Human Resources Committee on Nov. 24th, 2016

[The Chair, Liberal, Bryan May]

I'm sorry to interrupt you. You have lots of time, so I would ask that you slow it down. You're going a little fast for the translators.

[Bilan Arte]

Absolutely, I will. Thank you for that.

In 2013-14, 203,887 graduates couldn't make a single payment on their Canada student loan. This claim required reporting pre-tax incomes of less than $20,000 per year.

Earlier this month, the Canada student loans program adjusted its minimum income threshold for compulsory payments on public student loans to $25,000.

Members of the committee, I would like to point out that $25,000 is still earning well below a poverty level income. What's more, we know that our government today is profiting by close to $580 million in interest from the Canada student loans program in 2015, worsening what is already the plight of the most indebted generation in Canadian history, at over $20 billion owed collectively to the federal government.

In May, 2016, Canada's parliamentary budget officer noted that post-secondary education is disproportionately accessed by higher income Canadians, with 60% of students coming from the upper 40% of income earners. Those who are left behind include indigenous and racialized people, new immigrants and refugees, people with disabilities, young people from low-income families, and too many recently unemployed, or folks working minimum wage jobs who simply want to get skills to improve their lives.

I wish to stress that these statistics are not only numbers and need to be humanized, as they illustrate the stories of thousands of youth who, like me, always believed they could access higher education.

My parents came to Canada as refugees in the early 1990s. I grew up within a family and a community that was just surviving poverty and making it through paycheque to paycheque. I started working as early as I could to help my single mother make ends meet. At the age of 17, despite graduating from high school with honours and being granted early admission to university, I was resigned to give up on my dreams after failing to balance the expenses, because I knew that even with public loans I could never afford higher education.

A few weeks before university started, I received a full scholarship to the University of Manitoba, and my life changed forever. Without the full removal of tuition fees as a barrier to my access to university, I would never have had the opportunity to obtain a degree, develop my skills as a leader, nor much less be presenting to this committee today.

As the first person in my family to obtain a post-secondary degree, I'm hopeful that I can help break the cycle of poverty in my community. However, these days, I'm nervous for my siblings, especially my youngest sister, who is only six. My heart breaks to think how high tuition fees might be by the time she considers attending post-secondary. I only hope that I can be in a position to help her achieve her dreams when that time comes.

Members of the committee, I believe that hope is important, but I also hope that all of us here know today that we are in serious need of ending these cycles of poverty. For that, we need more than hope. We need government action, immediately, to remove all barriers to post-secondary education.

I know that my story is not unique. It is the reality and context for too many of my generation, and for generations to come. Young people across the country who come from low-income, marginalized communities cannot believe that they will achieve their dreams of accessing higher education because of skyrocketing tuition fees that increase every single year.

We deserve a Canada with a fully public system of post-secondary education, a Canada that enables the dreams of the innovators of tomorrow. I believe the cycle of inaccessibility to higher education needs to end now.

Furthermore, we know that income barriers that prevent highly qualified students from accessing public education interact with related forms of discrimination. For indigenous students, it means broken promises, despite an era of government commitment to truth and reconciliation.

The federal government is responsible to fulfill Canada's treaty obligation to education for first nations and Inuit students through the post-secondary student support program. In 1996, annual funding increases to the PSSSP were capped at 2%. For the past 20 years, successive federal governments, including this one, have continued this trend by choosing to maintain a 2% funding cap. As a result of this restrictive cap, funding has fallen far behind the growing demand for post-secondary education, with rising tuition fees and living costs.

The Assembly of First Nations has estimated that last year, more than 10,000 students were on a wait-list because of the backlog of funding. The federation is calling on this committee to follow through on its recent and historic commitment to indigenous students. The Canadian Federation of Students supports the demand of the Assembly of First Nations to invest an additional $141 million per year in the post-secondary student support program to fully fund all indigenous learners.

