Human Resources Committee on June 1st, 2009

[John Myles]

Yes, but even.... Ottawa runs the EI program. It has its own tiny version of active labour market policies and training initiatives. Some of that's been farmed out, more and more, to the provinces. But this is clearly an area of overlapping jurisdiction.

Now, whether you can build a consensus with the provinces.... And maybe you have to have some asymmetric federalism; you get the ones you can at the table to talk about employment levels, wage levels, and what to do about them. I think you could get more of a political legitimacy for that kind of issue, even from the middle class, than you would if you were to call it a poverty reduction strategy.

[Olivia Chow, NDP, Trinity—Spadina, ON]

So we should say that $16,200 per year on average for a single mother with kids is not enough, and that is the average wage; therefore, this is the standard, x dollars, and negotiate it with—

[John Myles]

We know for sure we don't want single mothers on social assistance for very long. They're never going to get out of poverty if they're relying purely on social assistance.

Certainly you need a strong social assistance system. But to solve their problems, eventually you want to get them into good jobs at decent wages. And an employment—

[Olivia Chow, NDP, Trinity—Spadina, ON]

With child care support, or else they can't work.

[John Myles]

Absolutely.

I'm just thinking of the example of the disabled workers, the ones with multiple sclerosis. That's been dealt with under some of these active labour market policies. It's not a sickness benefit. It's recognition that for some kinds of workers—and we have to think of these people as potential workers—you're going to need.... I've sort of pooh-poohed looking at wage subsidies as a strategy you want to rely on entirely over the next 30 years. I think we have to do a lot more than that.

But in countries like Denmark and the Netherlands, the strategy explicitly recognizes that certain kinds of individuals who have disabilities of various sorts are going to require permanent wage subsidies over their whole lives. That's part of active labour market policy. In other words—

[Olivia Chow, NDP, Trinity—Spadina, ON]

So just to see if I understand you correctly, the federal government, really, aside from the poverty reduction—25% in five years and all that—should have a labour market strategy and set some national standards together with the province to say how to get there, even using the open method you're talking about where we would do the audits and evaluate the successes. We could notch it up even more, perhaps to say that if we don't do that, therefore this would be the downside and therefore the punitive part, if we get there. And this is the kind of discussion we collectively, both the federal and provincial governments, must have. Am I getting that right?

[John Myles]

That's sort of where I'm heading.

[Olivia Chow, NDP, Trinity—Spadina, ON]

It's interesting, because in Nordic countries people are not as desperate. The local clerks and the restaurant waiters are not stressed out, because their income levels are at a place where they know they can feed their kids and still pay rent. In Canada, our income gap, especially gender gap, is like 14th out of 15. We are so low that even when people are working they have to take three shifts in order to survive.

[John Myles]

I talked about different institutions. They have different institutional arrangements. You have to remember that in most of Europe, outside of the U.K., 80% of workers, employees, are covered by labour union contracts.

[Olivia Chow, NDP, Trinity—Spadina, ON]

Yes, I do know that.

[John Myles]

That's how these decisions get made. But in Canada and the United States, we don't have that situation. Many of those countries don't have a minimum wage. The minimum wage is what gets negotiated between employers and unions and applied across the whole labour market.

In a sense, we rely on both levels of government to play the role labour unions do throughout Europe. And that's something that has to be recognized. We don't have the unions here to do it, so governments have to take up the slack.

[Josephine Grey]

I'd like to add a point about how Europe coordinates these things.

I watched very closely as they followed up on the World Summit for Social Development . One of the first things they did was meet the commitment to involve people who are affected and have them participate in the development of policy. But one of the other reasons Europe has this ability to succeed in these areas is that they all have human rights commitments and standards, and they take them seriously and they have accountability mechanisms at many levels. These things actually make a difference.

Now, I say that the provinces and the federal government signed and ratified those agreements. You can start there, as at least a framework of principles that are legally binding to the federal and provincial governments, as it works in Europe. If some of these commitments were taken seriously and followed through on, you would find you would get some similar results.

