Multi-Sectorial Approach in Addressing Child Poverty: A Case Study on Saint John, Canada

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Abstract

This paper examines the complex cause and solution to the child poverty issue through a case study of Saint John, Canada and will focus on the social and policy determinants of child poverty. Through analyzing the government’s fiscal policy, pricing for essential and public goods, and various current policies, the research concludes that the root cause of child poverty in Saint John is the extensive disparity between the wage and the cost of living and family composition. It is also found that stakeholders such as government, private sectors, and NGO’s actions are potentially persisting the poverty status quo. Utilizing direct interviews with poverty leaders, public opinion surveys, case studies, and further status quo analysis, the research finds that a multi-sectorial solution is the most viable approach to solving the problem. Based on the findings, a collective impact model is proposed to visually represent the ideal relationship and dynamic cooperation between various stakeholders in solving child poverty, which can be applied to other contexts as potential guidelines for policy implementation.

Key Words: child poverty, economic inequity,  public policy analysis

Introduction

Saint John is a seaport city located on the Bay of Fundy in the province of New Brunswick, Canada. It is Canada’s oldest incorporated city and includes five districts: Saint John, Rothesay, Quispamsis, Hampton, and Grand Bay, which collectively can be referred to as the Greater Saint John Area. As a port city. Saint John’s economy mainly relies on manufacturing and service, the port industry, and the oil manufacturing industry, with small contributions from tourism, investment, and labor1. The oil industry is the economic backbone of Saint John, as it is the production, administration, and economic center of Irving Oil Ltd. a Canadian privately-owned gasoline, oil, and natural gas production firm. With two refineries located in Saint John with a production capability of 320 thousand barrels per day, Irving Oil annually adds 500 million to the province’s GDP and accounts for 50% of all trade values2.

Despite being an economic center for Atlantic Canada, poverty and income inequality have always been a pressing challenge in Saint John. Despite having visible improvement over the past 20 years, the city’s poverty rate remains above the national average. According to the research by Tamarkc Institute, the leading poverty analytics organization in Canada, while the Canadian national poverty rate is around 13%, the poverty in the city of Saint John is a staggering 25%3 as shown in Fig.1.

Fig 1: Source: “Saint John, Stronger Together” by Sherri Torjman, Tamarack Institute. Based on the statistics from Statistics Canada Census measure – Low Income Measure-After Tax (LIM-AT)

Child poverty is a multi-faceted obstacle to the development of the city and contributes to various other social consequences. Saint John is ranked at the bottom of the National Happiness Index, at 96th out of the 100 cities on the list4. The chance of acquiring a life that is better off seems to be minimal, as Saint John’s income mobility, or the chance someone will move away from the level they were born into, is among the lowest in Canada5

Child poverty seems to be intricately tied with various other ethnic and geographic factors. Ethnic minority and indigenous children suffer from poverty heavily compared to their white counterparts. 1 in 3 children of ethnic minorities suffers from poverty throughout the province. Specifically, 56.1% of Arabian children are the victims of poverty, followed by 43.1% of Korean children, 32% of Latin Americans, and 31% of Chinese. 23.9% of Indigenous children also lived in poverty despite the government’s constant efforts in reconciliation6. Fig.2 illustrates the ethnical distribution of child poverty in Saint John.

Fig 2: Graph of the child poverty rate in New Brunswick by ethnic group.
Source: Constructed by the author based on Human Development Council’s 2022 New Brunswick Child Poverty Report Card, page 16

Geographically, within the greater Saint John area, the distribution of child poverty exhibits a strong regional disparity. In Quispamsis, for example, the child poverty rate of 7.0% is at its lowest. However, the City of Saint John, an area just 20 kilometers away, exhibits a tripled child poverty rate at a staggering 23.8%6. In some of the more “problematic” neighborhoods in Uptown Saint John, such as Waterloo Village or Crescent Valley, the rate could reach up to 50%5.

A deeper analysis of the issue reveals that Saint John’s child poverty problem is multi-faceted and complicated, with an uneven distribution based on geography and demographics. To solve this looming crisis, Saint John needs a unique solution and a systematic change to its socio-economic composition and stakeholder behaviors. In light of these trends, this paper explores the following questions:

  1. What is the core cause of child poverty and some of the main contributors to the persistence of this phenomenon?
  2. What are the public perceptions on the issue of poverty?
  3. How could public, private, and non-governmental stakeholders work together to help change the status quo of child poverty through a collective impact approach?

This paper will focus on the multi-sectorial approach in addressing social challenges, especially how public, private and non-governmental stakeholders collaborate to formulate child poverty policies and raise public awareness to alleviate the challenge.

Literature Review

The following literature review will review two aspects discussed in scholarly articles and reports regarding poverty specifically in Canada and Saint John–the causation of poverty and the major stakeholders involved in poverty.

The measure of poverty is now advancing beyond incomes and is gradually tying in with socioeconomic factors, political ideology, and family composition. The UN Sustainable Development Goals, the leading international guideline in reducing child poverty, advocate reducing multidimensional child poverty, a measure beyond income, by 50% by 20307. The relationship between non-income factors and poverty has been measured by analysis of child poverty in Canada by specific time frames. Kerr and Beaujot (2001) paid particular attention to the connection of child poverty to the incidence of lone parenthood, the number of children per family, and the age of parents when analyzing child poverty over the 1981-1997 period8. Sanjari (2002) examined child poverty from functionalist, structuralist, and feminist frameworks and discovered that human capital factors such as age and education were the most significant9. The opinion of the people seems to resonate with the structuralist explanation, as reflected by the survey sampling conducted by Reutter et al (2006) in Edmonton and Toronto, in which the majority of respondents chose the structuralist argument for the occurrence of child poverty10. In local literature, structuralist and non-income causes are often cited, such as lack of early childhood development as cited by Business Community Anti-Poverty Initiative (BCAPI)5. However, the analysis and methodology as to why non-income factors are the influencing factors are often unclear in local literature.

