Human Resources Committee on March 10th, 2009

[The Chair, Conservative, Dean Allison]

I'd like to call this meeting to order.

As we continue with our study on the federal contribution towards reducing poverty in Canada, I want to welcome the witnesses and thank them for making themselves available today. I know there always seems to be a “hurry up and let's wait” type of attitude up here in Parliament, but we started this study last year and we're back into it now. We appreciate your making your schedules available for today.

I do believe we have the Caledon Institute of Social Policy today, so we have Mr. Battle and Ms. Torjman. We have Mr. Sharpe from the Centre for the Study of Living Standards.

Welcome today.

As well, we have Mr. Roberts from the Canadian Policy Research Networks. We also have with us Mr. Williamson and Ms. Pollack.

Thank you very much for being here today.

I believe you each have some statements to begin with. If you could keep them to about 10 minutes, that would be great. I know there will be some questions that come out of those afterwards.

We'll start with the rounds. We'll start with the Caledon Institute.

You have 10 minutes, and once again, thank you for being here. We look forward to your comments.

[Ken Battle, President, Caledon Institute of Social Policy]

Thank you, Mr. Chair, and thank you for the invitation to appear.

Sherri and I are both going to speak, so we'll have to skip the wonderful introduction we wrote and just jump right into the meat of it.

Our basic argument is that the federal government has the dominant role to play in tackling poverty reduction in Canada. It can reduce poverty, it does reduce poverty, and it should reduce poverty a lot more.

Unlike some jurisdictions, both provincial and abroad, the federal government does not have a formal poverty reduction strategy replete with analysis evaluation, reform initiatives, and targets. However, the federal government does have at its disposal some potentially powerful instruments to help reduce poverty, which can service key elements of the full-blown poverty reduction strategy.

This morning we want to briefly discuss a few examples of federal programs that can help reduce poverty and offer some suggestions for improving their poverty reduction capacity. We distinguish here between incremental improvements to existing programs and deeper changes to the architecture or structure of social policy.

While the federal role in poverty reduction takes mainly the form of income security programs, it also has roles to play in supporting the services provided by provinces and territories. Ottawa can also help create an enabling environment that supports community interventions to reduce poverty.

Let me start with the biggest success story in poverty reduction at the federal level, and that's with seniors. As you may or may not know, Canada has made enormous progress in reducing poverty among the elderly. The rate went from 29% in 1976 to 5.4% in 2006. In fact, Canada ranks third-lowest among 23 industrialized nations in the poverty rate for seniors.

This huge reduction in poverty is due largely to improvements in public pension programs such as old age security, the guaranteed income supplement, and the Canada and Quebec pension plans, as well as the historic rise in the labour force participation of women. They are increasingly becoming eligible for pensions in their own right from the Canada and Quebec pension plans and, for a minority, employer-sponsored plans.

There are two ways we could make further progress against reducing poverty among seniors. I should point out that when we look at unattached seniors, there is a higher poverty rate than for seniors overall. It's 16.1% for elderly women and 14% for elderly men, and many more live just above the poverty line.

The most obvious program to further reduce poverty among seniors is the guaranteed income supplement. This received a few improvements a couple of years ago--the first ones in a generation. If we want to make further progress with poverty for seniors, we could make further increases in this program.

Another possibility is to take the age credit, which is a non-refundable credit, and make it a refundable credit. Then it would serve seniors who have income so low that they're below the taxpaying threshold.

Another area of progress against poverty in Canada is in child benefits. The Canada child tax benefit, which was the federal government's part of the federal-provincial-territorial national child benefit reform, has seen very large increases in recent years. Maximum payments for the first child went from $1,520 in July 1996 to $3,416 in July 2009. That's a very large increase. Caledon and a number of other groups have set a maximum of a $5,000 Canada child tax benefit as a target for a mature child benefit system.

Child benefits take a hefty whack out of the poverty statistics. If there were no federal child benefits, the low-income rate for families with children would be 15%. Under the current system of federal child benefits, the low-income rate for families with kids is 9.3%, and under Caledon's proposal for a $5,000 maximum CCTB we would reduce that further, to 8.3%. We'd see similar reductions in the numbers of low-income families and the depth of poverty.

The answer to further progress against child poverty in terms of child benefits is a simple one: the Canada child tax benefit is there. All we need to do is make further incremental improvements and we can reach the $5,000 target.

A new program that came in a couple of years ago is the working income tax benefit. This is support for Canada's working poor. This filled a big hole in the architecture of income security, because prior to this the working poor had no support from the federal government.

WITB has two major objectives: to reduce disincentives to work for Canadians who are stuck behind the welfare wall, and to enhance incentives to work among the working poor. The initial WITB program was extremely small--very modest. It was so modest in fact that it wouldn't even serve people working full-time at low wages.

