True costs revealed behind unsustainable economic system
TORONTO | Traditional territory of many nations including the Mississaugas of the Credit, the Anishnabeg, the Chippewa, the Haudenosaunee and the Wendat peoples and is now home to many diverse First Nations, Inuit and Métis peoples — Governments are spending millions on avoidable costs that are created in the pursuit of economic growth, a new report from the Wellbeing Economy Alliance (WEAll) finds.
“Failure Demand: Counting the True Costs of an Unjust and Unsustainable Economic System” examines two case studies in Scotland and Alberta, Canada, to demonstrate that the pursuit of economic growth — a stated goal of almost all governments — harms people and the planet. Governments then need to spend money to respond to these harms, which in turn becomes a justification for growth.
In other words, we are caught in a cycle of paying to fix what we continue to break. This is known as “failure demand.” The report argues that these costs, and harms, can be avoided by taking an approach that focuses on root causes and prioritizes well-being.
“Our economic system doesn’t distinguish between what is good or bad for society, which means it often benefits from social ills and environmental crises,” says Yannick Beaudoin, lead facilitator for the Well-being Economies Alliance for Canada and Sovereign Nations (WEAll Can). “Break your leg? That’s money in the country’s bank. It’s time to stop the vicious cycle of chasing economic growth above all else.”
The report presents just a fraction of the total failure demand bill, focusing on three key sectors: paid work, housing and environment.
It finds that in Alberta:
- In 2019, an estimated 310,363 Albertans (7.1 per cent of the population) lived in poverty, with an estimated societal cost of $9.1 billion.
- The societal cost of homelessness in Alberta was $1.05 billion in public programs and other supports.
- Weather-related disaster costs increased by over 2,500 per cent to approximately $9 billion, with the Alberta government incurring an estimated $2.3 billion from 2010 to 2016.
“These findings aren’t unique to Alberta,” Beaudoin says. “Governments throughout Canada and the world are incurring avoidable costs by chasing the wrong thing. We need to focus on growing well-being instead of GDP.”
The report argues that by focusing on upstream prevention and addressing the root causes of challenges facing communities, governments can save money by reducing failure demand, as well as producing better outcomes for people and the planet. As an example, if low-income households in Edmonton received a living wage top-up to $17 per hour, the cost would amount to $1.21 billion per year. The result would be an immediate lift of about 10 per cent of Edmontonians out of their low-income conditions, as well as a savings of around $3 billion per year for the city in policing, community, family and other poverty-related services.
“We need an economic system that benefits more from your good health than your broken leg,” Beaudoin says. “We can avoid these unnecessary harms and costs by putting well-being at the heart of it.”
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Learn more about the Well-being Economies Alliance for Canada and Sovereign Indigenous Nations at https://weallcanada.org.
For more information or to arrange a media interview, please contact:
Stefanie Carmichael, David Suzuki Foundation: email@example.com, 437-221-4692
The Well-being Economy Alliance (weall.org) is a global coalition advancing economies designed with human and ecological well-being in mind. For the first time, it has found its way to the shared lands of Canada, Turtle Island and Inuit Nunangat. The Well-being Economies Alliance for Canada and Sovereign Indigenous Nations (weallcanada.org) is a network of interested and active actors working to accelerate the transition to well-being economies for people and planet, and create a systemic transformation of economic thinking and systems. WEAll Can works through a distributed leadership model to effect change.