We've had witness testimony that there are two major parts to the poverty equation: one is income and the other is outcome. If incomes go up, poverty tends to go down, but if the cost of living rises faster than incomes do, then poverty can actually go up, even in a growing-income environment.
What we're faced with right now is a new, nationally imposed, provincially administered consumption tax that will raise the price of things on which low-income families spend a disproportionate share of their income. I asked a witness from Stats Canada whether or not that would, all other things being equal, increase the number of people who are below the poverty line. He said yes. The reason is that, whether you use the LICO line or the market basket measure, the goods that carbon taxes inflate in price are all used to determine the threshold at which poverty is measured.
For example, the low-income cut-off line measures the percentage of income that a family must spend on essentials like food, utilities, and housing. The people who spend 20% more of their income on those things than the 1992 average are considered to be below the LICO line. As you raise the price of heat, electricity, gas, and food, you raise the LICO threshold and therefore increase the number of people who are under that threshold.
The same is true with the market basket measure. It takes into account a whole basket of things you need to have to be considered included in society. Among those are heat, fuel, electricity, food, etc. If you raise the price of those things, you automatically increase the number of people who are below the threshold and considered to be in poverty, based on that measure.
Our very first hearings were on those measurements, because we wanted to have some way of measuring poverty. So we obviously consider those things to be important in determining whether or not someone is considered to be in an impoverished circumstance.
On the question of the carbon tax, some people in the room support a carbon tax and others don't. I would suggest to you that, regardless of your position on that question, you can support this motion. There are lots of people who support carbon taxes, who believe they have mitigating solutions to address the problem I've just described, whether it's through rebates or changes to other taxes. Those sorts of solutions should be part of the conversation and could be brought to the floor in testimony from witnesses, and could be included in recommendations that come out of the committee. That doesn't mean we shouldn't study the problem at all.
I think the instinct of someone who sees this motion and is in favour of carbon taxes would be to say, “Let's vote this down”. That would clearly be just an attempt to besmirch a policy position that they support. I would argue that this is an opportunity for the government and for anyone who supports carbon taxes to study any mitigating measures that might address the concerns I'm raising. Refusal to do so would suggest that the government plans to do nothing to mitigate the impact on the poor of this new tax, or that they're not even interested in understanding the problem in the first place.
This is a problem. I'm telling you that this will become a problem for the government if it does not think this through. I know I sound like a broken record on this, but 11 years ago the provincial government made a policy decision to raise hydroelectricity prices. They believed they were creating this brand new green energy industry. Some 10 to 12 years later, they have an absolute crisis on their hands. Anybody who is a member of Parliament in Ontario will acknowledge that it is not only an economic crisis and a social justice crisis, but it is also now a major political crisis for the government in power, because they did not consider the impact this policy would have, particularly on low-income and vulnerable people.
I meet these people every week in my riding. They are people who simply cannot afford to live because they can't keep the lights on. Hydro bills have gone up in some cases by over 100%, and that necessarily harms people of lower income on a disproportionate basis, because electricity bills make up a larger share of their family budget.
The same is going to be true with this cost, so even if you believe that we need to have a price on carbon, I would encourage the government right now, before this actually comes into place, to consider the impact on people who can least afford to pay it, and come up with recommendations to mitigate those impacts.
I actually believe I'm giving the government an opportunity here to study those questions now. If they shrug them off, I can tell you, this will come back; this is not going away. With a $50-a-tonne price on carbon, whether you agree with it or not, whether you think it's necessary to save the world from climate change or you don't, I can tell you there are going to be real people in your ridings who are going to be pounding on your door when this takes effect, and you will be on the record. That's why it was so important for this to be discussed out of camera. You will be on the record having refused to even study that impact or how it could be mitigated.
I strongly encourage the government to show openness to this question and compassion for the people who are going to suffer. There's still time to investigate these questions before the policy comes into effect; therefore, I ask that members of the committee support the motion.
Thank you.
