SCYR Committee Meeting

SUB-COMMITTEE ON CHILDREN AND YOUTH AT RISK OF THE STANDING COMMITTEE ON HUMAN RESOURCES DEVELOPMENT AND THE STATUS OF PERSONS WITH DISABILITIES

SOUS-COMITÉ SUR LES ENFANTS ET JEUNES À RISQUE DU COMITÉ PERMANENT DES RESOURCES HUMAINES ET DE LA CONDITION DES PERSONNES HANDICAPÉES

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, April 13, 1999

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[English]

The Chair (Mr. John Godfrey (Don Valley West, Lib.)): First of all, I'd like to welcome everybody to today's session. I want to apologize to all concerned for the crowdedness of the room, particularly those who are not seated very comfortably at the back. This is not within our control; room allocation is done by other persons. So we apologize to you for the discomfort.

I want to welcome witnesses from two institutions, the Caledon Institute and the National Council of Welfare.

Just to remind everybody what we're up to here, we're undertaking a study that began with an attempt to understand what we know or don't know about the state of Canada's children. We then moved on to some ideas that have been put forward by people like Tom Kent and Don Lenihan, and dealing with issues like children.

Today we're very lucky to have two organizations here. One is Caledon, which has been very much associated with things that the government has been doing, such as the national child benefit system. The other group is the National Council of Welfare, which, by the most timely of considerations, has just produced—officially, I guess it was yesterday—this report, which is

[Translation]

in both official languages. I hope we will get a copy, Ms. Gagnon.

[English]

It was reported in this morning's Globe and Mail, which reminds Liberals that we did promise something in 1993 called a nation-wide daycare system.

So the timing is excellent for our guests, and we welcome them here.

I think the one thing we are hoping to increasingly focus on as we do our work is how we know whether or not our programs work. I think this was a question raised in our first round. How do we measure it? How do we learn from measuring programs that exist, or how do we test programs that might exist?

That's the context, and I think I'll begin alphabetically, both by person and organization. Battle comes before Brun, so I'm going to ask Ken Battle to make some opening remarks. I'll then ask the National Council of Welfare to do the same, and then move straight to questions.

Mr. Ken Battle (Director, Caledon Institute of Social Policy): Thanks for inviting me along, Mr. Chairman.

I guess I should put my cards on the table on child benefit reform, and say that we certainly have been fairly intimately involved with the development of the child benefit reform that's underway now. Both before it happened and as it was happening, I was policy adviser to Ministers Young and Pettigrew, and I've been advising Minister Martin all along on this.

I just want to make a couple of brief points, but before I do, I would just bring to the committee's attention some of the pieces we've written on child benefit reform, because they set out our views at greater length. One that I would recommend, if you haven't looked at it, is a report that I wrote with Michael Mendelson. It was commissioned by the British Columbia and federal governments, and it's called Child Benefit Reform in Canada: an evaluative framework and future directions. It was an attempt pretty early on—we released it in 1997—to explore evaluative criteria and developmental—

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[Translation]

Ms. Christiane Gagnon (Québec, BQ): There must be a technical problem, because we can barely hear you.

[English]

Mr. Ken Battle: Do you want me to speak a little more quietly?

The Chair: It has nothing to do with you.

Mr. Ken Battle: I mentioned that report simply because it's an attempt to think about how we might develop the child benefit reform beyond what the federal and provincial governments have signed on to. I think this is very important in order to understand where Caledon is coming from in all of this.

Our vision of the development of a child benefit goes well beyond one that will simply, and hopefully fairly soon, displace welfare benefits paid on behalf of kids. We've talked about a much larger child benefit that would substantially increase child benefits and disposable income for all low-income families with kids, and that would also substantially increase benefits from modest- to middle-income families. I just mention that.

You mentioned the difficulties in trying to figure out what works in social programming, Mr. Chair. In that report, we're trying to think out loud about how one can plot, chart and evaluate the development of the child benefit reform in a way that is realistic, yet tough-minded. I emphasize one of the recommendations that we made in that report, because I think it's very important, and that's to combine quantitative analysis with qualitative analysis, with talking to people who receive benefits. We did that in the preparation of this report. We met with a group of working poor families in British Columbia who were receiving the new B.C. family bonus. You can learn a lot about policy development and evaluation by talking to people who receive these things.

Just recently, actually Saturday morning, I delivered a paper to the Canadian Tax Foundation. I would also recommend that to people. It looks at the development of child benefits as a tax transfer integrative mechanism.

I have some general points about the child benefit. I won't elaborate on them, I'll just read them quickly.

One, I think child benefit reform is very poorly understood. I don't think people get it, and that's as much the fault of the government as it is the fault of the critics and the media. I don't think people understand what it means in terms of the reform of child benefits. They certainly don't understand its broader implications, its potential implications for welfare reform and income security reform more generally.

