Human Resources Committee on March 10th, 2009

[Ben Lobb, Conservative, Huron—Bruce, ON]

We've discussed a lot as well with the committee so far on how best to measure poverty. Does the panel have a preference? Do they prefer the market basket approach, or is there a particular measurement your group prefers or recommends?

Mr. Roberts, I guess you can start, since the mike is on.

[Dr. Glen Roberts]

I'm not sure I want to. I'm a little bit risk resistant to say, because we haven't done any clear research on this. From being around economists for the past decade and a half, my sense is that taking the LICO, but making sure you're modifying it for actual cost of living, is the right way to go. It might be the market basket, but I really think it is about LICO and then revising it.

[Dr. Andrew Sharpe]

I don't think there would be any change in the overall trends if we came up with another measure.

You need different measures for different purposes. Some people like to focus on inequality in our society. If you want to focus on inequality, then what is called the low-income measure, the international measure of percentage of the population at less than one-half median income, is the way to go. If you want to focus on the effect of whether economic growth can actually help reduce poverty, then you would want to have some type of absolute component to it. Then the LICO is the way to go.

We should have all these measures. Right now we're focusing on the after-tax LICO. Let's agree to that and let's focus all our energies on policies to reduce the number of Canadians below that line. That really should be the focus for the measure.

We've been debating measurement for decades, and I don't think there's going to be a lot more progress to be made.

I do agree, though, that there are a lot of problems with the LICO, not at the national level. People are well aware of it. The main problem, for example, is that the cost of living is related to the size of the community, which is fine because smaller communities do tend to have a lower cost of living, but that would mean all cities above one million have the same cost of living. We know housing costs a lot less in Montreal than in Vancouver or Toronto, yet we're using the same level of prices for both those communities. That creates a real bias in the numbers, giving Montreal a poverty rate that's really too high.

Those types of things should be corrected. There is work to do there, but I don't think that should be the focus of the debate about poverty.

[Sherri Torjman]

I would like to respond briefly to your question about assets, because there are a lot of community-based groups across the country that are trying to help low-income families to build assets to have their own personal safety net. The problem is that these organizations get themselves caught in the charitable act trap. There needs to be a new legal framework, and that is clearly federal. A lot of organizations are doing research right now and are asking for a change to the framework we have, which places them as charities, and they are not really charities. They are saying they are community enterprises. In the U.K. and the U.S., their work is recognized as community enterprise, but there is a legal status problem in Canada that we really need to look at, and that is something the federal government clearly could do to enable that kind of work throughout the country.

[The Vice-Chair, Liberal, Raymonde Folco]

That's good timing.

Madam Minna, you have five minutes.

[Maria Minna, Liberal, Beaches—East York, ON]

Thank you, Madam Chair.

First, I want to say that what most of you, in particular the Caledon Institute, have said are things that the Liberal women's caucus had in the pink books--a lot of the same major pieces in terms of child care, education, $5,000 for the child benefit, affordable housing, and so on. From my perspective, obviously, it affects women's income very much.

I want to focus on a couple of areas, if I may. Mr. Battle, Ms. Torjman, you both mentioned two things. In the child benefit as currently structured, the $1,200 is not taxable. My understanding is that the government is receiving about $300 million of income tax on that, so that's not really worth the full $1,200. My suspicion is that the $300 million is coming from lower income, because it's taxed in the hands of the lower-income family. So that's a negative.

Just to be clear, you're suggesting that we would take the $1,200, which I agree with you on, add it to the child benefit, and take the child tax credits—both the non-refundable and the other—and add it to the child benefit, beefing that up to at least $5,000. Am I right?

Very quickly, please. I have a couple of other questions.

[Ken Battle]

Basically, we had one program, the Canada child tax benefit. It took about 30 years to finally get one rational, sensible program that worked. The current government came in and brought back a version of the old family allowances, which became the $100-a-month universal child care benefit. One budget after that, it revived the old non-refundable child credit that we got rid of ten years ago. We got rid of those programs for good reason: they had built-in inequities. By adding them back in we've created a more inequitable system. Not only is the universal child care benefit a taxable benefit—and therefore what you see is not what you get—but what you get depends on what province you live in, because it's also taxed through provincial and territorial income tax. If we gave examples, in some places high-income families would end up with more money than low-income families in another province. It made for a very irrational system.

All we're saying is let's go back to the single income-tested program, the Canada child tax benefit, fold the money that we're spending on those other two programs into it, and we'd just boost that into a larger, more effective program.

