Madam Speaker, it is a pleasure to rise in the House today to speak to Bill C-395, the opportunities act. I want to take an opportunity very quickly to thank the member for Carleton for bringing this forward. I know the opportunity to present a private member's bill does not come along that often, and many members in the House will not have an opportunity to see one through to completion. When people take the time they are allotted for a cause and purpose like this, it is to be commended. The member, through his private member's bill, is really starting to highlight and draw attention to a very important issue that we need to be looking at closely. We need to be examining it and figuring out what can be done. The bill he has introduced puts us on the right path and in the direction of being able to start having this discussion.
I am going to focus my comments on the problem that exists. My staff and I had an opportunity to research this and look at some of the problems. I would like to talk about those as well as about some statistics we were able to find that highlight even further the problem that exists. I will then talk a bit about some of the recommendations out there and the Canada social transfer component and what this bill would do to change that.
The first thing we have to understand is the marginal effective tax rate that so many people who are receiving some kind of social assistance or disability payment, or whatever it might be from the government, are dealing with. In particular, as it relates to people with disabilities, what we are finding is that they are less interested in getting into the marketplace because of the clawback that would happen when they get into the workforce and start to generate income. Their disability payments would be clawed back. Therefore, their marginal effective rate of tax would actually starts to increase.
According to figures we were able to obtain from the Library of Parliament, a person with a disability working 30 hours a week in Ontario pays a marginal effective tax rate of up to 70%. If members think that is astonishing, in Alberta it can be as much as 115% for a person who has a disability and is working 40 hours a week. Another term for this is what is referred to as the “welfare wall”. That was coined by the Centre for Research on Work and Disability Policy. It refers to a cluster of factors that together act as a trap for people on social assistance, or ”welfare”, the term it uses, and makes it difficult for them to move off that program of income support. I think that is exactly the case we are seeing here for people with disabilities with the disability payments they are getting.
This problem is also well documented by the Caledon Institute of Social Policy in a 1993 study, which found that Ontario social assistance recipients who supplement their social benefits by working get to keep only a very small fraction of these earnings. Basically, there is a wall, called the “welfare wall”, put up in front of people that is preventing them from actually getting into the workforce. In particular, the more they work, the more is clawed back. Therefore, even if they do start to get into the workforce, there is a disincentive to continue to work more.
The Organisation for Economic Co-operation and Development, the OECD, did a study on this and found that unemployment rates of persons with disabilities in 2006 were 50% higher than for Canadians without disabilities. The OECD concluded:
Much of Canada's sickness and disability policy reform efforts so far have been piecemeal rather than co-ordinated, and had seemingly limited overall impact on a system that remains complex and fragmented.
I mentioned earlier that I would talk about some statistics. This is from Statistics Canada. According to a 2012 Canadian survey on disability, there were over 650,000 disabled individuals, aged 15 to 64, who were not in the labour force who either used to work or indicated that they were capable of working. Of these, 94,000 reported feeling that if they were employed, they would lose additional support.
That is key. These are people thinking to themselves that if they start working, they will lose support. They are not even in the participation rates, because many of them are not actually looking for jobs, because they fear these clawbacks.
The unemployment rate for persons with disabilities is 11%, compared to 6% for people without disabilities, which is almost double. It is important to mention that the unemployment rate always includes people who are actively looking for work, and that is why we have to talk about the participation rate, which is equally important. The participation rate is 55% for people with disabilities versus 84% for people without disabilities.
I have outlined why I see a big problem here. I would agree with the member that we are not doing enough to combat this problem. We are not doing enough to put additional measures in place to discourage the welfare wall that has been created.
That is why I think the part of the member's bill that talks about the minister collecting data and reporting back to Parliament on a regular basis is extremely important. By getting that information, we can have a discussion about it. Quite frankly, a lot of Canadians are not having a discussion about this, because they are not aware of the information and do not realize the impact.
My colleague on the other side talked a little bit about the HUMA recommendations. I admit that I am not a member of the committee, but I did look at the report it produced. It had four recommendations that I believe are related to this.
The first is “that the government task the Parliamentary Budget Officer with reporting annually on the marginal effective tax rates...that low-income disabled people pay in each province.”
The second recommendation is “that, at the next meeting of the federal-provincial Finance Ministers, all governments agree”, which I think is the key word here, “on a coordinated plan to cap [marginal effective tax rates] at...50% for all disabled Canadians”. It goes on to give more detail. I think it is key that we recognize that the word “agree” was used there because of the problem that is presented by the Canada social transfer.
The difference between this bill and the HUMA report is that the bill directs the federal government to do something with the Canada social transfer.
I know the member across the way mentioned that the Canada social transfer has one single condition, but there is a valid reason for that. Under section 25.1 of the Federal-Provincial Fiscal Arrangements Act, provinces and territories must meet a national standard of having no minimum residency period. That is the sole criterion, and this was done intentionally to create a scenario in which the provinces are responsible to the people, as opposed to being responsible to the federal government.
That is probably what has motivated the government, through the parliamentary secretary, to explain why it might not be supporting it. This bill would have been a lot more palatable if it did not have the component regarding the Canada social transfer. If it did not, we would have been able to get that information on a regular basis.
I am very supportive of the concept and what I have heard, but to be completely honest, I am still deliberating as to how I am going to vote on this. I think this is a noble effort, and I know what people with disabilities face.
As a personal anecdote, I have a nephew with Down syndrome. He has great and amazing supports right now, but we worry about what supports he is going to have after he finishes high school.
I will leave it at that.