Human Resources Committee on Dec. 4th, 2009

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

I know, Brendan, that you have spoken about the Manitoba plan where the CED poverty framework and lens is concerned. Maybe you could also build that into your comments.

[Brendan Reimer]

In terms of the poverty plan, the provincial plan here is called the all aboard strategy. While it has many good steps dealing with some of the core issues around poverty, I would still say that it's not a comprehensive plan. I would still say that it doesn't have clear targets and timelines for outcome-based results, which is critically important and goes to your question about how you get there.

I would say that it could really be strengthened with anti-poverty legislation and built-in accountability measures, whether those are annual public reports on outcomes or public advisory councils that hold them accountable for the different actions. Then there has to be political will, which I think there is at the provincial level, but some of those other pieces are missing. This political will would ensure that the actions are consistent with this desire for a poverty reduction strategy that goes through the different departments.

As I said, each department has different kinds of opportunities to impact poverty. But when you say you want to end child poverty--and poor children live in poor families--and you don't follow through with social housing or child care strategies, and you're cutting the EI support, there really isn't a cross-departmental consistent effort to achieve that desired outcome. So it goes back to your question of how you achieve it. You have to make sure there's consistency through the departments to achieve it.

The policy framework and lens they talked about is a community economic development policy framework and lens. What it does--the lens, in particular--when government people and departments are implementing different kinds of programs and initiatives, whether it's capital projects or policies, is ask a series of questions. What is the local decision-making component in this initiative? Is this building local capacity for communities to take leadership? What is the skills development and training component? Is this hiring local people? Is this stimulating the local economy? Is this considering the environment in the work? Is this considering human dignity in the community?

So it asks a series of questions and it could be tailored to be a poverty reduction lens, which wouldn't be that much different. But if at any time the government acted on a different kind of project--whatever department it would happen to be--if it asked these questions and asked what the impact is going to be on people who live in poverty and on poor communities, and if it really built that into the considerations, I think it could have a good impact. That's where the concept of a lens can be quite useful. But it has to have some teeth to it.

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

You mentioned earlier, Sid, that we don't want on ongoing, never-ending debate on measurements. There's also a debate within the community, as we try to develop plans here around whether we take an incremental approach or we try to find some big fix. When we looked at senior poverty a few years ago, we brought in CPP and then GIS and it lifted everybody. Canada Without Poverty is calling for a 100% poverty reduction now. Do you have any comment about that?

[Dr. Sid Frankel]

We realize how difficult and how expensive this is to do, so there are no illusions about that. We're very concerned that the decade that ended with the beginning of the recession was a decade of great economic growth, most of which went to the incomes of the upper decile of Canadians. Manitoba is actually worse in that regard than the rest of the country. So our argument would be that the federal government should articulate a comprehensive plan and that it absolutely must contain interim targets and timelines for the accomplishment of those targets.

We'll note, for example, that in the United Kingdom such a plan was put forward. Under the Blair government it was clearly acknowledged when there was progress. The Rowntree Society issued a report this past week pointing to the fact that under the Brown government there has been a failure. Big surprise: the investment was decreased and the poverty rates, especially the child poverty rates, tragically have gone back in the U.K. to where they were a decade ago.

One of the things we would say is that it's good that this measure was put forward by the government so that their failures, as well as their successes, could be pointed to. But our argument would be that the plan should be comprehensive and articulated at the beginning. The implementation, of course, would have to be over time. We would have no illusions about that. There should be clear targets and timelines over time. As you know, Campaign 2000 would favour a reduction by 50% of poverty in Canada for all groups by the year 2020.

[The Chair, Conservative, Dean Allison]

Thanks, Tony.

Brendan, I had a couple of questions for you, because you talked about the economic development going on in Vancouver. I wonder if you have any specific examples for us. We heard some interesting things around policies. Can you give us any specific examples in Winnipeg?

[Brendan Reimer]

On social enterprise?

[The Chair, Conservative, Dean Allison]

Yes.

[Brendan Reimer]

In terms of stories, that's one thing. In terms of policies needed to support them, that's another.

[The Chair, Conservative, Dean Allison]

Sure, let's do both.

[Brendan Reimer]

There are many stories here. There is a strong organizing community here in Winnipeg where people are coming up with different kinds of solutions. I mentioned Inner City Renovation. It's a construction company that was started to employ people who had various employments, and they've been paying out millions of dollars in wages over the last number of years for housing and commercial construction work.

A new initiative doing energy retrofits is called BUILD, or maybe it's called Warm Up Winnipeg now. They're doing energy retrofits on Manitoba housing as a training program for individuals with various.... I had the opportunity to go on local radio with one of the young men who was in the program. He came out of the gangs and said it was really hard to come out, but his life was so different now because he had an opportunity to earn a paycheque, go home, watch TV with his girlfriend, and I think he had a dog. He said, this is a clean life, a good life; it's a life you can be proud of. But when he tried to turn this corner, nobody would hire him. But when he walked into BUILD and dropped off his resumé, he didn't hope for anything because he knew he had a record, and he knew his appearance and who he had associated with, but they hired him.

