Human Resources Committee on March 24th, 2010

[The Chair, Conservative, Candice Bergen]

Thank you very much, Senator.

I should have mentioned before Madam Folco began that this is actually our second round, so we have just five minutes for each question and answer. We did go over that by about 30 seconds.

We'll now go to Mr. Vellacott, please.

[Maurice Vellacott, Conservative, Saskatoon—Wanuskewin, SK]

Thank you, Madam Chair.

Your approach, senators, makes nine recommendations, recommendations 7 through 15, respecting employment insurance. I want to ask a little bit about that and get your input on those recommendations.

The report notes that you “opted for the short-term expedience of sustaining these initiatives within EI”, or, in other words, these nine recommendations here. As we know, the funds spent under the EI program come from the pockets of each one of us, from the workers of Canada and from the employers. Like any other program expansion, we'd obviously have to find money to pay for any expansion, or for these recommendations in particular, I guess.

It looks to me like three of your recommendations would be revenue neutral, but six would cost, and there would be a fair bit of expense there. In looking at that whole area and those extensive recommendations, did you or the committee find that in any way there would be a possibility of reducing the overall cost to the EI account, or the potential of putting downward pressure on the EI account with these recommendations, all other things being equal?

[Senator Art Eggleton]

We didn't say it necessarily had to be the EI account in every case. For example, in recommendation 7 we said:

The Committee recommends that the federal government develop a new program to insure against income losses due to long-term employment interruption that covers those who are not included under the Employment Insurance Act.

The problem is that while most of those people on employment insurance may have got some benefit from EI, particularly during this period of recession, the majority of the people unemployed in this country don't qualify for EI. Something needs to be done about them.

Again, we need them to work. It's costing us money. They go onto social assistance. It's costing them. It's costing us. We need to get these people working. So to us it's an investment. If you end up getting a job, you're contributing to the economy and you're paying taxes. That's far better than being on social assistance. If you look at the case, it's either/or. You're going to pay for it on social assistance, or you're going to put something into a program, which I would call an investment, to get these people jobs.

[Maurice Vellacott, Conservative, Saskatoon—Wanuskewin, SK]

You said you weren't necessarily taking some of these out. I think you said number 7 in particular here. I don't know if there were any others as well outside. So none of these is talking about reducing or having any downward pressure on the EI account. We're just kind of looking at the same sums of money, more or less, and then dealing with government expenditures in another area?

[Senator Art Eggleton]

Recommendation 10, for example, says to “...re-engineer the Employment Insurance program to allow adjustments to anticipated economic downturns, rather than be based solely on recent but past experience.” That speaks to the regional context such that in some areas you don't qualify and in other areas you do. We're saying that when you get into a full-blown recession, you should be able to adapt and temporarily suspend the regional context, because past experience doesn't necessarily prevail. We're saying that in a recession, the program, in the regional context, isn't quite the same. We would see some modifications there.

Extending parental insurance to self-employed individuals and expanding the EI sickness benefits over time to 50 weeks have factors of additional costs in EI. It depends how you want to fund them. Certainly from a fair and just standpoint, the EI sickness benefit, for example, right now is 15 weeks, and that hasn't changed since 1971. People with cancer or some other chronic illnesses will be off work longer.

We see some of these but not necessarily all of them as being EI.

[Maurice Vellacott, Conservative, Saskatoon—Wanuskewin, SK]

Senator Eggleton and Senator Segal, as you know, the government has taken some action on a couple of these, two of them in fact, which is very interesting. One is the EI special benefits for the self-employed in Bill C-56, as you know, and then the extra weeks of benefit for the long-tenured workers in Bill C-50, both from last fall.

We know through the budgets and estimates what the costs are. At least we're getting some sense of that. In addition, the department, HRSDC, has given us at various times costs for our estimates on some proposed forms of some of these EI recommendations you have. Those costs could run, depending on who you ask, into the billions of dollars each year.

[The Chair, Conservative, Candice Bergen]

Mr. Vellacott, could--

[Maurice Vellacott, Conservative, Saskatoon—Wanuskewin, SK]

Could I wrap it up? Okay.

Did you find, solicit, or attempt to get some calculations on start-up or annual cost estimates for any of these programs?

[Senator Art Eggleton]

No, I think it would have been another year or two before we got to that. Obviously each recommendation has to be taken and costed. What we want to have here is a change in the paradigm, a change in how we look at this. Let's look at it through the lens that if we invest this money and get people to work, they're going to pay taxes, and they're going to produce more for the economy as opposed to being on social welfare or as opposed to being in homeless shelters. We have to look at the other side of the coin. It's costing us more to keep these people in poverty.

[The Chair, Conservative, Candice Bergen]

Thank you very much, Senator.

Madame Beaudin, please.

[Josée Beaudin, Bloc, Saint-Lambert, QC]

Thank you, Madam Chair.

Thank you, senators, for your research, but five minutes is not much time. We need hours to discuss this topic.

