Human Resources Committee on April 15th, 2008

[Katherine Scott]

Are you asking what types of items might be included in a deprivation measure, that sort of thing?

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

The comment was that we're not seeing malnourished kids. It's not malnutrition; we're not that deep, but there are social exclusions. So what are some of the basic human needs? Perhaps you could highlight those and put them on the record.

[Richard Shillington]

I now wish I hadn't said that. I was referring to this poem. I'm not suggesting there's malnutrition.

There are a couple of examples of things you might think about. We know from surveys that there's very little income effect on accessing a physician, but there's a huge income effect in accessing a dentist, huge. The chances of accessing a dentist, if you're a low-income Canadian without employer health benefits, is exceedingly small, and you can see the effect when people reach age 20.

Prescription drugs. Yesterday's Globe and Mail had a horrible story about a child. If that child's parents had been employed by the provincial or federal governments, that drug would be covered, I'm sure. I don't know that for a certainty.

Health benefits. What are the things that we value, as credible people with good jobs that carry benefits? We value maternity benefits, we value drug plans, we value dental coverage--all of those health benefits that are subsidized by the treasury through the tax system. Those are generally not available to the working poor. Those are areas where you could take it over. If the employers aren't going to provide it, then do it.

I think we are heading for extraordinary inequality in the incomes of seniors, the disparity between the retirement income of people who had very nice pensions all their lives compared with the half of the population who retire with no pension plan and have average incomes of $15,000.

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

Okay. I'll throw it right back at you then.

I'm sure all witnesses would see some merit in a national program--I know we want to be cautious with the jurisdictional responsibilities, but a national program. I have people coming to my constituency office who tell me it boils down to making decisions as to whether or not to buy their medication or put food in the fridge.

Could I get your comments on a national program, pharmacare or a catastrophic drug program? You might want to weigh in with comments on that.

[Richard Shillington]

I'll jump in, because I actually did a fair bit of research for Senator Kirby, which was used, and I have actually in my paying life, my salaried job, done a lot of work on pharmacare coverage.

Generally the pharmacare problem is a maritime problem. You're talking about people who do not have coverage whatsoever, basically people who are of working age in the Maritimes. Actually, some provinces are now moving into that area, thankfully. I believe Nova Scotia and Newfoundland are. Many of the provinces have it. Certainly the prairie provinces have reasonable coverage, but the deductibles are extraordinarily high. You have $800,000 deductibles for a public plan targeted at the need, whereas I think your deductible is $60, if that.

So we have a program that is far less generous for the poor, which is standard. This is what we do with maternity benefits, child care, everything. The programs for the poor are less generous.

The federal government has an initiative around catastrophic drug coverage, but that's strictly for catastrophic. That's for your $4,000 to $5,000 drug care, and we're talking about life and death here, you know that.

So we move that ahead. What I would do is this, and I have no idea if it's in your jurisdiction. There are formularies attached to all these drug plans, and I would say that in each province the formulary for the publicly administered drug plan should be the same as the formulary of the person who administers the program--his employer health benefit. I've always liked to latch on to self-interest, which is why Canadians understand why we don't want two-tier medicine. The reason we want one-tier medicare is so we're all sharing the same program. And we don't do that on dental.

I have one last quick comment. This poem about kids is about hot dog days, it's about field trips. How early does a child who is low income in Canada learn that they're low income? I suspect they learn very quickly. If they haven't learned by the time they're in kindergarten or grade one, they learn there, when they discover that they're not going on the field trip or they can't take art.

Did I use his time? I'm sorry.

[The Vice-Chair, Bloc, Yves Lessard]

Thank you very much, Mr. Shillington.

Now over to Mr. Brown.

[Gord Brown, Conservative, Leeds—Grenville, ON]

Thank you very much, Mr. Chairman.

I want to thank our witnesses for being here today. I think many Canadians in their busy lives don't really think about a lot of these issues, and I'm glad this committee is doing this study. I think many of you have some good insight and can help us here.

I'm going to go to Ms. Scott first and go back to the question that Mr. Lake asked about support for those who presently are actually employable and maybe moving some of those resources to those who are unemployable. I know you didn't get to finish that question. Maybe you might like to do that for us.

[Katherine Scott]

I was going to speak about that example, and I certainly responded that I don't tend to see it as a zero-sum game. What that example said to me, as you were speaking about it, Mr. Lake, concerned the enormous number of disincentives that continue to be built into our income security programs, where your foster mothers would feel it was in their self-interest to continue, assuming they're making a set of rational choices.

I think that's true for income security programs across the country. For instance, a single mother would face the terrible choice of giving up her dental coverage or her access to a clothing allowance for winter. We were talking about what poor people go without. The answer is warm clothes for their kids, real boots to wear to school, and participation in a variety of things. We force low-income people who are reliant or dependent on income security support systems to make these terrible trade-offs all the time.