[The Acting Chair, Conservative, Maurice Vellacott]

Thank you, Josephine.

We have to go to a couple of site visits shortly. I'll finish up with a couple of quick questions, and we may not use the seven minutes, but then we'll have to say our farewells to our panellists here today.

My first question is to John.

In terms of sustaining social programs in the future, because some of the academics write of a demographic winter in Canada and a birth rate decline all across the country, it's more in replacing ourselves at this point, but it's moving progressively down. I want to bring that together with a suggestion that came from Judit and Elita, the eleventh recommendation, on maternity benefits being de-linked from EI and made available to all women. I know countries such France, Japan, and elsewhere have had to think of this in terms of the demographic. How do we sustain our programs for the future unless by immigration, or an increased birth rate, or such policies as Judit and Elita have suggested? How do we sustain it? Do you see some foreboding, some difficulty ahead, in terms of the sustaining of our workforce?

[John Myles]

Because of the aging of the Canadian population.

[The Acting Chair, Conservative, Maurice Vellacott]

Exactly, and not replacing it.

[John Myles]

My main area of research over the years has been public pension policy. I'm very popular on that issue in Europe. They asked me to come over and speak on it.

About every ten years we get interested in pension policy in Canada. For many reasons it simply hasn't had the political leverage in Canada that it's had in Europe, but there are very good reasons for that. Our public pension system is a very low-cost item. We spend about 5% of GDP on our public pension system and get those low poverty rates I mentioned earlier. The European countries are spending anywhere between 10% and 15% of GDP on their public pension systems. We have very different mechanisms of financing. Half of our old age budget, at least in the pension area, comes from general revenue rather than payroll taxes. That saved us from many of the pressures being experienced in the larger European countries.

[The Acting Chair, Conservative, Maurice Vellacott]

Should we be doing something along the lines of encouraging the birth rates in the country, as they have in France, Japan, and elsewhere?

[John Myles]

Should we be doing something to encourage birth rates? That's a toughie. We have lots of examples. You could take a look at Quebec. Demonstrating that the policies have turned the birth rate around is technically a very difficult thing to do, but certainly the changes in Quebec in terms of family support, child support, have to some degree reversed it. Quebec had one of the lowest rates in the world until recently.

[Yves Savoie]

There are people who have been marginalized from sustainable attachment to the labour market by reason of family structure or by reason of disability who need not be marginalized from the labour market. The recommendations that we've put forward are very modest and practical, but at the end of the day they build on a knowledge we have that every person with MS wants to work, but the reality of our systems--public transportation, attendant care, and home care supports--are such that in fact people are prevented.

They make choices about going for disability benefits at a much earlier stage of what is a progressive disease in the context of MS. While they might be able to work 15, 25, or 30 hours and be gainfully employed and pay taxes, which is to the heart of the your question, they make a choice of being full-time on a disability benefit. They lose the social value of work, the motivation that comes from it, but more fundamentally they lose the opportunity to contribute as citizens productively to our economies and to the tax base.

To your argument, I'd say this is something you need to look at in an integrated way. I believe there are a lot of people who are marginalized from a sustainable attachment to the labour market not because they don't want to work or they can't work, but because the system prevents them from making that choice.

[Josephine Grey]

I'd like to add that the administrative complexity is extremely expensive, and having so much invested in preventing fraud, etc., is very costly. If we had much simpler systems we would have our allocation of funds going towards things far more important and useful than policing whether or not a few people make a few extra dollars. I think this is incredibly important.

[The Acting Chair, Conservative, Maurice Vellacott]

Thank you, one and all: Judit, Elita, Josephine, Yves, John, Mark, and Sarah. We appreciate your input to us. You'll see it on the record. We'll continue this dialogue across the country in the days ahead.

Our meeting has completed. You can stick around as long as you want.

The meeting is adjourned.