Human Resources Committee on April 10th, 2008

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Mr. Chair, on a point of order.

You mentioned immigration. I'm curious to hear him elaborate on that too. He went through three things, but there are actually four things we're talking about.

[Garnett Picot]

As Sylvie pointed out, we observed—lots of people, lots of researchers have observed—that outcomes for recent immigrants, and immigrants in general, have been deteriorating since the early 1980s. That's in spite of the fact, as I think you probably all know, that the educational attainment of immigrants has risen dramatically. About half of the immigrants who come to Canada now have a university degree. Back in the early 1980s, that was about 17%. So there's been a tremendous rise in educational attainment.

Many more of them are now in the economic class; that is, they're brought in for economic reasons. You'd expect things would improve, given those kinds of changes, but in fact they continue to deteriorate.

People have been asking why. Through the 1980s and 1990s, a lot of it had to do with what economists refer to as “declining returns to foreign experience”. When you enter the labour market, if you have some work experience you expect to be rewarded for that. What we were finding with immigrants was that that used to be the case before 1980, but during the 1990s that totally disappeared. So an immigrant entering with some foreign experience basically receives zero benefit for that. And that was one of the major reasons why we saw this decline in outcomes.

Another one was that labour market entrants, in general, through the 1980s and 1990s, were having a tougher time. For instance, we saw the earnings of young males fall in the labour market. Recent immigrants are, in a sense, just a special case of a new labour market entrant. So they got caught up in this tendency toward poor outcomes for labour market entrants.

That was true in the 1980s and 1990s. Post-2000, we were hoping, frankly, to see some improvement in outcomes for entering immigrants and we didn't see it. There, the reason is quite different. Sylvie has already alluded to the fact that it had a lot to do with technology and engineering.

Through the late 1990s, we started to bring in a lot of engineers and IT workers, information technology workers, in response to the demand for labour. Through the late 1990s, you'll recall the high-tech boom. During that period there was a lot of demand. And then suddenly we were hit with the high-tech downturn, post-2000. Since immigrants were so highly concentrated in these two professions, engineering and IT, they really got hit by that downturn, and it seems as though they haven't recovered. So that's a big part of the story post-2000.

I'll leave it there.

[The Vice-Chair, Liberal, Michael Savage]

Thank you, Mr. Picot and Madame Michaud.

You mentioned you might have some new information in May. I would encourage you and any other witnesses who have information that's updated, that's new from when you testified here today, to please give it to us. We're particularly interested in any information, as current as we can get, that you have on this issue.

Thank you very much.

We're going to move to the National Council of Welfare, Sheila Regehr, director, and Diane Richard, researcher and policy advisor. We look forward to hearing from you. Thank you for coming.

[Sheila Regehr, Director, National Council of Welfare]

Thank you.

I would just add that Diane is our expert on welfare incomes, which is one of the things we haven't touched on yet.

On behalf of our chairperson, John Rook in Calgary, and the members of the council, I want to thank the committee very much for this opportunity and really commend your efforts to find solutions to the tragedy of poverty in this rich country.

As others have said, 10 minutes.... I'm going to have two sentences on everything too. These are quite complex matters. I'm not going to give you a lot of statistics. We're well known for this. You'll see some of them in your package; you've heard a lot today. So we're not going to do that, but of course we'd welcome any questions or further explanation you might have on the presentation, or any of the numbers in the extensive package we've provided.

I'm assuming you're generally aware of the council's history and its publications, including the regular poverty profile and welfare income series that we've been putting out for about a quarter of a century, and our recent report on solving poverty, which really turns things towards finding solutions.

So I'll draw on these and the work of lots of other people as well and offer some insights into what I understand are the key questions that are of interest to the committee. There are basically five areas: the current situation in Canada; populations most at risk; federal roles; a bit about measures and indicators; and some discussion of financing the solutions.

First, let's look at the current situation. As others have indicated, we have to begin with the essential question of what is poverty. There are lots of statistical answers. I won't go into that because others have covered it. But I want to highlight the trends they talked about as to the difference between what has happened with seniors and with the rest of the population, and not just from a statistical perspective, but to look at that from a policy perspective, because in this case we can see very clearly what the policy impact has been on this population. It's much harder to determine what impact different policies are having on other populations. We hear about much of the money that's going into them, but we really don't know how the outcomes are following through.