One final thing that's important. The proposal that we made is fairly expensive—$4 billion is not inexpensive, although it's a long-term target—but one of the reasons for the proposal is that we would increase benefits for modest- and middle-income families as well. They have not seen an increase in their child benefits for 20 or 30 years, virtually. We don't want a child benefit system where most of the money goes on the bottom end and then you get a steep dog leg like that, and if you become of modest income, you end up with a huge reduction in your child benefit. So we created a smoother descending curve so that the large majority of Canadian families would see an improvement in their benefits. The low-income would see the largest improvement, but modest- and middle-income families would see an improvement too, and that's important.

[Maria Minna, Liberal, Beaches—East York, ON]

Thank you.

There are actually two questions, so I apologize, but if you can get to them, the other piece is about the blending of EI and welfare. I understand what you're telling us, that in reforming EI, ultimately there will always be someone left behind, because of part-time work, because of all kinds of things, especially with respect to women in particular, and maybe immigrants, who have not had a history of work when they started out or were students or what have you. To catch everybody is very difficult.

So you're looking at blending EI and welfare as an income. You're talking about a guaranteed income of some kind, essentially. Would you blend in the WITB as well then, if you're looking at a guaranteed income for adults? That's one piece.

The other piece is the issue of equity, which affects adult women in terms of their poverty levels, and doing proper gender analysis to see how our spending affects women, the poverty of certain women in this country.

I'm looking at a bigger puzzle with bigger elements. They're all really interrelated. You can't just take one out. So I just wondered if you could comment on that.

[Sherri Torjman]

You're absolutely right. All the parts are interrelated. That's why we've designed what we've called a new architecture for the adult benefits with all the linked pieces. Now, it doesn't call for blending employment insurance and welfare, as you've described it. We still would keep an employment insurance system. To that we would add a temporary income system. What I had described with respect to taking people off welfare was in particular for people with severe disabilities, who would be taken off welfare and put into a new income-tested program.

So it wasn't a total across-the-board guaranteed income program for everybody. It keeps in place several of the key components, like the working income tax benefit, the child tax benefit, employment insurance, a small welfare program, and a new blended program for people with disabilities.

[The Vice-Chair, Liberal, Raymonde Folco]

Thank you.

Mr. Cannan.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Thank you, Madam Chair

And thank you to our witnesses who are here this afternoon.

I want to comment on a couple of things. I'm not sure how much time I have; it's almost near the end of the meeting.

Before we wrap it up, I appreciate the facts about single seniors. I represent a constituency in the Okanagan Valley, and in the last census it had the highest percentage of seniors in metropolitan areas. The GIS increase, as you said, was the first in a generation, and it was well received.

I was looking at other ways that we can work with our provincial and municipal partners. Many of these issues need all three levels of government working together. I spent nine years on city council and the social planning committee.

Sherri, I think you mentioned decent, affordable housing. Can you define what you mean by decent, affordable housing?

[Sherri Torjman]

I don't have it with me, but the Canada Mortgage and Housing Corporation does have definitions of core housing need in terms of affordability. If you're spending 30% or more of your income on housing, it would be unaffordable. They also have some guidelines with respect to the number of people in your household and how many people have to share rooms for sleeping purposes. So there are some very clear guidelines that we've set, as a country.

The one area we really need to be looking at in terms of decent, affordable housing is a new dimension, which is only now being talked about, and that is called “visitability”. That means your home is accessible and it can be visited by people with disabilities. Again, with an aging population, we're far more concerned about ensuring the whole population has access to housing and that housing is built in an accessible way.

There is an affordability and a space constraint, and now there is an accessibility component being added to that.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

I'm well aware.

The other component is with the province in British Columbia, which I'm most familiar with. In 2006, we signed a B.C.-Canada social housing transfer agreement, for 30 years, which is working very well. Minister Coleman, who is the provincial minister, is being labelled as the housing czar, and Premier Campbell is working on an initiative to help low-income seniors and families find affordable housing. A lot of this is about mental health issues as well, with people in the streets. It's a complex issue and mostly within the provincial mandate.

The other comment was on the GST. It is the tax reduction that benefits those who are least well off, as they have to use the highest percentage of their income to buy necessities. One cannot underestimate the value of lowering the GST and also the economic stimulus to help us get through. We're now entering this global economic recession. As I say, hopefully the late persons to the party are the first ones to leave. If we can get through this, the quicker the better.

There was one comment by Mr. Roberts that I think the committee really needs to take a look at.

