Significant work and billions of dollars have been invested in reducing poverty in Canada. In Ontario, all three major political parties (prior to Mr. Ford) have made poverty reduction a significant investment in their platforms. Yet, there are opportunities to increase the capacity of individuals and reduce the criminalization of impoverished individuals without substantial expenses. In some instances, there may be an opportunity to save money in these ministries. Some of the changes have been and are implemented in different progressive and developed countries around the world. Most of these ideas would come from the socialist democratic style of countries but are amongst the peers of Canada. The first idea is tailoring post-secondary tuition to your income levels and second is again attributing monetary fines to your income.
Post-secondary education is incredibly relevant in today’s economy. It is seen as a minimum standard for many positions whether it be college or university. Yet, thousands of low-income individuals either cannot afford to attend or struggle with massive amounts of debt to attend. This is because there is a standard cost associated with attending a university in the form of flat-rate tuition. This tuition is subsidized by the government to allow for Canadian students to attend at a cheaper rate (international students are not included in this. Hence they pay the “full amount” of tuition). While this subsidized rate does efficiently create ‘equal’ access for thousands of students it does this unequally. If tuition stands at $7,000 annually for a Canadian student, this is the standard no matter the income. A student whose family makes $32,000 annually or $250,000 annually pays the same amount. Yet, this dramatic income differential has a drastically different effect on both individuals. That student whose family makes $32,000 must set aside almost 22% of their annual earnings to just pay the entrance fee. Whereas the student whose family earns $250,000 only has to set aside 2.8%. This places that student whose family earns significantly less annually in a drastically more difficult situation. To be able to pay tuition let alone the other necessities associated with education and living and continuing with getting an education over 4+ years. The flat rate program leaves that student in a situation where the only viable option is a drastically large student debt allotment which causes future financial difficulties. While our system is set out to be equal and fair; it, in fact, is not. Both students share the same opportunity to attend by the governments flat rate but both students do not have the equal genuine opportunity due to large upfront and long-term fixed costs. While the family that earns $250,000 will see more deductions from their income through income taxes and that student may not qualify for additional supports once a student; the upfront cost and long-term costs are not significant barriers or as significant.
Visible minorities, Indigenous peoples, and new Canadians are often the ones that struggle with low income, poverty, and education is supposed to be an opportunity to provide these individuals with current and future changes. This flat rate system means more often then not we end up subsidizing higher income families who ability to pay is apparent; while only assisting those few lower-income individuals once they have made it past the gatekeeper. Changing the way we charge tuition and provide assistance to those with lower income would provide more accessibility and opportunity to these individuals while also being fiscally responsible. A tiered system would be necessary to provide these opportunities to those individuals who met the standards. The subsidy would be based on the earned income of the individual/family. The family who makes $32,000 a year may see their costs go from the flat rate of $7,000 to $2,500 annually. An annual reduction from 22% annual income to 7.8% or a -14.2% reduction for that student to attend university. This increased subsidy could be offset by increasing the amount for that student whose family earns more. The student whose family earns $250,000 could be asked to pay $11,500 annually in tuition to cover the reduction for low-income students. This increase in cost still is below what that low-income student would have to save annually. The amount based on the income would increase from 2.8% annual savings to 4.6% which is less than a +2% increase. This change would allow a significant improvement in the livelihoods of students who struggle with costs associated with post-secondary and the related debt. The difference of $4,500 for that low-income student pays for 9 out of 12 months of rent (Room rent of $500), or it pays for 15 months worth of food ($300 monthly) reducing both student homelessness and student hunger.
This would also not be detrimental to either party minus the small increase in monetary costs to the higher earners. Universities love international students because they pay up front and they pay the full amount. They don’t have to fight with governments over ratios or numbers, and they set the amount charged. These higher tuition costs mean those post secondary institutions would be challenging to attract more senior income students because they would pay more up front. As such it would allow for more lower-income students to attend that institution and get the same education. In other areas; where there are low mobility rates and depressed income levels generally, there is an opportunity to subsidize those areas with income from richer communities to allow for a diversification of the workforce in the depressed areas.