Income, nonetheless, cannot be ignored and is still a crucial factor for poverty, as the main method for measuring poverty in Canada is according to income. A common measure utilized by many Canadian governmental agencies and non-profits is the OECD’s measurement for child poverty, which calculates the proportion of children living in households where disposable income is less than 50 percent of the median in each country11. The government measures poverty mainly based on income, such as through low-income cut-offs and low-income measures12. Income, as Duru (2018) states, still lies at the heart of poverty12. When considering the poverty causes in Saint John, this research will examine both the income distribution and expenditures and the socioeconomic factors and family composition.

A review of current literature suggests that the stakeholders discussed when examining poverty are often limited, and oftentimes government takes the whole responsibility. Many sources attribute child poverty entirely to government actions and offer recommendation policies for governments only but ignore many other crucial stakeholders such as corporations and NGOs. Garcia (2002) analyzed child poverty during the years 1990, 1993, and 1997 and concluded that the government’s cutback of social assistance and reduction of social programs had negative effects on families and children13. Hunter (2006) placed heavier blame on the government by stating child poverty is “a policy of social disengagement on the part of the Canadian government”14. Perhaps the most straightforward is Duru (2018), who states that “Child poverty persists at rather high levels in Canada simply due to the government’s failure to formulate and implement effective poverty eradication strategies”12. This lack of consideration for other stakeholders is present in local reports as well. An example is how the policy recommendation section for the yearly Human Development Council’s New Brunswick Poverty Report is only limited to the government and ignores other stakeholders6. The lack of discussion with other stakeholders limits the scope of poverty analysis and the extent to which a comprehensive anti-poverty initiative can be carried out.

Root Cause Analysis

Poverty can manifest in many forms, such as hunger, starvation, lack of education, social discrimination, and beyond, but it stems from the lack of financial resources and material possessions. To analyze the root cause of child poverty from the perspective of income, tracing people’s money flow, namely, their wages and expenditures, is needed.

New Brunswick, being an economically less developed province with only 1.1% real GDP growth in 202215, also falls significantly behind in the effort to implement a minimum wage program, as for the past 9 years, New Brunswick’s minimum wage was always at the bottom of all the provinces and exhibits a large gap with the federally required minimum wage level. The table and graph below outline the development in the numerical value of Canadian provinces from 2015 to 2023 as documented by the Government of Canada, which sees New Brunswick consistently having one of the lowest minimums in the country. It is also worth noticing that despite the increase in the minimum wage over the recent year, the minimum wage is nowhere near the value of the living wage, or the amount an individual or family would need to make to avoid living in poverty.

Fig 3: Source: Table and graph constructed by the author based on “General Hourly Minimum Wage Rates in Canada since 1965” by Government of Canada at https://srv116.services.gc.ca/dimt-wid/sm-mw/rpt2.aspx, updated 2023
Note: The province of Alberta and the territory of Northwest Territories and Nunavit was not included in the graph and table due to the lack of data. The gap in the table are also due to limitation in data gathering, and was represented by a gap in the graph, such as Ontario’s minimum wage during 2019. In the case where the minimum wage changes in October the 1st due to legislation change, the October wage level was used to represent the yearly value. 

The people’s expenditures could be expressed as the consumer price index (CPI). However, the general CPI includes various items such as luxury and durable goods. As this report investigates the root cause of poverty, the CPI used here would be the essential goods, which include food and energy.

Although there is an inflation of food prices throughout Canada due to factors such as the exacerbated climate crisis, the Russian-Ukraine War, and the rising energy cost, New Brunswick suffers heavier than most of the province. Having a 6.4% increase in food price, New Brunswick is the second highest province regarding the increase rate and is forecasted to increase above the national average in 202416.

The New Brunswick energy prices have been subject to a severe increase due to factors such as increased natural gas and oil costs, lack of workforce, and debt of NB power. From 2012 to 2020, the energy price had small fluctuations but generally remained stable at a low price of $45 per MWh. However, from 2021 to 2022, due to the influence of the Russian-Ukraine War, the oil prices surged and went to a staggering level of over $110 per MWh. It shows no sign of stopping down as NB Power continues to increase its price17. The following graph illustrates the fluctuation and the drastic recent increase.

Fig 4: Source: Constructed by the author based on “Historical Interruptible Prices” by NB Power at https://www.nbpower.com/en/products-services/business/rates/historical-interruptible-prices/

Based on the analysis of the minimum wage and the cost for two essential goods, it shows that despite having a high-cost and drastic increase rate in the price of essential goods, New Brunswick’s wage level is still at a very low level compared to other provinces and territories. This reveals the core cause of poverty within Saint John and New Brunswick in general–the wage does not keep up with the cost.

This is a major cause of child poverty, as the wages of the parents of the impoverished children are not enough to afford education, childcare, extra-curricular development, and supporting the children in general. This income disparity between what is earned and what needs to be spent manifests itself in many social phenomena, many of which we associate with child poverty. For example, many suggest that the poor access to education is the cause of poverty. However, a deeper analysis of the issue would show that the decision for children to not receive education revolves around the idea of financial constraints, as many impoverished families cannot afford the expense of schooling or are compelled to prioritize immediate economic needs over long-term investments such as education.

When evaluating the children, it is crucial to look at their family and especially their parents. A crucial non-income factor that contributed to the high child poverty rate in Saint John is family composition. In the 2021 Census, it is revealed that the lone-parent rate is 22.8% Saint John, which exceeds the national average of 16.4%. 37% of the children living in a one-parent family, which is also greater than the national average of 24.6%18. Because only one adult can provide financial resources to the family, the income of the parent is stretched further than compared to couple households. When those incomes are inadequate to support the children, child poverty occurs. In New Brunswick, the child poverty rate for one-parent families is 43.4% compared to 8.3% for coupled children6. When examining the demographics of those families, the female-led family demonstrates the highest level of income inequality due to the effect of gender pay6. This gender disparity presents a serious issue to Saint John where 80% of the lone-parent family are led by a female parent18. The family composition of Saint John in correlation to its high poverty proves the validity of the point made by Kerr and Beaujot (2001) and should be a highlighted factor for consideration when evaluating the cause and solution of poverty.

