Thank you very much for the opportunity to appear before the standing committee today on your pre-budget consultations.
The Nova Scotia Association of Social Workers is the professional association for 1,600 social workers in the province. We regulate and strengthen the profession and we also have a mandate to pursue social justice. Indeed, our code of ethics calls upon us to engage in social action. Social workers are well positioned to see the devastating impact of poverty on people's lives, and our collective experience as front-line workers has reinforced our resolve to push for changes that would create a more just and equitable society.
The theme of the committee's consultations this year is the tax system the country needs for a prosperous future. It is certainly a daunting focus for those of us who don't consider ourselves too well versed in economics; however, we believe we understand enough to be able to contribute to this discussion.
Certainly we understand the government has a vital role to play, both in mustering resources and, just as important, in providing leadership in building a political will to eradicate poverty so that prosperity is within reach of everybody in Canada.
In our remarks today we'll be focusing on five things. The first is poverty as exclusion. We believe Canada is already a prosperous country. In 2007 Canada recorded a surplus for the ninth consecutive year. In this context we believe there is plenty for everyone, and it's disgraceful that people are being excluded from the good life we all know is possible here.
Let's be clear: poverty isn't just about money; it's about a cycle that denies access to aspects of life that those of us who are well off take for granted, things like good health, a safe and affordable home, and a good education. The resulting inequalities are destructive. As the Canadian Policy Research Networks points out, they erode social cohesion. They lead to worse health and personal security outcomes. They lead to the withdrawal of the haves from the life of the community and the exclusion of the have-nots, and generally, inequality diminishes the richness and flourishing of a society.
To accomplish our vision of a prosperous future for all Canadians, it is essential to direct our efforts toward eliminating these inequalities so that everyone has an opportunity to fulfill their dreams.
Second is what it means to be poor. In Canada we also envision a need to recognize our collective responsibilities and to treat each other with respect. In this regard, we must be vigilant about the exclusionary impact of callous, negative, and dismissive attitudes toward people living in poverty. The Fraser Institute states in one of its reports that poverty means that people cannot afford all the basic necessities of life and must go to extraordinary lengths or do without. The extraordinary lengths they then go on to mention include borrowing or getting assistance from family and friends. Actually, it is important to understand that the extraordinary lengths people go to when they're living in poverty include using food banks, choosing between heating and eating, not taking medications because they're too expensive, living in substandard housing, eating poorly or not at all, and becoming homeless.
Another example of a negative innuendo about poverty can be found in some of the arguments in support of a flat tax because of the enormous positive incentives for hard work, savings, and investment. This notion implies that if you are poor it is because you do not work hard enough. In fact, living in poverty is really hard work, and this kind of negative stereotype is symptomatic of the unforgiving societal attitudes poor people have to endure along with their material hardship.
Third is what taxes are for. What has all this got to do with the tax system, you might ask. Essentially, we think the tax system provides a way to pay for public goods and services, including those that will alleviate poverty. This includes a whole range of things from public schools, universities, health care, libraries, safe communities, and the list goes on and on. Many of us think taxes are onerous. We celebrate tax freedom day with a mixture of resignation and glee, and yet we don't complain about the public services available to us as citizens of Canada, or if we complain, it's because we want to have more and better services.
An American author critical of the whole idea of tax freedom day commented that we have no moral claim to our pre-tax income, as that very income is made possible not simply by our personal efforts but by our participation in a broader system of social cooperation, the economy, which itself is made possible in part by taxes and the public actions they facilitate.
Fourth is how the tax system does not address poverty. The tax system provides ways for taxpayers to save--RESPs and RRSPs, for example. This is another area where poverty is exclusive, since those struggling to survive on low incomes cannot take advantage of these mechanisms. Other aspects of the tax system that disadvantage the poor include disincentives for saving and other forms of asset accumulation, retirement savings that render people ineligible for social programs, and tax credits that low-income earners cannot access. The Organisation for Economic Co-operation and Development highlights the benefits of structuring programs that allow poor people to accumulate assets, thus addressing what another author has dubbed the double standard in public policy: providing large asset subsidies for the wealthy but discouraging asset accumulation by the poor.
Finally, our recommendations.
The first one is to make poverty reduction an interim step and, ultimately, the elimination of poverty as a top priority for the federal government.
The second one is to understand poverty in its broadest sense of exclusion from the prosperity experienced by most Canadians. Devise poverty reduction and poverty elimination strategies that create an inclusive society.
The third one is to recognize that taxes have a purpose: the creation of financial resources that make inclusiveness and prosperity possible, and clearly articulate this purpose so that taxes are not just considered to be a burden.
The fourth one is to maintain a progressive income tax and do not institute a flat tax.
The fifth one is not to cut taxes unless this can be done without cutbacks to the social programs that were funded through tax revenues.
The sixth one is to revise tax structures that advantage wealthy people and disadvantage low-income people. Possible revisions would be refundable tax credits that are not clawed back, tax pre-paid savings plans, and social investments that make it possible for low-income people to accumulate savings.
We believe that collectively, as Canadians, we can all work to bring about a prosperous future, which we think was one of your goals in your pre-budget hearings this year.
Thank you.