Saturday, February 03, 2007

Wealth, poverty at once

from Canada Com

Home to Canada's hottest economy, Alberta is also seeing an alarming rise in hardship

Kevin Libin in Calgary

One Alberta paper called it "the curse of prosperity." Another, "the dark side of the boom." One of the city's dailies ran a week-long series entitled "boom and gloom," looking at what Albertans are regularly told are their worsening social conditions, from homelessness to hunger to domestic violence. The province may be home to Canada's hottest economy, but it's also headquarters to its harshest guilt trip.

Social workers call it the "prosperity paradox" -- while the provincial GDP will grow 3.6% this year, life for folks on the margins appears to be getting worse. "People think prosperity will lift all boats. And all boats don't rise," says Ruth Ramsden- Wood, president of the United Way for the Calgary area.

Certainly, a stroll through an Albertan downtown can be a mighty confusing exercise: On one hand, "Help Wanted" signs paper every second shop window, typically offering entry-level wages double the $7 minimum. On the other, it seems there are more panhandlers; more sleeping bags slumped over heating grates; and more shivering crowds around shelter doorways than ever. John Rook, CEO of Calgary's Salvation Army Community Services, believes 3% unemployment and rising salaries have hardened Albertans.

"You get that sock mentality. 'Just pull up your socks. I've got a job. I'mdoing well. I don't have that much education.' And they think everybody can do that," he says.

Actually, donations to outreach agencies are breaking records, suggesting Albertans are far from unconcerned. Ted Byfield, a popular political commentator and founder of the now-defunct newsmagazine Alberta Report, says the idea that, as the rich get richer, the poor get poorer, surfaces whenever the province gets a hot streak. "We heard it during the Seventies, we heard it in the Eighties." He calls it a typically Canadian reflex to "be ashamed of your prosperity," even though growth generally benefits all classes. But there are, he allows, exceptions: those on fixed incomes who, by definition, can't keep up in an expanding economy.

And it's those stories -- the retired war veteran, or the single welfare mother caring for her handicapped daughter, faced with a sudden 40% rent increase -- that weigh most heavily on the conscience of Albertans. Stories like that have been all over the news, leaving Albertans wondering if their prosperity is worth the problems.

But while undeniably heartbreaking, those stories are also exceptional, says Sylvia Le Roy, a Fraser Institute policy analyst. "The only evidence that I have seen [or] heard to suggest that there is a 'prosperity paradox' in Calgary has been anecdotal." Either that, she adds, or from reports about food bank usage or homeless counts, whose accuracy and methodology "are questionable, to say the least."

Data from Statistics Canada show that, whatever the perception, oil executives and real estate agents are not the only ones thriving in Alberta's fertile economy. The ranks of low-income workers have progressively shrunk. Fully 97% of workers make more than minimum wage. Alberta's median annual household income for 2004, the most recent measure, was $67,000 -- tops in the country and 20% higher than the national figure. Child poverty is second-lowest in the country. And the number of people living below the low-income cutoff has fallen by a third since the mid-1990s, when the province was struggling with economic malaise and wishing hard for a boom like the one we have now.

But rows of rosy statistics don't explain away the column of humans filing into the Salvation Army's cafeteria to warm up and get a bowl of soup on a blustery Calgary January afternoon. Or the fact that the homeless numbers in Alberta's cities have

doubled in the past four years. Shelters are filled to capacity. During Calgary's last serious cold snap, the city was forced to create emergency shelter space at the Stampede Grandstand and in an abandoned furniture warehouse.

But the face of homelessness isn't what you might expect. Yes, there are the addicts, the alcoholics and the mentally ill. But the growth segment -- as many as a third of those in the shelters, estimates Ms. Ramsden-Wood --is among fully employed, often skilled workers, sometimes making $40,000 a year or more. They come here from Quebec, the Atlantic region or B.C., she says, drawn by the lure of lucrative jobs (meaning they frequently arrive without much cash, and without support networks).

Instead of streets paved with gold, they find apartments going for treasure. Calgary's vacancy rate is a merciless 0.5% and with apartments averaging

$851 a month in the province's biggest city, it can take months to save the three-month deposit that many landlords ask. Thankfully, statistics show they nearly all find a place and get out of the shelters in relatively short order. Often, just a few days. The bad news: There are thousands more future Albertans on their way to take their place.

And while some retrograde activists still rail against "greedy" landlords, demanding long-failed rent-control policies, in truth, there is no easy scapegoat for the housing shortage. In the past six years, the provincial population has ballooned by nearly a half million souls, a 12% increase. It's remarkable we've managed to absorb as many newcomers as we have.

Still, discomfited Albertans are anxious for some kind of solution and this week, the province responded, striking an affordable housing committee to address the issue. Social agencies are hoping it will look, for instance, at tax incentives for developers building cheaper housing. There's also a growing call for Edmonton and Calgary politicians to allow homeowners to build secondary suites. Basement apartments are generally illegal in Alberta's biggest cities, even though they've successfully depressurized strained rental markets in Vancouver and Toronto. But for now, says Jon Lord, a former Calgary alderman and Alberta MLA, who championed the idea for years, politicians are cowed by a handful of vocal critics nervous about more cars parked on their street and rowdy college kids invading their neighbourhoods.

Last month, a group of Calgary business leaders announced their own task force with the declared goal of permanently ending homelessness, modelled after the U.S. Interagency Council on Homelessness, which has been credited for slashing the problem by nearly 30% in Miami, Dallas and San Francisco. (Set up by U.S. President George W. Bush, the bureau is led by Philip Mangano, an advocate of the unorthodox "power law" theory of homelessness, which considers it cheaper and more effective, in many cases, to give apartments to the chronically homeless rather than perennially rotating them in and out of shelters and hospitals.)

Steve Snyder, chief of Transalta Corp., who chairs the group -- which also includes honchos from Suncor, Canadian Pacific and Imperial Oil-- says the business community not only feels it "the right thing" to do, but adds it's critical to stem the growth of the problem so Alberta remains "a place where people want to move to and live in." Out-of-control social problems can, after all, have a deleterious effect on an economy. And if Albertans think they are uneasy today with the dark side of a boom, just wait till they once again discover how dark things can get in a bust.

Klibin@nationalpost.com

No comments: