Human Resources Committee on June 17th, 2008

[The Chair, Conservative, Dean Allison]

Mr. Gourde.

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

Thank you very much, Mr. Chair.

I would like the committee to take note of what the witnesses have said and to add fuel poverty to our agenda. The committee could then work on it later. I feel that this is important for our committee and for all Canadians. Thank you, Mr. Chair.

[The Vice-Chair, Liberal, Michael Savage]

Thank you very much.

We're going to go to our next round.

We'll start off with Mr. Cuzner, from Cape Breton—Canso, Nova Scotia, halfway to England.

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

Thank you, Mr. Chairman. You're doing an adequate job in filling in for our regular chairman.

I'd like to ask a question of each of our witnesses today. We really appreciate the discussion around this today. I'll ask the questions, then I'll step back and allow you to answer.

Mr. Gordon, you had talked about the supports going to the seniors. The cheques go to the seniors, especially those who are living in older accommodations, older houses, and that money is not necessarily going toward retrofitting or refurbishing and bringing down the costs, the heating costs, the heating demands for that particular unit. So really what we're doing is feeding a cycle. We're throwing good money after bad. So I'd like your comments.

Can the U.K. be doing a better job of that? I think we do a fairly good job of it here in Canada as far as initiatives are concerned, where we can encourage seniors to help with the roofing and the windows and furnaces. Do you see some kind of initiative having to be undertaken in order to make sure that those heating costs are brought down?

I'll leave that with Mr. Gordon.

Mr. Kenway, you expressed a concern about putting a price on carbon and the potential hardships it might cause if other measures are not enacted, if other measures aren't taken to offset any kind of increase in a price on carbon. Perhaps you could expand on that.

I'll ask Mr. Gordon to go first, and then Mr. Kenway. Thank you.

[Prof. David Gordon]

As Peter said, and as has been said before, the policy to eradicate fuel poverty by 2018 is looking unlikely to be met; certainly the interim targets are. At the moment, about 4,000 people are employed to go into houses and implement the energy-efficiency measures of improving the windows, insulating the walls and the roofs, changing the light bulbs to more energy-efficient ones, and carrying out other such policies. But that's nowhere near enough, given the age of the U.K. housing stock, and the very low rate of building at the moment. We replace about 1% of the U.K. housing stock a year, so it will take them probably longer than 100 years to replace all of the stock. That's far too long in order to meet a 2018 target, given the very low thermal efficiency of much of the older stock.

There are new building regulations that should make the new stock much more efficient, but these still have not all entirely come into force. So the policies, to a certain extent, are effective in dealing with the problems of the housing, although nowhere near enough is being done. There are at least a million dwellings at the moment that are not really fit for habitation in some way or another. But also there is not enough for those whose income is so low that, even if they have efficient housing, they can't afford to meet the fuel needs.

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

Mr. Gordon, could I just clarify a point, please? You had said earlier that the cheques do come to the seniors to help with the fuel costs, but sometimes their household priorities are such that they don't necessarily go towards that; they might go to something else. We certainly understand that, but is there some way we should be getting them to reinvest in their housing to bring those costs down? Is there some way we can encourage that sort of outcome?

[Prof. David Gordon]

There are two planks to that. There are some authorities, like local government authorities—you need local government involved in these policies—who are trying to start what we call “investing to save”, so giving people the information on how they can invest their money in energy efficiency and therefore save in the long term. The problem they have is that often these are low-income households, and it's coming up to Christmas, and they have the choice of investing in energy efficiency to save down the line, or buying Christmas presents for their grandchildren.

Stopping people who don't have enough money from buying Christmas presents for their grandchildren is not necessarily a good policy choice to make. So you need a multi-tier approach, not just a one-off payment once a year close to Christmas, to deal with these problems.

[The Vice-Chair, Liberal, Michael Savage]

Thank you, Professor Gordon.

I'm going to give Dr. Kenway a chance to give us a quick thought on the question Mr. Cuzner posed to him.

[Dr. Peter Kenway]

Thank you.

I assume that we are moving now into a new era in terms of permanently higher energy costs, and then the consequent actions that we, as scientists, want to take to reduce our energy consumption. And it seems to me, really, with the way we do things in Britain, the change will be piecemeal. I suspect that this is a situation in which you don't need piecemeal change. You need an integrated look, a coherent look perhaps at all your energy taxes, and also at your income taxes and your benefits system.