We need social enterprises like this because they create opportunities for people to get the job experience, to get the resumé, to get the connections, to enter the labour market to create a different path for themselves. We have many; some of them are worker co-ops. We have Enviro-Safe Cleaning here. A group of refugees from the Congo started a commercial cleaning worker co-op. There are thrift stores for women run by the North End Women's Centre. These are women who have many different kinds of barriers, but they learn retail experience with flexible work hours because that's what's required. There are many like this.

Some of the policies...what's tricky is that in terms of support there's not a lot of understanding of what these organizations are. In Quebec there's a strong social economy and a different kind of understanding of what these organizations are and the value they add and how to support them. They're not just a regular commercial enterprise. You can't treat them just like regular competitive private businesses, with the same kinds of lending mechanisms and the same kinds of policies. But they're not just a social service either. So there needs to be a better understanding of the value they bring and the kinds of initiatives they are in order to be able to support the social side, the employment, the labour market development side of it with resources, understanding that these social enterprises are taking on important work that private enterprise is not likely to do.

They need resources for that part of it. They are enterprises and they need access to markets as well. So there's procurement. How much does government spend? How much do institutions spend? And we work with this, whether it's with the credit unions or the universities. It's one thing to hand out grants to start or support these kinds of initiatives, but if you shift the way government spending is done, and if government is really for the good of the people, purchasing from these kinds of enterprises can do a lot of good for different communities and for reducing poverty. But one of the challenges is that contracts are often huge. If you unbundle contracts, it makes them more accessible to smaller social enterprises.

You just need to make sure there are not actual barriers in the tendering process. I think when we looked through the federal initiative years ago, some said it had to be for-profit businesses and completely ruled out any of these social enterprises from being eligible. If value is going to be recognized--and this is where a poverty reduction lens would be very useful--this enterprise would do more in terms of either local spinoff, as Susan was talking about with child care, or in reduced poverty, increased labour market attachment bringing people off EI, these kinds of things. If that value, which is very valuable especially in reducing poverty, is going to be recognized in the tendering process with extra points or extra criteria, it's valid, but it's not recognized. If that were recognized, these enterprises could gain access to a lot more contracts.

These are some of the stories, and there are many more out there. I'd gladly write you a storybook on these things and the difference they make. Never mind the funding or the grants at start-up; the procurement piece could make a huge difference in supporting the work these social enterprises do and in helping them grow so they can do even more of this work.

[The Chair, Conservative, Dean Allison]

Thank you very much.

I'm going to turn it back to Mr. Lessard, but I want to recognize Anita Neville once again.

Thank you for joining our committee.

[Anita Neville, Liberal, Winnipeg South Centre, MB]

Thank you. I apologize for being late.

[The Chair, Conservative, Dean Allison]

I know you have other things.

Go ahead, Mr. Lessard. It's back to you for seven minutes.

[Yves Lessard, Bloc, Chambly—Borduas, QC]

I am coming back to the question I did not pursue earlier which you were unable to answer.

Last May, the Government of Manitoba introduced a policy called “All Aboard". Yesterday, we were told that a modern approach to poverty consisted primarily in ensuring that people have a place to live. We were told that a place to live is essential to the stability of individuals and families. I find that very interesting. We have to start somewhere.

I warn you up front that I am going to play devil's advocate a bit. That is not to say that I do not believe in the current approach. However, you are going to enlighten us so that we learn how to do things differently. An undertaking was made in 1989. The MPs back then were honest, confident people. Yet we see that it all ended in failure. Today, it is like we are handing over to the federal government a solution based on the principle whereby if the problem is left to the provinces alone, they will not necessarily use the money wisely. That is what I get from the exercise we are engaged in here this morning. If I am wrong, please tell me.

Most of the progress that has been made in terms of eliminating poverty can be attributed to provincial initiatives. I spoke to you about Quebec, but there is also Newfoundland and Labrador. Every time, there was opposition to the federal government throwing weight around. I will use an example that is very familiar to me. I am not saying it's perfect in Quebec. We have a daycare system. Quebec had to take responsibility for the system all on its own. It still pays for the system. The federal government launched a daycare project but then abandoned it. As madam pointed out earlier, we cannot change measures every time there is a change in government.