The second thing I have to repeat literally every time I talk to people: nobody is selling the national child benefit—at least, I'm not—or any reform of child benefits as a magic bullet to solve child poverty. To use words that I wrote when I was at the national council some years ago, kids are poor because their parents are poor; the parents are poor because of a variety of problems, both social and economic, that are deeply rooted in society. We have to say that over and over again, because it is important. Obviously we need a much broader approach to family poverty, one that is both preventive and remedial, one that involves fiscal and monetary policy as much as it does income security, social services and health. I don't think we can say that often enough.

As another quick point, as I said, the phase of the child benefit reform that we're in now is only the first stage. It only establishes the foundation for creating an adequate child benefit system. If governments stop once they've reached that foundation—which would be a maximum child benefit of about $2,500 per year—the reform will be stillborn, to use a rather horrible analogy, and we won't have got that far.

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So I'm really emphasizing that the onus is on the federal government to keep investing substantial sums in developing the national child benefit. We've set the first decade of the next century as the time to do this. And this is going to cost a lot more money.

A partial deindexation of the Canada child tax benefit, and indeed of provincial income-tested benefits and earnings benefits—of course welfare, which is non-indexed—remains an Achilles heel of the child benefit. It's a serious problem that we have to grapple with. I'd rather do it sooner than later, and there are arguments here about what should you do first in terms of cost. But as you well know, as we increase child benefits, people are going up a down staircase and partial indexation not only of child benefits but of the refundable GST credit and of the income tax system generally is eating into the increases in child benefits.

Finally, I wonder if I could quickly show a few graphs to emphasise some of my points. I'm sorry, Mr. Chair, I should have spread this around before.

While I'm at it, let me make one final point. It's true that the net child benefits available to families on social assistance are not going to increase in this stage of the child benefit, because most provinces are offsetting their welfare benefits for kids by the increase in the federal child benefits.

I think it's important, though...and one can debate the wisdom, political and otherwise, of having made that choice. It was dictated primarily, I think, by cost. But I would argue that welfare families are better off, even if they're not getting any more net child benefits, to the extent that they get more of their child benefits from Ottawa and less from provincial capitals. And I'd be happy to elaborate on that. I think they're far better off getting benefits from an income-tested program that is politically secure, at least now, than from needs-tested welfare, which is stigmatizing and which is highly vulnerable to provincial politicians.

I'll quickly end, Mr. Chair and committee members, with a couple of graphs. I've updated some of the work we've done before to take into account the secondary increase in the Canada child tax benefit that was announced in the 1999 federal budget.

If you look at figure 1, what I've done is plot the cash benefits that have been paid to low-income families over the years. I emphasize that this does not include the children's tax exemption or non-refundable credit. We're looking at cash benefits that all low-income families would have received over the years. They changed in nature. I won't go into it.

It does show that there has been a fairly substantial improvement or increase in the child benefits over the long haul.

If you look at figure 2, though, the other side of the story is that low-income families have seen an increase in their federal child benefits at the expense of middle- and upper-income families. The grey lines, the lowest lines along the bottom there, are showing what the distribution of benefits looked like in 1984 under the old system of universal family allowances, the refundable child tax credit, and the children's tax exemption. We had a very universal and untargeted, quite irrational, system.

The middle bars are showing the coming of the child tax benefit in 1993, which folded the three main federal programs into a single income-tested system. Basically we were seeing cost cutting there. You can see by the distribution that middle- and upper-income families were starting then to help fund the anti-deficit fight. There weren't particularly large increases at the bottom end.

The black bars, the tallest ones, are showing the Canada child tax benefit as it will be in 2000, when the second increment is phased in. It shows two things. One, there has been a not bad increase at the bottom end, not as much as one would like, but there has been improvement. The decision in this budget, which I think is a very important small step forward, to start restoring benefits for non-poor families shows up as well.

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Figure 3 puts them into some perspective. We can see what the changes in child benefits look like as a percentage of earnings; I've tried to put them on a comparable basis. And you can see that they represent a pretty substantial increase for the lower-income families. We're not talking about small amounts there, because as you know, child benefits are particularly important for low-income families. The losses to non-poor families unfortunately hit hardest at lower-middle-income families; $60,000 would be roughly middle income for earnings and it's the $45,000 families that have seen the largest loss over the years.

Finally, figure 4 is simply to show us why we have an awfully long way to go in terms of improving child benefits at the bottom end, let alone for middle-income families. What I've done here is I've used after-tax low-income cut-offs and compared the disposable income of three different families, one earning $15,000, one $20,000, and one $25,000, in Ontario under the child tax benefit in 1993 and under the new Canada child tax benefit as of 2000.

