Madam Speaker, I am very pleased to rise today to speak to this motion of income inequality. One of the fundamental tenets of the NDP is the promotion of a more equal society and therefore we will be supporting this motion.
Increased inequality is one of Canada's greatest challenges. Most Canadians' real wages have remained stagnant for several years now. In fact, the average income of Canadians has increased by only 5.5% over a period of 33 years.
According to the Conference Board of Canada, income inequality is growing faster in Canada than it is in the United States. Much of this growing inequality can be attributed to an increase in the revenues of the richest 1% of the population. Canadians who belong to that 1% have increased their share of the nation's total revenue from 8.1% in 1980 to 13.3% in 2007.
In fact, Canadians in that 1% are responsible for nearly one-third of all total income growth between 1997 and 2007. This growth occurred at the expense of other income groups.
This increase in equality of the 1% has had serious implications for the majority of Canadian families.
Lars Osberg at Dalhousie University argues that over the period from 1981 to 2006 the life experience of most Canadian families has changed. The new normal has been that entering cohorts of young workers have earned less in real terms than their parents' generation did at the comparable age.
We also now see double the unemployment rate for young Canadians. The national unemployment rate is already far too high. Our young people are also facing a much tighter job market. Conservative budget plans call for unemployment to actually rise. Women, aboriginal people, racialized communities and recent immigrants also suffer from disproportionate poverty relative to other Canadians. Such inequality has societal consequences.
In 2009 a groundbreaking book on inequality by British scholars Richard Wilkinson and Kate Pickett demonstrates that inequality, more than GNP or GDP, has a significant impact on a range of social indicators, indicators like health outcomes, such as the average life expectancy, and in other measures of human development, such as rates of literacy, teenage pregnancy or incarceration.
I see this growing poverty, this growing inequality, in my own neighbourhood, in Parkdale—High Park, where people suffering from poverty, from mental health problems, from lack of housing are seeing their condition worsen.
This is not the legacy that we should be leaving to the next generation.
Before the mid-1990s, Canada's tax and benefit system was just as effective at stabilizing inequality as those of Nordic countries, offsetting over 70% of the rise in income inequality. However, the impact of redistribution has declined since then. The OECD found that taxation and benefits now offset less than 40% of the increase in inequality.
The Conservatives tend to focus on an economic spinoff model with respect to income distribution. They seem to think that higher incomes for the rich will ultimately trickle down and benefit the rest of us. However, tax cuts for big corporations and the richest Canadians have resulted in rising income inequality, stagnant economic growth and increasing unemployment. They are really on the wrong track.
Moreover, several university studies have concluded that census data are critical to accurately measuring income inequality. The elimination of the long form census will interfere with our ability to tackle the problem.
The Liberals presided over increased income inequality when they were in power during the 1990s and 2000s. They have also consistently supported Conservative budgets that have led us down the wrong path. We saw during the Liberal government the most massive cuts to our social programs, which had serious and dramatic effects in increasing inequality.
Even when the Liberals had the financial ability with surplus budgets to make positive changes, they cut the national housing strategy and the funding for housing. They cancelled the national minimum wage. They failed to create a national child care program. They also failed to make serious and meaningful investments in our infrastructure.
The motion introduced by my colleague from Kings—Hants is a starting point, but the suggested study is limited in the taxes it would examine. Inequality is not influenced only by personal income tax and transfers. It is also influenced by consumption taxation, corporate taxation and international taxation. The motion would be stronger if it included some of these items in the scope of the study. Furthermore, there is no reason that this study should constrain the tools with which we can combat inequality.
It is important to learn from our mistakes, Liberal and Conservative mistakes, mistakes made around the world, and identify precisely what has contributed to the increasing inequality in the latter half of the 20th century.
The specific references to the welfare trap and the disincentives to paid work in the formal economy may open the way to unduly focusing the study on the characteristics of the poor and/or the unemployed as a cause of inequality. This is typically the manner in which the Conservatives approach the issue.
A stronger, more progressive approach would look at the full range of micro and macro economic and structural determinants of inequality, such as income redistribution through taxes and transfers, access to and the process of collective bargaining, access to education, health care and other social services, especially mental health services, structural changes to Canada's industrial composition, the government's role in employment transition and regional inequalities.
The suggested study also limits itself to recommendations to improve equality of opportunity. This is not consistent with the rest of the motion. If we are to study income inequality, there should be recommendations regarding the reduction of inequality.
Income inequality is a serious problem with serious consequences, and Canadians want us to take action.
According to the results of a recent EKOS poll, Canadians' primary concern is inequality. Another recent survey shows that 77% of Canadians believe income inequality is a serious problem, and that they are ready to do their part to find a solution.
The occupy movement gave rise to a major public debate in many western nations about income inequality. The OECD stated that governments like Canada's should do more to reduce income inequality because inequality undermines growth and social cohesion.
The OECD's 2011 report also underlined “the need for governments to review their tax systems to ensure that wealthier individuals contribute their fair share of the tax burden.”
One of the fundamental goals of the NDP is a more equal society and even in its present form, the motion is consistent with that goal.
New Democrats have a long history of fighting to reduce inequality and fighting for equality. Unlike the Conservatives, we will not work actively to increase inequality. Unlike the Liberals, we will not say we want to reduce inequality and then do the opposite.
Supporting the motion will be a continuation of our decades of work on income inequality. Canadians can count on New Democrats to work for a prosperous Canada for all.