The student support must be tied with rival public spending. With federal spending on public services now lower than it was in the 1940s, we believe it's time to reinvest in public education. Recently, provincial governments in Ontario and New Brunswick have taken note of the barriers of high tuition fees and have taken steps to offset these costs for students from low-income families.

However, we need system reform across Canada to guarantee access for everyone, in every province, and across every territory. As a federal government, you can bring provinces together and enable access to post-secondary education through a dedicated federal transfer to eliminate tuition fees for all.

Canadian businesses will benefit from a society where people are empowered to develop their capacities to the fullest extent possible. A skilled, curious, and vibrant public lies at the heart of any functioning economy. Maintaining high tuition fees, high debt, and a diminishing funding model for post-secondary education does not serve the interests of our society or the entrepreneurs who create within it.

Perhaps most importantly, as this committee's goals today are to hear meaningful approaches to reducing poverty in our country, I believe firmly that ensuring universal access to post-secondary education is the best social equalizer at this government's disposal. Students expect and deserve more from a government with the means and power to make education free.

With that, I will welcome any questions you have. I look forward to working with members of this committee to develop an anti-poverty strategy for our country that centres a universal system of post-secondary education as a key framework to help achieve that goal.

[The Chair, Liberal, Bryan May]

Thank you very much.

Now, from the Metcalf Foundation, is Mr. John Stapleton.

The next seven minutes are yours, sir.

[John Stapleton]

Thank you very much to you and the committee for having me here today, and good day to all the guests.

I've come to talk a little bit about our disability income programs in Canada. First of all, I'll say that I have 28 years of experience working in government as a benefit designer and a policy analyst. I've spent the last 12 years outside of government working for various organizations, mostly in the area of community-based research and policy analysis.

I want to start by saying that Canada, in its different ways, shapes, and forms, spends $33 billion in disability benefits for approximately two million Canadians.

It's very Canadian of us, I think, that we have 10 different disability income systems. I'll just briefly name them: workers' compensation; auto insurance, going to accident victims with persons with disabilities; our veterans programs for our veterans with disabilities; the Canada Pension Plan disability component; the employment insurance sickness component; the disability tax credit; the registered disability savings plan; social assistance, which has programs that differ in each province; private disability income; and 10th, the disability component of the working income tax benefit. Those programs spend $33 billion.

There are two important items that you should know about those. Only two of those programs provide ongoing full-time benefits to the age of 65, the CPP disability program and social assistance. The other programs provide time-limited benefits. You should also know that six of those disability income systems only provide benefits based on someone's already having worked; for example, workers' compensation, veterans programs, CPPD, EI, etc.

The important point in taking this inventory of these programs is that they all have different purposes. In many ways I would characterize them as 10 cats in a bag. They have different philosophies; they came in at different times.

I was especially interested in Mark Wafer's comments about the ways we used to think of people with disabilities. Many of the programs that came in to serve people with disabilities are programs that came in at a time when we did not think people with disabilities ought to work. We thought we would pay them income security to stay at home.

We no longer think this. We are very lucky to be in a society in which we all think that people with disabilities should have the opportunity to work. The same is true among people who themselves have disabilities, and governments also believe this.

Why then do we have this array of programs that interact in many ways to thwart the efforts of people with disabilities to work? The social assistance program I'm most familiar with is Ontario's. I know that for approximately 30,000 of the recipients—about 10% of the people on the program—their households have people who report earnings, yet in many ways the programs work to confiscate that income, and, therefore, thwart efforts for people to work. When they do work, they have their incomes taken away from them.

It's important to know that the footprint of the social assistance component is growing across Canada, in terms of the money it's spending, because we are seeing cuts of various sorts in the other programs. The consequence of that is that more people with disabilities are faced with social assistance being the only choice for meeting their needs.

