Human Resources Committee on April 10th, 2008

[Doug Murphy]

In 2004 alone, the NCB reduced the low-income rate for children by 125,000 children. So we do have analysis of its impact on the low-income rate for children.

[The Vice-Chair, Liberal, Michael Savage]

Thank you.

Roger.

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

Thank you very much.

Mr. Fedyk, I'd like to go to one of the questions that was posed by my colleague, Mrs. Sgro, on the number of GIS recipients who participated in the workforce in past years. Can we get some kind of information around that? I'm sure you have projections from before this measure was taken. If we can get access to something like that, it would be helpful.

Mr. Picot, it's very important that you mentioned the broad measurements we refer to. We talk about people who are below the low-income thresholds, but there's a gap there. I imagine that a much more intensive measurement instrument is necessary to delve into that. Is that information out there, or don't we factor it in?

[Garnett Picot]

I think we've become so accustomed to talking about the low-income rate that we just sort of forget about the low-income gap and the depth. The data is there and is actually in publications coming out of Stats Canada, so it would be very easy to put that together for you.

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

I'd appreciate that.

[Doug Murphy]

May I add one thing about the low-income gap? When we get an estimate of the aggregate low-income gap in Canada, I would exercise a bit of caution in equating that with the cost of eliminating low income in Canada. It's just an approximation of the overall distance, on average, between low-income people and that low-income line. So it would be very hard to just “fill that gap” and eliminate low income.

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

I'm going to ask two questions. First, the factors that impact on poverty in rural areas and urban centres vary. Are there statistics on that?

My final question is about your position on aboriginal poverty. You state that you believe it should be part of the broader go-forward strategy on poverty, and we agree. But the committee has said that is sort of a monster on its own. There are some very specific impacts on first nations poverty. Could you share with us your take on some of the factors on reserve and off reserve, and how we might be able to deal with that as a committee as we move forward?

[Sylvie Michaud]

For the urban-rural, we can provide some numbers, but you'll see a big difference whether you use the LICO and the MBM. Part of it is because of transportation, which has a different component. There is also the cost of food--for example, in Newfoundland, the basket is higher than the LICO. We can provide you with numbers under the two measures to study.

[The Vice-Chair, Liberal, Michael Savage]

Ms. Regehr.

[Sheila Regehr]

Very quickly, on the aboriginal issue--and I think it also gives me a chance to come back to Lynne's question, because they're linked--the recent report we did, Time to Act, shows there is a lot of positive development happening.

There is an incredible hunger in this country. I mean, we're small, and we're just touching the iceberg in trying to connect with people and find out what's going on. But there's an incredible hunger for learning from other people's experiences: developing, leveraging whatever they can from different levels of government and community sources, and growing what they're doing. When we looked at a lot of the aboriginal projects, for example, they said they're hugely successful, but with the resources they have, they're only serving about 10% or 20% of the population.

If we have examples of success, let's leverage them. Let's grow. Let's not reinvent the wheel. Let's learn from each other and build on those things.

You're right, there's no easy answer to the aboriginal question. But I think with all the populations that are at high, high risk, we need to have a clearer, more nuanced position and look to them for solutions.

[The Vice-Chair, Liberal, Michael Savage]

Thank you very much.

Mr. Lake.

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

I want to start by commenting on the LICO. Someone asked the question about how much it would cost to get everybody up to the poverty line. If I'm not mistaken, one of the challenges with LICO is that if you get everybody to that line, the line actually moves up, because it's a relative measure. In theory, getting up to the line is difficult.

[Sylvie Michaud]

Actually, it used to be more of a relative measure. However, the last time we rebased the basket was in 1992, and now we index it to inflation. So it's starting to look more--

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

With LICO?

[Sylvie Michaud]

Yes, in 1992. So it's starting to look a bit more like an absolute measure than a relative measure.

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

Okay.

I want to clarify something that Mr. Picot said earlier.

I think I heard you say that in terms of absolute purchasing power, people who are below the poverty line in North America are roughly the same as the Nordic countries.

[Garnett Picot]

It isn't people who are below the poverty line; it's people who are at the tenth percentile in income distribution. That is, 10% of the population are below them and 90% are above them, in terms of their income.

If you look at that particular group.... This is from a research paper by Tim Smeeding. Your researchers probably know who he is already, but you may want to look at his international work. Using purchasing power parity numbers, he tried to compare the purchasing power in different countries. He concluded that the purchasing power--that tenth percentile--was about the same in the United States as in Europe. Canada was marginally above it--about 15% above it in terms of purchasing power.

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

Okay, so we're actually better than both.

[Garnett Picot]

According to that particular study.

Now, I should really stress that there are all sorts of difficulties in doing this. Deriving those purchasing power parity numbers is extremely difficult, so I would take this as a rough-and-ready guide.

The main point is that the relative low-income measures, such as half the median income, demonstrate a very high low-income rate in the United States relative to European countries. When you look at some form of purchasing power parity numbers, that disappears. That's the main point.

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

I have a question for Ms. Regehr. I know that John Richards, who is a former NDP MLA, I believe, from Saskatchewan, and he is now a member on the board of your organization, did a report recently called Reducing Poverty: What has Worked and What Should Come Next.

Thinking about federal responsibility, he refers to the EI program and the Chrétien government steps, and he states:

Changes to the program increased work requirements and penalized frequent users. One result of reform has been a decline in the percent of the unemployed receiving EI benefits, from roughly 80 percent in the late 1980s to 40 percent a decade later.

Then he goes on a bit later, in that same section, to say:

...changes in EI eligibility and benefits were among the shifting incentives that contributed to the rise in the Canadian employment rate and consequent decline in aggregate Canadian poverty rate.

I'm wondering if you agree with that thinking.

[Sheila Regehr]

Thank you.

That's an interesting question, and it's interesting that you refer to that paper, because he talks about some trends for which other explanations have been offered by Mr. Picot this morning as well. I think that emphasizes that a lot of these matters are quite complicated.

Yes, Mr. Richards has just joined the council. We haven't had any decision-making meetings yet with our new board, so what he has published is under his own right, and it's fair to ask him those questions, I think. This isn't necessarily the council's view at this point, so I can't comment on his particular research, unfortunately.

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

Are we going to have time for Gord to ask a question afterwards?

[The Vice-Chair, Liberal, Michael Savage]

I'm going to go to Mr. Martin at the end of five, and then I'll allow Mr. Brown to have a question after that, with the indulgence of the committee.

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

Okay. Then I'll just move to one more question I have here.

Mr. Fedyk, in your statement you talked about persistent poverty. I was struck when I read that you said, “That is, they have a cumulative income over a six-year period that is below the cumulative low-income threshold for that six-year period”. If I read that, I would think, for example, about someone who might have zero income, someone who is homeless and might be dealing with some substance abuse issues for three or four years, and then overcomes those issues and goes out and makes an income for the last two years, significantly over the amount required to be above the poverty line. Yet they would still be considered within the “persistent poor”. Is that accurate?

[Frank Fedyk]

Could Mr. Murphy elaborate?