Human Resources Committee on Feb. 21st, 2017

[Karen Vecchio, Conservative, Elgin—Middlesex—London, ON]

That's excellent. Thank you very much. There was talk about the fact that when people go into their first house it opens up some of that rental property, so that's wonderful.

Gavin and anyone who wants to comment on the following, when we're looking at the issues dealing with poverty in neighbourhoods, comparing rural and northern with urban, what are some of the things we always need to keep in mind, especially for the people who live in rural Canada?

[Gavin Still]

In central rural Canada, one of the most noteworthy differences is that it's a little circular in the sense that there isn't any public transit, so typically poverty is exacerbated by the fact that many people, in order to get to their jobs or social events, have to provide their own transportation, which comes at quite a high cost. That circles into the fact that municipal zoning here typically requires a lot of open parking space, which of course feeds on the fact that there isn't public transit and people need vehicles to travel. That's one of the big differences, and obviously the cost of materials, especially for building, and the cost of living in general is high, as was mentioned before. Those things are certainly different.

If we can solve some of those problems.... I'll go back to the positives, the social heart of the community is quite close in relative terms if people can get access, so it all circles together, if that makes sense.

[Karen Vecchio, Conservative, Elgin—Middlesex—London, ON]

Gary, I'm not going to ask you any questions, because I've had a one-on-one with you before, but I would like to commend you on your phenomenal work. You do great things, and hopefully we can work together.

[The Chair, Liberal, Bryan May]

Madame Sansoucy, you have three minutes.

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

Thank you, Mr. Chair.

Mr. Speer, you mentioned indigenous people. We talked earlier about the reality of life on-reserve, but have you noted the challenges that indigenous people face in urban settings?

[Sean Speer]

I'm going to speak in English, I apologize. My French isn't as strong as your English.

The experience of indigenous people in urban centres is a subject that ought to be a matter of concern for the federal government and this committee. As I said, any federal poverty reduction strategy that doesn't place indigenous people near the centre is lacking, for two reasons: principally, because of the disproportionate levels of low income and poverty that this particular population group faces; and second, because it's one of the areas of federal responsibility.

As I said, on reserve and off reserve, indigenous people need to be part of the strategy. The extent to which the solutions or policy interventions differ between those on reserve and off reserve exceeds my expertise. I wouldn't want to venture a comment. My fellow panellists may have a view.

One thing Shawn said in his comments about social assistance on reserve is precisely right. Not only is there room to increase the level of benefit available, there are also ways to experiment with the way the program is delivered. Not only can that help to improve the conditions for folks on reserve; it can also catalyze change at the provincial level.

I think there is a real opportunity to focus on reforming the social assistance programming for indigenous people as part of the committee's work.

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

Mr. Pegg, do you know the percentage of indigenous people living in urban centres who access food banks? A strategy exists for indigenous people in urban settings, but is it meeting their needs? Do indigenous people face specific challenges that we need to consider?

[Shawn Pegg]

We know that about 12% of people accessing food banks self-identify as first nations, Métis, or Inuit. They make up about 4% of the Canadian population, I believe. They're certainly overrepresented, and the numbers skyrocket in the western provinces, as you might expect with the larger populations there.

As Mr. Speer said, I'm not sure I'm the right person to really be speaking to that issue. It's certainly something we see every day in food banks, but that's as far as I would go.

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

Mr. Speer, you recommend making the disability tax credit refundable.

Do you really believe the tax credit is underused because it is non-refundable? Does the credit's underuse not have more to do with the fact that individuals who have two of the five restrictions do not see themselves as disabled and therefore do not think the tax credit is for them?

[Sean Speer]

I'll answer that question as briefly as I can, cognizant of the time.

Before I directly address it, I think the government's review of the federal tax code that has taken place over the last year is not just an opportunity to decide which tax expenditures ought to be eliminated or maintained. It's also an opportunity to think about the effectiveness of existing tax expenditures and whether they ought to be reformed.

I would place a disability tax credit near the top of the list of tax expenditures that not only ought to be maintained but ought to be reformed as part of this review process. You've raised the question of whether the eligibility for the tax credit ought to be changed. I'm afraid I don't have an opinion on that, or at least I've not studied it closely.

The question of refundability is a sensible change. The purpose of the tax credit is to help defray the cost associated with one's disability. Those costs don't end when the value of the tax credit ceases. It would be a positive reform, as part of the review of federal tax expenditures, not just to eliminate or maintain expenditures but also to reform ones like the disability tax credit. There are a lot of solid proposals out there to do so.

[The Chair, Liberal, Bryan May]

Thank you very much, Mr. Speer.

Now on our next round of questioning, we have Mr. Poilievre.

