Human Resources Committee on May 28th, 2009

[Pierre Métivier]

I assure you that I at least didn't come here this morning in a limousine.

There is that aspect, indeed. And Mr. Allison and Mr. Martin can probably corroborate that, I hope. In Calgary, last week, the Canadian Social Forum of the CCSD, the Canadian Council on Social Development, was very interesting in that respect, Mr. Lessard. A lot of people living in poverty or who had recently joined community groups were there. Obviously, financial support from private foundations enabled them to get there. A lot of questions were raised at the forum. Your colleagues were there. Direct, unfiltered questions were put directly to people. They were questions, comments and reactions. I found it one of the best conferences I have attended in a very long time.

Obviously, when people living in poverty speak at these kinds of forums, they are impressed, and can be a little intimidated, and so on, but real things are said.

I want to cite a brief example here because it concerns government services. One person said that, if he receives welfare benefits and has to speak to the government, he has to go and explain his situation to an official, who is behind a window with a little hole, and shout his problems very loud so that he can note them down. That person added that that's not how he wants to talk to the people who are going to help him. He said he didn't want to talk to someone on the other side of a window, where there are 25 people, and he didn't want to explain his situation in that manner.

It's like talking to your doctor from the waiting room. There are these kinds of abnormal situations that are not necessarily deliberate, but that are real. The message is clear: cohabitation, proximity, respect and dignity. These people offer these kinds of very concrete ideas. Then, how can we realign a system, an organization? I don't necessarily know. However, those people are able to deliver those messages.

I invite your committee to conduct a public exercise to enable these people to speak to you. Of course, they can be assisted by organizations such ours, the United Way, or other foundations to gain access to these kinds of forums and give their opinions. That will be like an additional message that our charities can pass on. That's the best answer I can give you.

[The Chair, Conservative, Dean Allison]

Thank you very much.

We'll now move on to Mr. Martin, for seven minutes, please.

[Tony Martin, NDP, Sault Ste. Marie, ON]

Thank you very much.

Thanks for being here today and participating in this really important discussion we're having at the federal government level with regard to how we can eradicate poverty.

Greg, you've raised the issue of legislation, and you have also said that it needs to be connected in some way to human rights and covenants that we've signed internationally and have not been very good at living up to. When you begin to look at poverty, it is, of course, multi-faceted. It's very complicated, and it can be quite overwhelming, actually, when you think about the size of Canada and you look at the statistics and see the number of people who are living in poverty and try to figure out the dynamics, what's causing it and so on.

As a country, we have from time to time risen to the occasion in terms of doing something substantial that benefited everybody. But I have to say, Greg, that when I look at some of the direction of the provinces, although I understand why they're going where they're going, they simply don't have the resources to bite off the bigger piece. For example, doing 25% in five years makes me ask, what about the other 75%, and what do we do after five years? It's those kinds of things.

As Canadians, over the years we've determined that too many seniors live in poverty, so we brought in the Canada Pension Plan. We then brought in the OAS and the GIS. Then there was some reference to, and we've all been involved in this, some seniors falling through the cracks in terms of the GIS. It's really not that complicated for government, as they do in Quebec, to make sure that everybody automatically gets the GIS if they're qualified. That's not hard. We could do that if we wanted to fix that, but we don't.

We decided that everybody in Canada should have health care, so we brought in an act that made it possible for everybody to have health care. We decided that people who are working, when they lost their job, should have employment insurance. We brought in legislation that has been watered down over the years, in some respects, because we decided that we couldn't afford some of it, while at the same time we were giving tax relief to people in substantial amounts.

Because you've brought it up, and it has been raised on a number of occasions, we're looking at the question of justice versus charity and catching everybody. We're looking at the possibility of an act. We used to have the Canada Assistance Plan. We got rid of that in 1996, I think. It was an offering to the provincial governments, who were getting less money to spend on social programs, to be more flexible. So they got rid of the Canada Assistance Plan.

I would like some comment from all or any of you. If we moved in that direction, what would be the fundamental tenets, what would be the framework that we would need to consider if we were to move to put in place a piece of legislation that would guarantee that everybody who lived in Canada didn't have to live in poverty?

[Greg deGroot-Maggetti]

That's an excellent question. Thank you very much.

