Thank you for the question.
I think something like a working income tax benefit will have its place in a strategy to try to address low wages and low skills, but it's only part of the component. Really, poverty reduction needs to be seen as an integrated part of economic development as well as social development.
Let me give you an example. What needs to happen is not just to raise the incomes of low-wage working poor but also to raise the skill content of the work they do and the actual pay they get. In fact, you build the right kinds of incentives for Canadian business so that they will pursue a high-scale, high-productivity track that provides good jobs for folks. So things like ongoing training and stuff like that would be an important part of that.
I say the working income tax benefit has a place because if that becomes the only tool we have, it can, in effect, subsidize a low-wage, low-cost strategy.
A recent study by the Canadian Policy Research Network points out that one of the most troubling aspects of Canada's economy is that the competitive human resource strategy of too many Canadian firms is based on a low-cost, low-value-added approach and that this approach perpetuates a low-skill, low-wage equilibrium in which neither employees nor employers demand higher levels of skills. What I'm suggesting is that we need a mix to raise the wages of low-skilled workers, and we don't want to just keep them in low-skill jobs.
An example is among hotel workers in Toronto. The Unite Here union and the Royal York Hotel have teamed up and negotiated an agreement where the chambermaids, the janitors, etc., can receive training from local community colleges to upgrade their skills and actually move up the career scale. We're not just supplementing their wages but actually increasing the skill and productivity of their jobs so that they can sustain higher wages. Some of that can be funded using EI funds for training and things like that. It will cost money, but there may be some less costly ways to implement that.