Based on the root cause analysis, this paper will primarily focus on the analysis of wage gap and family structure. Not only does this approach directly examines two of the greatest challenge in Saint John, it also fulfill both the income-based framework and the multi-dimensional framework of poverty. Wage disparity and family structure, being the root causes, manifest into many other social factors, such as lack of educational access or parental neglects, as justified above.

Stakeholder Analysis

A multi-sectoral solution to an issue requires a multi-sectorial analysis of the cause of the issue. The section below will outline some potential ways that government and private sectors contribute to the persistence of child poverty, as well as the evaluation of current policies.

Stakeholder (1): Government

The Saint John government is usually considered responsible for and should lead poverty alleviation efforts.  The regional government of Saint John and the provincial government of New Brunswick contributed to the child poverty problem in several ways

  1. Reluctance to carry out minimum wage policy

Perhaps worrying that minimum wage would make the industry less competitive or raise the price level, or perhaps due to economic constraints, the provincial government has been unwilling to implement the minimum wage policy. This results in a lack of protection for the workers, creating the difference between what is earned and what is needed. Minimum wage law is correlated with a reduction in the child poverty rate, as an increase in income would provide families with more resources to allocate to their children for their development. This is especially true for children living in female-headed households, where a 10 percent increase in the minimum wage decreases child poverty rates by 1.8 percentage points19. However, the minimum wage policy should be implemented with careful planning by the government, as the relationship between poverty and minimum wages is much more complex, as not everyone living in poverty earns a minimum wage, and not everyone who earns a minimum wage is poor. The dynamic effect of child poverty also needs to be considered for minimum wage evaluation, as workers frequently exit and enter the minimum wage pool due to changes in employment status and lifestyle.

  • Failure to prioritize child poverty in financial and legislative Decisions

Child poverty might be the most crucial and urgent issue in Saint John and should receive the most attention, but the government expenditure spreadsheet says otherwise. The government spent 50 million on wind farm development and 42 million on the Port of Saint John20. While these measures provide an economic uplift to Saint John, these are a large portion of the government’s budget but are not that targeted to the child poverty issue. In the education sector, which is intricately tied to child poverty, a combined 38 million was spent on the University of New Brunswick Saint John Campus and New Brunswick Community College Saint John Campus, while the amount spent on preschool or early education is significantly lower, such as the government investment of 3 million over 2 years into pre-school program and the 7.5 million budget onto integrated community hub20, despite research showing that pre-school education investment yields a significantly higher return compared to K-12 and post-secondary education11. Thus, the current fiscal policy is not based on emergencies and priorities and fails to combat child poverty directly. 

  •   Lack of high-quality social assistance coverage

A crucial part of the poverty picture is the households who are not able to maintain stable and decent employment and who rely on government programs for their income, primarily NB Social Assistance. Despite having one of the highest poverty rates in the country, the Social Assistance rate provided by the provincial government is among the lowest in the country, covering 4.4 percent under 65, a rate which is substantially lower than that of neighboring Atlantic provinces or that of Ontario and Quebec21. When examined based on the annually distributed amount, New Brunswick’s yearly beneficiaries of both the Transitional Assistance Program (TAP) and Extended Benefit Program (EBP) have been decreasing. The quality of the coverage is also not optimal, as households who receive social assistance in New Brunswick have the lowest welfare income in Canada, particularly for unattached singles and single-parent families22.

Children from families relying on social assistance are extremely prone to intergenerational poverty, as without social support, the income earned by their parents is usually not enough and unstable. Saint John’s child poverty rate is intricately linked to social assistance. The reduction of child poverty in 2020 despite COVID-19 is associated with the provincial government’s active implementation of the federal Canada Emergency Response Benefit (CERB), Canada Recovery Benefit (CRB), and Canada Emergency Sickness Benefit (CESB). The removal of those social assistants caused a rise in the child poverty rate in 2021 and has been increasing ever since6. Currently, the status quo of social assistance for child poverty seems dismal, as the current quantity and quality do not seem enough to lift people out of poverty.

  • Housing Crisis

The explanation for the aforementioned geographical disparity in the child poverty rate can be attributed to the difference in housing costs. For example, the reason why uptown Saint John’s poverty rate is significantly higher than Quispamsis’s is that the cost of housing in uptown Saint John is significantly lower than that of Quispamsis, leading to the clustering of impoverished households. Both the provincial and regional governments are ineffective in dealing with the housing issue. Between 2016 and 2021 there has been an estimated 8,600 fewer housing units with monthly costs below $750. Since 2015, the average rent paid by New Brunswick households has increased by 42%23. In Saint John, the average house price is 63% higher than the city’s median income24. While Canada has provided a good condition for housing reforms, as the Canadian federal government provides ample funds and programs totaling up to 50 billion dedicated to housing reforms, the provincial government’s effort was limited. Out of the 33 million given to New Brunswick for housing projects, a mere 4 million was spent in 202325. The budget Saint John received was a mere 800 thousand for four housing projects, which is, surprisingly, lower than that spent on constructing a clubhouse for the local Trojan rugby team26’((W. Long. 2023 Fall Economic Statement, City of Saint John, (2024).)). The existing policy is neither enough, efficient nor effective in addressing the housing issue, contributing to more poverty and higher costs of houses. The housing crisis, although not shared by many, is an important contributor to child poverty. For children, living in poorly constructed or overcrowded housing conditions affects a child’s ability to learn, which can have a lasting impact on a child’s chances of succeeding in life. Living in a house without enough sanitation or lacking energy might also contribute to health issues. For adults, unaffordable rent or mortgage rate further burdens their financial status, decreasing what is left for children.

Stakeholder (2) The private firms and corporations

  1. Low wages within the company

The private sector and firms are crucial and key factors in addressing the core cause of poverty, especially the wage issue because they are the supplier of the wages. If the parents do not receive enough wages from their employers (provided they are employed), they cannot support the children financially. The most direct way for businesses to alleviate child poverty is to make sure that the wage of the workers is equal to or above the living wage.

  • Lack of attention and value toward low-skill labor.