I think the one thing that poverty really has put on the agenda in Britain in the last ten years is that when one comes to look at this, the whole question of what the distributional impacts are and how a change affects low-income households compared with middle-income or high-income households is now something that is routinely done. I think that's actually a very useful step forward. So in some sense, it's an integrated look and you have to make sure you pay attention to the distributional implications, particularly at the bottom.

[The Vice-Chair, Liberal, Michael Savage]

Thank you very much.

We'll move to the Conservatives, with Mr. Mike Lake, for five minutes.

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

I guess I'll start this one by just thanking you for helping us out with our study and taking the time out of your day to do this.

I want to go back again to the lone-parent scenario that you bring up. I think you rightly suggest that we need to pay special attention to children in these situations. But there are a few things, in terms of thinking about this as we've had the discussion, that kind of come to mind. First, we know that the poverty rate in single-parent families is higher, and we know that the number of single-parent families is increasing--I think you mentioned that, Mr. Gordon. We also know that the number one cause of family breakup is financial stress. I guess when you put those three things together, common sense would dictate--to me anyway--that if we can take measures to decrease that amount of financial stress on families, we might be able to actually, in some way, solve this problem in the long term. Maybe you can comment; I don't know if there's been any study in that regard.

[Dr. Peter Kenway]

I'll say a couple of things, then give David a chance.

The first point to emphasize is that this rise in the number of lone-parent families, up to about a quarter, has been a very long-term trend. It's tempting to imagine that it is accelerated under the new Labour government here, which has produced a tax-credit system that in some ways is quite favourable to lone parents. But the truth of the matter is that, as in fact with most things in Britain, the era of revolution, the era of great change, was actually in the late 1980s under the premiership of Mrs. Thatcher, after the recessions of the early years. It's almost that period of great growth in the late 1980s that seems to have been when so many things changed, and I think there was a substantial rise in lone parenthood then.

Should the systems be adjusted to provide greater support for two-parent families? I think it's a very reasonable question. A point that is worth making is that most of the in-work poverty for children is among two-parent families; most of the out-of-work poverty is among lone-parent families. I think it's partly a question of how far one wants to sort of socially engineer in this way, or whether perhaps we need to look more basically at the way in which we recognize and reward the caring responsibilities. David has talked about this; we are a society in which unpaid caring is poorly recognized, including financially.

Perhaps the answer to the problem that you raise needs a slightly oblique response, rather than a direct one. But it's certainly a legitimate question.

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

Go ahead, Mr. Gordon.

[Prof. David Gordon]

I was going to agree with Peter. The growth in lone-parent families is a long-term trend, not just in the U.K., but across Europe. You're absolutely right that one of the leading causes is financial stress. But I'm also dubious that reducing financial stress would reduce the rate at which lone-parent families form, because they form for a whole range of reasons.

One of the things that runs counter to that is that financial independence for women sometimes means that women who are dissatisfied in a relationship now become lone-parent households because they're not so economically dependent.

It's a complex issue. I don't think reducing financial stress would reduce the numbers of lone-parent households by a significant degree, although again it's a legitimate question.

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

I talked a little earlier about the unintended consequences of some of these income support strategies. It's a no-brainer that we should help, as governments, the people who truly can't help themselves, through income support programs. There aren't many other ways you can do this, other than through income support.

I have a son with autism who's 12 years old now, and I've seen adults with autism or other disabilities who clearly need some help with income and other supports. But when we allocate too many resources to people who can help themselves, we shortchange, in the resources we have left to help, those who truly can't.

With respect to that 50% you were talking about earlier, that hard-to-reach 50%, it seems that what has happened is that we've put our attention on the 50% who can help themselves. We throw a lot of resources and money towards this, with a focus on income support. Maybe we should be focusing on less money-intensive opportunity creation. This would in many cases serve these people better in the long term. We have nothing left to support the people, the hard-to-reach 50%, with the real help that they need.

Maybe you could comment.

[The Vice-Chair, Liberal, Michael Savage]

This is the second time that Mr. Lake has raised this, so I do want to get an answer.

[Prof. David Gordon]

The U.K. government hasn't always, now or in the past, spent a lot of money policing the welfare system. With any welfare system, there will be people who try to get around it, cheat it, and use it when they don't really have a need. But that tends to be a very small percentage. Arguably, the U.K. system and many other systems are over-policed, in that the cost of prevention, of catching people getting the benefits who should be working, far outweighs the actual gains derived from stopping those people. For the overwhelming majority, if the welfare system is inadequate to prevent poverty, increasing the amount of benefits available will have a major impact on alleviating poverty. It will have a minor impact on increasing a very small number of people who'd beat the system and cheat it. This is true not just for the U.K.; it has been demonstrated in many comparative studies in many countries.