The work that I've done, especially in community-based research, has shown that people, especially those who also live in subsidized housing, which they can afford, and are therefore often closest to an employer's workplace, for every single dollar that they earn, they will, in fact, lose at least half of the income they received from their employer, and then also receive a 30% increase in their rent. It would be difficult for any of us, I think, to be faced with the idea of losing up to 80% of every dollar that we earn simply because a program needs to claw it back in order to be affordable to the public. I think this is very short-sighted.

In terms of the work we heard about from the woman from the Federation of Students, from Meticulon, and from Mark Wafer for Tim Hortons, we are trying to get people with disabilities back into the labour force and make sure that they can earn enough, along with their income security programs.

It's very important to note that when we have this vast array of programs, all with different philosophies, all which in many cases claw back benefits, what we see is a great reluctance on the part of people with disabilities to actually move into work because they are going to have their benefits otherwise confiscated through these programs. It's important for you to know that social assistance, as a program, deducts all these other forms of income. If someone gets workers' compensation, it they get a veteran's allowance, if they get CPP disability, EI sickness, then those programs are actually deducted off their social assistance at 100%, and at the same time, then, earnings are deducted at 50%.

We have to figure out a way for the very poorest of people with disabilities to be able to have programs work together in a seamless way so that we have a system where people can move into work and be able to meet their own needs.

Thanks very much.

[The Chair, Liberal, Bryan May]

Thank you very much.

Last but not least, from the Peel Poverty Reduction Strategy Committee, we have Ms Pace.

I understand, Ms. Pace, you will lead us off.

[Sonia Pace, Co-Chair, Peel Poverty Reduction Strategy Committee]

Good morning, Mr. Chairman, members of Parliament, and guests. Thank you for the opportunity to present here today.

Adaoma and I will focus our presentation on three recommendations and ideas on the leadership role that the federal government can play to support social and skill development for our vulnerable.

The Peel poverty reduction strategy is a three-year community plan that was created in 2012 to address the growing issue of poverty in our community of Peel, which consists of Mississauga, Brampton, and Caledon. This multi-sectoral table is co-chaired by the United Way of Peel and the Region of Peel. The Peel Poverty Reduction Strategy Committee is a member of vibrant communities, cities reducing poverty, which is a national initiative of 50 communities across Canada.

Why is addressing poverty in Peel important?

With a rapidly growing population, currently at 1,386,000, Peel is one of the fastest-growing regions in Canada. In 2011, there were 17.1% of Peel residents living in poverty. As such, with this level of poverty, our focus in Peel is on the following identified issues that were determined with the community: safe and affordable housing, affordable and accessible transportation, income security, economic opportunities, and food security.

We strongly believe that the government has a role to play. As the economy continues to change and more jobs transform from full time to part time and precarious, federal, provincial, and municipal governments have a role to play in supporting people, beyond traditional social transfer payments and services. Governments have the infrastructure in place to provide training and employment opportunities to Canadians, especially those facing disabilities or multiple barriers and experiencing poverty.

Poverty is fundamentally about limited access to income, supports, and resources. It is also about the inability of individuals and families to live independently, to focus on wellness, and to be involved in community life. Programs and services that are integrated and put people, rather than systems, first are crucial in helping people to get what they need, when they need it.

The following are two recommendations on the federal role.

The first one is to remove systemic barriers. Canadians experiencing poverty often cite how systems prevent them from moving forward. Silo approaches to service delivery at the federal, provincial, and municipal levels of government make things harder for people to get the supports they need when they need them.

Therefore, our recommendation is to encourage the federal government to mandate all departments that deliver services to work with provincial and municipal ministries and departments to share data, streamline processes, and use a “one-door approach” to delivering services.

As such, we have two examples. First, the Canada Revenue Agency could work more closely with municipal social services departments to ensure clients are receiving the full tax benefits and credits to which they are entitled. Second, employment insurance staff could work with social services staff to ensure clients who are exiting EI and moving to social services programs are better supported during the transition period from one program to another.