A large portion of Saint John’s economy is made up of the service industry and relatively low-skill jobs such as construction, manufacturing, and factory operations. Many of the low-skill service belongs to the low-wage labor. This explains the highly racialized child poverty rate, as many of the minorities, especially the new immigrants, are forced to become low-skill labor workers due to the discriminatory selection process, making it harder for them to take care of their children27. This is caused by the lack of value toward low-skill labor and subsequently, an unequal wage level within the corporation. Corporations and business leaders need to create an inclusive, equitable, and fair working environment where every employee feels represented, empowered, and valued.

  • Neglect of understanding and awareness

In a one-on-one interview, the leader of the Business Community Anti-Poverty Initiative Monica Chaperlin pointed out that businesses are not fully aware of the poverty status quo28. Businesses might be economic development and profiting experts, but not social development experts. Thus, the business sectors do not understand the barriers and causes of intergenerational poverty and child poverty and how to break them. Business leaders need to be more aware of the child poverty issue through direct exposure, such as field visits, first-hand data analysis, or involvement in community initiative organizations or consultation with NGOs or government agencies.

  • Unsustainable charity efforts

Following the new global trend of corporate responsibility and ESG, many of the local companies in Saint John started conducting charitable efforts to address poverty issues. An example is a local company’s program, where the company provides free energy sources along with remote medical benefits to children and households in need. This is a good measure, as it directly increases the affordability of two essential services—energy and healthcare. However, it should not be regarded as sustainable. Impactful and sustainable community give-back programs should move beyond the traditional charitable model into corporate citizenship efforts, which requires scaling up existing give-back efforts, collaborating with various stakeholders such as government and NGOs, leveraging its financial capabilities to target the root cause of the problem, such as funding for implementation of a higher minimum wage or living wage and providing financial and innovation support to various anti-poverty endeavors, and, most importantly, integrate social responsibility action as an integral part of the business operation.  To achieve a sustainable corporate citizenship effort, businesses should have the big picture in mind and focus on strengthening the whole economy rather than individual action, which includes making CSR an intrinsic part of their business operation rather than a short-lived philanthropic effort. Thus, though the current corporate policies are arguably effective and pertinent, they must be institutionalized as CSR programs to embrace sustainability to achieve a larger, scalable impact.

Stakeholder (3): NGOs[1]

  1. Inefficiency in raising money or gaining influence

Theoretically, NGOs should be the voice of impoverished communities and have the bargaining power to monitor businesses and the government to adopt appropriate measures to combat child poverty. However, the influence of the NGOs in Saint John lacks the power and does not have the influence it should have. The channel of money gathering usually comes from “goodwill”, such as through public advertisements, schools, or donations from customers at supermarkets or shopping malls, rather than influence and actively seeking funding. The money transfer is also not transparent to the donors and the public. The NGOs’ insufficient funding has hindered their poverty alleviation progress, leading to an under-representation of the community and undermining their bargaining efforts. 

  • Quantity over Quality

Currently, there are many NGO institutions in Saint John dealing with poverty, such as Teen Resource Center, United Ways, and many others. With over 100 NGOs and local initiatives, there is duplication and tension. There is also no collective goal, as each initiative has its own measures and standards of poverty, making it difficult to cooperate and work together5. While it is certainly beneficial to have multiple diversified NGOs and initiatives to combat the looming poverty crisis, a common goal and shared vision need to be crafted and used as a guideline in poverty reduction efforts to maximize the effect.

In the status quo, the ability of collaboration of all three stakeholders are severely under- mined by two problems. The first problem being the conflict of interests. Different stakeholders prioritizes different aims and goals in the issue of child poverty crisis in Saint John. For the gov- ernment, both economic development and economic wellbeing are important goals on their agendas. This presents a challenge, as whether to prioritize economic growth or economic well- being is a trade-off that the government often need to make, potentially resulting in harm to stakeholders or inequitable development. For businesses in Saint John, their end goal still lies in revenue and profit, as businesses are, in essence, profit-seeking entities. This prioritization of profit may induces reluctance in implementing corporate social responsibility efforts or raising the wages of the employees, as this heightened the cost of operation. As the major decision mak- ers in firms are high-level managers, their profit-seeking incentives may limit their understand- ing and awareness of the child poverty issue. For NGOs, their goals lies in improving the society and advocating for social justices. However, with a large quantity of NGOs and local initiatives in the region of Saint John, a collective goal is missing.

The second power is the power imbalance, which limits the ability of certain stakeholders to carry out their full potentials or to conduct active collaborations. In Saint John, ironically, businesses and private sectors hold the highest power in the social issue of poverty. As a potential benefactor with ample amount of innovative and financial capabilities and the direct provider of wages, businesses are a key determinant for child poverty issue. Being the driving forces be- hind the economy of Saint John, businesses naturally have a key saying in the city’s social developments. Conversely, because of the power of business, their refusal and reluctance to con- tribute to this issue would also severely hinder the effort to combat poverty. Thus, a crucial question for policymakers and anti-poverty leader to consider is how to incentivize businesses. The public sector and government also have a high power in the issue of child poverty, as they have the ability to pass legislation and policies directly targeting this issue. This corresponds to the people’s extensive trust in the responsibility of the government (shown in the survey analysis section). However, their powers are limited by a limit in budget, internal conflict of interests and that the result of their efforts are heavily determined by the cooperations of individuals and private sectors. As a stakeholder that is devoted to poverty, NGO suffers from lack of power and representation, as in Saint John, both their fundraising and lobbying power are significantly limited, and their opinions are usually not taken into account in the legislation-making process.

Survey Analysis

This section presents key findings from an original public perception survey. The survey’s sample was strategically chosen to engage in multiple stakeholders. Through the network of BCAPI, the survey was sent to business leaders and poverty leaders around Saint John. To re- flect the opinion of a wider audience both in Saint John and beyond, the survey was distributed to randomly sampled participants of varying income level both in Saint John and across the globe through the author’s personal network.  In the end, the survey received 54 responses from both the global anti-poverty community and the local anti-poverty leaders and business leaders in Saint John. The survey results are analyzed with singe-question descriptive and cross-tabulation methods. Below are some of the interesting results.