The federal government has not been involved in social housing for 10 years. Only two provinces have poverty legislation. Cuts are being made to literacy programs. The provinces are taking on that task alone, at least the ones that are doing it. Quebec has pay equity legislation, for and against the federal government. It also has a minimum wage law. Quebec has put in place measures to offset cuts in Employment Insurance. There, too, it is going it all alone. Other provinces have taken similar measures. There is a Young Offenders Act. The federal government passed a law so that it would disrupt Quebec's legislation. I have to say something today about violence against women. Tomorrow is the 20th anniversary of the École polytechnique massacre. That is only one example, but how many women are killed each year? More than were killed at the École polytechnique. It's a symbol. As far as violence goes, we can see what is happening at the federal level. All we need do is look at the current Firearms Act.

Am I preaching to the converted? I told you that I would be playing devil's advocate in order to challenge you a bit on this approach. Are we repeating the exercise for nothing? The legislation and measures governments have adopted are at cross purposes with what needs to be done to eliminate poverty.

Quebec has established a social economy system. As Mr. Reimer said, this legislation establishes and sets parameters for the entire social economy system. I am telling you all this so that I can force things a little bit, find out what you think and what needs to be done differently so that the entire exercise is productive. I know enough of my colleagues here today individually. Yesterday, I heard a remark from our chair about what needed to be said and done.

Is that going to be implemented? I am sure that my colleagues and I are going to make good recommendations, but it remains to be seen whether they are going to be implemented.

Otherwise, what has to be done?

[Dr. Susan Prentice]

You ask a very difficult and important, passionate question, which of course raises the question of federalism in Canada.

Quebec has made strong commitments to redistribution, and you are the envy of much of the rest of the country. Quebec has done some splendid things, although, as you know, it is not perfect.

Many of us in the rest of Canada look to the federal government to help resource that commitment to social inclusion, to redistribution, to social cohesion. For example, the kinds of programs we were able to do in Canada under the Canada assistance program, which was a federal initiative that provided redistribution across Canada to the historically poorer provinces, were enormously important. In recent years, we've been confronting a federal government in Canada that has been unwilling to, as I would say, take the leadership role for Canada as a nation. This raises the debate about nationalism, and it may not seem so necessary to a Quebecker, but it seems very important to the rest of us across the country to look to the national government to begin to provide the resourcing.

So it takes a different kind of federal commitment to inclusion and to equality and to redistribution.

[Yves Lessard, Bloc, Chambly—Borduas, QC]

How should that undertaking be different?

[The Chair, Conservative, Dean Allison]

We're almost out of time. Let's get a response from Lynne and then Sid.

[Lynne Fernandez]

I agree with Susan. I think you're getting to a debate or a discussion about the nature of our federalism.

I'm an economist and I'm always looking at revenues and expenditures. One thing that hasn't been mentioned here yet today as part of the reason the federal government has backed away from what I would consider its responsibility across the country is that it has cut its revenues to the extent that it doesn't have the money to spend that it used to have.

This is a debate that is starting to grow in the United States. Very mainstream economists are starting to talk about how taxes have been cut so much in that country that it's just impossible for them to have a functioning society. I think we perhaps haven't cut quite as much in Canada, but we've cut too much. Whether it's at the provincial or federal level, we have persistent talks about the need to cut taxes and cut taxes and cut taxes. I think it's time we took an honest look at that and said it's actually the other way around: it's time to start raising taxes. I know it's painful. It's politically unpopular and it's going to be a nasty issue to bring up, but we have to do it.

[The Chair, Conservative, Dean Allison]

Thanks for that, Ms. Fernandez.

I'll finish with Mr. Frankel.

[Dr. Sid Frankel]

I would say there are two other important elements here. One is that the plan, the targets, and the timelines are absolutely essential. Mr. Brown is taking a battering in the British press right now, and he should be, because of how he has disinvested in poverty reduction.

The second thing that's necessary is a vibrant voluntary sector to hold politicians' feet to the fire. I hope your recommendations include a plan that has two elements. One is funding to the voluntary sector to do that, because it's very hard even for Campaign 2000, which has now existed for too many years, to do that. The second is changing the taxation rules around charities so that kind of non-partisan advocacy can occur. In Britain, the Rowntree trust is in Mr. Brown's nightmares, and again, it should be.

Thanks.

[The Chair, Conservative, Dean Allison]

Thank you. Thank you very much, Mr. Lessard.

We're going to finish up with Mr. Martin. You've got seven minutes, sir.

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

Thank you.

I have a couple of questions that I want to ask, but Lynne's passionate plea a second ago encouraged me to put them together, because if we're going to do a number of things that are national in scope and big enough to make a difference, they're going to cost money.

We heard today a call for a national child care program. That would go a long way to alleviating poverty among women and children. We heard a plea for a significant increase in the national child benefit, which would go a long way to lifting children and their families out of poverty. We heard from Neil a plea for reform of the EI system, which we need to do. Mind you, that's money that's outside, or at least used to be outside, the taxation system. It was self-funding at one time, to a surplus of more than $54 billion.