Thanks in part to emphasis from our organization and others, the finance minister saw fit in the most recent budget to substantially improve the working income tax benefit by increasing the maximum benefit and also pushing the income level eligibility higher up for this program. This is an extremely new program, but it's potentially very important in terms of reducing poverty among the working poor, who make up about half of low-income Canadians.

Employment insurance is a troubled program, to say the least. As you may or may not know, virtually all employees pay EI premiums but only a minority are able to draw upon the program's income benefits and employment services when they become unemployed. In fact, coverage of the unemployed fell from 83% in 1990 to 43% in 2008, which is the lowest number since 1976.

There is a gender gap in EI. Only 39% of unemployed women received EI at last count, compared to 46% of men. And that gender gap has widened over the years.

Benefits are by no means generous. The maximum benefit has declined from $595, in inflation-adjusted terms, in the mid-nineties, down to $447 in 2009. Average benefits for women amount to $4,544 below the poverty line. Even if you manage to qualify for EI, which most unemployed people don't, you don't get a very generous benefit.

What should we do? Most progressive organizations have called for an end to the variable entrance requirement. This is the regional aspect of EI whereby your eligibility for benefits and the length of time you get benefits varies by the regional unemployment rate. Groups have called for that to be substantially reduced and indeed removed. The earnings replacement rate could be increased. It's only 55% of insurable earnings; this could be up to 60% or 75%. And extend the duration of benefits.

We have supported these kinds of changes as a stopgap measure because of the recession. As you know, all the budget did was increase the maximum duration of benefits by five weeks. This doesn't help the majority of unemployed who don't even qualify for benefits.

Groups are asking for a restoration of EI. We have done that, but we don't think that's enough. We think we need more major structural changes in EI so that it can better meet the needs of the non-standard workforce, which now makes up about 40% of all workers.

We have been working on a new architecture of benefits over the last couple of years that would see changes to welfare and unemployment insurance. With unemployment insurance, we would end the regional aspect; increase the earnings for replacement capacity of EI; and create a new program, a temporary income program, which would be an income-tested program funded out of general revenues. It would be a federal program, which would meet the needs of unemployed Canadians who are never going to be eligible for EI. We would actually create a two-part EI system.

I'll now turn it over to Sherri, who will talk about disability income.

[Sherri Torjman, Vice-President, Caledon Institute of Social Policy]

Thank you.

We've been concerned for years about the fact that persons with disabilities in Canada face disproportionately higher rates of poverty than do other Canadians. One of the problems is that they can't get into the labour market and can't contribute to many of the social insurance benefits that we have, for example, the employment insurance sickness benefit or the Canada Pension Plan disability benefit, and, as a result, we have about 500,000 Canadians throughout the country who have to rely on welfare.

Welfare is a program of last resort. It never was intended to provide a guaranteed income for so many Canadians. One of our proposals has to do with the possibility of taking people who have a disability off welfare to create a new basic income program that would be supported by the federal government. It would be similar to the kinds of configurations that we have for seniors, particularly the guaranteed income supplement, which is an income-tested program. The combined old age security and guaranteed income supplement provide about $13,700 a year, so we're looking at that configuration as a model for how we might reform income security.

Now, if we did that, if in fact we removed people from welfare and had a new income security program, there would be considerable savings to the provinces and territories. One of our proposals is that under a negotiated agreement with the federal government there would be a reinvestment in disability supports. These include technical aids and equipment and personal supports like home care and homemakers' services. This is really a significant area that we've overlooked, not just for the 16% of Canadians considered to be disabled from a formal definition perspective, but also from the viewpoint that we have an aging population in Canada, and we have to pay attention to that issue.

Another core component of a poverty strategy has to do with a set of services. The federal government really has an important role to play in terms of financial support for these services. One of them, the core area that we have been looking at over the years, is child care. Child care is significant because of its social policy value and its economic policy value. In terms of social policy, we know from a burgeoning literature, a very vast literature, about the value of investing in early childhood development, from the perspective of readiness to learn and support for good mental health and development over the years. But we also know that high-quality, affordable child care is essential to economic policy because it enables families to pursue education and to participate in the labour market.

One of our concerns has to do with the fact that a good-quality, early childhood development system requires an investment of funding. The federal government had played a major role in this regard in the federal-provincial-territorial agreements it had signed, both in the year 2000 and in the year 2003, which really enabled the development of this system across the country. There have been some new measures and a real retrenchment from that commitment, and we're concerned that within a major poverty reduction policy we should be investing significantly in high-quality, affordable child care.

Another core component of a poverty reduction strategy is decent affordable housing. This is significant because it's both a safety net and a springboard. It's a safety net in terms of providing support for people who are not able to pay their rent--and we have a lot of Canadians who are in very precarious positions right now--but having them in stable environments is also a springboard, because it contributes to healthy development of children, and it also allows people to participate in education and training.

