Human Resources Committee on Oct. 18th, 2016

[Brigitte Sansoucy, NDP, Saint-Hyacinthe—Bagot, QC]

Thank you, Mr. Chair.

As I was saying earlier, it's not enough to compare a bunch of potential strategies. I spent part of my career in the health and social services field, and it's quite clear that the silo approach isn't having the desired effect when it comes to poverty reduction.

The effects of poverty are wide-ranging. Poverty is one of the key determinants of health and well-being. Poor people are sicker and take more drugs. The impact of mental health is another consideration, as is the impact of poverty on indigenous peoples.

Has each of your respective departments assessed the total cost of not reducing poverty? Despite the absence of poverty reduction measures and a poverty definition, is it possible to put a number on the overall cost of having one in 10 Canadians live in poverty?

I represent a riding where the dropout rate is still much too high. I realize that education is an area of provincial jurisdiction, but it is tied to poverty, given the connection between dropping out of school and living in poverty. In some sectors, small and medium-sized businesses in my riding are facing a labour shortage, and that gives rise to broader costs, socially and otherwise.

Have you estimated the cost of failing to take poverty reduction measures?

[Andrew Heisz]

We, at Statistics Canada, don't have any figures that would make it possible to answer that question.

[Pierre LeBlanc]

The same goes for our department. As you explained so well, a number of elements and factors come into play as far as poverty is concerned. A rather complex study would have to be done in order to answer that.

[Nancy Milroy-Swainson]

I don't have that figure either, but I would say two things. Absolutely, government is interested in raising the economic productivity of the country, which will assist all Canadians in theory, and at the same time, the discussion paper that was released two weeks ago recognizes the complexity of poverty and recognizes the need to bring partners together so that we don't have a siloed approach.

Having the study being undertaken by your committee, having Minister Duclos launch his paper, and there being further conversations following your report is a very good indicator of the intent to work together and to bring partners together.

[Brigitte Sansoucy, NDP, Saint-Hyacinthe—Bagot, QC]

I can appreciate that you don't have any data or facts on that.

It's safe to say that the committee's job is to suggest genuine solutions. As my colleague Mr. Long said, all of us hope that our report won't just wind up sitting on a shelf and that the results of our study will make a veritable difference in reducing poverty. Despite the fact that you don't have any concrete data, I think we can all agree that it's more costly than not if we don't take action to reduce poverty and we don't achieve real results. The proof is in the numbers: allowing Canadians to live in poverty is collectively more expensive than putting effective measures in place.

I see people agreeing with that.

My question is for Mr. LeBlanc. I'd like to better understand what you said about TFSAs being more beneficial to low-income individuals. I must confess I didn't quite understand everything you said about that point. I'd like you to elaborate, if you wouldn't mind.

[Pierre LeBlanc]

Okay.

I said they would be more beneficial than RRSPs.

In the case of RRSPs, contributions are deductible. In addition, contributions and investment income are not taxed at the time, but are taxed during retirement. They are also included in the income used to calculate income-tested benefits such as the GIS.

In the case of TFSAs, the opposite is true. The reason they are more appealing to low-income individuals is that neither the investment income earned in a TFSA nor withdrawals from it are included in the calculation of income-tested benefits.

[Brigitte Sansoucy, NDP, Saint-Hyacinthe—Bagot, QC]

Do you know what percentage of TFSA holders have low incomes? I have trouble seeing how low-income individuals can manage to save money in a TFSA.

[Pierre LeBlanc]

As I mentioned, almost half of TFSA holders had an individual income under $40,000.

[The Chair, Liberal, Bryan May]

Thank you.

Go ahead, Mr. Long, please.

[Wayne Long, Liberal, Saint John—Rothesay, NB]

Thank you, Chairman, and thanks again to our witnesses.

I'll be sharing my time with MP Tassi.

Further to the comparison between RRSPs and TFSAs and RESPs, and so on, I can clearly tell you that when going door to door in a priority neighbourhood in Saint John, if you asked people if they invested in a TFSA or maximized their TFSA they'd laugh at you. They don't have any money to put into a TFSA and that's why only 6.7% of Canadians maximize their TFSA.

Further to the programs that you're currently delivering, I'm wondering if there's ever been any thought to sending cheques out at different dates. I don't know if anyone can actually answer that. Often people in priority neighbourhoods would say to me, “It would be very helpful to me if I received my social assistance cheque at the end of the month and maybe the supplement or Canada child benefit in the middle of the month as opposed to all of it at once, just from a budgeting perspective.” Has anyone ever considered that? Do you have comments on what the cost would be?

It seems like a very simple thing. Again, a lady just said, “Look, I'm not the best at budgeting. I get it all at once and then I have 30 days to budget it.” What if you staggered it by sending cheques out in the middle of the month as opposed to the end? Are there any comments on that from our panel?

