My point is that addressing the poverty problem requires a whole family of policy initiatives that all work together at the same time. That means that fighting poverty requires lots and lots of policy coordination. If you want to maximize employment, for example, you also have to be thinking about family and child care issues. You can't deal with them as separate issues. But our structures and institutions make this difficult.
There are two main obstacles to developing a well-coordinated policy agenda. One is the old problem that every country faces, which is a bureaucratic division of labour into different departments of government. We've chopped up the policy domain into little packages to make it manageable. But every country faces that. The most pressing problem is overlapping federal and provincial government jurisdiction, especially in areas related to the labour market, which is an issue I've emphasized this afternoon.
Is there any solution to this problem? The committee might find it instructive, if you haven't already studied it, to consider the European Union strategy for addressing an even more conflictual problem with coordination across member countries. It's called the open method of coordination. It involves the setting of common targets, such as employment levels, without trying to dictate to countries which policy mechanisms they will use to reach those targets. It also involves an intensive system of auditing and analysis to evaluate national success in reaching these targets.
Here in Canada we also have exemplars of an even more demanding political process, and I'll close on this. To illustrate, I want to use the example of the CPP reform of the late nineties, a reform that almost everyone now judges to be one of our big federal-provincial success stories. What drove the reform? Bruce Little's recent book on the CPP reform, which I recommend to you all, contains what I think is the essence of the answer. In 1985, ten years before people started looking for a solution, the federal government and the provinces introduced what I will call a forcing mechanism that required them to seek a joint solution to problems of inadequate CPP funding, as determined by the chief actuary. The default provision they introduced in 1985 meant that when the chief actuary submitted his gloomy 15th report on the CPP in 1995, the outcome was certain. Federal and provincial ministers would soon be at the bargaining table, either to cut benefits or to raise contributions. They had locked themselves into this agreement. Should they have failed to act, contribution rates would automatically have risen to about 14% in the year 2030, and for reasons of intergenerational equity, no one wanted that. The entire purpose of the reform was to preclude that possibility, and they cut a deal that will keep the rates stable at about 9.9% well in the future.
What do we see here? Despite enormous differences in political preferences among the provinces and the federal government, they reached a consensus on policy targets. Then they created a lock-in provision that required them to reach these targets: if X doesn't happen, Y will happen. This is exactly what I encourage you to think about. If the Parliament of Canada wants to reduce poverty, lock yourselves and your successors, along with the provinces, to the extent you can, into reaching specific outcomes. And specify what must happen if those targets are not reached. I think of this as making a poverty reduction contract with the people of Canada.
Thank you.