So beyond the numbers, I want to focus a bit about what we're really talking about in human terms, and it's a continuum of problems. People have talked about “depth of poverty” and “persistence”. People have been looking to Ireland; they have something called a “consistent poverty measure”, or something like that. And we've been hearing different terms and different things. They're all part of the continuum of poverty, misery, insecurity, inequality, exclusion, and even desperation. So I'm not going to go through them all, but in the presentation there are some example scenarios. I didn't put any labels on them, but they give you some hint at real lives and real individuals and how different their circumstances are.

One of the things I'd really like to highlight is the difference between the seniors and most of the others, in relation not just to their level of income but to the security of income and the source of income and how that affects their dignity and their ability to do anything about their circumstances.

One of the most striking things I've read lately--and it's why I included it as an example, and I've heard it from several sources--is how worried people are about aboriginal gangs. There are very clear reasons for that, which we can see if we look beyond the numbers.

Another part of the problem, as I mentioned, is figuring out why we're really not getting results when we've got so many programs and we're putting so much money into things. It seems that's where we really need to focus now.

So one of the things that the National Council of Welfare did in 2006 was to run a questionnaire about poverty and income security. We got a wide range of responses, and they indicated that this array of programs is working. There's no magic about it. There is an array of programs that are really important, some more so than others. Some are really not working, and social assistance tops that list outstandingly. There's no comparison. But student loans and employment insurance follow closely behind as areas that are important valued assets for Canadians, but they really needing improvement.

Aside from direct income support--and we have to look at poverty as income and other things as well--there's a range of social programs and services related to housing, child care, wage laws. All of those things were highly valued as well, and many of them are also in need of improvement.

So in brief, there's no doubt that we have a complex, persistent problem, but we also have elements in place to help us find the way out.

I want to say just a few words about populations most at risk. Again, my first paragraph is irrelevant because it's already been stated. We know statistically who they are. But sometimes we run into the trap of looking at these people as the problem when we do it that way, so I'd encourage the committee to turn around and look at it on its head, look at it in a different way: what factors are putting people at risk? The answer to this is a little bit different, because it includes things like racism and gender discrimination, violence, divorce, illness, accident, disease, low wages, lack of education or qualifications—many of the things we've talked about. Having a child is an economic risk to women, much more so than to men. We really don't have a serious program addressing that.

Another important point is that risk increases when multiple factors are involved. It's not very often just one thing that's going to tip people over. I think it's also important to highlight that almost all of us are part of this lottery. I think if we start asking friends and relatives, it becomes really clear, because it's really often some trauma or some series of incidents--again, not often one thing but a series of things. It doesn't take long to fall into poverty, and to fall into deep poverty, in this country now, given how easy it is to not qualify for employment insurance. Having to quickly go to what should be the last resort is too often becoming the first resort for many people.

We talked about demographic trends. We talked about the maturation of CPP and OAS, and how important that was to the question of poverty in seniors. But the other trend that's really key there is women's earnings. That's huge, and it's a demographic change that has to do with other programs related to employment equity and child care, and things that many women feel are threatened now. So in many respects the two-income families become a de facto social safety net, and if you don't fall into that, you really are vulnerable.

I want to concentrate now on federal roles, and I think there are several.

I'm conscious of the time. I'm taking a little bit longer than I thought as well.

[The Vice-Chair, Liberal, Michael Savage]

Take what you need within reason, but keep in mind there will be questions as well.

[Sheila Regehr]

Agreed. Yes, I've got a lot to cover, and it's going slowly, it feels to me.

There's a lot in the work the National Council has done on solving poverty that looks at things more from a governance model, which means that anything in there applies to any order of government or even communities. Most Canadians, when we talked to them about these things—we thought they were going to be considered esoteric or too complicated or something—understand, too, that you have to have a vision of where.... Even at a household level, when you're raising your children, you have to have a vision of what you want down the road. You have to have some plan in place to get there. You have to assign some resources. You have to figure out who's responsible. You have to do all of those things. You have to involve the people. As your children get older, you involve them in your own plan for their future.

All of these things are important, no matter at what level of government. So solving poverty, as people have mentioned, is a national issue. The federal government has to be involved if it's going to work.

