Bonjour. Good morning to everyone. Thank you for this invitation. My name is Claire de Oliveira and I'm currently a research fellow at the C.D. Howe Institute here in Toronto.
As some of you may know, the C.D. Howe Institute is a think-tank that is known for its relevant, independent, and quality research.
In my presentation I will briefly discuss how the federal government can contribute to reducing poverty across Canada, while providing effective solutions for dealing with this problem. In particular, I will be focusing specifically on child poverty and recommendations to deal with this issue.
The main tools that policy-makers have at their disposal to increase the welfare of the poor are usually cash and in-kind transfers of goods and services. Generally, policy-makers are interested in understanding whether governments can improve children's welfare by increasing cash transfers to low-income families or whether they should focus on the provision of services such as early childhood education or parenting training. Cash transfers typically raise the welfare of the poor by increasing their disposable income, while in-kind benefits are used primarily to alter the poor's consumption behaviour towards higher levels of a given good or service.
Thus, many economists have suggested that in-kind transfers are a better policy instrument than cash transfers to increase the well-being of children directly, as the former can be more effective in encouraging the consumption of specific goods and services that governments may wish individuals to consume. My own research confirms these findings.
Currently, funding for in-kind transfers for early childhood development and early learning and child care is transferred to the provinces and territories from the federal government through the Canada health and social transfer and is provided on an equal per capital cash basis to ensure that all Canadians have similar support regardless of their place of residence. The preference for in-kind transfers over cash transfers to address child poverty suggests that provincial governments have a larger role to play than the federal government in achieving the best policy outcomes. Provincial governments handle the provision and partial funding of most child-targeted programs, while the federal government provides the remaining funding.
For programs aimed specifically at low-income families, this model should remain as it is. Nonetheless, the federal government still has an important role within this context, and changes will need to occur at the federal level to improve the current model.
For example, an important measure to minimize child poverty is to improve the national child benefit by broadening the range of services delivered under this program. This includes pre-natal screening, child care, parenting skills, and information on mothers' and children's nutrition. This will require the allocation of additional resources to the program, from the federal government to the provincial and territorial governments. Some may even suggest that when these funds are transferred from the federal government to the provincial and territorial governments, there should be some stipulation of how these funds should be spent.
Thank you for your time. I hope these comments are useful and can contribute to this debate.