Thank you.
I thank the committee for inviting me to appear before you today, because I have a very personal interest in this subject. In 1971, exactly 45 years ago this year, I dropped out of grade 12, and by any measure, I was below the poverty line. I was frequently unemployed, and I was certainly always earning minimum wage when I was employed; and I remained in that status until I returned to school as a mature student a couple or three years later.
First, here are my disclosures. As you mentioned, I'm an associate professor, tenured, at Carleton, in the Sprott School where I teach business strategy and public policy. Second, I do not belong to or donate any monies to any political party. Third, I'm not a registered lobbyist under the Lobbying Act. I don't represent anyone anywhere, except myself. Fourth, I've taught approximately 100 times in developing countries around the world since 1991.
What I'm going to talk about today is based on a meta literature review, a peer-reviewed article by me and Sprott Chancellor Professor Vijay Jog, concerning the Canadian public retirement income system. It was published by the Journal of Public Finance and Management. I'm also drawing on another peer-reviewed article that I wrote, which was published this year in How Ottawa Spends and focused on the policy and vertical issues in the reform debates surrounding CPP. I'm going to expand on that and generalize from that.
Finally, I'll also draw on my op-ed published two years ago for Ottawa Business Journal, which was called “The Benefits of a Lower Minimum Wage”.
As someone who is relentlessly evidence-based, relying on evidence from StatsCan, OECD, and OECD government departments, I want to provide some background empirical data concerning wealth, incomes, and poverty in Canada. I do this due to what I believe is a substantial amount of misinformation and misunderstanding in the public today concerning poverty in Canada, due to what I characterize perhaps a little facetiously as Trumpisms, made-up statements lacking any empirical basis.
I do have the background data for this, which I will provide to the committee after. I have the actual source data from StatsCan and the OECD, and so forth.
Restated, contrary to what has been reported widely, poverty is not skyrocketing and it's not exploding in Canada. It's real, it's there, but it's not exploding and it's not skyrocketing. Income inequality is not exploding or skyrocketing in Canada. I have the OECD data on that. Incomes are not stagnant in Canada per StatsCan.
First, the overall Canadian income data is in a comparative context. I provide this to my students every year and they're just simply astonished. This is based on 2011, because there's a lag when you're using OECD. Canada's average GDP per capita, our income per capita, expressed in U.S. dollars, because the OECD converts everything into U.S. dollars so you can compare across countries, was $44,000 U.S. The EU average at that time was $36,000 U.S.; that's the EU-28. The eurozone average was $38,000. The OECD overall average was $38,900. So Canada was averaging and is averaging about 20% higher than the European Union, which of course we know is one of the wealthiest places in the world.
Turning to Canadian poverty rates, we discover they're at the lowest level ever in Canadian history, at approximately 8.8%. In my lifetime, from the 1960s until now, poverty has collapsed. That's not to say it's disappeared. Of course, it hasn't, and there's more work to do, but it's certainly not going up.
Then we examine inequality; Canada is below the OECD average. That's never reported. We get the impression that we're skyrocketing and we're above everybody else. That's simply not true. Then we examine outer poverty in Canada and discover what we all know, that it has been collapsed since the 1960s. Whether you use the LICO or the LIM, whether it's households or single people, it's collapsed.
Again, according to the OECD, Canada has one of the lowest rates of elder poverty in the entire world. There is only a handful of countries that have a lower poverty rate than we do.
Turning to my research on the retirement income system, my overarching message is that Canada and other OECD countries go forward into a new world of significantly reduced economic growth due to the aging of the population, which will inexorably lead to diminished taxation revenues, as Minister Morneau is going to tell us this afternoon. We can no longer squander scarce public resources on frivolous policies, of which universality is exhibit A.
Our meta literature review of the Canadian retirement income system showed that Canada has one of the lowest levels of elder poverty in the world per OECD pensions, at a glance. Moreover, a consensus of Canadian researchers such as Professor Milligan of UBC, Jack Mintz in Calgary, and even Bob Baldwin from the Canadian Labour Congress find that approximately 80% of Canadians not yet retired are in fact pension-ready, and that the problem is not in the bottom two quintiles but in the middle and upper-middle quintile. This cries out for a targeted solution, not a universal, one-size-fits-all policy.
My second message to this committee—and I'll be winding up right now—is probably going to be very different from that of most witnesses who will argue that we simply need to spend more money to solve our problem. I want to first note that I am not here before your committee asking for more money for my interest group, for the universities. Not at all.
Rather, I hope and urge that the committee can think about how we can grow the economic pie through restructuring policies such as the elimination of protectionist barriers, such as were advocated by the advisory committee to Minister Morneau, rather than simply redistributing the pie or rearranging the chairs on the deck of the Titanic in this brave new world of much lower economic growth.
Thank you.