It's also really important, I think, especially for the federal government, to recognize that people who are already marginalized have to be involved and that poverty has to be seen, as most European countries see it, in the context of larger social and economic objectives, not something on its own.

I want to reinforce that Canada has already made commitments in human rights instruments, both nationally and internationally, to do the work that most poverty advocates say needs to be done. Leadership also involves recognizing a good idea and running with it. The federal government did this with Tommy Douglas's idea for medicare, but it wouldn't have happened on a national level if the federal government hadn't picked it up. CPP is a similar kind of situation. Another leadership role is that you don't have to be the first out with the good idea, but the support and the championing matters.

I won't talk a lot, either, about the direct action role the government has, because my colleagues here in HRSDC have talked about that. I think one of the things we really have to look at carefully, and I understand some committee members are doing this, is the role of the income tax system. That deserves a little bit more mention, and I think I'll talk about that later, in the next section.

Again I want to stress that income matters, but income can't replace services like health care or a child care system, just as individuals are never going to build the system of highways. So that matters tremendously.

There are many areas. When I started outlining this presentation, I thought, “Okay, let me see, where are the direct federal actions and where are the really, really clear provincial things?” It's not clear, and it's not clear to most Canadians. Quite frankly, most Canadians we've heard from are just fed up with how complex it is. It's more and more complex the less and less income you have, because you don't have anybody to help you sort it out. So that really matters.

On measures and indicators, a lot has been debated. I think our bottom line on this is that there's been enough talk. Let's pick a small selection. Let's just decide, do them, learn as we go, get better, and have some official measures. The council would agree that this is not Statistics Canada's role; this is part of our governance structure, and governments need to decide that.

There's also a role for things like the kind of reporting the employment insurance system does, so you know who's getting benefits, how much they're getting, who qualifies, who doesn't. We get a sense of what kind of impact this is having. I think something similar to that in many more program areas would be valuable, and that leads directly into my final section, which is about financing the solutions.

Here we would encourage the committee members to read our Cost of Poverty report. There's a more recent example that's very interesting as well that the United Way of Calgary has done on the external costs of poverty, and by “external” it means that this is the amount of money it takes, not to pay welfare recipients but to pay for the costs of increased crime, obesity rates, diabetes, and health care problems. And things that we don't prevent come back to haunt us later on, so I think sometimes we don't do a full enough accounting of things.

I also want to give a few examples of how we need to think of it outside the box. There are good examples of things we've already done, which some of us know about but which are not well known. One that strikes me is a study I know about lone parents, which was done by Gina Browne at McMaster University. She found, I think, rates of something like--and don't quote me on this--80% for clinical depression among a group of lone parents she was working with in this particular project. They looked at what kinds of different solutions there were. The obvious one would be to send these people into the health care system and to psychologists and psychiatrists, and that would cost a fortune. What they discovered was if they could get their son into a football program, or if they could get their daughter into a ballet class, and somebody else looked after their child for a few hours a week, their mental health problem was not a mental health problem. So we really need to ask the right questions.

The NCW's Justice and the Poor report, I think, is really valuable too. We didn't bring it, but it's one of our most highly requested publications, and we're almost out of copies. It shows just how easy it is when you're poor to get incarcerated, and then your learning comes from all the other criminals around you. It's quite astounding how that perpetuates the kind of thing we don't want, whereas prevention would save us all a lot of money.

The last example I want to give is a series of examples. This is a publication from 1976, so all of the data in it is obviously really old, but it's called The Hidden Welfare System, and the subtitle is about the personal income tax system in Canada. It shows that compared to how much money we distribute in welfare to the very lowest-income Canadians, we're distributing so much more and so much more security to people who already have lots of resources.

In terms of financing the solutions, I think there's a combination of things that includes better planning and policy design, some reallocation of resources, and some new investments that provide a good return over time, which actually result in cost savings. One of the arguments the Calgary United Way paper makes is that no matter what you feel about the causes of poverty--and you may feel that a lot of people have brought their own misfortune upon themselves--the cost of poverty is so high to so many people that finding solutions is worth it to you.

It really is about values, about vision, about leadership. What we need as a country can't be accomplished by individuals, families, charities, or communities, even though all of those things are important. Ensuring that ordinary citizens are treated fairly and can live with decency and respect is the responsibility of democratic governments.

