in employment programs. An additional $2 million is also being invested over three years to assist individuals on Income Support and those at risk of an attachment to Income Support in gaining better access to a range of employment interventions and labour market opportunities. The department will actively identify those that can most benefit from the employment programs and work to help these individuals develop employability skills, and link with education, training and employment opportunities. Appendix A - Other Initiatives (2006-2007) 35 Reducing Poverty: An Action Plan for Newfoundland and Labrador Transition Fund for Youth ■ The Transitional Fund combines a variety of supports with an intensive case management approach on employment for youth applying for Income Support. The goal is to provide youth with career development and improved skill development that will enhance their participation in the labour market and reduce reliance on Income Support. ■ Research conducted by the Department of Human Resources, Labour and Employment found that children from families that relied on Income Support are more likely to rely on Income Support as adults than those children whose parents did not rely on Income Support. Nearly fifty percent of new applicants for Income Support are youth. Research also shows that employment interventions designed for youth have positive outcomes for those who participate. ■ Engaging youth in an alternate program before they enter the Income Support system can prevent long term dependency and poverty. Enhanced Collection of Court-Ordered Support ■ Government passed amendments to the Support Order Enforcement Act in the 2006 Spring Session in order to strengthen the enforcement of and collection of court-ordered support payments. ■ Many whose court-ordered support orders are registered with the Support Enforcement Division are heavily reliant on those payments for core family expenses. Improved enforcement and collection mechanisms will mean that more of the payments owing will go into the hands of those owed the funds in a more timely and efficient manner. Amendments to Human Rights Code ■ The Human Rights Code has been amended to provide protection against discrimination based on source of income. As a result, people cannot be denied access to rental accommodations because their source of income is Income Support. Improve Results for Women’s Employment for Medium and Large Scale Development Projects by Strengthening Requirements Under the Environmental Approval Process ■ Women are under-represented in well-paying trades and technology related occupations. When publicly-owned resources are being used by companies, all citizens should have access to employment that is created. ■ Under the Environmental approval process, the Government of Newfoundland and Labrador requires proponents of development projects to design human resource plans with initiatives to increase the participation of women in areas where they have traditionally been under-represented. Stronger requirements and greater compliance measures will ensure such plans are more effective. 36 Appendix A - Other Initiatives (2006-2007) Reducing Poverty: An Action Plan for Newfoundland and Labrador Early Initiatives (2003-2005) The 2006/07 initiatives outlined here build on ongoing initiatives designed to reduce poverty and create a healthier, stronger and more prosperous province such as: ■ The Low Income Tax Reduction Program which began in the 2005 taxation year and eliminates provincial income tax for individuals with net income up to $12,000, and for families with net income up to $19,000. Partial tax reductions are received by individuals with net income up to $14,600 and for families with net income up to $21,900. ■ The implementation of the Department of Education’s White Paper on Post- Secondary Education, including initiatives to provide affordable and accessible post-secondary educational opportunities such as a tuition freeze and increase in grants to post-secondary institutions. ■ The 2005/06 Home Heating Fuel Rebate Program announced in October 2005 which is available to residents of the province whose household income is $30,000 or less and whose primary heat source is home heating fuel. A maximum rebate amount of $400 is available to households with income of $22,500 or less. Individuals and families with income between $22,500 and $30,000 will receive a reduced amount, with a minimum rebate of $100. ■ The Department of Innovation Trade and Rural Development’s Comprehensive Regional Diversification and Innovation Strategies. ■ The long term and integrated focus of the Rural Secretariat in regional sustainability. ■ Various Labour Market Development initiatives, including early work on an immigration strategy, a number of labour market research projects and partnering with business and labour to address labour market issues. ■ The Department of Health and Community Services launch of Achieving Health and Wellness: Provincial Wellness Plan for Newfoundland and Labrador to improve the overall health and well-being of our citizens. ■ The Federal/Provincial Affordable Housing Agreements Phase 1 and 2 will provide approximately $20M million ($5.31 million provincial funds) over the next four years to create new affordable rental housing for low-to-moderate income households. ■ Between June 2005 and January 2007, the Government of Newfoundland and Labrador has raised the minimum wage from $6 to $7 per hour representing a 16% increase in less than two years. ■ The Video Lottery Terminal Action Plan announced in the 2005 Budget capped the number of VLTs in the province at 2,687 machines. Starting April 2006, the number of VLTs in the province will be reduced by 15 percent over five years. In addition, by the end of the five-year period, the maximum number of VLTs allowed in an establishment will be five. ■ A set of initiatives to reduce energy costs for low-income homeowners including providing $6.9 million over the next five years to provide real-time power meters and rebates for furnace testing and tune-ups.  Home heating fuel includes furnace fuel, stove oil, and propane Appendix A - Early Initiatives (2003-2005) 37 Reducing Poverty: An Action Plan for Newfoundland and Labrador ■ Government has invested $2.7 million over the last two budget years to assist persons suffering from alcohol, drug and gambling problems. Budget 2006 also included $1.1 million to construct a new provincial addictions centre in Corner Brook, as part of a $3.0 million investment over two years. ■ Government has invested $3 million over the past three years (beginning in 04/05), demonstrating our commitment to providing mental health consumers with the resources they need to continue to access services which enable them to live healthy and fulfilling lives. 