  • On a scale from 1 to 10, Saint John’s poverty leader perceived the local severity of child poverty at a mean value of 8.4
  • On a scale from 1 to 10, Saint John’s poverty and business leaders perceived corporate responsibility in addressing poverty at a mean value of 8.00 while the global community has a mean value of 7.61
  • When asked about whether philanthropic efforts from the company such as providing free healthcare help mitigate the poverty crisis, 33.33% of respondents from Saint John do not think so while another 26.67% are uncertain
  • 80% of Saint John respondents feel like child poverty has exacerbated over the past five years while the 62.96% of respondents from the global community reported so
  • When asked about how the government contributes to the high child poverty rate, the two choices with the highest response are “loophole in policy planning” and “ineffectiveness in carrying out policies”
  • When asked about how child poverty can be better solved, there are many insightful responses such as “Better access to education, transportation, healthy food”, “More resources are needed for early childhood intervention”, “Governments need to hold major corporations accountable for their tax income.”, and “increased awareness and involvement of communities”

When examining the results of the survey, especially cross-question analysis, some interesting phenomena and questions are worth discussing.

(1) Why, despite a high sentiment for corporate responsibility (7.53/10), over 80 percent of the answers still determined that local and provincial governments should take the leading role in combating poverty.

Poverty, in the end, is still an economic and political issue that is deeply rooted in civic life. This makes it natural for people to think that the government should be the leader in addressing poverty since it has to create safe and prosperous societies and ensure civic well-being. However, a high sentiment for corporate responsibility also demonstrates the importance for the private sector to be involved in this matter and do what they can to aid the policy and decision-making process. This sentiment is further emphasized by that 44% of respondents chose that corporates should assume leadership positions. Thus, because of the leadership position the government possess in people’s opinion, it must fulfill itself as a leader in solving poverty and make oversees the anti-poverty actions. Government also cannot neglect people’s trust and should aim to understand the issue of poverty to the fullest degree. The strong sentiment for corporates also acts as a signal for corporates to execute its social responsibility, provide fair wages and actively engage in policy making efforts.

(2) Why, in a global context, over 62% believed that child poverty had exacerbated over the past 5 years, but still perceive the severity of current child poverty at a moderate level of 5.6/10.

Official data shows child poverty has been exacerbated over the past 5 years, especially due to the global COVID-19 recession and the reduction of employment opportunities. However, the reason behind the moderate perception of poverty is twofold. First, the international respondents, in contrast with the local poverty leaders who specialize in poverty and inequality, might not have an accurate perception and awareness of local poverty and might tend to underestimate its severity and misunderstand the complexities of poverty. Secondly, the disparity in results could also be caused by the resilience of communities and governments in implementing measures to alleviate immediate impacts, such as social welfare and donations, which effectively mitigate the severity in the eyes of the respondents. Though public perceptions are subjective and are prone to the influence of experience and personal beliefs, this cross-examination proves that stakeholders lack awareness of the poverty crisis, which ultimately contributes to the lack of funding and sustainable philanthropic efforts. The analysis shows that statistical or objective measures of child poverty severity need to be considered and widely broadcasted, which can be done via concrete actions such as the issuing of annual reports by statistics agency and govern- ment, direct exposure to poverty, and awareness raising efforts from governments and NGOs.

(3) Who should provide? What is missing?

According to the responses to questions 6.1, 6.2, and 6.3 and the short answer question 9 (see Appendix A), the respondent’s concerns are evenly distributed across all three sectors.

For the government, the two main concerns are “loopholes in social policy planning” and “ineffectiveness in carrying out policies”. For the private corporations, the concerns are major crowding out other businesses and programs that potentially would be beneficial and lack of quality job and job training. For the NGOs, the main concern is inefficiency in gathering funds.

The responses suggest that all three sectors should do what they can to solve the child poverty issue, especially by making policy planning and executing processes more transparent and efficient, building a more diverse economy with more employment opportunities, and more funds targeted toward solving the issue. Specifically, there is also a widespread sentiment of corporations paying a fair share of taxes, investing in early education, better housing models, and increasing awareness and community engagement. However, one institution or stakeholder can’t satisfy all of the public opinion, which further emphasizes the importance of multi-sectorial collaboration.

Case Studies

In the city of Saint John, there have been some instances where a healthy relationship between government, NGOs, and corporations is established and developed as a multi-sectorial solution to poverty. The section below will discuss two successful initiatives: Saint John Learning Exchange and the When Children Succeed Project.

Saint John Learning Exchange

Saint John Learning Exchange is a collaboration of NGOs and the business sector in response to the loophole and inadequate address toward the education sector of the government. It is the pioneer of using performance-based funding, in which the Learning Exchange is paid by a contract to achieve agreed-upon education and employment benchmarks. The business sector contributes to the scaling-up and the success of the NGOs, as more than 100 local business leaders partnering with the Exchange and viewing it as an opportunity to prepare and secure potential employees to be ready for the job. Saint John Learning Exchange, despite being a non-profit organization, advances into the business sectors by having its own social enterprises, where it works toward paying its employees a living wage. Through acute problem perception, symbiosis partnership, and avid actions, the Saint John Learning Exchange demonstrated a $7.50 social and economic return on every $1 invested and is continuing its innovation to work toward the ultimate goal of breaking generational poverty3.

The sustainability of this model of charity, however, raises a concern. Although Saint John Learning Exchange is a good example of a program that addresses the problem creatively, its approach of performance-based funding raises some concerns, as NGOs might prioritizes metrics over concrete impacts, which might result in the children going back to poverty despite having a short-term gain. This requires a check-and-balance effort from the government. To evaluate the validity of the performance, a government-issued standardized test could be utilized to test the effort of the Exchange. The government should lead effort to track long-term experience of the participants of the Exchange, such as their educational performance and career out- come with systemic methods (preferably collaborate with academia, NGOs and other stakeholders), and reduce funding for or penalize the NGO if a long-term impact is not demonstrated. The government should also incentivize the NGO to actively look after the child’s long-term development and to provide support when necessary.