Our second recommendation is to address racism and discrimination. There are higher rates of poverty among indigenous and racialized Canadians, which is partly a result of racism and systemic discrimination, which often manifests itself in subtle, hidden ways. The federal government needs to acknowledge the role racism and discrimination plays in preventing indigenous and racialized people from moving out of poverty.

We encourage the government to ensure that the pending federal poverty reduction strategy consultations include questions about racism and discrimination, and identify specific recommendations and mechanisms to address these issues. We encourage the federal government to undertake the collection and analysis of ethno-racially and otherwise appropriately disaggregated data across all federal departments, ministries, and public institutions.

[Adaoma C. Patterson, Adviser, Peel Poverty Reduction Strategy Committee]

Now I will focus on three ideas we have that really emerged from our community.

The first concerns community benefits agreements. A community benefits agreement provides jobs and other benefits for community residents. It is a signed, legally enforceable agreement, having clear monitoring and enforcement mechanisms.

Although this initiative is relatively new to Canada, we believe that CBAs have the potential to create training and employment opportunities, especially for vulnerable Canadians. The target population could be newcomers, youth, or people who have been out of the workforce for an extended period of time. We encourage the government to develop a cross-government policy framework that supports the principle of community benefits. This includes removing barriers for the various departments that have a role to play in implementation.

The second idea concerns the public service providing employment pathways. The public service can play an important role in creating employment and training opportunities for Canadians facing multiple barriers or struggling to enter the labour market. Who is the target population? It is youth not in employment, education, or training—we call them NEET youth—and social assistance recipients, including those in the disability programs that John referred to.

For example, the Region of Peel recently launched its model employer pilot initiative: 14 entry-level positions were identified across the organization, and people who are in receipt of social assistance were given the opportunity to apply for an entry-level administrative position. Clients were supported through the entire process, from screening to placement, by social services workers. The placement opportunity is for six months, earning the minimum band paid to regular full-time employees, and includes a mentoring component. The rate is above the living wage for Peel region; our living wage for Peel Region is about $16.50 an hour. Participants will work with a supervisor to develop a learning plan and will continue to receive support from the social services staff throughout the placement so that we ensure success along the way.

The third and final idea concerns affordable transit. In 2012, the Peel poverty reduction committee identified transit affordability as a key barrier to social inclusion and employment. There is a role for the federal government to play in ensuring that municipalities can fund transit infrastructure and programs that are targeted to low-income individuals and families. In fact, there are many communities now, at the municipal level, in which those affordable programs are being funded.

Here is another example in our community. The Region of Peel and the City of Mississauga through its MiWay transit department launched the affordable transit pilot program, phases one and two. Results from phase one participants showed an increase in visits to employment support services, volunteer opportunities, food services, recreational spaces, and medical services.

One participant noted, “Due to this pilot, I find that I have more balance in my life. I now visit family and am able to attend church since there is no additional stress about how to get there. I also have expanded my job search area, since travelling farther from home is now more affordable.”

In closing, we want to emphasize that the Peel Poverty Reduction Strategy Committee understands that income is the root cause of poverty. A sufficient, stable income allows people not to have to choose between paying rent and buying food. However, other important interventions take advantage of what is already in place, whether it is employment and training opportunities that all levels of governments can provide through existing departments or removing silos to put citizens at the centre of our services, regardless of which level of government is delivering them. We need to think and act differently to achieve better outcomes for our most vulnerable Canadians.

Thank you.

[The Chair, Liberal, Bryan May]

Thank you very much.

Now we're going to get started with questions. First up, we have MP Zimmer.

[Bob Zimmer, Conservative, Prince George—Peace River—Northern Rockies, BC]

Thank you, Mr. Chair.

Thank you, witnesses, for coming today.

I just have an initial comment to Bilan. I'm a person who formerly went to university. I have two degrees, so I know what it's like to live close to poverty, or at poverty. We had four children when I was in school, so we had a lot of Kraft Dinners. I've told this story many times to this committee, and they're getting bored with it now.