Let me start by recommending to the committee that if you haven't already looked at this document that was created by the UN Office of the High Commissioner for Human Rights, published in 2004, called Human Rights and Poverty Reduction: A Conceptual Framework, it really does a nice job of looking at human rights and poverty reduction and looking at the connection between the two. A really important element in that is the principle of progressive realization, because when we look at these human rights covenants that Canada has signed onto, it speaks about how governments will work to progressively realize each of these rights. I think a key starting point for poverty reduction legislation is to clearly link the reason Canada is making this commitment to reduce and eradicate poverty in Canada: it's a fulfillment of our human rights commitments.

I'm glad to say that Quebec's legislation does name the human rights commitments that Quebec and Canada are signatories to as a foundation for that, so that would be the first element.

The second one is to clearly state that the objective is a poverty-free Canada.

Another key thing would be to link it to social exclusion, because poverty is one facet of what we need, getting out of poverty and having a decent standard of living, just living a full life in dignity. People are excluded from full participation in many ways, whether in the workforce or in community organizations, so the legislation should also speak to social exclusion and creating a more inclusive Canada.

The legislation should stipulate that the federal government bring in an action plan every several years to move forward on progressively realizing more of those rights. It is about reducing income poverty, but also making sure that people are not in core housing need and people are not living on the streets, that people have access to the highest standards of mental and physical health, access to education, food security, all those elements. There needs to be an action plan, which should be updated every couple of years.

I mention this because the Quebec legislation specifies this. The Ontario legislation does. Every country in the European Union updates its action plan for reducing poverty and social exclusion every two years. Our legislation should say the same.

There should be annual public reporting on the progress on the goals that are included in this strategy. Again, that report should talk about the outcome indicators on a full range of the strategy and the rights as well as the policy effort indicators. What has the government committed to do? How effective has it been? Those kinds of things.

There should be an interministerial committee, as in Newfoundland and Labrador, to make sure that efforts taken in one ministry are consistent with what goes on in other ministries.

The legislation should also stipulate that federal laws, regulations, and programs should be reviewed for their impact on poverty reduction. Any time a new piece of legislation or change in policy is brought in, it should look at the impact on poverty reduction. Will it have an impact, and what should that impact be?

There should be an independent review of the poverty reduction strategy. This is one thing we tried to get in the Ontario legislation. We were not able to do that. But the European Union includes independent reviews every year of all their strategies.

The last thing I would mention is the importance of an advisory body as in Quebec's legislation. I would point to a body like the National Council of Welfare, which already exists, that could serve that role, as well as organizations like Canada Without Poverty, which is made up of people living on low incomes.

Those 10 elements would be key for poverty reduction.

Thank you.

[The Chair, Conservative, Dean Allison]

Thanks, Tony.

We're going to move to Mr. Vellacott. Sir, you have 10 minutes.

[Maurice Vellacott, Conservative, Saskatoon—Wanuskewin, SK]

Thank you very much.

I appreciate all the groups being here today. From the United Way, it's good to see Émilie here again. Thank you for being here.

There's the good work that MCC has done over time, and I think most of us are familiar with that. I served with the Brethren in Christ, so I'm quite aware of and involved in some of the good work that MCC does in the country and abroad. Mr. Cannan is from a Mennonite church as well, so he's acquainted with the work you do.

Then there's the Institute of Marriage and Family Canada, the new kid on the block here. I appreciate the contributions you're making with research and the study, prodding us in a number of areas through some of the questioning today.

I would like to explore that and get some response initially from Mr. Quist, and then from the others as well. You raised a fairly big elephant in the room on the matter of splitting of income. Some of us have looked at that and see some merit in it. I've looked at it abroad, and there's the paper in the package you've provided. I'd like to ask a few questions about “Taxing Families; Does The System Need An Overhaul?”, particularly as it pertains to poverty. Since that is the nature of our discussion here, we want to find out how that will impact poverty and to what degree it will alleviate or ameliorate it.

I notice that nine industrial countries around the world are cited in this paper. These countries say this whole issue of splitting income, or the family taxation principle, has an effect. They all have slightly different variations or formulas. In France and Portugal, they have systems that aggregate family income but explicitly allow for family size to reduce tax payments. The Czech Republic, Germany, Ireland, Luxembourg, Poland, Switzerland, and the United States allow family members to file jointly and split income. It takes away a little bit of the administrative burden of managing or handling the individual ones. I suspect that other industrialized countries are looking at this kind of thing.