When Children Succeed Project

The When Children Succeed Project demonstrates a true symbiotic relationship between the NGOs, the business sector, and the public sector. This project was first started between a partnership of the Business Community Anti-Poverty Initiative5 and the school district in Saint John’s vulnerable neighborhoods after finding out that investment in early child development yields the greatest social and economic returns. BCAPI aims to provide individualized and professional education practices to enhance student’s critical thinking, social, and academic skills and also aid school districts in implementing high-quality teachers. The project’s value resonated within the NGO community and gained the support of initiatives such as Living Saint John and New Brunswick Children’s Foundation29. It also gained approval and funding from the regional government, as the government of Saint John donated 3 million for the Project30. With an intricate collaboration, united focus, and a clear vision, the When Children Succeed Project significantly boosted the high school graduation rate of the children of the neighborhoods in uptown Saint John.

A common critique of the project is the potential effect of the conflict of interests, the consideration that the involvement of multiple stakeholders hinders the efficiency of the project. Particularly, as fundings come from the government, many fears that there might be certain conditions attached and might be used as a political tool rather than a charity organization. However, When Children Succeed Project presents itself as a positive example of aligning stakeholders together through a common goal and interest—to close the educational achievement gap through building a solid foundation at a young age. When Children Succeed Project was designed around the provincial government’s 10-year education plans, which stresses on energizing the private sectors, breaking the cycle of poverty, and establishing a world-class education system. It also aligns with the strategic goal of Department of Education and Department of Labor. The vision is shared by the private sectors, who, being member of the BCAPI, aims to utilize their business resources to break the cycle of poverty. The model of the project provides the insight that for an anti-poverty social project to involve all stakeholders symbiotically, a value proposition must be carefully designed to satisfy the need of all the stakeholders and eliminate potential conflict of interest or manipulation of power.

Discussion

The status quo analysis, case studies, and survey analysis point to a shared message: a collective impact approach with a shared vision and close-knit collaboration among three stakeholders – government, corporations, and NGOs – are instrumental to alleviating child poverty. Based on the analysis, a collective impact model is demonstrated below to illustrate this optimal relationship.

Fig 5: Collective impact approach model constructed by the author.

As shown in the model, the relationship between all three stakeholders is dynamic, and the private sector, government, and NGO each have a different role in solving child poverty. However, a systemic solution requires an interconnected collaboration between all three sectors, thus having a “multi-sectorial approach”.

As reflected in the survey result, the government should take the leading role in addressing child poverty, and the main tools the government must utilize are its political power and its policy-making ability. However, there are two things the government should keep in mind when making policy. The first is to prioritize child poverty in political decisions, as it is one of the most urgent problems in the community and can greatly impact future generations, economic development, and the local talent pool. This prioritization can be achieved through measures such as increasing funding for child poverty-related issues such as preschool education, social assistance, and wage policy and establishing a specialized committee dedicated to this issue. The second is to issue targeted policies and wage laws. The government has to target the issue, or issue policies pertaining to the root causes of child poverty, target the population, or who is eligible to receive aid and social assistance, and be aware of the dynamic nature of poverty and minimum wage eligibility. In relation to other stakeholders, the government should use its political power and its financial capabilities to act as an enforcer and supporter. The government should enforce minimum wage laws in individual business organizations and incentivize child-friendly businesses through tax exemption or subsidy. For NGOs lacking funding that was proven effective, the government should supply the funding necessary. The government must understand the extent of poverty and the dynamic nature of poverty to systemically eradicate the root cause of poverty in the long term rather than short-term philanthropic action.

Many would question the role of business in alleviating poverty, considering that the sole motivation of businesses seems to be profit. However, under the global trend of sustainable economics and development, the aim of modern business is not just limited to profiting but also includes environmental and social considerations, and the concept of corporate social responsibility (CSR) was gradually implemented as an integral part of business strategy and operation.

In the specific context of Saint John, CSR efforts from businesses to solve child poverty are integral, as the high child poverty rate negatively impacts the operation and the development of businesses themselves. Child poverty is generational and persists into adulthood, as many children do not have the opportunity to receive education and therefore cannot have professional training or post-secondary education. A city’s economic vibrancy is undermined when its residents are poorly educated, low-skilled, and with no steady income. This takes a toll on business, as poverty hinders the quality of the available talent pool. Saint John’s business revenue also increases as CSR efforts toward child poverty are conducted, as when individuals and households have sufficient wages and decent living conditions, economic activities increase and generate more consumer activities for the business.  In the meantime, a caring and compassionate brand image could also be used to enhance customer loyalty. This benefits of social improvement on business revenue and increased talent pool act as a return to justify businesses’ investment into social spending and should be the key incentive for businesses to combat child poverty. However, when businesses fail to adequately perceive the return on investment or when there isn’t enough data to support it, credible third parties such as sustainability consultancies, academia, NGOs, and others may step in to quantify the return on social investment, thereby incentivizing businesses and raising their awareness. Initially, these incentives may be fiscal, but persistent efforts will be scaled up to establish a new norm, fostering a spontaneous commitment to ‘busi- ness for good”.

To further contribute to solving child poverty, the firms in Saint John must move beyond charity and philanthropy and integrate CSR into their professional business practices. Firms also need to find their unique entry point and leverage their assets to offer unique insights into the child poverty problem, aiding the government in planning policy and offering a for-profit view of the child poverty issue. As wage providers, businesses also need to undertake the responsibility of implementing the minimum wage law and fostering a diverse, inclusive, and productive work environment.

As an active advocate for equal development, NGOs need to move beyond the traditional model of raising funds in the collective impact system. NGOs should become the check and balance of government and business, ensuring the address of child poverty and other related issues and enforcing proper decisions and policies being made. As a stakeholder who is constantly exposed to poverty problems, NGOs need to make sure that businesses and governments have a high awareness of the child poverty issue and need to actively expose them to the child poverty status quo. In the collective impact model, NGOs also need to become the voice of the community and represent impoverished households during the decision-making process, thus ensuring that the voice of the poor can be heard.

The final part of the discussion will outline some detailed recommended policies for each of the stakeholders. Because the financial and capabilities of the stakeholders are limited and each action will result in an opportunity cost, the following policies are arranged based on priorities. The suggestions for all three sectors, however, should happen simultaneously. The following suggestions are for how to combat children and intergenerational poverty and to build a resilient economy, where both economic development and economic well-being happen simultaneously.