But I just wanted to give you a little bit of information. Federally, taxpayers spend $12.3 billion on education per year. That's federally alone. It looks closer to $35 billion if you include the provincial contributions to education. Our national debt is almost $1.2 trillion when you take into consideration the federal and provincial components. At $1.2 trillion, that's about $36,000 of debt per Canadian. It costs Canadians about 11.1% of every revenue dollar, so every tax dollar that people spend, it takes 11.1% of that dollar to service the debt, which adds up to $30 billion per year.

You mentioned the government was making a profit from student loans. I don't see it that way from those numbers. The federal government has to borrow that $12.3 billion, the money used to pay for that education, and there's a debt cost. If you look at a percentage in terms of interest, it's about 6% to 7%, but you could say it's an effective tax rate of 11%. You could look at it that way. It still costs government to borrow money to give to students to go to school. That's what I'm getting at, so it's not free.

I think the perception from your organization is that education should be free, but it's certainly not free. I guess what I'm concerned about is, as taxpayers, we talk about poverty reduction strategies. That's the focus of this study, but I'm concerned about Joe and Jane Taxpayer who are asked to contribute more and more every day so somebody else gets something for free. As a concern for poverty, what I'm concerned about with Joe and Jane Taxpayer is that we ask them for more and more every day, and pretty soon they're in poverty. These people who go to work every day, they go do their best for their families and for their kids, and we're asking them to bear more tax burden and debt burden every day.

That's just a comment to you, Bilan, to consider for your organization.

I want to talk about taxpayers, and I want to get to Mark and your presentation, because I think what you're doing is excellent, not to mention that you make great coffee. I have it regularly on weekends when I watch my daughter play hockey.

I want to ask you, in terms of poverty—you see a lot of people who work for you—what is the number one thing that you think is most important to getting somebody who's in poverty out of poverty?

[Mark Wafer]

Number one is a paycheque. A paycheque changes everything. Right now, people who have disabilities who are on all of these pensions that John was talking about are a drain on the system. By taking an individual off those benefits and putting them into the workplace, it's a win-win because you're saving the taxpayer the cost of the benefit, and you're also creating a brand new taxpayer.

If you take 5,000 people here in Ontario off the Ontario disability support program, if those 5,000 people are making the maximum amount of benefits, and you put those 5,000 people into the workplace making a living wage, the combination of the savings from ODSP and the contribution in taxes to the government is about $70 million. There's a huge benefit in removing people from ODSP or other types of benefits across the country and creating new taxpayers. In fact, the only way in which a person with a disability can live a full life is with a paycheque. That is the most important thing.

[Bob Zimmer, Conservative, Prince George—Peace River—Northern Rockies, BC]

I think one thing we talk about often is poverty, having money, and having a paycheque, etc., but as a former teacher and as a parent and coach of kids, I think there's something to be said that what's more important is the prosperity of a person. You see the smiles on people's faces after a hard day's work or after somebody, who hadn't been able to get a job before, finally gets one. That's the kind of stuff that probably makes you feel the most rewarded for what you're doing.

[Mark Wafer]

Yes, absolutely.

I have one quick story I want to share with the group about a young lady I hired five years ago who is profoundly deaf. She met me at a presentation, and she asked if she could come and work in one of my stores. I asked her for her resumé, and she had an MBA. She had graduated from Queen's University three years prior to this meeting, and she had never worked. Imagine that, being in the city of Toronto with an MBA and not working for three years.

She did come to work for me as a baker, a production worker, and she was an excellent worker, but she was only working three hours a day at that time. She was travelling five hours a day in order to work three hours, so that shows the desperation that's out there.

As I said, it changed her life, the fact that it was her first job. She's not with me anymore. She's now working for Deloitte, using her MBA.

[Bob Zimmer, Conservative, Prince George—Peace River—Northern Rockies, BC]

There you go.

[Mark Wafer]

But this was the springboard in order for her to get there.

[The Chair, Liberal, Bryan May]

Thank you very much.