We were very pleased to see the investment in affordable housing in the last budget: the $1 billion for social housing, the $1.9 billion to the affordable housing agreements, the additional billions that were spent for housing on reserves and in the north and for seniors, and the $75 million for housing for disability. All those are very significant, and we have supported that and said this is an essential part of our social infrastructure. Our concern has to do with the fact that we don't really have in the country a strategy for affordable housing. It really has been more hit and miss. It's been from one agreement to the next, but there is a real role federally for leadership in meeting the affordable housing needs, as well as for continued investment, and the security of that investment. It's very difficult to have an affordable housing plan unless you're assured of the financing.

Just very, very briefly, there are two more areas we have written about, and those are social infrastructure and the enabling environment. In our view, to reduce poverty, it's not enough just to have affordable housing. Four walls and a roof are obviously critical, but equally important are healthy communities, which allow citizens to participate and allow children to have opportunities to participate in recreational and artistic programs. We have argued that the infrastructure financing should go equally to social infrastructure, such as repairing our schools, our community centres, our libraries, all the places that make for healthy communities.

We were pleased to see that the last budget made investments in recreational centres. We had argued that rather than put money into individual tax credits, which benefit higher-income families, you really have to invest in the actual places and neighbourhoods and communities where people are living and raising their children.

One last point we'd like to make in terms of a federal role—because we talked about a direct federal role with respect to income security, and a shared federal role in terms of financing some of the social programs, like child care and housing and social infrastructure—is that we would also like to see the federal government play a role in terms of the enabling environment for community groups, who are trying to find local solutions to reduce poverty.

There's a tremendous amount of activity under way in the country, in which local groups are working with business and labour unions and the voluntary sector, and people living in poverty are coming together and trying to find their own solutions. Oftentimes they find they're up against the rules and policies of governments and other funders, which make it difficult for them to do their work.

So there are a number of areas where we would like to see these barriers and policy difficulties removed to enable the work of local groups. The other aspect of that, of course, is providing some support for them to be able to help each other and to learn from each other.

I will stop here. Thank you, again, for the opportunity to share our views.

[The Chair, Conservative, Dean Allison]

Thank you very much.

We're going to move on to the Centre for the Study of Living Standards.

Mr. Sharpe, you have the floor, sir.

[Dr. Andrew Sharpe, Executive Director, Centre for the Study of Living Standards]

Thank you very much.

I greatly appreciate the invitation to appear before you today.

The Centre for the Study of Living Standards is an Ottawa-based, non-profit economic research institution, focusing particularly on productivity, living standards, and economic well-being. Linked to economic well-being, of course, is poverty. We've done a number of studies on poverty.

My remarks today focus on two particular sections. First, I want to provide some insight into the nature of poverty, because if we want to reduce poverty, we have to understand its dynamics. Second, I'll go through some federal policies that could alleviate the poverty situation.

Before beginning, I want to make two points in terms of the poverty debate. The first relates to the measure of poverty and whether it's a relative or an absolute measure. There's a lot of literature on this, which I'm sure you're familiar with. But I think it's important to note that in the international context, when we talk about poverty in Canada using OECD numbers, we're looking at poverty in relative terms. By that, I mean the percentage of the population that would be, say, below one-half of the median income. This means that if you would double the real income of everybody, you would have no effect on poverty, because you'd still have the same percentage of the population below that threshold. You can't grow yourself out of poverty.

However, in Canada we use more of an absolute approach called the LICO, the low-income cut-off, and there we have a particular income threshold. In fact, you can, through economic growth, grow the country out of poverty. Therefore, there's a lot of confusion in the debate about international comparisons and whether you're using one or the other.

My discussion today will be based on the Canadian measures, the official Statistics Canada low-income cut-offs, which are not an official poverty measure but which many people do refer to as poverty measures.

The second point in terms of understanding poverty is that there are two fundamental drivers to poverty rates. One is the state of the economy. The second, of course, is public policies. I'll be talking about those. It's important to differentiate, where possible, the effect of those two influences.

Turning to the nature of poverty, in 2006 our poverty rate was 10.5% in Canada. That's for all persons. That's 3.4 million people living in poverty, after tax. There are measures before tax and they are slightly higher, but I'll focus on the after-tax measure.

It's important to differentiate the poverty by different groups. As Ken mentioned, the poverty rate for the elderly is very low. It's around 5%. The poverty rate for children is about 12%. The poverty rate for ages 18 to 64 is about 11%.

So in that sense, the child poverty rate is higher than that of those other two age groups. Of course, for the elderly, we basically have virtually no poverty in terms of the elderly families, at around 1%, whereas for elderly unattached, as Ken mentioned, it's much higher, at 15%. Also, of course, if you break it down by family type, you see that female single parents have a very high poverty rate of about 32%, and unattached individuals under 65 also have a poverty rate of around 31%. Again, it's very important to look at the different family types.