I'm also suggesting, and this is a question that I'll put, but in the context of taxation and money and finances: what about a guaranteed annual income? What about a basic income for people? We just came from the north in the last couple of days, where we heard about the very deep and desperate and devastating poverty amongst aboriginal people in aboriginal communities. You're talking about aboriginal people in urban communities as a big problem as well and asking how we get the resources to turn that problem into an asset. Brendan talked a lot about how we can be creative in doing that.

But you're right, it all goes back to the question where we get the money. The CCPA put out a release in the last couple of days to say that actually the money is there, that it's just a question of ideology. We've had a number of years now during which we thought a good economy would lift all boats, and it hasn't. We turned over the building of housing, back in the late 1980s and early 1990s, to the private sector, thinking they would build the affordable housing, and they haven't. And so what do we do?

I guess the question is how we as politicians.... I raised this yesterday. It is a debate that we have to have, and we might as well start it now. How do we as politicians, knowing that our constituents want tax breaks...? That's what they say, if you call them up and ask what they would like. Mind you, as somebody yesterday said, it all depends on the question you ask them: tax breaks versus what—better health care? Tax breaks versus...?

I wonder whether you have any guidance for us in terms of that underlying, basic question. We go back to our constituents and we want to be re-elected. Martin Luther King used to say that there were three kinds of politicians: the ones who always do the right thing; the group that, if you give them the right argument, will do the right thing; and then the third group, usually the largest group, walking around with their fingers in the air wondering which way the wind is blowing, determining whether they'll be re-elected or not.

We go back to our constituents in an election and say we're going to give them a tax break. They say, great; we're voting for you. If we go back to our constituents and say we're going to raise their taxes, they look around for the person who's going to tell them they're not going to do that. Then they watch you like a hawk once you get in, if you in fact break that promise and look at circumstances, realizing that you need more revenue, and do whatever it takes.

The question is, politically—and I guess this is our dilemma if we're going to put in place a comprehensive anti-poverty strategy that has these really good things in it that are going to cost money—how do we do it? I certainly have some thoughts on it, but I want to hear yours.

[Lynne Fernandez]

You're right, it's a question of ideology, and a certain ideology has been successful over the last 30 years in convincing people that taxation is a bad thing. It is as if people and corporations have the idea that their tax money is going into a black hole.

You mentioned the CCPA earlier. Hugh Mackenzie at their national office did a report that came out earlier this year. It shows what the actual value is that Canadians get for their taxation. I think that's the key. We have to start educating people about the value of taxation. The returns on taxation are incredible. The average middle class family realizes between $40,000 to $60,000 worth of benefits every year from taxation. We need to make that connection. We need to connect the dots and show people the value they're getting out of taxation. Hugh Mackenzie did exactly that. It's astounding: every Canadian receives between $40,000 and $60,000 worth of services by paying taxes. That's more than some families are bringing in to start with.

When you look at before-tax incomes across Canada, you see that most of the money is going to the top decile, and it's even worse in Manitoba. But when you look at after-tax incomes, it is clear that in Manitoba we do better at redistributing our income. That's because we have a slightly better way of taxing the higher-income people and then redistributing it. So although we look worse before taxes, we look better after taxes, because our taxation system is a little more progressive.

What happens when low-income people are getting more money needs to be explained to people. We are spending less on health care; we're spending less on crime prevention; we're spending less on jails; we're spending less on all kinds of things. But the cost-benefit is that we actually get more value from taxation than if we don't tax people. That argument has to be made. It's a tough argument to make, though. For whatever reason, the other ideology has convinced people that taxation is bad. It's just a knee-jerk reaction. We need to turn that argument around. Look at what's happening in the United States. We don't want it happening in Canada. It's a question of education. I don't envy politicians having to take it on. I hope some of you will be brave enough to broach the issue. It's unpleasant, but it has to be done.

[The Chair, Conservative, Dean Allison]

Neil wanted to respond.

[Neil Cohen]

I'm happy that Lynne talked about the consequences of poverty. Historically, governments seldom match the revenue side with the expenditure side. There is a cost to be associated with people and poverty. Health care costs rise, as we know. All kinds of studies have been done for many years. We know that the suicide rate among unemployed workers is 30 times that of the working population. We know there are increased hospital admissions, mental problems, and physical disabilities related to unemployment. So governments are going to pay one way or another, whether on the revenue side or the expenditure side. I think that it's a good investment in poverty reduction.

In 1990, when the legislation was passed to make EI self-financing, workers paid $3.07 per $100 of earnings and employers paid 1.4 times that. The EI premium rate now is about a third of that, and the federal government no longer contributes. This shows the diminished level of contribution to training and income support. More needs to be done, and we can see how much less is being done.