Thank you very much for having us share our experiences and our thoughts on the issue of poverty.
In 2001, after a life on Bay Street and private practice of 15 to 18 years, I experienced dislocation in my life. The dislocation took me into a shelter, the Maxwell Meighen Centre, in downtown Toronto. I took the experience of dislocation as an opportunity for me to learn new things in a new terrain.
I spent two years in the shelter and then I migrated to the next level of accommodation for low-income people, which is supportive housing, the Homes First Society. I am still there. I remain there because I saw an opportunity in terms of the problems and the challenges faced by the poor and I committed myself to developing solutions based upon their needs. Green Pastures Society is the result of that experience.
In my presentation I am going to focus on one specific area, which I entitle financial advocacy. It's the problem experienced by the poor in accessing financial support and benefit entitlements under existing legislation, be it taxes or pensions or whatever. What I found, living among the poor, was that most of them are not aware of a lot of these supports or entitlements.
I organized groups of volunteers with financial backgrounds to render services to them. What we found increasingly is that many people do not file their taxes for many years and many people do not know how to get basic entitlements. What we did, therefore, was conduct a global study about the issues and the research.
One of the studies we came across was a Statistics Canada report about the guaranteed income supplement and the problems people are experiencing with that. About 300,000 seniors across the country may be losing about $300 million every year because they are not filing.
We also found the challenges of financial literacy are big for the whole country, but particularly so for low-income people.
We found HRSDC, in one of their outreach evaluation reports, reporting that it seems some marginalized people are losing out on their entitlements. They don't apply for them.
We found another study from the Retirement Planning Institute, which reviewed a number of situations for pensioners. They found about $1.3 million in terms of retroactive benefit payments people were entitled to, and those were refunded to them.
Within the Green Pastures experience, let me mention two or three instances of what we call outrageous experiences we've come across. We encountered a homeless senior and a veteran who, for 17 years, never filed their taxes. They qualified for the guaranteed income supplement for the 17 years, but because they never filed their taxes they were entitled to payments for only 11 months. At current values their loss was about $133,000.
We also found gaps in terms of expertise among existing bookkeepers and accountants in helping the poor. A person received about $40,000 in retroactive CPP disability payments and the taxes were completed and the low-income person had to pay about $8,000 to Revenue Canada. The person was referred to us and after doing the research and applying income averaging opportunities, we were able to allocate the $40,000 over the relevant years and the taxes vanished.
What we are encountering is that among the poor across Canada there is an enormous gap in terms of literacy, and the organizations of professionals serving the people in the economy don't know the issues of the poor. We tested our findings over a three-year period. We selected about 250 people, and as a result of our services, we generated half a million dollars in terms of refunds and everything for them.
So my message to you is this. We need a new infrastructure across the landscape in Canada to help the poor. We have existing community legal clinics where people go for legal help, but in the financial area we don't have any kind of help. There's a role that the federal government can play in this area. We have to conduct research spanning the extent to which outreach services from federal agencies reach out to the poor in their communities to help them. That's one.
Number two, I think that the federal government, having confirmed the need for these kinds of services, has to team up with the provinces and the cities to establish these financial centres that people can turn to for help.
Most importantly, I want to focus on existing tax legislation. It seems like existing tax legislation is creating a debtors' prison for the poor. Let me cite one example. When somebody is poor...and of course, in their prior life they perhaps had higher incomes, and they may owe some taxes. When they become poor and they're on assistance and all that, they cannot meet those kinds of debt payments.
We did income taxes for one person recently, about five or six months ago, and we filed from 1998 to 2007. They had a refund coming to them of about $3,600. But in 1997, they owed the federal government about $4,000. The interest came to about $6,100. So that refund was taken by Revenue Canada to offset the balance. The balance he owes Revenue Canada right now is $6,600. This has huge implications for such programs as working income tax benefit. You're trying to get money to the poor, but the point is that if they owe Revenue Canada some money, Revenue Canada takes it. We have a federal tax code ruling that if Revenue Canada doesn't collect or attempt to collect moneys from people owing them for six years, that debt should be zero. Revenue Canada is not following that right now. They grab the refund and they use it to settle the debt. This is prison for the poor.
The other thing is the statute of limitations. When a person does not apply for child tax benefit, when they do not apply for the GIS, there is a limitation period of one year that they can go back. So everything that was allowed over all those years is gone. I believe that those benefits are trust funds for these people. The statute of limitations has to be removed. We shouldn't direct those funds to general revenues to support everything that the government does.
That's my presentation.