Also, the poverty rate is extremely sensitive to whether or not there's an earner in the family. For example, the poverty rate for single parent households, female, where there's no earner, is 80%. When there's one earner, it drops to 20%. That's, of course, the effect of jobs on poverty.

Of course, poverty rates vary by particular groups. We have very high poverty rates for aboriginals, for recent immigrants, and, as Sherri pointed out, for the disabled.

There's a regional dimension to poverty in Canada. You get somewhat funny results from the LICO series, but it's interesting to look at. British Columbia actually has the highest poverty rate at 13%. The province that has the lowest poverty rate is Prince Edward Island, at 5%. That's linked to the relatively low cost of living in Prince Edward Island, according to.... There are a lot of problems with our measures, and I won't get into the details on that.

Another issue, of course, is the persistence of poverty. I mentioned that the poverty rate is around 10%. Over a three-year period, about 4% of the population is in poverty for three consecutive years. Over that three-year period, about 16% of all Canadians experienced a bout of poverty. So there's a certain persistence to poverty, but also, a lot of people go in and out of poverty.

It's interesting to compare how Canada does internationally. We don't do that well. For example, on median income, we're about fifth in the OECD in terms of the level of real median income. In terms of the top decile, we're actually a little bit better, at around 6%. However, if you look at just the bottom decile, the population--that's the tenth of the people who are in poverty--we're number 14. So the poor don't do well in Canada, not as well as the average or median, compared to other countries.

What's been happening to poverty? Well, basically, there's been good news on the poverty front in recent years. We went from 4.5 million people defined as being in low income in 1976 down to 3.4 million, or the poverty rate went from 15.7% down to 10.6%. However, we still were not as good as we were in 1989, when the poverty rate was 10.2%. The poverty rate went up a lot in the first half of the 1990s, and then it has taken us a long time to get it down to where it was before the recession of the early 1990s.

Again, the key group, in terms of the age groups, has been children; they have done the best. Their poverty rate has fallen six percentage points, from around 18% to 12%. As Ken mentioned, a lot of this is due to the child benefit, and then the overall poverty rate for both the elderly and the adults has fallen four percentage points in the last decade.

What's interesting is that the female lone parent's poverty rate has fallen significantly from 53% down to 32%, so there's been a 20% fall in the female lone-parent poverty rate, which is very positive. That again reflects both the better economy--many of those single parents have jobs--and also the increased child benefits.

Now, what's been happening recently? The problem with poverty statistics is they're not current. The latest data from Statistics Canada on LICOs is for 2006. We expect the SLID data for 2007 probably in April. So a month from now, hopefully, we can have data for 2007, but it's going to take over a year to get data for 2008, which we're through. But by looking at the historical trends we can pretty well say what we think happened to poverty.

In 2007 the unemployment rate fell to 6.0% from 6.3%, and real incomes in Canada increased. I would expect the data will show a slight fall in poverty for 2007. We might be 10.2% or 10% instead of 10.5%. That would be my forecast. In 2008, the year that just ended, the unemployment rate actually went up a little bit. It went up a lot at the end of the year, but on an average annual basis it increased only from 6% to 6.1%. So poverty was stable in 2008 probably.

An increasing question is, what's going to happen to poverty now that we've fallen off the cliff in terms of the economy? Well, if you look at the historical experience of the early 1990s, from 1989 to 1993 the unemployment rate went from 7.5% to 11.4%. So the unemployment rate rose four percentage points, and the poverty rate, well, it rose from 10.2% to 14.3%, four percentage points. That's a one-to-one relationship between the percentage point change in the unemployment rate and the poverty rate, and I predict that's what will happen in 2009. For example, if in 2009 the unemployment rate is 8%...and given how the economy is going now, I wouldn't be surprised if we make that. Most people say it's around 7.5%, but I think we've been underestimating the severity of the recession. That means the unemployment rate is going to go from 6% to 8%; the poverty rate in 2009 is probably going to go from 10.5% to about 12.5%.

For every unemployed person there will be two people in poverty. The labour force is around 15 million and the number of Canadians is around 30 million, so basically if we see an increase in unemployment of maybe 300,000, we're going to see an increase in poverty of around 600,000. There's basically a two-to-one relationship for the number of people involved. So it doesn't look good in terms of policies.

What should the federal government do? Well, as I mentioned, there have been two drivers of poverty, and both of those drivers in the last decade have been very positive. The economy has been doing very well, and we've been putting policies in place. Now, of course, we've seen the opposite, basically. The economy is doing very poorly; therefore, we have to take new policies.