[Pierre Poilievre, Conservative, Carleton, ON]

When we talk about these income support initiatives, we have to be very careful about doing more damage than good. For example, there are social assistance programs in this country that have clawback rates, when combined with taxation, that are above 100%. In other words, a person loses money by going to work.

The working income tax benefit, for example, has a clawback rate of 15%. For a disabled person earning minimum wage, the working income tax benefit actually increases their marginal effective tax rate. When their income gets over $20,000, the clawback of 15% of that benefit actually increases the share of their earned income that they lose as a result of earning that next dollar.

The same could happen if you “means test” a basic income. If you have a basic income, you have to ask yourself, are we are going to give it to millionaires and billionaires? No? Okay, are we going to give it to people who earn over $100,000? No? Okay, how about over $50,000? No? Okay, how about over $25,000? If we say $25,000, and when someone gets to that level of earned income and they start experiencing a clawback, they are actually punished on each extra dollar they earn, not to mention the fact that such a benefit would require higher income taxes. As they start to get into a middle-class tax bracket, they are actually paying more to fund a benefit for which they no longer qualify.

The disability tax credit, for example, was designed to help disabled people with the cost of working, because there are extra costs for working that are associated with being disabled. Making it refundable would remove that additional benefit.

I want to see if, particularly Mr. Speer, or Mr. Gladstone, who works in the field of getting jobs for disabled people, can talk particularly about some of those perverse incentives that can result from good intentions.

[Sean Speer]

The challenge of marginal effective tax rates are implicit in any income support program.

I think the question that policy-makers have to confront is twofold. First, is the net benefit of those income support programs worth the potential cost of the marginal effective tax rate that Mr. Poilievre describes? Second, are there ways to minimize the effects that he describes?

The working income tax benefit is a great example, where it's designed principally to try to smooth out the effects of marginal effective tax rates. But as a result, in and of itself, it has one.

I would say, on balance, that's a cost that I'm prepared to accept because the program provides considerable benefit. I think it speaks to the point in my initial comments. As policy-makers design programs to help people in poverty or in low-income circumstances, it's essential that it's not done in a clumsy way because of the negative consequences that he describes.

[Gary Gladstone]

Thank you very much.

In terms of employment incentives, and if you're able to work, should you be earning more and have it not clawed back? Absolutely.

In terms of some of the programs you mentioned and the clawbacks with those, I'm not that familiar with them because the employment piece is not my specialty.

I will say, absolutely, that particularly for those who we serve with developmental disabilities, we're able to get them jobs at minimum wage and above. The shelters are no longer...nor should they be. Fair work, fair pay. As they are working more, they should be in the position to earn more and do better than if they weren't. At the same time, I'm saying that if they're not in the position to work, policy-makers should still ensure that Canada, being the incredible country that we are, is taking care of them appropriately.

I hope that answers you.

[Pierre Poilievre, Conservative, Carleton, ON]

My next question is about Ontario phasing out sheltered workshops.

[Gary Gladstone]

Correct.

[Pierre Poilievre, Conservative, Carleton, ON]

I think we all agree that is what needs to happen in the long run.

[Gary Gladstone]

Right.

[Pierre Poilievre, Conservative, Carleton, ON]

However, there are some people who, were it not for a sheltered workshop, would not have any employment whatsoever. What do we do for them?

[Gary Gladstone]

There are many opportunities for them to be engaged in the community that may not be employment at full dollars, but may have engagement. Back to Dan Ruimy's point of “what else does Reena do”, community engagement is at the core of everything we do, be it work in the community, assisting with other agencies, or what have you. There are ways that employment.... You're right. For those that we serve, this is not for everybody, but certainly those who we can assist.... With government programming, we can expand and enhance that.

[Pierre Poilievre, Conservative, Carleton, ON]

The data is clear that the overwhelming majority of disabled people want to work.

[Gary Gladstone]

Correct.

[Pierre Poilievre, Conservative, Carleton, ON]

There's no doubt about that whatsoever. There's also data to show that, if given the choice between working and being part of a day program, the overwhelming majority of disabled people choose to work.

[Gary Gladstone]

Absolutely, and those are the people that we serve. A number of corporations are now coming to the realization that employees with a disability of any sort—in this case, I'll harp on developmental disabilities—make incredible employees because they are not looking anywhere else. They are loyal. They are great. Some of the banks are now starting to have disability amounts to make sure...the same as with gender equality. It's making a difference. We are able to work with them through other agencies to train them and find appropriate places for them.

[The Chair, Liberal, Bryan May]

Thank you very much. I let you go a little long there and you can't have another one, unless Mr. Long wants to share his time, but I don't know that he will.

Mr. Long.