Thank you, Madam Chair. It is a pleasure for me to be here today. I'm going to speak in English.
I want to say that if I were giving this presentation to your committee six months or a year ago, it would be categorically a different tone from the one I want to use today. I can scarcely underscore enough the urgency with which you meet today to do something about poverty prevention.
You're here to discuss poverty reduction strategies. I want to salute the Member of Parliament from the Soo, Tony Martin, as well as Mike Savage. I want to salute Senator Segal, who has addressed himself to this topic, and the leader of the Bloc Québécois, who has been unremitting in his discussion of the need to fix the unemployment insurance system in this country to be able to prevent massive poverty. And I would like to salute the Senate committees that have talked about rural poverty, urban poverty, poverty among the aged, as well as poverty as a social determinant of health.
The Parliament of Canada has been doing much work to discuss the importance of poverty in the run-up to the recession. Today, you have to actually roll up your sleeves and provide leadership on how we do something about it, not simply talk about it any more.
Let me tell you why I think this is so important. We have said now for over 15 years in this country, maybe 20 years, that the best social policy in this country is a job. What happens when the jobs dry up? Tomorrow we will be releasing through the Canadian Centre for Policy Alternatives a report that shows that this recession is the deepest of any recession that has hit us since the 1930s. The job losses in the opening months of this recession outstrip anything we saw in the 1981-1982 recession or the 1990-1991 recession. We are also more exposed as Canadians to high levels of household debt, which are higher than at any point on record, rates of savings that look more like the late 1930s than anything we've seen since, and an unemployment insurance system that is so stripped back it looks like the 1940s.
We are completely unprepared to deal with the magnum force of what is going to happen in terms of the job losses coming down the pike. Today's unemployment insurance numbers show that the number of claims that were put forward in front of the EI commission this month are the highest at any time since the system was stripped back. We had, I believe, 325,000 claims this month. We haven't seen anything like it since we changed the EI system, with the last round of changes being in 1996.
I want to say that those jobs that are being lost in the hundreds of thousands—and will continue to accelerate in the coming months if this recession is anything like what we've seen previously—will add the nouveau poor to the déja poor.
You know as well as I do that how you count poverty determines how many people you can say are poor. Pick a measure, any measure. The most common measure is the low-income cut-off. Using that measure, we have about 3.5 million Canadians who fall under the low-income cut-off. Regrettably, this now starts to include the working poor, after a ten-year blockbuster juggernaut of job creation in Canada, Canada having outpaced every other G-7 nation in terms of job creation in the last decade. So that has not managed to actually eliminate poverty, though poverty has been cut dramatically in the last ten years.
I want to say that Canadians need your help and need it quickly. There are 300 or so parliamentarians in the House of Commons. Only you can change the unemployment insurance system to help protect Canadians in the event of job loss. What we have right now is six out of ten unemployed Canadians who have no access to jobless benefits. In the last recession, it was only two out of ten Canadians.
I don't know what kinds of things have to happen to people in terms of running through their savings, selling what assets they have, and looking for cheaper places to live, which is in very short supply, unless you're prepared to act. We are looking at a massive wave of economic dislocation, a disaster in the making that is utterly preventable.
I hope I have made with some force my sense of urgency that you consider very seriously, as part of poverty prevention, things that you could do today, things that do not require an act, do not require long-term thinking but can prevent poverty today, so that when you do get around to doing something about poverty reduction, you're not starting from a higher level of poverty.
If the government's number one job is anything in a time of recession, it is to stop the decline. That is something that absolutely you can do. The government has acted with great haste to back up the banks, by providing $125 billion for the banks and CMHC to protect mortgages.
There are also 32% of Canadians who live in rental housing, and when they lose their jobs, they are just as likely to lose where they live. We need to be thinking very seriously about what we can do on the housing side as well, in this recession, to prevent, as I say, an unnecessary and utterly preventable wave of economic dislocation, the likes of which we will not have seen since the 1930s.