That was what I was going to say in response to how I heard your example of the foster mothers.

In terms of the question about whether we spend disproportionately, the idea that we're spending too much money on active labour market programs or training for low-income people, well, in fact that's not the experience in Canada. Canada stands out as actually having a fairly undeveloped training assistance and apprenticeship program, particularly for low-income people.

I think there's much to be done in both ways in offering supports not only for people on income assistance programs to participate in the labour market, but for those who would be able to participate in other forms of community life. I speak from my own experience of having a brother with a developmental disability when I speak of providing those opportunities to people to participate in their communities. We've really not done a very good job of that in Canada today.

[Dr. Glenn Drover]

I would like to add in particular one group, a very significant group: single mothers in this country, many of whom are unemployed and many of whom probably would like to be employed. The problem is not so much their willingness to be employed but the disincentives to employment in this country.

The other feature, I think, is that if you compare our training programs with some of the European programs, they have greater depth to their programs and they have greater longevity. Their programs run for longer periods of time. One of the things we have tended to do particularly with single mothers and people on welfare is to go for the quick job to get them off welfare and get them into a job, which may or may not last. So they cycle in and out all the time, whereas the Europeans have gone for the long term and, looking at the markets ahead, have moved toward middle- to high-end jobs as much as possible.

One of the realities with a lot of these single mothers is that they're reasonably well educated. The problem is the care of the kids and other kinds of things they have to deal with, as well as the family supports that are necessary to get them into the labour force. So you have a large significant group there who are not currently being touched in any realistic way.

[Gord Brown, Conservative, Leeds—Grenville, ON]

Thank you.

I have just one more quick one for Ms. Scott. You said that some places in the U.S. have exemplary poverty programs. Maybe you can tell us where and quickly give us a little bit of a background on them.

[Katherine Scott]

Certainly the literature on poverty programming describes extraordinary experimental design programs in the United States. Obviously their early head start programs, for instance, led the way in terms of identifying types of supports for poor kids--integration for school dropouts, zones where they're really tackling school dropouts in certain American inner cities. But what happens is that you'll have these fabulous experimental designs, one-off programs, but they've never been able to scale them up or ramp them up, partly because of the scale involved or the lack of other public infrastructure that would support these types of initiatives.

[Gord Brown, Conservative, Leeds—Grenville, ON]

Where would one of those programs be that we might be able to do a little bit more research on?

[Katherine Scott]

It would depend on what you're particularly interested in. I can follow up with you later, if you are looking at school dropouts or training programs for low-income workers or those sorts of things. It's an interesting feature of the United States that some of the best thinking is brought to bear there but that their public systems don't tend to support it, so they actually have quite long-term persistent problems with poverty.

I can follow up afterwards with a particular example for you, if you would like.

[Gord Brown, Conservative, Leeds—Grenville, ON]

Okay, thank you.

[The Vice-Chair, Bloc, Yves Lessard]

Mr. Martin has the floor now.

[Tony Martin, NDP, Sault Ste. Marie, ON]

I'd be interested in that too, so make sure everybody gets that.

I wanted to get back to this issue of definition and the federal role and how we might put something in place here, a framework of some sort that would make sure we are allowing everybody in Canada to participate, but that we're measuring what we're doing so that we know whether we're having success. I wanted to go to Mr. Shillington because I missed out last time. Mr. Shillington had some disparaging remarks to make about this notion of defining or finding a definition and of the time we spend trying to find a definition.

We've heard this morning across the panel that perhaps a composite poverty line or a suite of indicators.... We kind of did that a little bit, but I think we got ourselves into a place that really, in my view, wasn't very helpful in that we moved from LICO to this notion of market basket that Mr. Sarlo has promoted. He'll be coming next week sometime, or very soon, and we'll hear from him.

But I'd like to hear from Mr. Shillington on his notion of what would work in terms of definition and what the federal role should be in this whole exercise.

[Richard Shillington]

Thank you.

Somebody here said that all poverty measures are relative in that even the market basket we have today is different from the market basket in Pakistan, different from the market basket we had 20 years ago. Actually, to me the critical issue--one that nobody has mentioned--is with regard to when the market basket is adjusted, if you accept that should happen, to reflect the living standards of Canadians in general. If our standard of living goes up 20%, does the poverty line go up at all, or is there no influence? Some people would argue that there should be no effect. Other people would say, no, we're richer; our obligations to the children change.

A critical question, because actually it's political, is whether that adjustment is automatic or ad hoc. The low-income cut-offs are called “relative” because every once in a while they get re-based. That's what makes them relative. If they're not re-based, they're not relative. They're back to being an absolute measure of poverty, where the standard of living doesn't change in time.

