Human Resources Committee on April 10th, 2008

[Doug Murphy]

Based on that definition of persistent poverty, that would be the case. There are a few ways of measuring persistent poverty. One is, for example, over six consecutive years. They all show roughly similar trends, so certainly if you have a very high income one year and zero the next, you could have a cumulative income over six years, but if you look at the range of different definitions, those groups certainly show themselves to be at particular risk of persistent poverty.

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

It could be different people who shift in and out of that category?

[Doug Murphy]

It's pretty small, yes.

[The Vice-Chair, Liberal, Michael Savage]

We're almost at 11 o'clock, but we're going to finish up. I know that members are busy and everybody else is busy, and nobody likes to miss House duty, but I'm going to allow Mr. Martin his five minutes, and then I'm going to go to Mr. Brown, if people are okay with that. There's nobody in this room after us.

Mr. Martin.

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

There are just a couple of things. Regarding the presentation this morning on the stats, it makes it look as though our poverty rate has been fairly consistent in terms of percentage. The numbers, though, would speak to a different reality, in that numbers have gone up as the population has grown. So poverty has grown significantly in the country in terms of real numbers, real people, in poverty. Is that correct?

[Sylvie Michaud]

Yes, and we can provide you the actual numbers.

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

Okay.

The Canada Pension Plan, CPP, has been heralded this morning as one program that we put in place that lifted all the boats, lifted everybody to a certain level. In fact, out there you really can't see the difference, although we're beginning to chip away at it a little bit now, with the cost of living and whether it matches....

We had EI, which was a program that did somewhat the same sort of thing, but we've changed the rules now, based on a perception, I think, that the EI program was too rich and it got in the way of people actually going out and getting work. There was a sense that some people were living on EI as opposed to going to work.

Also, when it comes to welfare and social assistance, there's this concept of the welfare wall that often gets in the way of any movement and progress. In fact, it was used as the reason, for example, to cut welfare in Ontario by 21.6% in 1995.

I wanted some comments from people as to the impact and how we should be looking at this, and that kind of thinking where EI or social assistance is concerned.

I have a comment on the WITB, which was talked about. It actually accrues to only a small number of people, because, for example, somebody working for minimum wage, full-time, all year, doesn't qualify for the individual allotment. We did the analysis here. A family, a couple, working full-time all year would not qualify either, so there are a whole bunch of people who, really, are living in poverty, who just are not able to take advantage of that.

Anyway, those are just a few issues I'd like comments on, particularly on the concept of the welfare wall and this notion that somehow EI gets in the way of people actually wanting to go out to find some work.

[Doug Murphy]

I can answer a few of those. I can't speak to EI. It's not my area of expertise.

In terms of the welfare wall, it depends on how you look at it. There is an issue of equity between low-income working people and people on social assistance, and there was a feeling in the mid-1990s that programs should offer incentives so that it actually makes financial sense to take a job. It wasn't just the dollars; it was that social assistance had a lot of ancillary benefits and services—dental, health, and supplementary health benefits. If you left social assistance and went into low-paid work, you wouldn't get those benefits. So that's the diagnostic around the welfare wall.

I think it has been reduced. I do think low-income working people have more benefits now. Our work on the working poor shows that there are still some gaps in terms of what low-income workers get, in terms of the supplementary health benefits and that, but it's much more comparable, and a lot of provinces have provided those types of benefits based on a test of income rather than tying them specifically to the receipt of social assistance.

In terms of the working income tax benefit, you're absolutely right that if you're working full time, the full year, for example, in Ontario, with minimum wage, your income would be over the threshold. One of the objectives of the WITB was to provide an incentive to get back to.... Its explicit rationale was to address the welfare wall. It was an incentive to get people from social assistance to help them make work pay. So it has dual objectives, to provide an incentive for people to enter the labour force from social assistance and for some people in the labour force. I think about 1.2 million low-income working Canadians actually get some benefits from WITB.

[The Vice-Chair, Liberal, Michael Savage]

Thank you, Mr. Murphy. We're going to have to cut it there.

I'm going to give Mr. Brown a chance to ask some questions. He's been waiting patiently.

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

Thank you very much, Mr. Chairman, and thanks for the opportunity to get in a question or two.

In the province of Ontario, the national child benefit supplement is clawed back. Are there any comments around the table on that and the impact that might have?

[Doug Murphy]

Actually, when Ontario introduced their Ontario child benefit, they stopped recovering the national child benefit from social assistance. They overhauled their social assistance system to take the child benefit portion out and create an Ontario child benefit. People who receive the Ontario child benefit—and that's based on a test of income, so it's no longer tied to Ontario social assistance—don't see a clawback of the national child benefit supplement. That's as of last year, so it's a fairly recent development.

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

Okay, because I had heard about this quite a bit from my constituents. They were asking me to see what we could do. Of course, I headed them in the provincial direction to do that.

I have one last question for Ms. Regehr. You said that when women have children, it puts them more at risk of falling into poverty. We all know the reasons for that, but maybe you can quickly give us a little expansion on that.

[Sheila Regehr]

Thank you very much.

It's also a good opportunity to come back to Tony's questions about CPP.

One of the really neat things about CPP is that it has a child-rearing dropout provision that recognizes the time and effort it takes for women to raise children where they can't be in the labour force. Unfortunately, you don't get the benefit of that until you're 65. When you're 25 or 30, it is a huge economic risk for women to have children, if you look at the rate of divorce, the rate of default on child support payments, all those things. That's why you have lone-parent poverty rates that are as high as they are.

You might again want to look at other countries to see different examples of how they do it. I don't know the details from Sweden, but I understand that a lot of their efforts to address lone parenthood are done through the tax system and that their lone parent rate of really serious poverty is extremely low compared to Canada. I think we have a lot of work to do on that. Some of the EI reforms around parental benefits were incredibly well done, but could have been done so much better and much more flexibly to allow all new parents to have some benefit of something that is a human benefit to the whole country.

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

Okay. Thank you.

[The Vice-Chair, Liberal, Michael Savage]

Thank you, Ms. Regehr.

[Judy Sgro, Liberal, York West, ON]

There are reports we have asked for. If possible, just in the interest of trying to save the environment, rather than having them all printed for all of us, could they go to the researcher, through the clerk, to have an overview of them done? Then if we want the whole report, we could contact the researcher.

[The Vice-Chair, Liberal, Michael Savage]

Yes. We'll ask them to consider that.

Any specific requests that come out of a meeting, I'm reminded, quite often get forgotten if there isn't a time limit. So we're suggesting that you get back to us within two weeks on anything that has come directly from this meeting. It would be very helpful for us to circulate either the reports or a summary.

Any updates that come out after that we'd certainly appreciate having. We encourage you all to keep an eye on the committee as we go forward on this study and to get in touch with us either individually or in whatever way you can to let us know how you think it's going. I think it's very important.

Thank you. And I know my colleagues will thank you for taking the time. We've gone slightly over, but this is a good start for our poverty study.

We'll resume next Tuesday with Monsieur Lessard, probably, in the chair.

The meeting is adjourned.