Thank you.

[The Vice-Chair, Liberal, Michael Savage]

Thank you.

Ms. Sgro.

[Judy Sgro, Liberal, York West, ON]

The presenter mentioned the Justice and the Poor report. Could she forward one of those reports over to the clerk, who could copy it and distribute it, as they're running out of copies?

[Sheila Regehr]

We'll try to get one of those. I also have two copies, one in English and one in French, of the The Hidden Welfare System. This is all we have left too, except for a few copies in our archives. We can leave these with the clerk.

[The Vice-Chair, Liberal, Michael Savage]

We can make copies of those and give the originals back, if you like.

Thank you very much, Ms. Regehr and Madame Richard. I want to commend the work the national council has done on this. The information you've given us is very good. I'm sure our researchers have seen that it identifies some of the jurisdictions that have done work, and the work you did last winter on that, so thank you very much.

Thank you all for the work you've done and the presentations you've given.

We'll now go to questions from members, and we'll start off with Ms. Dhalla from the Liberal Party.

[Ruby Dhalla, Liberal, Brampton—Springdale, ON]

I think it's going to be Mr. Cuzner.

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

I can start off, Mr. Chair, if I might. I'll go with a couple of quick ones, and then I'll turn it over to my colleague.

I think it's a great start to this very important study, and I thank all the witnesses for their presentations this morning. They were very informative.

Just on measurement first, Mr. Fedyk, does the market basket measure include heating costs as well?

[Frank Fedyk]

That's under housing costs. I'll ask our expert, Mr. Murphy, to elaborate on what's in the basket.

[Doug Murphy, Assistant Director, Economic Security Policy, Department of Human Resources and Social Development]

Yes, we can certainly provide you more detail, but it does include various costs of living, which would include heating. It includes shelter costs, heating, food, clothing, footwear--

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

It wasn't spelled out with the heating, and heating seems to be the most volatile of the inputs for people at that level.

[Doug Murphy]

We'll provide the committee with a finer breakdown of the composition of the market basket measure.

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

Great. Thank you.

Mr. Picot, regarding the measurements and their comparison with some of the other countries, are we using a close enough instrument so that the committee can be confident that when we're looking at the numbers we are comparing apples to apples? Are you comfortable with...?

[Garnett Picot]

That's a good question.

The measure everyone uses, and the one that I and other people have talked about, is a relative measure, which means it's relative to the median. So a country like the United States, which has a very high median income, is going to have a very high low-income cut-off, which means it's easier to be poor, if you wish, in the United States. You can be poor in the United States with a higher income than you could in, say, Denmark, because it's relative to the wealth of that nation, and the U.S. is a wealthier nation.

Some people have tried to move to a more absolute measure, and as far as I can tell, they found roughly the following. This isn't so much a low-income rate as it is what people earn at, say, the tenth percentile. That is, if you take a look at the people who are in the bottom tenth of the income distribution, what are their earnings--the people who are right at the tenth percentile, if you follow that.

Generally, what people have found is that when you do it that way, the Americans tend to line up pretty well with the Europeans. So although they have a higher relative low-income rate, when you look at absolute purchasing power, at the bottom end among the poorer families it's about the same in the United States as it is in the Nordic countries, for instance.

Is that okay? Are you with me on that?

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

Yes, I think so.

[Garnett Picot]

So the United States looks a lot better in an absolute measure--a purchasing power measure--than it does in this relative measure, because it's wealthier.

In the absolute measure, that is, if you're talking about purchasing power, Canada comes out looking pretty good relative to.... It's about the same as the United States and roughly the same as the European nations. So although we have a higher relative low-income rate, in terms of purchasing power, our poor seem to be at about the same level as the Europeans.

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

Okay. Thank you.

In regard to the low-income rates...declining among lone parents, single parents, is there a gender breakdown? Is there a gender reference on that?

[Garnett Picot]

The work we did was on lone female parents, single moms.

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

Just lone females?

[Garnett Picot]

Yes. We didn't actually look at males. We couldn't, because the sample wasn't large enough in the particular study. So those findings I talked about were really for lone mothers.

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

We do this in the Canadian way. They used to be called single moms; now they're lone-parent families.