Human Resources Committee on April 15th, 2008

[Shawn Murphy, Liberal, Charlottetown, PE]

Thank you very much, Mr. Chairman.

I want to thank everyone for the presentations.

This is a very important and broad topic, and this committee will be looking for policy instruments. But it also has to be somewhat respectful of the jurisdictions we are involved with. Some of the instruments, I believe, have worked to a certain degree--they're not perfect--such as the child tax credit and the guaranteed income supplement. When I look back, there are a number of different cohorts, whether it's aboriginals, the disabled, and so on. One of the groups I see out there is unattached individuals, mainly between 55 and 65 and probably predominantly female. There are health issues, predominantly self-esteem, whatever you call it. Those people are on provincial social assistance right now, which is totally inadequate for any kind of dignified living. It's an extremely small allowance, and it's just not acceptable in this century in this country. Again, that's a provincial jurisdiction.

Has there ever been any empirical research on taking the guaranteed income supplement and taking it back to cover the 55- to 65-year-old cohort? What are the costs, the merits, and the obstacles in such a scheme?

[Richard Shillington]

I have a couple of comments.

I happen to know that there are about 150,000 people on welfare in Canada who are 55 to 64. I just have a habit of remembering numbers. We know that most of them are probably not going to bounce back into a job. The welfare regulations will strip them of any assets and any hope of improving their circumstances, so this is probably, I would say, serving no useful purpose.

I mentioned in my presentation, and I'll come back to it, that there's a widow's allowance program, which is for people who are 60 to 64 who meet an income criterion, and it gives them about $13,000 a year. It's not a lot of money, but it is perhaps double what they would get on welfare.

There are about 20,000 or so people getting the widow's allowance. There are about 120,000 people, single people on their own, who meet the income criterion for the widow's allowance but who don't happen to be widowed. There has been a Supreme Court challenge of the widow's allowance on the grounds of marital status discrimination. There's a perfect example of what you're talking about. The federal government is already giving it to widows but not to single, divorced, or separated people. Those people, if they're on welfare in Ontario, would be eligible for $6,000 a year, serving no useful purpose.

I know that the Caledon Institute published a paper recently on the cost of making the widow's allowance broader. So there are some papers out there, and there's a precedent with the widow's allowance.

[Shawn Murphy, Liberal, Charlottetown, PE]

That also goes to my second issue. Have there been any studies done on...? We all know that income level is one of the determinants of health care costs. Once you're in that 55- to 65-year-old bracket, you're into increased health costs. Has that ever been analyzed as to possible decreases in health care funding from a provincial point of view, which in some provinces is coming close to 50% of their budget?

[Richard Shillington]

I'd like to make a quick comment. There may be data, and I'm not aware of it, but I'd hate to think that we would provide health care only if there was a cost-benefit analysis that makes it a positive return.

[Shawn Murphy, Liberal, Charlottetown, PE]

No, but it should be taken into consideration in the discussion because it is a determinant of the....

[Richard Shillington]

I take your point, but I think you understand what I'm saying as well.

[Shawn Murphy, Liberal, Charlottetown, PE]

For this committee going forward, are there any international examples the committee should be looking at? I know that Canada is a unique country. Is there any country this committee should be looking at as an example, where they have taken this issue and, through public policy, taken some constructive steps?

[Dr. Glenn Drover]

Fifty-five to sixty-four...?

[Shawn Murphy, Liberal, Charlottetown, PE]

No, generally speaking.

[Dr. Glenn Drover]

Well, I can start the discussion on that.

I think there are several countries in Europe.... The committee would well know that the Scandinavian countries in general are quite ahead of us in this regard while maintaining high economic growth. Both at an economic level and a social policy level, they set a kind of standard. In addition, England, certainly during the Blair administration, moved quite dramatically to address a lot of these issues, some of them successfully, some of them less so, but nevertheless they did experiment and have come up with some measures of success.

It so happens that Wendy Thomson, who is one of the people who headed up that initiative in England, now lives in Montreal--McGill University. It might be worthwhile talking to her to get some better sense of what's going on and what went on there. She certainly is in touch with what's going on there currently, so you'd have a good sense from that.