I have been a member for only around a year and a half. All the years prior to that, I was out in the field, working with the people you are talking about, low-income families and especially women. Your report does not seem to focus very much on women as one of the overrepresented groups you mentioned. I would have liked for your report to focus a lot more on these women. I am talking about those women and mothers who are often single parents.

You are right, we should not just look to the mistakes of the past. But I always learned that you should learn from your mistakes so you do not repeat them. Since I have been here and we have been studying the issue of poverty, what I see, and you frequently pointed it out, Mr. Segal, is that, in Quebec, we established framework legislation in 2002. I see that Ontario is also on the verge of creating antipoverty legislation. That is the case in Newfoundland, as well. You mentioned examples in Toronto. I think that where Canada has failed in eliminating child poverty, Quebec and certain other provinces are succeeding.

I want us to succeed in solving the poverty problem. When you look at where things stand, do you not think that the best solution would be to increase transfer payments to Quebec and the other provinces?

That is my main question.

[Senator Hugh Segal]

I was one of the people who worked fervently to get the Meech Lake Accord passed. I even worked on getting the Charlottetown Accord passed; it was based on the principle of giving the provinces the fiscal capacity to fund their social instruments. That was a fundamental principle. Unfortunately, given the policies of the day, the agreement was rejected for various reasons. Frankly, in my opinion, if the provinces are willing to assume their role in this large-scale social struggle, we will work towards our own goals with our own resources. I have no objection to giving the provinces more funding and freedom to do it.

Negotiations on transfer systems are coming up in two or three years. I imagine that the premiers will hold talks on what the new formula should be. I have no problem with a decentralized solution if it improves the situation of our fellow Canadians. That is what matters. My Liberal colleague may take a different view, but, the way I see it, it does not matter which government gets the credit. All that matters is who will provide the tools and who is willing to work towards these objectives. I have no problem taking a confederal position on this issue, as I am usually not in favour of a centralizing position.

[Josée Beaudin, Bloc, Saint-Lambert, QC]

Mr. Eggleton.

[Senator Art Eggleton]

We have a little bit of a different perspective on that, but I won't go there.

Let me say, however, that this comes from a subcommittee on cities. We started at the local level in our examination of this. We feel a lot of the answers are at the local level--through the provinces, of course, because that's the proper route. At the local level, not just the municipal governments but the people in organizations know a lot of the needs and a lot of the answers. We found a lot of passion out there amongst those people at the local level who are providing good programs to lift people out of poverty.

[Josée Beaudin, Bloc, Saint-Lambert, QC]

I have to interrupt you as I have very little time left, and I would like to check something else with you.

You are aware that, right now, operating budgets are being frozen perhaps for several years. We do not know for how long. In addition, we need to avoid program duplication and overlap. I have worked in those organizations. I have filled out federal and provincial funding applications. I have lost time getting mired in red tape instead of taking action and using the money where it was needed. That is precisely what we must avoid.

As you know, the funding needed to put your measures in place over the next few years will probably not be available given the freeze on operating budgets and the fact that the government is currently trying to tighten its belt. So to avoid all existing duplication at the same time, would the best solution not be to transfer the money needed to Quebec and the provinces so that their governments can take action themselves?

[Senator Hugh Segal]

I was in favour of Mr. Harper's policy on the fiscal imbalance. It reflected for the first time a certain reality for all the provinces with respect to their tax base. One of our economists at Queen's University, Thomas Courchesne, said that a number of provinces are not seeking new powers but money to exercise their current powers under the existing constitution. In my opinion, the fiscal imbalance issue is an integral part of the debate, namely, in terms of how we can avoid overlap and make some headway with a view to provincial autonomy, which is key to success.

[The Chair, Conservative, Candice Bergen]

Mr. Cannan, you have five minutes.

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

Thank you, Madam Chair.

Thank you to our witnesses.

I'd like to start off by echoing Mr. Savage's comments about the work of the Senate, especially Senator Kirby's report and the creation of the Mental Health Commission. A lot of this is tied in with the issue of homelessness and the social challenges we face, from small rural communities to large urban metropolitan cities, throughout our great country.

I had nine years of good experience in local government and spent several years with the housing committee working with those grassroots organizations you mentioned. They have wonderful ideas, passionate volunteers, in many cases, and some employees.

You mentioned a national housing strategy perspective and doing it on a macro basis. I had a conversation with one of the city councillors on the weekend who spent many years in our community with the Society of Hope, a not-for-profit. He totally disagrees with the idea of a national housing strategy, because one size doesn't fit all. If you're looking at what's good for Saskatchewan, it doesn't work in Ontario or British Columbia. Speaking specifically for B.C., we have BC Housing, which works really well. They have a good working relationship between the federal and provincial levels.

I just wanted to maybe get a little feedback, from your perspective. One of the challenges provincially is that they don't want tied aid. It is almost like when foreign aid was tied, and we got rid of that. They don't want to have conditions on their social transfers. But I see, reading the report, that it more or less pins down the province: if we're going to give them money from the federal government, they have to allocate it to a specific expenditure.

Is that what some of your thoughts are?

