In April 2016, the Government of Canada will stop issuing checks to Canadians and using direct deposit instead. Touted to be a good example of austerity, the result will be more than $17 million in savings for the government. Direct deposit is more secure of course and continues even as people relocate. Moving more to direct deposit is fine for most of us, but not for the people who can’t get a bank account. According to the Canadian Community Reinvestment Coalition, “over 600,000 Canadians, many with low incomes, have no bank account and inadequate access to other banking services.”
Here is what will likely happen.
- A percentage of the 600,000 will get identification and open bank accounts. What percentage is not known.
- The remainder will not have bank accounts and will not receive their federal cheques. My guess this amount of money involved will be a whole lot higher than the $17 million saved by the government.
- Hundreds of thousands of low income people will experience significant hardship. Many may face the loss of housing and a deeper poverty than ever before. Health issues will increase and for those most desperate, perhaps crime will become an option for more than we care to think.
- The economy will lose out on the commerce end of things and likely be faced with the local costs of increased poverty by those affected by the April 2016 change.
This seems to be an example of an austerity measure that requires further thinking and more so a sensitivity to the realities faced by folks who can’t get identification and/or open a bank account. It seems so simple for most of us, but not so for way too many of our neighbours.
The savings experienced by the federal government will result in increased pressures on organizations like Bissell Centre that work to support the poor and disadvantaged. It’s not like our organizations are looking for more problems to help the poor overcome. Will human service organizations have to raise more money to help the government save its $17 million?
I don’t think this is a black and white issue. Clearly, for the majority of Canadians direct deposit works just fine and there are cost savings to be realized there, and I think the government should save money where it can, but certainly there must be a way for the government to accommodate those who can’t get bank accounts (or don’t want one – it is a free country, right?). After all, I would assume if the government is issuing payments these folks are entitled to, It follows that it take what steps are reasonable to ensure their citizens can receive what is rightfully their’s.
What do you think?