Human Resources Committee on June 17th, 2008

[Yves Lessard, Bloc, Chambly—Borduas, QC]

Thank you, Mr. Chair.

My question goes to both Mr. Kenway and Mr. Gordon. Has any of these measures shown itself to be particularly effective? If so, are you able to tell us by how much it has reduced poverty?

[The Vice-Chair, Liberal, Michael Savage]

Who wants to take that?

Dr. Kenway.

[Dr. Peter Kenway]

I think the government here has been very successful in raising the lone-parent employment rate, and its tax credit system, which is designed to deliver a significant increase in income to a lone parent if they are working 16 hours a week, is definitely a part of that, a scenario where the incentives that they've designed seem to have worked. Lone-parent employment, particularly among non-disabled lone parents, is, I believe, now overall at about 58%, a little under 60%. Among non-disabled lone parents, it is now up into the middle 60% range, which compares, from my point of view, pretty favourably with the overall employment rate for women in the U.K. economy. So that has certainly been a success.

There are, however, some unintended consequences of that—and I won't take up any more time, but perhaps you'd want to come back to that.

[The Vice-Chair, Liberal, Michael Savage]

Professor Gordon.

[Prof. David Gordon]

On the broader picture, we know from comparative studies across Europe that welfare states redistribute money from the rich to poor and from men to women, mainly, but also across the life course, taking money away from the middle-aged and giving it to the elderly, in terms of pensions, and to the young, in terms of family and child benefits. We know those universal pensions and those universal family benefits are universally shown to be effective at reducing poverty across individuals' life courses.

By doing that, it reduces the poverty rates tremendously. For specific targeted groups, obviously education is a route out of poverty, and investing in education has been helpful, but an adequate minimum social safety net that's effective has also universally been shown, in every country that has introduced it, to be an effective and efficient way of reducing poverty.

[Yves Lessard, Bloc, Chambly—Borduas, QC]

You now have a universal day care system. Can you tell us how the system works and what impact it has on poverty, specifically as it allows women to work, particularly single mothers? Could you tell us a little about that?

[The Vice-Chair, Liberal, Michael Savage]

Professor Gordon.

[Prof. David Gordon]

One of the central barriers to women going back into the labour force has been the gross inadequacy of affordable child care in the past. The government has pursued a number of policies to try to make child care more affordable, including a national day care network, but also vouchers for nurseries, and a range of other policies.

These have been effective as far as they go, but are a very expensive way of getting people into work, particularly if there are only low-paid jobs available. At some point, you get to a point where you're paying one group of relatively poor women to look after the children of another group of relatively poor women. This is because of the way economics works, as it seems to increase the GDP. If you look after your own children, it has no economic benefit; if you look after someone else's children, the GDP of the country increases. So it increases economic productivity, but it has some negative policy consequences.

There can be problems with some children if they spend a lot of time in day care from a very young age and both parents are working very long hours. The family tends to be under stress, both the parents and the children. There is a need to see the value of unpaid work and caring work, which is not really recognized in the current government's social exclusion policies in all parts of the U.K. It is recognized more in some parts of the U.K. than others.

This is a big issue that ministers often only address tangentially: who should care for children, how should they be cared for, and for how much time, and who's going to pay for it?

[The Vice-Chair, Liberal, Michael Savage]

Thank you very much.

Thank you, Mr. Lessard.

We're going to move to Judy Sgro.

[Judy Sgro, Liberal, York West, ON]

The more we hear from you, the more questions come up on a variety of things.

I was interested to know if, as part of this anti-poverty strategy, the issue of mental health has been raised, and how big an issue is it when you're talking about families living in poverty?

[Dr. Peter Kenway]

Shall I answer that one?

[The Vice-Chair, Liberal, Michael Savage]

Yes, please, Dr. Kenway.

[Dr. Peter Kenway]

The answer is that it's a very big part. And the answer to your other question, I think, is no, it has not in any sense been properly raised.

Something we have not really discussed around our tables with you today is the whole situation of disabled people, many of whom have work-related disabilities to do with mental illness. In some sense, there's a kind of picture that these people are, as it were, former miners or men with bad backs, which I think is still the popular image in this country. Those people, of course, exist within the statistics, but they're not a majority.

The key point is that we find that the poverty rate for working-age adults with disabilities is pretty much twice the rate for adults without them. It is quite clearly a major source of economic disadvantage, and it has not been addressed. I think the mental illness angle is particularly difficult and needs very close attention.

Until one get to grips with this, people have very simplistic ideas about the situations disabled people may be in, and with the idea that they might be fit for work or not, and that this status might almost vary at times from day to day. So it's a very important issue, and I don't think the U.K. has a great deal to teach about it.

[The Vice-Chair, Liberal, Michael Savage]

Go ahead, Professor Gordon.

[Prof. David Gordon]

I would just answer that I agree with Peter. Mental health is a big issue, and there has been a massive increase in the prescribing of anti-depression drugs. There has been, and continues to be, major discrimination by employers against employing people who have a history of mental health problems. The government's policies in the Disability Discrimination Act are good, but they have not been rigorously enforced, so there is a major issue there.