Now we'll go over to MP Long.

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

Thank you, Chair.

I thank our witnesses for coming in this morning. It's great to see so many passionate advocates on poverty and helping those in need, so again, thank you.

My first question will be for you, Mr. Wafer. I read with interest some articles on you, about what you've done with people with disabilities. In the articles, some of the statistics were staggering: an unemployment rate of 54% for people with disabilities. When you include those who have probably given up looking for work, it can be as high as 70%. Again, I commend you for what you're doing at your Tim Hortons. I think it's a fantastic good-news story.

From a federal government perspective, are you able to give me some opinion or thoughts as to what we can do federally to help those businesses improve accessibility and safety for people with disabilities? What can we do as a federal government to help you and to make more people with disabilities able to get jobs in the workplace?

[Mark Wafer]

Thank you very much for that question.

Let's start with what we shouldn't do. Right now, the federal opportunities fund, which is that $40 million, is being used largely for direct-to-employer wage subsidies. This is a huge problem. The way forward in getting businesses to open their doors, getting businesses to get over their fear of hiring people with disabilities, and getting rid of the misconceptions and misperceptions and the stereotypes, is through education and awareness.

When I stand before a group of business owners and I tell them about my story, one or two or three always come up to me at the end and say, “I want to do this. How do I do this? How do I get started?”

Governments can't solve this problem; neither can social service workers solve this problem. The problem can only be solved by the private sector because the people in the private sector are the ones who have to open their doors. How do we do that? We engage them. We educate them. We show them that by being inclusive employers they will reap the benefits from a P and L and bottom-line point of view; no more discussion about charity, no more discussion about legislative compliance, no more discussion about anything other than the economic case.

So what can the federal government do?

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

Right.

[Mark Wafer]

The federal government can use those types of funds, like the opportunities fund. The gentleman over here on the right this morning said, “We don't want to go back to taxpayers and ask them for more money.” We don't need to do that. The resources are already there. The money that's being used for wage subsidies right now should be used for those engagement programs instead of having social service agencies take a cheque for $5,000 and give it to an employer to hire somebody with a disability. That is a very dangerous thing to do. Yes, it gets that person in the door, but it's not sustainable. The attitude of the employer has not changed. He or she still sees that person as somehow broken, not whole.

If the wage subsidy runs out, which invariably it will, what happens to that position after that? Also, positions in companies that have a wage subsidy component are rarely real and meaningful positions. They're made-up positions that have been suggested by a social service agency.

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

I guess I would jump in to say that certainly in Saint John–Rothesay I could give you examples where wage subsidies have been very effective in helping people get that leg in or that first step, but I respect your opinion on that.

Again, I would just say congratulations on what you're doing. I think it's fantastic and it's certainly a model that other organizations could use across the country.

[Mark Wafer]

Thank you.

But could I just add, Wayne, you're absolutely right. There are places and times in which a wage subsidy has worked very well.

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

Yes.

[Mark Wafer]

But not for people with disabilities.

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

That's good to know. Thanks.

Mr. Stapleton, it was a great presentation. I read it out of interest again. You were 28 years in social assistance policy and operations with the Province of Ontario. Again, I say this every time we speak at this committee. We're here to help our department, Minister Jean-Yves Duclos especially, come up with a national poverty reduction strategy, and to aid him in helping those in need.

Mr. Stapleton, can you give me some insight as to what plans and policies are effective at reducing poverty from a government perspective? What have you seen?

[John Stapleton]

The programs that are effective are the ones that help with the transition. I was especially interested in listening to Mark talk about giving someone a paycheque, but as someone transitions from those few hours a week and gets more into the full-time labour market, we have to remember that full-time minimum wage, at least in the Province of Ontario, is about $20,000. A program like the Canada Pension Plan disability will cut you completely off benefits at about one-third of that minimum wage, so there's a perfect example of a program that doesn't really work in the way that it should to help people get back into the labour force.