38 Appendix A - Early Initiatives (2003-2005) Reducing Poverty: An Action Plan for Newfoundland and Labrador Appendix B How Poverty is Measured Many individuals and organizations want to know how many people live in poverty in their community or province. They want to know how their communities are doing compared to other places and to know if the overall rate of poverty or the poverty rates of specific groups are getting better or worse. Social activists, policy analysts, politicians and others who want to tackle poverty want to know if particular initiatives are having an effect on reducing poverty. In other words, people need tools to measure poverty, however imprecise, to help them make informed decisions. There is no agreement on the best measure of poverty nor is there an official poverty line in Canada or in Newfoundland and Labrador. However, Statistics Canada produces three statistical measures of low income, often referred to as measures of poverty. They are: ■ Low-Income Cut-off (LICO), both before- and after-tax; ■ Low-Income Measure (LIM); and ■ Market Basket Measure (MBM). Statistics Canada rightly insists that these measures are not poverty lines but, rather, measures of low income. Nevertheless, they are widely used as poverty lines by most individuals and groups. Low-Income Cut-off (LICO) This is the most commonly used statistical measure for defining poverty. Low-Income Cut-offs are used by Statistics Canada to identify those families and individuals that are substantially worse off than the average family. A low-income household is defined as one that spends 20 per cent more of its income on food, clothing and shelter than the average family spends on these necessities. The rate of 20 per cent was settled on, somewhat arbitrarily, by Statistics Canada as a reasonable measure of the additional burden. Statistics Canada, using the Family Expenditure Survey (FAMEX), calculates the average portion of their incomes that families spend on food, clothing and shelter. The 1992 FAMEX survey, on which current calculations are based, found that, on average, Canadian families spend 44 per cent of after-tax income on food, clothing and shelter. Thus, adding the 20 per cent noted above, it is assumed that Canadian families that spend at least 64 per cent of after-tax income on food, clothing and shelter are low- income families and, thus, are commonly referred to as being ‘below the poverty line.’ After-tax income refers only to the deduction of personal income tax and not to other deductions or taxes, such as Employment Insurance premiums, Canada Pension Plan contributions or sales taxes. Appendix B: How Poverty is Measured 39 Reducing Poverty: An Action Plan for Newfoundland and Labrador Using survey data, Statistics Canada determines the level of income at which families tend to spend 20 per cent more of their income on food, clothing and shelter than the average family spends on these necessities. Currently using the 1992 base, each year Statistics Canada takes inflation into account to update a set of low-income cut-offs for seven family sizes in five different sizes of communities, resulting in a set of thirty- five low-income cut-offs. Larger communities have higher low-income cut-offs for all family sizes. In the latest release, for 2004, for example, a family of four living in a rural area, such as Baie Verte, is considered to be living in low income if its after-tax income is less than $20,844. The same family living in Grand Falls-Windsor needs an after-tax income of $23,856 to be above the low-income cut-off, and a family of this size living in St. John’s needs an after-tax income of $26,948 to be above the low-income cut-off. While there is no agreement on the best measure of poverty, the Low-Income Cut- off After-Tax Measure is used consistently in the Poverty Reduction Strategy for two reasons: ■ since the purchase of necessities is made with after-tax dollars, using people’s after-tax income seems logical, and ■ the after-tax rates take into account the considerable effect of personal taxation on redistributing wealth. Low-Income Measure (LIM) The Low-Income Measure (LIM), released by Statistics Canada since 1991 but used less frequently, is equal to one-half of the median family income adjusted for family size, that is, half the families have incomes higher than it, and half have incomes lower. LIMs vary with family size and composition, but they are the same in all parts of the country and, thus, do not reflect the reality of higher costs of living in large cities and lower costs in rural areas. The Low-Income Measure is often used in international comparative studies. Market Basket Measure (MBM) Canada’s third barometer of low income, which has had only one release, in 2003 based on data for 2000, is designed as a more absolute measure of what it actually costs to provide adequately for families in different parts of the country. It is an attempt to do a better job of accounting for urban-rural differences than the Low-Income Measure and to counter the criticism that the Low-Income Cut-Offs measure inequality rather than poverty. The Market Basket Measure is intended to complement, rather than replace, other tools to assess low income. As the name implies, the Market Basket Measure estimates the cost of a specific basket of goods and services. Using this measure, a family is defined as having a low income if its disposable family income falls below the cost of the goods and services in the market basket for their community size. The basket of goods and services includes specified quantities and qualities of food, clothing and footwear, shelter (including utilities), as well as items not included in LICO, such as 40 Appendix B: How Poverty is Measured Reducing Poverty: An Action Plan for Newfoundland and Labrador transportation, personal care, telephone, school supplies, and modest levels of reading, recreation and entertainment. Three thresholds are produced for Newfoundland and Labrador: rural areas with populations less than 5,000; communities with populations less than 30,000; and the St. John’s Census Metropolitan Area. The Market Basket Measure is somewhat sensitive to the geographic variations in the costs of the various components of the basket, particularly for shelter and transportation. Transportation in urban areas, for example, is based on the monthly cost of a bus pass and in rural areas on the cost of operating a five-year-old car. The shelter component reflects the median rents for two- and three-bedroom units and includes utilities, but does not take into account the high level of home ownership in this province. As well, the clothing and footwear component is currently based on pricing in Winnipeg and does not yet reflect inter-provincial variation. The content of the food component is intended to represent a nutritious diet consistent with the food purchases of ordinary Canadian households. In 2006 the Newfoundland and Labrador Statistics Agency will release a Market Basket Measure that it has developed specifically for Newfoundland and Labrador. Modeled on the federal Market Basket Measure, the cost of the ‘basket’ of goods and services in Newfoundland and Labrador incorporates modifications to make it more specific to the realities of this province. The advantage of the provincial measure is that it can be applied at lower levels of geography and better reflects costs of living in this province. The federal Market Basket Measure does not allow smaller area comparisons and is not specific to many of the Canadian provinces because of the more generalized data used. Further information about measures of low income can be found on Statistics Canada’s web site at www.statcan.ca or on the provincial government’s Community Accounts web site at www.communityaccounts.ca Appendix B: How Poverty is Measured 41 Reducing Poverty: An Action Plan for Newfoundland and Labrador