[Senator Hugh Segal]

Well, let me quote one of my favourite economists from the University of Chicago, Milton Friedman, who once said about the American government that if you put the federal government in charge of the Sahara desert, we would have a sand shortage in five years.

[Some hon. members]

Oh, oh!

[Senator Hugh Segal]

So my general view is that if there's a way for the local authorities and the local not-for-profits to have the freedom to do what they want to do, that is the best option all the time.

Let me make one reference to the Calgary Homeless Foundation. This is not run by government public officials. This is not run by politicians. It is run by retired CEOs and others from the oil companies, tax lawyers, and people involved with local church organizations. They said that it is not acceptable that there are 250 people sleeping on the street in London, England, and there are 500 people sleeping on the street in Calgary. They also said that it is odd to have 2,500 people in a hostel every night, which gets 40 bucks per head--the Sally Ann gets it--for doing a great job providing that emergency housing. If you add up 365 times 40 times 2,500, you actually get a fair amount of money to do something with in housing, and a much better response.

They have put together a mix of private sector and not-for-profits. They're getting old buildings and redoing them. They get some help from government. They're saying that since you have that vacant land, why don't you give it to us at a notional cost so that we can...?

By the way, this is what local organizations can do that government can't do. The Homeless Foundation said they were going to eradicate homelessness in 10 years--not help it, not make it a little better, but eradicate it. Their definition is that nobody stays in a hostel for more than seven days before they find a place. So far, after year one, they're at 15% of their target.

I agree with you that we have to have a frame of reference whereby the local organizations can go about it.

I think it was regrettable--but I understand why he felt he had to do it--that Finance Minister Martin slashed all the investment in social housing. This fellow was a mayor who actually invested a lot of municipal funds in social housing when he was the mayor of Toronto. It was a terrible thing they did. They felt they had no choice.

I am proud of my government for beginning to reinvest. But I would like to see that happen in a way that gives the local municipalities and the local not-for-profits the most freedom possible to make their decisions and doesn't tie them to bureaucratically defined conditions, which actually don't work outside the Ottawa bubble anyway.

That would be my preference.

[Senator Art Eggleton]

If I could just briefly respond, we're not talking about a prescriptive federal strategy, but the federal government has money in housing. It has an agency with a lot of expertise: CMHC. It has a strategy now that deals with homelessness. What we're saying here is, it needs to be a collaborative effort among the different orders of government in the communities.

The provinces need to come in with their funds as well. It's not going to work with just one level of government putting in funds. Both have to, and perhaps the municipal level may have to as well. We're talking about a collaborative effort among all the organizations.

We didn't use the word “strategy” too much because we recognize that that word comes up an awful lot. So we decided to limit it to this, a national housing and homelessness strategy, simply because that's what we heard from people in the housing business in different communities right across this country. I realize there can be exceptions, with people thinking it might not be the best way to go, particularly if they thought it was going to be prescriptive, but this would not be prescriptive from the federal level.

Whatever money goes in from the federal level, there has to be accountability. For that reason alone, the federal government has to be at the table.

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

We all have to be accountable.

Thank you very much. That's great.

[The Chair, Conservative, Candice Bergen]

Madam Minna.

Thank you very much.

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

Thank you, Madam Chair.

Thank you to both of you for being here.

I have to correct Senator Segal's comment about housing. There were cuts, but there was also major reinvestment, as you very well know. The now renamed SCPI program was started by us at the time.

To me, a national housing strategy--I'm glad you used the term, actually--doesn't mean a one-size-fits-all. It means a partnership across the spectrum. It means, I would hope, various models from rental to ownership, delivered through partnerships with municipalities, just as the homelessness program is delivered. And the not-for-profit...and the co-op program, which is cooperative, is one of the best housing programs in the country, in fact. I have some fabulous housing in my riding that deals with that.

Housing was one of the things I was going to look at. For me, there are four or five things that really go to the core of poverty. Housing is one of them, obviously, and housing also goes to the core of health and education. In fact, Ontario is doing a study now on the correlation between health determinants and the housing situation. I'm sure they'll find a connection.

Early education and child care for children, income support for families, education, and training are the four or five things we need to work at. The money is there, but there are areas....

You mentioned that some programs are not working really well. We're spending $150 billion, but some are not hitting the mark. Maybe, as we look at the annual basic income and other things, we have to collapse others and rationalize and look at them.

I wonder if you looked at some programs to see whether or not they are effective. The child care tax credit is not refundable and therefore only certain families can access it. If you have money, you do; if you don't, the $1,200 child benefit, again, does not provide.... It's probably a bit more money. It doesn't make you rich and it doesn't give you child care. It gives you neither one nor the other, and it doesn't help women.

We spend a tremendous amount on RRSPs. I think it costs the treasury $16 billion or $17 billion, but the average Canadian really doesn't benefit from the RRSP. In terms of a pension structure we know it doesn't really work to address poverty for seniors for the long term.

There are things like that. I wondered if you looked at the tax expenditure side of things. Did you take it apart a bit? Did you do some analysis to see where we could rationalize change?