[Pierre LeBlanc]

That's a good question. One would need to think across the range of federal and provincial benefits and programs. I'm thinking of income-tested benefits delivered through the tax system.

As you mentioned, that's part of the reason that the Canada child benefit is delivered on the 20th of the month. If you look at the GST credit, it's quarterly on the first month of every quarter. I'm not sure how much of a strategy I can claim is behind it, but there is some spacing. I don't know what answer others would have.

[Wayne Long, Liberal, Saint John—Rothesay, NB]

It seems that it was mentioned to me again and again going through our priority neighbourhoods. It seems like such a simple potential fix, so I just wondered.

[Nancy Milroy-Swainson]

Old age security and GIS benefits are paid on the same day of the month. They're intended to be received by the client on the fourth-last day of the month. While you could contemplate staggering those with, for example, provincial benefits, we have a number of provinces for whom we do an integrated payment, so that there's only one payment. There are significant administrative savings associated with that kind of a process. I don't have an estimate of the cost that would be generated by trying to pay on different dates.

[Wayne Long, Liberal, Saint John—Rothesay, NB]

Mr. Heisz, with respect to some of these government programs, the Canada child benefit, for example, when do you foresee having real good data on that? We certainly hear at times critics say, “That's great that these families are getting cheques, but they're not going to spend them properly”, and so on.

Is there a timeline where you would foresee us having hard data on that program?

[Andrew Heisz]

A number of years ago, Statistics Canada made the decision to start using Canadian's income tax data in its estimates of income. That has improved the quality of our data quite a lot. As a result, we somewhat rely on the tax system for moving the full suite of income indicators along. Our normal release period dictates that we have to wait for Canadians to file their taxes, and CRA has to put together a complete enough file to provide to us so that we can then use it to produce estimates for populations. Our normal timeline for the full suite of tax indicators is 16 to 18 months, and usually it's on the short side of that.

Having said that, we could have access to child benefit files directly, and that could give us part of the story as we go forward, but perhaps not the complete story. The child benefit files are available on a more regular basis because they're administrative files that are sent out by ESDC rather than by.... It doesn't have to go through the big circle that I just described.

[Filomena Tassi, Liberal, Hamilton West—Ancaster—Dundas, ON]

My question is with respect to pay equity. I don't know if you have stats or data on this. I'd like to pose the question because I think it's an important one. We know that pay equity is a major issue across Canada, and men often get paid more than women for the same work.

Is there any information you can provide us that will outline the progress, if any, that's being made in this area, even with respect to whether it's recognized in a number of cases, the costs in order to get pay equity, or women being paid an equal amount of compensation as men?

[Nancy Milroy-Swainson]

I'm not able to answer that question.

[Filomena Tassi, Liberal, Hamilton West—Ancaster—Dundas, ON]

With the number of cases that have gone to the Human Rights Commission, is it recognized as an area that is an issue? Is it on anyone's radar?

No? Okay.

Over the summer, a number of media outlets, such as CBC, reported that some indigenous families living on reserves would have trouble receiving the CCB because they may not have filed an income tax return. I know in my own riding, with other individuals, we had constituents that called and were in the same situation.

Has the federal government done anything with respect to ensuring that everyone who is eligible to receive the benefit is in fact receiving it, particularly those who haven't filed tax returns? Have you taken any initiatives there?

[Pierre LeBlanc]

It's been recognized as a very important issue. What I think I can tell you is that quite a few departments, such as Statistics Canada, Employment and Social Development Canada, and Indigenous Affairs are working together on outreach with communities to increase filing rates for people filing T1 returns, so that they can have access to the benefits to which they are entitled.

Yes, it's getting a lot of attention.

[Filomena Tassi, Liberal, Hamilton West—Ancaster—Dundas, ON]

Okay, very good.

[Filomena Tassi, Liberal, Hamilton West—Ancaster—Dundas, ON]

With respect to the child benefit, I'm wondering why it's not being indexed. Could you just comment on the current situation of it not being indexed and the reason why that is?

[Pierre LeBlanc]

The government has indicated its intention to index no later that 2020. I think the government wanted to make sure that when the program was first introduced, it was introduced fully and especially at a time of a fair bit of economic and fiscal uncertainty, so that families would have the income support that the CCB is intended to provide.

[Filomena Tassi, Liberal, Hamilton West—Ancaster—Dundas, ON]

Okay, thank you.

[The Chair, Liberal, Bryan May]

Thank you very much, everybody. That was incredibly informative, and I want to thank all the panellists today for all the information they brought to us. This is going to be a fairly extensive study, a long study. If there are questions as we move forward that pertain, obviously, to your domains, we may be sending those to you. But, again, I appreciate your getting up early today and being with us.

Thank you, again, obviously, to our clerk, analysts, and translators, and everybody involved in making this work.

The meeting is adjourned.