Germany has a system implemented for monetary penalties given by the judicial system where it too is associated with your income. An individual was found driving egregiously on the Autobahn and was caught speeding; based on his income his fine was $22,000. Whereas someone with a lower income bracket would pay must less but both serve these individuals as effective deterrents because they are proportional to their income. Our system as we have it currently presents everyone as equals. Whether you have $1 to your name or billions both are considered equal. This system while ‘income blind’ doesn’t effectively create the proper outcomes or equal ones. People struggling with low income or people who are impoverished face much larger proportional penalties than someone with a large income and wealth even though the fines are the same. Much like the university tuition system in Canada, it is a flat rate system. This costs us the taxpayer millions of dollars annually as well because the system is not representative of the individual’s situation. For example, a public intoxication ticket is relatively minor and cheap. In Ontario, the cost is $65, but depending on your situation the outcomes could be completely different. A homeless individual whose home is ‘the environment in which he /she lives’ can often rack up a large number of these within short order. Whereas, a college student drunk walking down the street and being a danger to himself may only get one in his/her lifetime. The student ends up paying the ticket, and it costs him a weekend of partying or a week of ramen noodles. For that homeless individual; with no adequate income or a limited income, it can result in jail time. Enough tickets associated with an individual will lead to his arrest through a bench warrant. Often this leads to jail time for the individual and thousands of dollars in costs to taxpayers. To keep an individual in jail per day costs on average $116,000 a year to keep someone in jail. If an individual gets sent to jail for a 3 month period because of intox. Tickets; as taxpayers, we spend $28,600. Editors note: Police officers are often aware that people cannot pay; sometimes tickets are given with the knowledge that these individuals will go to jail eventually (Yes, they are legitimate tickets). Winter is a tough time for homeless individuals, and with enough tickets, the individual may spend the time inside (jail) with a warm environment, food, and access to medical help. It’s an unfortunate workaround to make sure people don’t freeze to death or suffer unnecessarily. Associating tickets to individuals incomes would be more effective in deterring individuals but also understanding their realities. That ticket tied to the homeless person’s income may be better given as community service without the monetary penalty. If we could reduce the number of people spending time in prisons because they are homeless or lack the ability to pay then we could save millions annually.
Speeding is another example of an area where a flexible system would be better served then the flat rate system. A flat rate of $500 would have significantly more detrimental effects on the individual whose car is falling apart than the individual whose Maserati is sitting in the lockup. A monetary fine that is too large for an individual to pay may also have external but related negative impacts. That suspended license for not paying the penalty could lead to a no insurance ticket which if caught is a $5,000 fine or higher insurance premiums from canceling and reopening policies. It could also be the only means for an individual to get to and from work which could cause job loss and potentially both confidence and mental health issues. While it is important to have a fine that is effective at deterring individuals from committing these acts it is also important to understand the realities of the human situation. Set the fine at a flat rate of income; 2% as an example would mean an individual earning $32,000 would pay $640 but an individual earning $250,000 would be $5,000. While neither fine may break the bank for either person it provides a useful deterrent to people; it also takes into account the human element of the situation. It is more equitable than the flat rate system and it gives additional flexibility to justices when making decisions on fines. Both individuals are harmed, but neither is hampered to the point where it unequally impacts one person because of their income levels.
Our idea of a flat fee for everyone is noble and comes with good intentions. It removes the human element of the situation and we lose sight of the purpose. We want to punish people enough to deter them from conducting themselves in certain ways. We do not want to hamper them so much we effectively kill all hope for progress. Our society is considered to be fair and provide the necessary helping hand when needed. Yet, we are subsidzing the education of the rich while effectively denying it to the poor or indebting them so much that they continue to stay poor while profiting off them.
What do you think of the situation?