In terms of what would not be effective, I would argue that, overall, raising the federal minimum wage is basically not a particularly effective policy because there are very few workers in the federal jurisdiction who receive minimum wage. You also want to have some regional sensitivity there. Overall, minimum wage is a very crude instrument to reduce poverty. It has its role, but it's not always effective because a lot of people who receive the minimum wage may not be poor.

Another, I would say, non-starter in the debate is the whole idea of a guaranteed annual income. A lot of that debate, in my view, is counterproductive. Basically, one glove does not fit all hands. You have to tailor poverty reduction programs to the needs of the particular client. If you had a guaranteed annual income that put all people out of poverty, it would be extremely expensive.

What works? Well, again, long term, it's education. We all know that. That's really the key to poverty reduction. But we're thinking more here in terms of short term or medium term. And of course we should continue the structural policies that Ken mentioned. I concur entirely with him about raising the child benefit over time. I think the working income tax benefit has been very positive. It has been very small. It has been enriched and it should be further enriched.

I would argue that the most important policy we should have in the short term, if we're serious as a government, is to expand unemployment insurance to all potential exhaustees for up to a year. Instead of 50 weeks, people could get unemployment insurance for 100 weeks. This would be temporary. It wouldn't be a permanent change to the program. I think we have to make structural changes to EI, as Sherri was mentioning, but this is just a temporary measure.

There are two reasons for that policy. One is that it's a very effective stimulus. If you give money to low-income persons who are unemployed, they're going to spend that money. It's going to be automatic. It's not like a tax cut where a certain amount of that money is not spent. It's a very effective stimulus. It also will prevent the poverty rate from rising.

That would be my key recommendation. Encourage the federal government to basically extend EI benefits for much longer than they are now.

I'll stop there.

Thank you very much.

[The Chair, Conservative, Dean Allison]

Thank you, Mr. Sharpe.

We're now going to move to the Canadian Policy Research Networks.

Mr. Roberts, you have 10 minutes, sir.

[Dr. Glen Roberts, Vice-President, Research and Development, Canadian Policy Research Networks]

I appreciate the opportunity, honourable members.

Mr. Chair, thank you for the opportunity as well.

As I sit here looking at the picture of the Fathers of Confederation, I think it's a rather interesting time to be talking about poverty. Andrew talked about the state of our economy and the impact it will have, invariably, on poverty.

With the permission of the chair, I have some slides that I would love to pass out, although they're not translated. There are some slides in here that are frankly about trends. If you could disregard the text, it's about the pictures. I'd love if people could at least look at them while I'm giving my presentation. I'll look to the chair on that.

While you're thinking about that, I'm going to start. If we choose otherwise, I'll just continue as though we're okay with at least looking at the pictures.

The title of my presentation is “Dissecting the Line on Poverty”. The question posed to the three of us was: What was or what could be the federal contribution to reducing poverty in Canada? I will take a slightly different approach from that of Ken and Sherri. Rather than looking at the incremental side, my focus will be more on the transformational side, respecting, of course, Andrew's thoughts around how one would push through the issues to bring about transformational change.

This is a synthesis of the CPRN research. We've been doing research in the public space for about 15 years. My presentation will focus on our research but also will bring in a couple of slides from Ipsos Reid and Statistics Canada.

I'll begin very briefly by giving a couple of the key facts on poverty, just to reiterate in order to make my points as I go through here.

First of all, there's been a fair bit of interest internationally on the importance of goals on poverty....

Mr. Chair?

[The Vice-Chair, Bloc, Yves Lessard]

Excuse me, Mr. Roberts. You wanted a document to be distributed to members, but we have a policy that says that documents must be in both languages. I think you were made aware of this. I understand that you would only like to refer to some graphs, but there is also some text. I believe the text is as important for French-speaking members as for English-speaking members. We will therefore keep this document, have it translated and disseminated afterwards. I just wanted to inform you of this and ask you to take it into account during your presentation.

You may continue.

[Dr. Glen Roberts]

I'm sorry, Mr. Chair, should I just continue?

[The Vice-Chair, Bloc, Yves Lessard]

Continue.

[Dr. Glen Roberts]

Key facts are related to poverty.

First, the goals on poverty. UNICEF released some poverty goals, about 25% reductions in five years. It appears this is going to be adopted by the Ontario government.

Second, the federal government, as all of you know, approved a goal back in November of 1989 to eliminate child poverty by 2000.

Third is an issue that Andrew raised around defining and measuring. There are a number of measures: the LICO before and after tax, the market basket measures, and a litany of measures. So there's a real issue around how one defines poverty.

Finally, to indicate the major risk groups--I think Sherri and Ken did a nice job on that: single parents, typically females, unattached, between 45 and 64; disabled, primarily those disabled who are work-limited; recent immigrants, primarily refugees, aboriginals; and those at risk to employment generally.