We are here to discuss poverty reduction. I'm an economist, and I want to raise a point about the costs of poverty should you do nothing. The Ontario Association of Food Banks put out a document that was co-authored in part with contributions from Don Drummond, the chief economist from the Toronto Dominion Bank. That document showed that the poverty-related cost in Ontario alone for health care costs strictly connected to the treatment of poor people was $2.9 billion. Lost production in the province of Ontario was between 5.5% and 6.5% of GDP because of poverty, which amounts to $25 billion to $30 billion, and lost revenues to both the federal and the provincial public purse were in the order of $4 billion to $6 billion. So you see, there is a real cost to not addressing poverty. Forget about the human costs; there is a macro cost to it.
We are an aging society, and I think it is to our great shame that of all the demographics in this country, of all the rates of poverty, the rate of child poverty is the highest. I have to say that we in Canada have made the most progress, not only in the last decade but in the last several decades, on reducing the poverty among those over the age of 65. Child poverty remains stubbornly high. In 1989 there was a unanimous declaration by parliamentarians in this place to say that child poverty was an affront in a nation that is as rich as Canada. Canada, by the way, is still the ninth-largest economy on the surface of the planet, with a fraction of the population. We are an aging population, and we can ill afford to dismiss 11% of the children who will be supporting us, in this room, in 15 to 20 years' time.
It is time to deal with child poverty. And I just want to say that when you look at poverty rates across Canada, using the measure I'm using consistently--the low-income cut-off of Statistics Canada--you will see great variation among jurisdictions, and you will see great variation among jurisdictions for different demographic groups.
It has already been mentioned that the greatest progress in reducing poverty in this country has been in Quebec and Newfoundland and Labrador. That happened for child poverty. Quebec reduced child poverty by 22.4%, down to 9.7%, in the space of ten years. That's pretty impressive. In Newfoundland and Labrador an 18.2% rate of child poverty went down to 9.3%. Newfoundland and Labrador has a seniors' rate of poverty of 2.3%. Quebec, which has seen such a dramatic rate of decline in seniors' poverty, has a 9.3% rate of poverty among seniors. There's huge variation from jurisdiction to jurisdiction, which tells us that poverty reduction is not just contingent on an economy, because if you're reducing child poverty or senior poverty it's not because the best social policy is a job. We're doing something, other than requiring people to work, to reduce poverty.
The second thing that I have to say is that it's not contingent on economic growth, because some of these jurisdictions achieved very strong rates of economic growth and others did not. So there is something to be said about the “yes, we can” principle. Yes, we can reduce poverty--but will we?
I have left with the clerk of the committee our stimulus package, which the Canadian Centre for Policy Alternatives helps co-author. Every year we do an alternative federal budget, which is a coalition process. This year, in early January, we floated a stimulus package. A number of measures were adopted by the Conservative government, and there's still room to move to prevent further poverty and to actually stimulate the economy, which will have to happen in the coming months.
I want to say that in the three-week period from late September to mid-October, the Canadian Centre for Policy Alternatives contracted with Environics to do a national poll of what people's perception of poverty was and how you could reduce poverty. This is precisely the time when we were having a federal election and when the economic storm was hitting North America and the world. In the midst of this recession, across the country from coast to coast, irrespective of political stripe, 77% of Canadians said the recession is the best time to deal with poverty-reduction measures. This is exactly the time at which we all have the same risk in common.
In the 1930s, what propelled us out of that was “there but for the grace of God go I”. We need protections for us all. We need social insurance for us all. That gave rise to the unemployment insurance system in the first place.
Today we see we are in a similar position. So I ask you, please, there is no time to waste and there is broad consensus on how we can change EI reform and how we can protect Canadians in the eye of the economic storm. This disaster in the making is utterly avoidable, and we call on you, our elected representatives, to make the difference for all of us.
Thank you.