Other initiatives have been taking place, both in France and in the Netherlands, in terms of these kinds of initiatives now. France has run into a lot of difficulty because of their income security programs--the high level of them--and as a consequence, they are trying to get people back to work, and so on. Again, one of the programs there that have been relatively successful is for employment of women, particularly middle-aged women.

One of the problems you talked about is not only the 55- to 64-year-olds, but particularly when you get down to the lower ranges there, women still can contribute quite significantly to the economy, so you don't have to write it off as an income transfer there. Perhaps with the 60- to 64-year-olds that's the case, and I would agree with what Richard said earlier, that the allowance and trying to extend that down to single women and so on would probably take care of that cohort.

Generally I would say most northern European countries have welfare systems that frankly, on the whole, are not much better than our own, but they have far fewer people on welfare than we do. And it's because of these other kinds of initiatives, particularly employment market initiatives and other kinds of income transfers for family and child care, that they keep people out of welfare, including these people you were talking about.

[The Vice-Chair, Bloc, Yves Lessard]

Thank you, Mr. Drover.

We now move to Mr. Gourde.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

Thank you, Mr. Chair.

I would like to take the opportunity to thank our witnesses for being here and to congratulate them for their comments.

I would like to give each one of you the opportunity to tell us how we should measure the poverty line. Should our vision be national or provincial? For young people or for elderly people, do we have to consider various sectors? There are also the working poor who cannot make an adequate salary in their jobs.

Could you give us a magic formula or recommend a way in which the line can be calculated?

[Katherine Scott]

I don't have a silver bullet. My earlier comment was that I don't think we have a single poverty measure silver bullet. One measure won't do all of the tasks that we need. But I would recommend, on your question of whether we need a national measure, that it's very important to have a set of national measures that can be used to assess the well-being of people living in Corner Brook and those living in Prince George. I think it is important in a country such as Canada to have standards and measures, like the unemployment rate, GDP, and the like, that are broadly applicable across the country.

I think we do need relative income measures like the LICO, and we can debate the pros and cons of the particular methodology, but that's important. It tracks low income and income inequality. But I would argue that we need to continue to develop a series of deprivation measures, whether it's the MBM or a list of.... For instance, New Zealand has developed a very interesting living standard index over the last decade as part of their social report, which would be very interesting. It would provide more of a direct assessment of people's access to basic goods and services, in some ways similar to some of the measures we have around housing.

But following up on Glenn's point, it would provide a more direct assessment of people's actual living circumstances. I think that would be hugely useful, certainly in a policy and program context, and such a measure could be developed at a provincial or a community level.

I made this case earlier around the United Kingdom. One of the things that have happened in the United Kingdom is that they have made a significant investment in data development and measurement at the local level. They have an extraordinary website, their neighbourhood statistics website—and I can leave the address with the clerk. For 32,000 communities in the United Kingdom, which is extraordinary, they provide incredibly detailed information about community living circumstances and material deprivation in those communities and compare them--actually their status or their ranking--with other communities in the U.K. They call it a swingometer, which I think is a funny term. A resident member can log into this website and find an incredible range of information. But it took the national government in England making that decision around poverty, prioritizing it, and making the investment in data development and measurement, so that 10 years later they have these data that are tremendously useful.

I would recommend a suite of measures. Canada needs to look at creating a deprivation or a living standard index, which I think would be tremendously useful to do.

[Dr. Glenn Drover]

I would just add two things to that.

One, I think the advantage of composite measure is that it allows for differentiation across the country and allows you to take into account the diversity, whether in Quebec or elsewhere. Two, I would say that all poverty measures are ultimately relative. They're always going to be debated, and that debate won't go away.

The advantage of composite measure is that you take into account more things, therefore you take into account more people's perceptions and attitudes. I think that has been the gain in those countries that have moved in that direction. It isn't so much that they have significantly come down and that poverty levels are vastly different. In our study--and you have the report--we compared several countries with Canada in terms of the income transfers and the income levels that were acceptable under LICO and other types of measures. They vary quite a bit across countries, but you can also get some commonalities.

On the deprivation measures that Katherine referred to, the research was done particularly in England on this. One type of measure tended to reflect certain kinds of differences, but there were also some commonalities with the income measures.

So we're not talking about things that will be widely disparate. We are talking about diversity in order to enhance a better understanding of poverty among the Canadian public, as well as among politicians and others who have to implement some measures to address those questions.