Right now we have four provinces with a plan on poverty, and we only have one province with a piece of legislation on poverty, and that is Quebec. In Quebec, in 2002, under Bernard Landry, they passed some legislation, and the plan that came about under Charest came out in April 2004. We did a report based on that. Two really important messages came out of the importance of that legislation. Putting aside the importance of legislation generally, there were two major pieces behind the introduction of that legislation, and that was major political motivation and political support. The government had lost a lot of its citizens' satisfaction—it had some of the lowest ratings at that time—and there was major public support; fully a third of Quebec citizens were supportive of poverty reduction.

I'm going to turn to the slides on trends in poverty to raise a number of points. This is all to get at the issue, some of which Andrew and Sherri talked about, and to make a few additional points.

First, interestingly, some of our highest poverty rates across the country were in about 1997, and since that time, we've had a pretty steady decline in poverty. Interestingly—and I think Andrew touched on this briefly—during times of economic growth we seem to have reductions in poverty and during times of economic downturns we seem to have increases in growth in poverty. This is a general statement. I'm not going to say we've done any randomized clinical trials or statistical analysis, but it is fairly indicative that as economies grow there's less poverty and as economies contract there is more poverty.

The question that was posed was, if I look at the line on poverty, what is the federal contribution to that? I haven't done the research to do that, but I want to indicate to you how to answer that question.

My next slide is around economic growth. This really does make the case that if you look at the trends around our economy, in particular the recessions in the eighties and nineties—and unfortunately the data doesn't track forward at this stage—you can see how recessions and subsequent recoveries line up very nicely with the lines around poverty.

The next point is around the trends in Canadian priorities. This is a very recent chart from Ipsos Reid, which looks at Canadians' priorities on a range of public policy issues. No surprise that the economy is Canadians' number one concern. Number two is health care, number three is the environment, and unfortunately, poverty is only in the top 10.

On my next slide I show you the levels of poverty, and right now the level of poverty as a priority for Canadians: the first choice is 2% and total choices are 4%. I want to raise whether or not we have the political context right now to bring about transformational change on this issue of poverty. Clearly the numbers we saw in the Quebec context, the importance of poverty put on that is significantly lower than the Canadian-at-large at this point.

In my slide on political motivation--I don't know that everybody has a copy--you can see that the trends around what sort of support various governments have raise a question about whether or not there clearly is a political context to deal with the transformational piece around poverty, such as thinking about legislation, for example.

Focused areas to reduce poverty--

[The Vice-Chair, Bloc, Yves Lessard]

Just a minute please, Mr. Roberts.

It is on a point of order, I believe.

[Raymonde Folco, Liberal, Laval—Les Îles, QC]

Yes.

I don't think Mr. Roberts understands that we do not have the slides, and I would appreciate if he would make his remarks with the understanding that we do not have the slides.

[Dr. Glen Roberts]

Thank you. I'll be happy to clarify that.

Shall I go forward? Thank you.

There are four areas that we've suggested to focus on with regard to poverty. The first is income support and living wages. The evidence would suggest that a living wage should be in the $10-an-hour range, but of course adjusted for inflation, which typically it is not.

Second, we recommend making sure that we have compliance with our employment standards.

Third, there should be sufficient capacity for affordable housing and, fourth, early childhood education and child care generally.

Just to dig a little bit into that, the issue of poverty and housing, our evidence and the research we've done suggest that there are two issues with respect to housing. The first is actually the dwelling and the second is the neighbourhood in which it is located. There are environmental health issues. There are psychological health effects that relate to socio-economic status, which really come about from endocrine immunological compromise from people who are under stress. It actually makes them susceptible to disease. So there are some pretty major issues with respect to the housing, and of course the location of the building, the reduced life chances, and the access to public services are very consistent with affordable housing, where it's located and the actual quality of the housing itself.

In a report that we will be releasing shortly, we talk about a couple of models for affordable housing. One is the U.S.-based Housing First model that originated in New York in 1992, and the other is the more recent Canadian version of that, which is the Toronto Streets to Homes model, also known as S to H. What we talk about in the report is the importance of the use of a Housing First model as a way to get people in there, and in fact the evaluation on the Housing First model is very good. The evaluations of them suggest fairly strongly that they reduce hospitalization and generally keep people located in homes for much longer.

So there are a couple of solutions to think about. First of all, an integrated policy framework through the use of joined-up policy-making.... I think if you look at the European countries, at why they are so much stronger at investing in social programs, it is because they take a much more holistic approach to such things as poverty. Second, we need to think about poverty in terms of income and assets. It's not just about incomes; it's also about assets, because we know that assets actually are the things that trap people into poverty. So we need to think again a bit more holistically rather than focusing on the income side. Thirdly, we need to think about alternatives to legislation. I would argue that in fact just coming together and agreeing upon standard definitions and goals and then measuring and delivering on those goals would be fundamental to the success of poverty reduction in Canada. I know there has been some interest in renewing the discussion around the SUFA agreement, although I struggle with that because I'm not convinced that it was that successful as a piece of legislation. Finally, we need to invest in social innovation.