For federal and regional governments:

  1. Prioritize underprivileged children in decision-making
  2. Approve an annual increase of the minimum wage to the federal requirement under planning and target and move it closer to the living wage. Government should implement a Minimum Wage Law that uses the federal rate as a guideline for the businesses to follow and incentivize private sectors through providing subsidies and tax breaks.
  3. Provide high-quality social assistance and increase the targeted coverage of impoverished households, specifically financial relief targeting the rising inflation.[2] This entails ensuring vulnerable populations, such as single-parent families to be completely covered by the Transitional Assistance Program and Extended Benefit Program and increase the coverage rates of these two acts. The government could also model targeted insurance based on Canada Emergency Response Benefit, given its effect in reducing child poverty during the pandemic.
  4. Provide impoverished children with quality education, particularly at an early age and preschool, and ensure the equitable distribution and development of the public education system. This include a comprehensive education system and investments focuses on early-age learning habits developments, primarily focusing on reading, writing and critical thinking. The government should also impose a tracking system to monitor the long-term performance of the participants of the program to prevent prioritizing metrics over impacts. To build a participatory policy process, the government should conduct both expert and public consultation to gain a comprehensive understanding of the issue at hand, including each stakeholder’s concerns, obstacles, and viable solutions.
  5. Implement a better housing plan for the province, including more budget for building more houses while ensuring the affordability of the houses. The government should re- quest more federal budget to build affordable and quality housing in the region of Saint John and ensures the access to energy, heating and water resources.

For private sector firms and corporations

  1. Raise the wage level within the company to that closer to the living wage standard, especially within the low-skill labor and service industry.
  2. Provide higher quality jobs and targeted job training for impoverished households. Businesses should collaborate with the Labor Department of Saint John to initiate a job training program where they actively reach out to unemployed households in poverty to give them training on certain jobs for free and employing them after the program. This would both increase the available workforce and talent pool for the company and increase productivity and decreases the unemployment.
  3. Raise its awareness of the child poverty issue through measures such as direct exposure to the issue and consultation with experts and poverty leaders. Businesses should consult with NGO or government leaders on the topic of poverty and demonstrate their under- standings and actions in an annually published ESG or child poverty related reports.
  4. Incorporate sustainable business practices within the business operations and strategy to achieve an actual CSR framework focusing on helping society to become more resilient.
  5. Aid government and NGOs in existing initiatives by providing financial or intellectual perspectives.
  6. Avidly start initiatives and join the discussion of poverty by offering a unique, for-profit point of view for business.
  7. Spread the idea of CSR in the business community through responsible leadership. Once some businesses make profit, both financial and non-financial, tangible and intangible, on CSR, the profit-seeking others will naturally follow suit.

For NGOs

  1. Increase the channel of money, influence, and presence within the society. The NGOs should seek partnerships with major governmental agencies or private sectors to compensate their disadvantage in the power dynamics. NGOs could also reach out to business to form a symbiotic partnership. An example of a program would be the NGO can help businesses advance their ESG efforts and perform social innovations while businesses use a portion of their revenue to contribute to the NGO’s fund.
  2. Be the voice of the community: represent the community during the decision-making process and lobby for the government to do the same.
  3. Be the check and balance: ensure the government prioritizes child poverty crisis in their decision-making process and make sure the businesses are acting responsibly for society. To achieve transparency and objectivity, NGOs should perform detailed investigations and publish annual reports such as Child Poverty Brand Audit or those of similar nature to document the past year’s effort in businesses and government from a third-party point of view.
  4. Have a collective goal. Quality over quantity. The NGO should specialize under an overarching goal to prevent conflict of interest and boost productivity.

For All Three Sectors

  1. Prioritize the issue of child poverty in their agenda, decision-making, and policy process concerning public budget allocation, social welfare, labor rights (minimum wage), and family.
  2. Cooperate avidly with each other and form a collective impact approach.
  3. Create a shared vision, attainable goals, and a financially realistic implementation roadmap.
  4. Prioritize sustainable and fundamental changes to the society and economy rather than discrete, individual actions
  5. Have energy, morality, and leadership.

Child poverty in Saint John is rooted in interlocking causes and has a profound impact on social inequality and economic development. While many social phenomena are the tip of the iceberg, the core causes of poverty are the disparity between wage and cost and the family composition. All three major stakeholders, including government, private firms, and NGOs all contributed to the poverty issue in some way, but each has the potential to utilize their advantage to help mitigate the crisis. The three sectors each shoulder different responsibilities but need to cooperate with a deep understanding of child poverty’s causes and impact, shared vision, responsible leadership, and a clear, concerted implementation scheme.

Method

To capture a complete picture and acquire a comprehensive set of solutions and recommended policies, this research employs a mix of methods to gather first and second-hand data and information.

Qualitative methods are mainly used in this report. This includes the collection of qualitative evidence describing how poverty is being combated, such as ESG (Environmental, Social, and Governance) reports from major corporations, annual summaries of anti-poverty organizations and governmental agencies, and open-ended responses to public opinion surveys (see Appendix 1). This also includes quantitative analysis of the evidence, such as evaluating the pros and cons of existing policy through written analysis. Quantitative methods are also used along with qualitative analysis, which includes gathering and analyzing data, such as the poverty trend, government budget spreadsheet, and statistics in the private sector’s ESG report.  The gathered information comprises both primary (one-on-one stakeholder interviews and public opinion surveys) and secondary sources (scholarly articles, reports, and stakeholders’ publications).

However, it should be noted that this research is subject to the following limitations:

  1. This report only addresses child poverty but does not focus on other types of poverty such as adult poverty, transitional poverty, and urban poverty, which are intertwined, pressing issues in Saint John. These have different causes and require drastically different approaches and solutions
  2. This report may not be exhaustive in analyzing all the factors that contributed to poverty, as the cause could come from other external factors that are not related to government operations, private sectors, or NGOs.
  3. This research focuses solely on family structure and wage disparity. Although this paper argues that those two aspects are the root cause of poverty, this approach might have a narrow focus and might be considered an oversimplification of poverty.