[The Vice-Chair, Bloc, Yves Lessard]

Thank you, Mr. Drover and Mr. Gourde. That is all.

We now move to Mr. Cuzner. I am sorry; actually, we are moving to Mr. Ménard.

[Réal Ménard, Bloc, Hochelaga, QC]

Mr. Chair, you know how accommodating I am. Accommodating, but not docile.

I would like to bring up something that seems important to me but that we have not yet dealt with in this debate on the fight against poverty. This is the matter of financial services.The National Council of Welfare has discussed it in its earlier reports.

Could you talk to us about access to microcredit? I come from a constituency in Montreal that is chronically disadvantaged. Where I come from, getting $300 or $400 to buy a household appliance, or to have one repaired, is extremely complicated. Banks are conspicuous by their absence in my area, and, if you can find one, they do not want to get involved with small loans. The credit unions will, but very reluctantly. The ACEFs have organized projects along these lines to help this segment of the population.

Several years ago, I went to the United States to study their Community Reinvestment Act. I was very surprised to learn that, in a society like the United States, financial institutions have had to report to an institution comparable to our Office of the Superintendent of Financial Institutions since 1977. They actually have to describe the way in which they plan to serve disadvantaged groups like the Hispanic and black communities with microcredit loans.

It seems to me that we cannot produce a serious study without recommendations on microcredit loans, and the role of financial institutions could play. If any of you would like to express ideas or make recommendations along these lines, I would love to hear them.

[Richard Shillington]

I don't know anything about it, so I wouldn't want to say anything.

[Dr. Glenn Drover]

I don't either, unfortunately.

[Drummond White]

I was on the board of a credit union, and I certainly know that in the north of Ontario and in Quebec there are many caisses populaires and credit unions that are very active in those areas. The idea of making a federal obligation for access to micro-credit makes a great deal of sense to me.

I'm speaking here on my own behalf, not on behalf of the CASW.

Thank you.

[Katherine Scott]

We haven't done any research on that particular area. We certainly know that since the mid-nineties the National Anti-Poverty Organization has lobbied the federal government, in its role as a regulator of financial institutions, to widen the accessibility to financial services by poor individuals. There's been some progress, but it remains very problematic. Some provinces are only now taking steps to regulate pawn shops and the predatory lenders and cheque-cashing services. The United States is much further ahead, and has for a long time, as you pointed out, required financial institutions to create that support.

There are a number of foundations in Canada, for instance, that work on first nations reserves and in developing countries. They have great expertise around micro-credit. They have used that in community economic development as a standard tool. It's an important area that we need to look at, particularly as it pertains to financial literacy and exploitation.

[Réal Ménard, Bloc, Hochelaga, QC]

Is my time up, Mr. Chair?

[The Vice-Chair, Bloc, Yves Lessard]

You have a minute and a half left.

[Réal Ménard, Bloc, Hochelaga, QC]

Praise the Lord, Mr. Chair.

Some automatic bank machines charge fees, $1.50 or $2 per withdrawal. This government's Minister of Finance is worried about these fees himself. As federal legislators, we could at least intervene with financial institutions. Some machines are not associated with a big bank, we know that for a fact.

Furthermore, we could amend the Bank Act to require the banks to report on the way in which they respond to the need for microcredit for the less fortunate. Those matters are clearly in the federal government's jurisdiction, it seems to me. It could be done quite easily. In 1995, the Bloc Québécois tabled bills along these lines. We have also raised the concerns whenever we could in the reports of the Standing Committee on Finance. That is all I have to say.

[The Vice-Chair, Bloc, Yves Lessard]

Thank you, Mr. Ménard.

Now we move to Mr. Cuzner.

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

Thank you. I'm going to try to get three questions in here.

I want to thank the witnesses as well. There has been excellent sharing of information here.

With material deprivation measures, I'd like to get some sense.... My colleague Shawn Murphy and I had this conversation, that when we grew up we both lived in communities where there wasn't a great deal of affluence. Everybody was poor and some people were dirt poor. Obviously society has changed considerably over the last number of years, but what are some of the basic needs that people aren't able to meet right now in today's society? What are those basic needs that poor people aren't able to meet?