You commented on an econometric model and focus on the cost benefits. Do you have a model we could work with? One of the things with this committee is that you can talk about poverty for 100 years, and that's what happens; you look at all the studies. Whether it's in this room or in the Senate committee, there have been numerous studies, but it's trying to find out the cost-benefit analysis and how to proceed.

As Maurice alluded to, there's a significant cost to each one of these. There's $4 billion for the child tax credit. If you wanted to raise EI from 50 weeks to 100 weeks, you can double the system.... It's unlimited, if you want to be like the U.S. and keep printing money. But we have to be fiscally responsible and realistic.

Mr. Roberts, do you have some kind of model we could work with on our committee?

[Dr. Glen Roberts]

I don't have the model, but it's actually not that complicated to create. I've done it in two different areas.

One was looking at health expenditures. We broke it out into inflation and demographics and volume changes. We then broke it into federal-provincial-territorial breakdowns. We broke it into components. Basically, that's the model.

I did a similar one looking at the number of doctors we needed in Ontario. We looked at how many we could create, through the diseases, the risk factors, the demographics of the population.

It's quite straightforward, but it's also quite an expensive proposition to undertake. The benefits are that ultimately the conversation changes from how many we have to what we can do about making those changes.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

I think it would be a good use of our committee's time, once we focus on what we want to accomplish from this.

One last comment is the aspect of helping people with disabilities. I know that our registered disability savings plan--

[The Vice-Chair, Liberal, Raymonde Folco]

I'm very sorry, I have to cut you off.

Before we end this meeting, I do have a question coming from our research team. It is addressed to Mr. Battle and it has to do with the variable entrance that you've talked about so much, the fact that you would like to see it uniform across Canada as opposed to what it is.

I'll be with you in a moment, Mr. Martin.

Do you believe that benefits also should vary across Canada, or do you think they should be the same?

[Ken Battle]

The same.

[The Vice-Chair, Liberal, Raymonde Folco]

The same, okay.

Mr. Martin, there is no more time, and I have a little bit of business to take care of.

I would like to mention to Mr. Roberts, you....

On a point of order, Mr. Martin.

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

On a point of order, Madam Chair, I would like to suggest that we didn't start this meeting until it was late. It was about ten after before we got going. Also, when we had the discussion amongst ourselves here, in terms of how we would run the questioning of witnesses, I agreed to a formula with the proviso that I would get my shot at the end, that the time would be managed such that I would get my questions at the end. I just want you to know that I'm not happy with that having happened and I don't think it's fair.

[The Vice-Chair, Liberal, Raymonde Folco]

Mr. Komarnicki.

[Ed Komarnicki, Conservative, Souris—Moose Mountain, SK]

I think the way it was meant to work was that Mr. Martin would speak and then we would go to ours last. If there was a falling off, then ours would fall off rather than Mr. Martin's. Today, maybe, was somewhat unusual because of the delayed start, but I have no objections. I know that our side wouldn't have any objections to him going for five minutes.

[The Vice-Chair, Liberal, Raymonde Folco]

Do we have any objections, Mr. Savage?

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

No.

[The Vice-Chair, Liberal, Raymonde Folco]

Okay.

I don't have any objections, and I apologize to you. Obviously there's been a change in the chair and I wasn't aware of this understanding.

May I, before I give you your time, Mr. Martin, mention a couple of things?

One is, Mr. Roberts, you said that you would possibly be sending a document. I would just remind you that any document that is sent to this committee should really be sent to the clerk.

Also, this list that you've received—and I'm speaking to the members of the committee here—of the potential witnesses on the poverty study, is a consolidation of the two lists that we received last week. It's all put together, and this is the one list that we will be working with.

Lastly, I remind everyone that the meeting next Thursday will begin at 10 a.m. and not at 11 a.m.

Now, Mr. Martin, you have the floor.

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

Thank you very much.

My question is for any of you, but particularly Mr. Battle. I've been at this for a long time. I've noted over the last 10 to 15 years that the driver in all of these anti-poverty strategies has been more a labour market strategy, getting people into the workforce, lowering the welfare wall, and that kind of thing, which leaves a lot of people out, such as the unemployable, a lot of them with mental health issues, and lots of families with single-parent families.

I know you designed a program, the child tax benefit and the supplement that was clawed back initially from families that weren't in the workforce. If we're trying to take children out of the welfare system, that didn't do it. It shoved them back in, in a way that I don't think they ever anticipated or expected.

Do you foresee us moving towards a national poverty strategy that isn't so readily tied to a labour market strategy?