The survey has received a rather small sample size of 54 and comprises respondents of mixed socioeconomic backgrounds, which might compromise the validity and representativeness of the conclusion drawn. Among the respondents, half are residents of Saint John that are in- volved in anti-poverty efforts, while the other half are distributed across the U.S., Europe, and Asia to show the comparison of local and global perspectives and to put the issue of child poverty to a greater scope. The reason for the relatively small sample size is that the suitable response sample that can provide a valid and insightful response on the Saint John’s child poverty issue is relatively small. To show a balanced representation between local and global perception, the au- thor reached out to knowledgeable participants around the world for participation, such as the community development coordinator of Saint John, Rothesay and the Fundy Region to represent public sectors, social development leader of various businesses to represent the private business sector and local and national NGO leaders. Given the time and resource constraints, the survey only received 54 valid response after data cleaning and quality control process. Nevertheless, the survey is complemented by interviews with key stakeholders and literature reviews to cross- check and ensure the finding’s validity.While the design of the survey is not regionally specific and brings in more diverse perspectives, it might not accurately reflect the wills and wants of the people in Saint John. When analyzing the survey, the local responses and the global responses will be analyzed separately.

Appendix One: Survey Design and Logics

Study on the Causes of the High Child Poverty Rate in Saint John

The social phenomenon of child poverty has deeply affected the city of Saint John for many years and has extensively shifted the social dynamics of the city. With the withdrawal of the COVID relief, Saint John’s child poverty rate reached a frightening 32.4% in 2021. The poverty rate slightly decreased in 2022 and 2023 but is still at a shocking rate of 23.8%, well over the provincial average of 16.6% and the national average of 7.4%. Saint John city center also has a much higher poverty rate than its neighbors. For example, while the rate of child poverty in uptown Saint John is 23.8%, the rate in Quispamsis is only 7%.

As the first incorporated city of Canada, one of the foundational economic centers of New Brunswick, and with the presence of international firms like Irving Oil, the cause of this persistent cycle of poverty is intriguing. This questionnaire will investigate the impact and the cause of child poverty from the general public’s perspective, looking to understand how the general public feels about the issue of poverty and the responsibility of the private and public sectors in dealing with the issue. The survey will keep the information of respondents fully confidential, and the results will be used for internal research purposes only. Thank you very much for your participation!

Q1. Based on your knowledge and experience, what is your perceived severity of local child poverty? Please rate on a scale of 1-10 (1=least severe, 10=most severe)

* Brackets: not severe (<4), moderate (4-6), severe (7 and above = severe)

Q2. Rank each of the following stakeholders in their severity of contribution to child poverty. Please rate by stakeholder on a scale of 1-10 (1=least severe, 10=most severe)

* Brackets: not severe (<4), moderate (4-6), severe (7 and above = severe)

  1. Government (regional, local, and provincial?
  2. Major corporates
  3. NGOs (their ineffectiveness in addressing the problem and gathering funds)

 [pop up if major corporates scale >4 in Q12]

Q3. Corporations often uphold the value of giving back to a community. Often, corporations could aid the government in changing a social issue by allocating funding, providing employment opportunities, or volunteering in social actions

Q.3-1. To what extent should corporations shoulder the responsibility to complement policies/ fill loopholes in policy implementation to alleviate/ address social challenges such as child poverty?

Scale: 1-10 where:

0: Companies have no responsibility at all

10: all companies should have the social responsibility mandate to complement the government in alleviating/ solving child poverty (e.g. by providing funds, child-focused charity programs, community give-back, etc.)

* Brackets: no/minimal responsibility (<3), moderate (4-7),  (8-10= severe)

Q3-2 Some local companies have adopted diverse measures to promote social sustainability, such as supporting more families who lack access to vital services by donating fuel cards for travel and helping children receive long-distance healthcare benefits. Do you think those effective measures in combating child poverty?

  1. Yes,
  2. No
  3. Uncertain

Q4. Do you think the negative side effects caused by major corporations contributed to child poverty in some way? (such as inflicting health problems through pollution and monopolizing the economy )

  1. Yes,
  2. No
  3. Uncertain

Q5. Based on your own experience and knowledge, do you think child poverty has been exacerbated in the past 5 years? Especially after Covid.

  1. Yes
  2. No
  3. Uncertain

Q6. In your opinion, what are some potential explanations for child poverty in general?  (multiple choice)

Q6.1 Government

  1. Did not supply enough funds for welfare and poverty alleviation
  2. Loopholes in social policy planning
  3. Ineffectiveness of carrying out policies
  4. Inadequate monitoring of policy implementation
  5. Did not track the data for gauging the effectiveness of child-related policies for evidence-based policymaking
  6. If none of the above, please indicate the cause______

Q6.2 Corporation

  1. Major corporations dominated the economy and crowded out other businesses and programs that potentially would be economically beneficial

(a diversified economy can offer more high-quality job opportunities and improve local workers’ wage levels)

  • Community give-back/ philanthropic programs (e.g. child healthcare programs and fuel programs) have been ineffective in alleviating local household/ child poverty
  • Companies should provide more quality jobs and job training for the parents of impoverished children
  • location in downtown induces negative externalities (e.g. environmental pollution) that exacerbate child poverty
  • If none of the above, please indicate the cause______

Q6.3 NGOs

  1. Did not build the proper awareness of the issue
  2. Inefficient at gathering funds
  3. If none of the above, please indicate the cause______

Q7. What is your expectation of child poverty rate five years from now?

  1. 35% or higher
  2. 25% to 30%
  3. 20% to 25%
  4. 15%-20%
  5. 15% or lower

Q8. Who do you think should take the most significant/ leading role in mitigating child poverty? (multiple choice)

  1. Local businesses and major corporations
  2. Local government
  3. NGOs
  4. The public
  5. If none of the above, please specify the stakeholder

Q9.  (short answer) How do you think child poverty could be better solved?

References


[1] Note: Because NGOs did not directly shape the wage level in the province and are not directly causing poverty. The below section will only examine its existing policies and evaluate the pros and cons

[2] For more detail, see: Tabarra, Mohy-Dean, and Alexi White. Better Supporting the Most Marginalized New Brunswickers, MayTree, Feb. 2024, maytree.com/wp-content/uploads/Bett er-supporting-the-most-marginalized-New-Brunswickers.pdf.

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