Do you have any recommendations for us as a country? I commissioned a study within the last year from the Library of Parliament on what it would cost the federal treasury in dollars. But I'm interested in getting a couple of things from you and then comments from the others. How would it help to move families up from below the poverty line? Which model do you tend to be drawn to more? Have you looked at any numbers on cost to the federal treasury if we went with something like income splitting?

There is a book about the declining population in our country--a demographic winter, if you will. That has happened in Japan, France, and elsewhere, and they've had to look seriously at that. Without question, it's an incentive to have families and a few more children than has been the norm, because we're moving into that demographic winter. Who will be covering my pension and taking care of me in my old age if we don't have these little taxpayers coming forward?

We want to bring people out of poverty. We also want to be sure we have a stable demographic in the future. So can you tell me the models you like best, the dollar amounts, and how you see them drawing people out of poverty?

[Dave Quist]

Thank you, Mr. Vellacott. Those are great questions. We could spend a lot of time talking about those, and I know time is pressing, so I'll be as fast as I can through some of those.

Income splitting will not help those people who are in abject poverty at this time. They need other programs to help move them up, through education and other social programs, and so on. Income splitting will help people who are in low-income families and who are on the borderline of poverty, who are paying a high percentage of tax right now. And the tax burden they have limits their choices; it limits their family's choices and it limits how they can move ahead.

It's in the document, but just for one quick example, take two families here in Ontario living side by side, both with two parents, two children, and both families earning $70,000. One family has a single earner, the other family has two earners--that's $35,000 each. So the scenario is exactly the same. The family that has one earner will pay approximately $4,000 more per year in taxation than the family next door that has the same family income. There's an inequity there: $4,000 can go a long way in a family that is trying to just pay the grocery bills or if they're trying to look for extras for their children that will advance their education, expand their cultural and social norms, and things of that nature.

You asked a question about “demographic winter” as well as the issue around models. The demographic winter is a huge question, and countries such as Japan and Russia, quite honestly, right now have a decreasing population. We're on the borderline of that right now. We're not quite there yet. Other countries in Europe are on the cusp of dropping their population overall in the long term as well. What that means for baby boomers--I look around here and the bulk of us are in that age range, from the maximum to the minimum--is that as we age, our health care costs are going to be going up. With a smaller number of children, there are going to be fewer taxpayers. Therefore, when we all want to have our health care for hip replacements, or knee replacements, or something like that, there's going to be an increased burden tax-wise onto the younger generation.

An interesting thing is that in the last number of years, with Alberta having such an economic boom in the last five or ten years, its birth rate has actually been going up a little bit this last while. We're seeing that the security of economics is definitely tied in with birth rate. We're seeing that with some of the other young people we've been researching or seeing through other studies, that where they feel economically secure, they're more likely to start their families or to have two children as opposed to one child and things of that nature.

The model that I like the best perhaps, or some aspects of it, is actually the French model. The reason is that it not only has aspects for families, but it also deals with single-parent families as well. How they do that is for a single mom and two children, the first child is counted as an adult in the taxation structure. So they account for the financial needs that a single-parent family actually has, something that some of the other countries do not take into account at this particular time.

[The Chair, Conservative, Dean Allison]

Thank you, Mr. Vellacott, Mr. Quist.

We're now going to move to a second round, which will be five minutes of questions and answers. I'm going to start with Ms. Minna for five minutes.

[Maria Minna, Liberal, Beaches—East York, ON]

Thank you, Mr. Chair.

I just want to continue this discussion with Mr. Quist because I find it quite interesting. First of all, I want to correct Mr. Quist. In the document that you presented this morning, the $5 billion national child care program was not a pilot; it was a program that was introduced by the government and it was meant to be a permanent program.

[Dave Quist]

If I said it was a pilot, my apologies.

[Maria Minna, Liberal, Beaches—East York, ON]

That's what your document says, so I thought I'd correct that just to make sure we're on the same wavelength.

I just want to understand something. There are a number of things you said this morning. One was about incentives for families to not split; the other one is income splitting.

I come from a poor family; that's where I grew up. My mom and dad worked. My father worked construction and my mother worked in a factory. Giving us income splitting wouldn't have made any difference. We could never have saved money to buy a house. We would not have had enough money to raise four children. It would not have helped: $4,000 does not make that big a difference in this scenario.