[Judy Sgro, Liberal, York West, ON]

The U.K. recently introduced the Sustainable Communities Act. Can you elaborate a bit about what that is, and how that is going to fit into the overall goal of eliminating poverty? Either of you can answer.

[Prof. David Gordon]

This comes back to the valuing of unpaid work to a certain degree, in that in the past, particularly in smaller towns and urban villages, there were women who had time to support people in the community, caring for their neighbours and helping by volunteering. With the need for women, as well as men, to go into the labour force to maintain their families, people do not have the time to do the level of voluntary activities in helping their neighbours as they have in the past. So one of the underlying problems that has arisen is that these communities are no longer sustainable. You have commuting villages, where the elderly do not have the social support networks they may have had 20, 30, or 40 years ago.

So the Sustainable Communities Act and a number of rural government policies are attempts at trying to find mechanisms with which to make communities more self-supporting—and also in terms of ecological objectives, which I won't go into, because they are not pertinent to your inquiries at the moment, I suspect.

[Judy Sgro, Liberal, York West, ON]

At the end of the day, we will probably have to recommend some measurement tool that helps to deal with the poverty issue.

Now, in the U.K. they use a tiered approach to measuring child poverty. Can you give us more details on that? Either individual could.

[Prof. David Gordon]

The tiered approach, as I said, came out of the consultation.

The first tier is a European Union-wide one, used in all 27 countries, and it refers to income below 60% of the median equivalized income. That is an EU-wide measure. The equivalization scale would probably not be appropriate to Canada, but as a relative income and equality measure, it's as good as many—although Canada has equally good measures with its low-income cut-offs, the market-based budget standards, and other methods I know you're developing.

The next tier is a kind of fixed poverty line, which is termed absolute, but it really is just a fixed relative line.

The last is a combined income and deprivation measure, which has high scientific validity and is very much closer to being a good operationalization of the European Union definition of poverty, which is households and families whose resources are so low as to exclude them from the acceptable way of life in the country in which they live. So the last tier is an attempt to look at how people are living, as well as how much income they have. That has been used in many countries, not just in Europe, but outside Europe.

[The Vice-Chair, Liberal, Michael Savage]

Thank you very much.

We're going to move back to the Conservatives.

Mr. Jacques Gourde, you have five minutes.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

Thank you, Mr. Chair.

I would like to thank the witnesses for everything they are sharing with us today. We are learning a great deal about the approach to poverty in the United Kingdom.

Mr. Gordon, Mr. Kenway, please correct me if I am wrong in my introductory remarks. The United Kingdom is one of the first countries in the world to address the problem of fuel poverty and to take steps to deal with it. Households are deemed to be fuel poor when they spend more than 10% of their income to buy fuel for the home. The estimate is that, in 2005, about 2.5 million households in the United Kingdom were fuel poor. The goal of the government of the United Kingdom and the regional assemblies is to put an end to fuel poverty by 2018.

Given the global rise in the price of energy, it will surely be more difficult for you to reach your goal by 2018. Since your strategy describes fuel poverty as one of the factors that can harm young families, would you recommend that others include fuel poverty in their efforts to fight poverty. My question goes to both witnesses? I would like to hear your comments, please.

[The Vice-Chair, Liberal, Michael Savage]

Who wants to go first on this one?

[Dr. Peter Kenway]

Shall I go first on that, David?

Let me make almost a political observation, not a party political observation.

I find that there's a lot more public support for the idea of doing something about fuel poverty than perhaps there is about doing something about the wider forms of poverty to do with income and the type we are concerned with. We are holding a seminar on the subject in a couple of weeks, and it's always, I think, a measure of these things. We're having no difficulty getting people to come along. So I think you certainly should. I think people recognize fuel poverty as being something quite tangible, so it should be part of it.

Perhaps I may make one technical point. David did make this point, but I want to elaborate on it just slightly. It is very much to do with single people. Crudely, it's that a single person has half the income of a two-adult household but something around three-quarters only of the fuel cost. And it also is very much related to disability. The people who are really vulnerable on this, I think, are the people who are at home all day. Obviously the disabled out of work are likely to be in that group, but they are equally well reachable through the benefit system, which delivers benefits to them.

[The Vice-Chair, Liberal, Michael Savage]

Mr. Gordon.

[Prof. David Gordon]

Again, to directly address your question, I think fuel poverty should be an integral part of any anti-poverty strategy in all countries. Even in Africa we know that one of the big problems African households in the poorest parts of Africa have is they don't have enough money for cooking fuels. So it's not just heating.

There is obviously some careful policy planning if the government is trying to reduce carbon dioxide emissions overall in the domestic sector, while at the same time many fuel-poor people need to increase their fuel consumption and therefore increase their carbon dioxide output. So there really does need to be some mechanism to reduce the fuel consumption of people who are using a very great deal, but it needs to be done on the basis of need. You need to make sure that things like fuel taxes don't impact on the poorest and make them even poorer and make them even colder. Therefore fuel poverty is not part of your anti-poverty policy. That will be missed. And other policies to reduce carbon dioxide will have very bad consequences for the poor and for your anti-poverty strategy.