Now I'm going to come back to the question around what the federal contribution is. What I've got is a picture of what poverty in Canada looks like using the LICO measure, before tax. When you look at it you can see it's a pretty flat line. It has a little bit of a downward trend, but ultimately it is a trend line over time from about 1980 to 2006, and as a policy thinker who has been involved with economics for as long as I have--one minute, I'll wrap it up--I think what you need to do is dissect that line in order to resolve it. What I mean by that is you need to take that line and figure out what part of that is provincial, what part of that line relates to federal, what part of that relates to housing, what part of that relates to education and child care. Only when you can answer those questions can you properly determine how you go forward.

I think about two debates. First of all, there's the debate that occurred around the Romanow commission regarding the percentage of the federal contribution to health care, and I don't think anybody knew what the answer was; and second, the impact of econometric modelling such things. It's a very simple thing to take this data and actually turn it into a model to actually ask questions about poverty and find out what the outcomes would be. So I would argue that in fact one of the major impacts you could have is creating some econometric modelling directly around poverty.

I leave you with three quotes. One, from the European Union, is “social expenditures are positively correlated with levels of productivity everywhere in the developed world.”

Second, “Children are kept in poverty not by a padlock to which there is a single key but by a combination lock that requires an alignment of factors if it is to be released.” This is from UNICEF. I think that emphasizes the complexity of this issue.

Last is something that was cited, actually, by a member of Parliament, and it was picked up in our research: “Why not a law against the rain?”

What I would suggest is that if you're really going to resolve the issue of poverty, we need strong leadership. As I stand in front of the Fathers of Confederation, I congratulate you on doing this.

[The Vice-Chair, Bloc, Yves Lessard]

Thank you very much for your presentations, and especially for staying within the time allowed.

We will now open the question period. We will have a first round of seven minutes for each party, which will be followed by five-minute rounds. We will begin with Ms. Folco, from the Liberal Party.

[Raymonde Folco, Liberal, Laval—Les Îles, QC]

Thank you, Mr. Chairman.

It is a pleasure to address you as Chairman. It is not the first time we exchange chairs.

[The Vice-Chair, Bloc, Yves Lessard]

It is a sweet reversal of fortune.

[Raymonde Folco, Liberal, Laval—Les Îles, QC]

I would like to congratulate each of you for this presentation which has been very much to the point and suggested some avenues for action. Several members here, on this side of the House and especially those of my party, have met with people outside of this Committee. I am sure you are aware of this. The goal was to try to find not one — since there is no single solution to this problem — but a number of practical solutions to the tangible issues that you brought up.

I'd like to refer specifically to the Canada social transfer. One of the big problems with it--and I come from Quebec--is that in the relationship between the provinces and territories and the federal government, once the provinces or territories get the money, they pretty well spend the money as they wish. There is no reddition de compte. There's no accountability to the federal government. They can just say that they've spent the money in that general area, but they do not have to say in what area, specifically, they have spent the money. This is a big problem, generally, and I think it's an even bigger problem in terms of poverty and in terms of all the different factors you have mentioned here this morning.

My first question is whether you have changes to suggest, if that could ever come about, to the Canada social transfer in terms of the relationship and in terms of accountability to the federal government, which holds the purse. How can we make sure that this money is spent in these specific envelopes, so to speak, rather than in the general one?

I'd like to make a comment before I hear your answers. I particularly appreciate Madam Torjman's suggestion about social policy structure. One of the things that struck us about the Conservative government's budget, Bill C-10, was the fact that as regards infrastructure--the money is welcome, of course--that infrastructure money really addresses men in the workplace, mostly. Women in the workplace don't seem to be addressed in Bill C-10. Your suggestion, Madam Torjman, and the others as well, is where I could see women in the workplace receiving money through this particular budget. So thank you very much for that suggestion. I wanted to make that remark, because that is something that, to some of us here, is very important.

My question is this. With respect to the Canada social transfer, what do you suggest be done to make it more responsive to the situation of poverty in Canada? I address that to anyone who wishes to answer.

[Sherri Torjman]

Thank you for your question.

It's a concern we've had for years, since the Canada Assistance Plan was changed. Originally, it was transformed into the Canada health and social transfer. We wrote a paper, back in the mid-nineties, called “The Dangers of Block Funding”, which identified precisely the kinds of issues you're raising.

We saw some positive developments in the country around, for example, the national child benefit. What is of interest, and what I think is helpful in this regard, as a model, is that it's a negotiated federal-provincial-territorial agreement. So the federal investment comes with an associated set of criteria or principles that have to be addressed with respect to receipt of the money. So it sets up, in a sense, an accountability mechanism.