This committee is looking at the issue of poverty, not people who are on the border or above the poverty line. We're talking about poverty, so that wouldn't do them any good. This is not to mention that the single, lone parents, who you mentioned earlier and identified as a major issue, would not benefit. You also mentioned birth rates, and the Quebec birth rate has actually gone up, but it's been done by giving families choice, not income splitting. It's been done by having a proper parental leave, which most European countries do have, up to three years. But children need help beyond three years; they don't walk off and look after themselves after three years of age.

I don't see how income splitting, just the way it has not worked for seniors.... In the ten buildings I visited on Mother's Day to deliver carnations a couple of weeks ago, 80% of the people living in those buildings were women, alone, single. That measure we had in the previous budget not too long ago did absolutely nothing for them.

Can you tell me how it actually would reduce poverty by having income splitting? That's number one.

The second question is this. I still don't understand your incentives to encourage people to marry or stay married. I want to understand a bit better how you would work that. Those are two very important areas for me to understand, because from my own experience and everything I've seen, I don't see how you would make it work.

[Dave Quist]

Thank you.

The income splitting, as I said in my preamble to Mr. Vellacott, will not work for those people who are below the LICO, if that's the measure we want to use. It's intended to assist families that are at low levels of--

[Maria Minna, Liberal, Beaches—East York, ON]

Then you're admitting that we're going to be spending a lot of money, because it's revenue lost, that will not help poor people in this country, or people below the poverty line.

I think Mr. deGroot-Maggetti is trying to say something as well.

[Greg deGroot-Maggetti]

I think this is a good illustration of why, when the federal government brings in poverty reduction legislation, it needs to include reviewing the impact of laws, policies, and regulations in light of what impact they might have on poverty reduction. I think this is a good example of where it likely won't have a very big impact on families in poverty.

I should also point out that we've talked a lot about families in poverty, but among the groups that experience some of the highest rates of poverty are single adults, working-age adults, and people with disabilities, newcomers, and so on.

[Maria Minna, Liberal, Beaches—East York, ON]

I'd like to go back to Mr. Quist on that issue, though. I apologize, but it's his policy of income splitting that doesn't address what you've just said. If you could let him finish, I just need that answer.

[Dave Quist]

I don't think the government can have just one tool that will address poverty. I think they need a variety of tools and a variety of policy incentives that will assist them. If we don't assist families that are on the borderline, they may indeed fall into poverty as well. So we need to give them financial security if at all possible.

[Maria Minna, Liberal, Beaches—East York, ON]

Except that I don't see how income splitting helps the people on the borderline. As I said, I know the families, I've lived with them, I've been one of those, and it doesn't help. It doesn't help the borderlines. The more money you have, the better off you are in the splitting.

By the way, on the splitting, would you put an upper limit or would you put it across the board?

[Dave Quist]

I think an upper limit is something that would be appropriate to look at.

[Maria Minna, Liberal, Beaches—East York, ON]

Where would your limit be?

[Dave Quist]

I've considered that question. I'm not an economist. I've talked to Mr. Mintz about that, because he wrote that paper. It probably varies because of the tax level in each respective province as well. I think there should be an upper limit of some sort, because people, after a certain point, don't need that incentive to assist them with poverty or for low income. Lower-income people actually need that incentive.

[Maria Minna, Liberal, Beaches—East York, ON]

Could you now expand on your incentives? You gave us specific recommendations. One of them had to do with providing incentives for couples to marry or to stay married. I just want to understand what those incentives would be.

[Dave Quist]

I'll be very brief, considering the bell is ringing on me again.

We clearly know that family breakdown is very expensive. As I mention in the report that we're releasing next Wednesday, it shows a lot of zeros behind the numbers, and it's something I'm sure that all Canadians and politicians would be interested in. If we can decrease family breakdown by even a small part of it, there will be an enormous saving.

[Maria Minna, Liberal, Beaches—East York, ON]

Specifically, what kinds of incentives do you mean?

I'm sorry, Mr. Chair, I just would like an answer.

[The Chair, Conservative, Dean Allison]

Just wrap it up, because we're over time.

[Maria Minna, Liberal, Beaches—East York, ON]

I'd like the answer.