The low-income cut-offs were started around 1968. They're re-based every seven or eight years. As you well know, they have not been re-based since 1992, which is one of the reasons why reported poverty--if we use LICOs for poverty, even though we're told we shouldn't--is going down. It's because they haven't been re-based. If you re-based them, I guarantee you the poverty rate would jump.

Statistics Canada, basically on its own, as far as I know, decided not to re-base it. It decided on its own to turn a relative measure of poverty into an absolute measure of poverty.

The market basket measure of poverty, created by HRSDC, was created at the behest of the provincial ministers of social services because they thought LICOs were too generous. I'm not just saying that; I can show you documentation where that's said. It was designed to reflect living standards of low-income people, not general living standards. That was part of the control. So it's not a relative measure of poverty, it's a measure of poverty for the poor. And changes to that basket will be subject to the approval of the provincial ministers of social services, who set welfare lines. That's a wonderful system for them. They can control welfare rates and they can control the poverty line against which they're compared.

The question is, who gets to do the adjustments? Nobody has really talked much about the low-income measure--effectively the half-median--that's the international standard for a developed country. You heard evidence last week that there is no international standard. I disagree; it's LIM, the low-income measure. The problem is that the LIM doesn't do geographic adjustments at all.

So I would recommend, if I had to come up with a poverty measure, the half-median with some reasonable adjustments for geographic differences in housing costs, the way MBM did. I would recommend that it be adjusted not ad hoc, not subject to the ministers of social services, but annually. That would be my preference.

[Tony Martin, NDP, Sault Ste. Marie, ON]

Thank you.

[The Vice-Chair, Bloc, Yves Lessard]

We could stop there, but first, if my colleagues will allow me, I would like to bring up a matter that was not dealt with...

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

On a point of order, Mr. Chair, you say that this wraps up our hearing, but we definitely have time for one more Liberal-Conservative round, as written in our routine motions. We might as well use the full amount of time. Can we do that?

[The Vice-Chair, Bloc, Yves Lessard]

We have seven or eight minutes left, Mr. Lake, and we have to be out of the room a little earlier because another committee is going to be meeting here at 11:00 a.m. We can have another round, but we will likely be rushing it a little.

Do you have a question, Mr. Lake?

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

Yes, I actually do. Is that okay?

My question is for Mr. Shillington, because we've had a lot of talk today about there being no need for measures and of the need for measures maybe being overstated. Mr. Shillington, in your initial opening statement you referred to an example of a woman from Quebec who, by different measures of poverty, would be defined very differently in terms of percentage. I think it was 65%, and you went down to 5% based on a whole bunch of different examples.

Now, as I explained before, as MPs we're asked to be stewards of Canadian taxpayers' dollars, and of course there are no real federal dollars. The federal government doesn't have a pot of money that is just the federal government's to spend. It's all Canadian individuals' money. As stewards of those dollars, when we're talking to our constituents and we're justifying the decisions we make, we have to be able to explain why we would take money away from one person--a taxpayer, one of our constituents--and give it to maybe not a taxpayer but to another Canadian citizen. There has to be a reasonable justification. That's why it's important that we have measures. If you don't have measures, or if measures aren't important, how do you make these political decisions?

I would actually ask this question of everybody, because I think all of you have touched on the fact that the need for measurement is somewhat overstated. I'd like to hear how you would make those decisions if you were in our position.

[Richard Shillington]

My comment about the debate over poverty lines being a diversion was based on having appeared before committees like this for more than 20 years and seeing, basically, much more debate about what we mean by poverty than debate about what programs could be put in place to improve the well-being of seniors.

For that group of senior single women in Quebec, those are federal programs, the OAS and GIS. You're right, you have to be accountable. But if I were to argue that we should increase the GIS to help that woman, I'm sure I would be asked how much that is going to cost and told that we can't afford it.

The GIS program costs $5 billion or $6 billion in total. The cost of subsidizing the pension incomes and the RRSP incomes of people who will never be in need is measured in the $20 billion range. For every dollar we give to a poor senior--I can document this--we spend four or five public dollars through the tax system subsidizing the incomes of people who will never be needy. I don't understand why every single time I talk about how we could improve the well-being of low-income people who are needy I get questions about the cost, when it's so easy for us to bring in pension splitting, increased age credits, and increased pension credits for people who are not needy and never will be.

[The Vice-Chair, Bloc, Yves Lessard]

Thank you, Mr. Shillington.

i am going to let Ms. Dhalla ask a quick question, but then I would like us to wrap up because the next committee is going to be telecast and webcast. So we have to let the other group set up.

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

Mr. Shillington, I'll just start off where I originally started with my question, which you never had time to answer, on the impact of early learning and child care on poverty. You had spoken very eloquently about improving accessibility to programs we have for seniors, such as CPP and GIS and some of the other programs. What are your thoughts with regard to child care solutions that are needed to address the issue of poverty?