Thursday, 8 December 2011

Value For The Money

The City of Toronto is currently wrestling with yet another "budget crises". One of the programs on the chopping block is the student nutrition program. This program is to ensure that children from poorer homes have at least one nutritious meal per day to compensate for the lack of food provided at home.

So moved by the plight of poorer children in his ward, Councillor Doug Ford donated $1,000 out of his own pocket to cover lost revenue due to the expected cuts. Apparently he agrees that this is an important issue, no? Then why not stop the cuts? "Ford said he supports the student nutrition program, but wonders if it could be delivered in a more cost-effective way."
Ahhh. The old "the program must be wasting money" canard. Too much gravy poured on the whole grain bagel I guess.

Since the article helpfully provided the numbers, I decided to do some number crunching. The program costs about $12 million to run and serves 140,000 children. So cost per child per year is $85.71.

Conveniently enough, last night was grocery night in our household. Using that as a representatvie sample, we spend $272.00 per week to feed a family of four(!!!) Over the same 42 week period as the school year, that works out to $11,424.00 for a per person cost of $2,856.00. Wow quite the difference! Keeping in mind that the grocery bill is for 3 meals a day, plus snacks and other household incidentals like toothpaste, water softener salt, etc. Let's assume only 1/10th of that bill goes to breakfast each morning. Recalculating that works out to an annual breakfast cost per person of $285.60. Over three times how much it costs to feed breakfast to a child under the Toronto student nutrition program. In point of fact, if my family's costs to provide breakfast were the same as this program, it would mean that approximately 1/33 of our bill was going towards breakfast. That's a huge friggin difference. So much so that I'm now thinking that grocery store owners are billionaires gleefully fleecing the public. Time for Occupy Loblaws!!! I jest.

Back to the main point. $12 million seems like a lot of money, but we used how much money we spend on breakfast the annual program cost would be $39.98 million.

Still not convinced? Two bagels and a medium coffee at Tim Hortons is $3.81. If you only do that once a week for 42 weeks, your annual costs for one person would be $160.02. Five days a week? $800.10. For two bagels and a coffee for one person.

Feel free to play with your own numbers. But from my own calculations, an annual cost of $85.71 a year to feed a child 5 days a week is an amazing deal.


Catelli said...

For the record, I'm having a hard time accepting the numbers I've come up with. If there is a serious flaw in my logic, I'd love to hear it!

Ken Breadner said...

I don't see it, Catelli. The City likely has deals in place to get product at or possibly below cost, and obviously to buy in serious bulk. (Many grocery store franchisees (and managers, where permitted) are more than willing to sell large quantities to *civilians* at cost. It inflates their sales and their basket size, both critical measures to head office types, even more so than margin, believe it or not.
Ford can try, but he's unlikely to get a better deal than the city's getting already.

Ken Breadner said...

Forgot to mention at least some goods will be purchased wholesale or possibly even closer to source, driving costs down even further...