I know there are opting-out provisions, and these always have been addressed. But when you do have these kinds of principles in place, everybody looks to those principles and those barometers as a means of measuring performance. I think it is one of the ways we can respond to this open funding. We tie it in more to a negotiated agreement.

Similarly, with respect to the child care agreements and the early childhood development framework we had in the year 2000 and then in 2003, we had an associated set of principles for that investment. It's, again, at least one way of looking at tying the money, to the extent we can, in a federation.

I don't know, Ken, if you want to add to that.

[Ken Battle]

The short answer to your question is no. I think federalism has moved on from the days of federal cost-sharing, when the federal government was the senior partner because federal money really drove social policy. That's no longer the case. The provinces have equal weight when it comes to social policy. I think we have to view it policy by policy, as Sherri mentioned.

We've used the term “framework federalism”. With child care the notion of a set of principles, not unlike the medicare principles in the Canada Health Act, doesn't give you the kind of accountability you might want, because you can never really know where the money goes. But one gets a sort of policy consensus as to what's going on, and we can get provinces, territories, and the federal government working together.

The national child benefit, for example, is interesting from an historic and social policy point of view because it's one of the few times I know of when the federal government and the provincial and territorial governments made changes to their programs that required a change in the other order of government. In other words, they didn't just say, “We're cooperating because we're going to get together and have a meeting every so often.” They actually made changes to their policy that wouldn't have worked unless they had done it together. The provinces took child benefits out of welfare and moved it into other income-tested programs. The federal government pushed more money into what had been provincial territory. There was a reinvestment agreement, as Sherri said.

Another example of this kind of friendly, less formal federalism is the working income tax benefit--the new program that came in two years ago. One of its features is that the provincial and territorial governments can vary the configuration of the federal program to meet their own income security priorities and needs. Quebec, B.C., and Nunavut so far have done that. We analyzed this in the paper we did commenting on the budget. There are quite remarkable differences in the design of those programs, but the federal government has allowed this as long as the cost isn't any more than it is now. It's another example of how the federal and provincial governments can work together in common policy principles.

[The Vice-Chair, Bloc, Yves Lessard]

Thank you. I would ask you to keep your answers as short as possible in order to allow each party the same amount of time to get their answers.

I will ask for your patience for maybe 30 seconds. In the absence of our chairman, I will now leave the chair to our first vice-chair who will preside over the rest of this meeting.

[The Vice-Chair, Liberal, Raymonde Folco]

Thank you, Mr. Lessard.

Mr. Sharp and Mr. Roberts, I would like to hear from you another time, because I understand that you didn't get much of a chance to answer my question. Perhaps after the meeting, or if one of the other members wishes to ask the same question, you might get a chance to answer. If not, I would like to talk to you after the meeting.

Thank you very much.

Our next speaker is Mr. Lessard.

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

Thank you, Madam Chair. If we are playing musical chairs here this morning, in the absence of Mr. Allison, it is to allow each of us to ask our questions.

Thank you for coming here this morning. The information you provided is very useful. I would like to start by discussing the situation of women. We know that certain groups are especially at risk of poverty. They are, of course, aboriginals, the disabled, immigrants, newcomers, unattached people, single-parent families and then women. Ms. Torjman mentioned them specifically.

Do we presently have a program that is specifically effective to deal with women's poverty? Now, we know that generally speaking, when women are poor, their children are poor also, as well as the rest of the family, obviously, but children are affected the most.

[Ken Battle]

Any program that deals with poor people is going to disproportionately deal with women, as you've said. To give you a concrete example of the importance of this, I'll go back to child benefits. Because of the federal and provincial reform of child benefits in recent years, their role in helping low-income families has increased quite a bit.

To give you some dollar amounts, if you look at a single parent in Ontario with one child under six, and if her earned income was $15,000, which is quite modest, not much above minimum wage, federal child benefits rose from 15% of that woman's income in 1993, to 15.8% in 1998, 22% in 2005, and just under 30% in 2007. This is an enormous boost to the income of that low-income, single-parent family. It's not the whole answer, but certainly one of the important answers to poverty is to improve incomes.

That's one example of how a federal program can disproportionately help low-income women.

[Sherri Torjman]

The related investment would be in the associated services of high-quality, affordable child care. It's impossible for women--or a family, generally, but you're asking about women in particular--to pursue education and training, or even remain in employment, unless they have access to high-quality, affordable child care. It is absolutely crucial.

By the way, the other aspect of investing in child care is that it does create a lot of jobs for women too. We were talking before about the infrastructure money not being particularly valuable for women with respect to employment. Well, women are disproportionately involved in terms of the caregivers in early childhood centres, and investing in child care creates employment for women as well. There are both support and employment opportunities for women through that kind of investment.