I would like to thank you for inviting us to present our views on the federal government's contribution to reducing poverty in Canada. The Union des consommateurs is a non-profit organization—a federation of cooperative home economic associations, which have had roots in every region of Quebec for more than 40 years now. Ten of these associations came together to create the Union des consommateurs, which represents their interests at the national level. The associations have daily contact with people struggling with poverty—people who have difficulty making ends meet and who come to them for advice on how to balance their budget, how to access certain government benefits and how to deal with welfare offices, if they are having trouble receiving benefits. These associations are out there every day helping people who are having trouble making ends meet and balancing their budget. The associations make us aware of the issues, and we then make representations to [Inaudible--Editor]. So, the focus of my presentation today will be the issues brought to our attention by the associations through the work they carry out on a daily basis in the field.
We have tried to answer one of the questions included in the witness guide. You asked if federal resources currently earmarked for reducing poverty could be distributed more effectively, if additional resources are necessary and how they could be funded.
I would like to give a three-part answer to that question.
It is quite clear to us that the federal government's current contribution is not adequate in terms of reducing poverty rates in Canada. The brief we submitted provides some figures to support that assertion. Indeed, in 1989, the House of Commons passed a resolution calling for an end to child poverty by the year 2000. We note that, in 2000, the child poverty rate was exactly the same as in 1989—11.7 %. So, child poverty has not gone down, despite the government's good intentions.
Furthermore, in 2008, despite increases in the minimum wage, no employee making minimum wage in Canada reached the poverty level by working 40 hours a week. We know that most people paid minimum wage do not work 40 hours per week. If we rely on this threshold, everyone falls under the poverty line.
As we see it, these numbers speak for themselves and clearly indicate that the very significant contribution of federal and provincial government social programs is not adequate to bring about a significant and lasting reduction in poverty rates in Canada. In our opinion, the federal government must do more.
As for your second question, regarding the resources needed to reduce poverty, we have set a number of priorities. I remind you that these are priorities. In our opinion, the following programs constitute a priority for additional federal government funding: employment insurance and the Canada Social Transfer, particularly in terms of support for children and post-secondary education, housing and public transit.
Along with these additional investments, the Union des consommateurs is also calling for an in-depth review of the Canadian tax system, in order to guarantee more equity among taxpayers.
We also believe that enforcement of the Canada Health Act and continuation of a strict ban on the advertising of prescription drugs are two priorities that would have an impact on poverty in Canada.
With respect to employment insurance, fewer than half of the workers who lose their jobs are currently eligible to receive EI benefits, even though all workers contribute to the system. We consider that to be completely unacceptable and unfair. We are calling for a major improvement in benefit coverage, by setting the number of work hours required to be eligible for benefits at 360 hours, extending the benefit period to a minimum of 35 weeks, setting the percentage of insurable earnings at 60 % of wages, abolishing the two-week waiting period, extending the illness benefits, and enhancing the benefits for compassionate reasons.
With respect to the Canada Social Transfer, we believe it is important to continue to enhance it. The many cuts made to provincial transfers since the 1990s have negatively affected the funding of many social programs in the provinces and resulted in chronic underfunding, something which has greatly affected service quality.
In our opinion, it is high time that the federal government increased transfers to the provinces, in particular, to allow for massive reinvestment in post-secondary education. In that respect, I would like to mention that an Ontario association published research in 2004 showing that investments in Ontario colleges yielded an annual rate of return of 12.7 % if one considers, among other things, income earned by graduates, improved health, lower government transfers, the unemployment rate, and so on. For comparison purposes, I would note that paying down the federal debt yields a rate of return of only 5.5 %, which is less than half.
The Quebec economist, Pierre Fortin, recently published research showing that every school dropout costs society some $500,000. We see this as clear evidence that a massive investment in post-secondary education is extremely important.