The figures just don't stack up when you look at objective social science research, whatever the underlying political beliefs of those researchers. In most systems, increasing the welfare benefits for an adequate system will have an impact.

[The Vice-Chair, Liberal, Michael Savage]

Thank you.

Madame France Bonsant.

[France Bonsant, Bloc, Compton—Stanstead, QC]

Thank you very much.

Thank you, gentlemen.

A little while ago, you mentioned single-parent families where the children are poor. I assume that the heads of those single-parent families are, in most cases, women.

Do you have a process or legislation providing for equal pay?

[Dr. Peter Kenway]

Yes, there has been equal pay legislation, but there nevertheless remains a substantial pay gap. David might correct me on this. I think it's possibly a 17% or 18% gender pay gap.

However, while gender pay gap and equal pay legislation is extremely important, I suspect that from the poverty point of view the pay that one really needs to worry about is the pay of part-time workers. Most part-time workers are women workers. However, the men who do the part-time jobs are also poorly paid. It's our view that there is a real prejudice against part-time. I don't know whether this translates very well into French, but in English you almost always get the word “only” in front of part-time--it's “only” part-time.

I think a considerable amount could be done for low-paid women if we did something about the low pay of part-time workers. It has to be said that this is only to some degree caused by market forces. A lot of this is in the public sector. In Britain, for example, many of these people are employed within the public sector, so it should be possible to do something.

It's not just the workings of globalization or international competition. Part-time work, for me, is the key gendered issue in pay. There are, of course, other issues.

[Prof. David Gordon]

Again, to answer that, the U.K. has had legislation on equal pay and sex discrimination since the early 1970s. This legislation is effective as far as it goes in individual cases, in that if individual cases are taken, they're often won. But it's ineffective in that it hasn't tackled the underlying problem, which is that individuals often can't afford to take the cases or don't have access to the knowledge they would need.

Class actions like in the U.S.—I'm not normally a fan of U.S. social policy—and using statistical evidence rather than individual evidence on comparability would probably be needed in order to close the pay gap we now have. It has closed a long way, but it is still a considerable sum of money over the life course of an individual woman compared to an individual man with equal levels of qualification, doing equal jobs.

[France Bonsant, Bloc, Compton—Stanstead, QC]

On the subject of qualifications, you are aware that people who are illiterate are to a great extent also poor. Are there partnerships between business, government and voluntary organizations to encourage literacy, so that people can overcome their lack of basic education and get better paying jobs?

[Prof. David Gordon]

Shall I answer that?

Illiteracy is a major problem—not not being able to read at all, but functional illiteracy. It's quite high in the U.K., although it's hard to get comparative statistics in this field.

There are partnerships between government nationally, locally, and in the voluntary sector, but the partnerships between the governments and the business sector are much reduced. There used to be more in terms of apprenticeships and in-work training, but the U.K. policy in this area is not really a model. In fact, one of the problems with both ordinary poverty and fuel poverty is that the government hasn't really brought the business sector on board. So in terms of fuel poverty, for example, although there are social tariffs, often even poor people on these tariffs end up paying much more for their fuel than people who are richer and can afford direct debits in bank accounts.

So in a whole range of areas, the poor often pay more than richer people in absolute terms for the same service or the same goods. And often in terms of getting an education in order to combat illiteracy, the provisions available through the business sector are ten to one against poor people in terms of their losing wages to take time to train.

[The Vice-Chair, Liberal, Michael Savage]

Thank you very much.

We'll go back to the Conservatives and Mr. Lake for five minutes.

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

Could I just come back to Mr. Gordon? When you were responding to my question, you were talking about cheating. I wasn't discussing cheating in terms of the situation I was talking about. I was talking more about government policy and programs where I think governments make the mistake of allocating our limited resources towards programs where we set up long-term income support programs for people who would be better served by training or the creation of opportunities.

In some situations it might be counselling services or referral services. In some cases more significant interventions may need to be set up. But the idea is that we can take individuals and help them to eventually be able to help themselves in the long term.

I think sometimes we take the easy default position, which is to create an income support program, and think we've solved the problem. And when we do that, it's my belief that we're using resources we could be using to better serve people who truly are unable to help themselves or have a much more difficult time, let's say, helping themselves and may require some income support for the longer term. And oftentimes in the child poverty situations, where there are real difficulties, we may need to set something up a little bit more in the long term--for example, maybe having people live with people with disabilities who need long-term support.

So just to clarify, I wasn't discussing the concept of people cheating the system. I was actually talking about the concept of the system cheating the people.