You can see that the new child tax benefit has reduced the poverty gap to some extent, but there's still an enormous distance between the disposable income of low-income families, particularly the working poor, and the after-tax low-income cut-offs, which simply tells us there's a much further way to go. The other thing it tells us is that we can't expect child benefits alone to fully close the family poverty gap. We have to look at both income security and social service family support programs such as child care to help us through it.

I'll end there, Mr. Chair.

The Chairman: That's an enormously helpful start.

Now, we have an armada. We have tonnes of people here. Who's up to bat? It's a familiar face; you might even be able to ask questions if you play your cards right. Welcome back to John Murphy, who was a parliamentarian in the last Parliament and has gone to a higher and better place.

Mr. John Murphy (Chairperson, National Council of Welfare): Thank you, Mr. Chairman. It's nice to see some of my friends and colleagues of the past.

Certainly we appreciate the opportunity, as the National Council of Welfare, to meet before your subcommittee in regard to the planning that is now taking place for the next federal budget. We're hoping, as you obviously are, that the federal budget will be a children's budget. We hope that our group and other social policy groups will have a chance to discuss the possibilities for the budget in some detail as the year progresses. We also hope that members of this subcommittee will not start locking themselves into specific ideas at this stage and will keep themselves open to a full range of possibilities, and I'm sure that will be the case.

We want to talk about a couple of things. As you know, we have a new report and Armand is going to speak about that. I want to say a word about the child tax benefit, and one of the big questions still to be answered is whether the federal government should commit additional funds to enhance that benefit after 2000. One of the obvious possibilities is another instalment of $850,000 in additional federal support. Certainly we're appreciative of what the federal government has done in the first two instalments; however, part of the issue is now new money that's likely to be available and what amount of that is available for families with children over the next several years. If money is relatively tight, our inclination as a national council is to forgo another increase in the child tax benefit and use the money on other programs for children.

As you are well aware, we had a previous document. Our prime concern about the child tax benefit is that it discriminates against families on welfare, notably welfare families headed by single mothers, and in our document we made a good argument and discussion on that point. We would not—and I would emphasize “not”—support additional money for the child tax benefit unless the clawback of the benefits from welfare families was ended. I think this is very important, and it was the centrepiece to our thesis in that document.

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We look forward to some of discussion with you all. I'm going to ask Armand if he would bring us through our new document, Preschool Children: Promises to Keep. We'll just open that with Armand, and then we'll move on from there.

Thank you.

[Translation]

Mr. Armand Brun (Vice-Chairperson, National Council of Welfare): The cornerstone of this report, Mr. Chairman, is child care.

Child care is another key area we had in mind when we urged you to keep an open mind about what goes into the next budget. Child care has become a dirty word in some parts of town, and we believe that is extremely unfortunate. In our opinion, a national child care program is essential to fighting child poverty.

We released a report yesterday called Preschool Children: Promises to Keep. The report reviews the status of children in Canada and the programs in place across the country. We noted the rising child poverty rates, the increase in the workforce participation of mothers and the fact that many children are being raised in single-parent families by mothers who just can't earn enough to raise their children out of poverty. We recommend a range of policies that can be pulled together in an integrated, national family policy that makes sense. But the report emphasizes one program in particular, and that is child care.

Many social programs support families, but child care is the backbone of them all. Child care has been shown over and over to be the essential ingredient for the workforce participation of parents—and especially mothers. When child care is high quality, affordable and accessible, it can be the centre of many other supports for families.

But without a strong system of child care, many families just can't participate in the job market. When parents can't find work, other family services are left picking up the pieces and trying to repair the damage that poverty causes.

Of course child care cannot stand alone. Supporting families is a complex matter, so there is no single solution. A national family policy should pull together labour policies, maternity and parental leave, income supports, employment equity, pay equity and education. But the core is a national child care program that provides high quality early childhood education that covers the work hours of parents.

Child care is the key piece of family policy still missing. Only a national child care program can ensure that care is available to children and families in all parts of the country, in the small provinces and the territories as well as the bigger provinces. Only the federal government has the money to ensure that such a program is available to make sure that all children have the chance at a good start.

We believe that intervention programs are an inappropriate route for the federal government's efforts in family policy. We know this recommendation has raised eyebrows around town, but we believe that federal programs that provide direct services add further complications to the tangle of fragmented programs and policies that are within the jurisdiction of the provincial and territorial governments. Time and money that should be spent on good programming that works with children is spent instead on managing jurisdictional problems between the two levels of government.

The federal government's resources would be better used in the provision of the money and basic quality standards for a national child care program that allows the provinces and territories to create programming tailored to their jurisdictions. With a good national child care program in place, the provinces and territories would have money available to help support other initiatives for families. Parents would have the service that would allow them to finish their educations and find work, and children would have the opportunity to enjoy high-quality early childhood education.

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Thank you, Mr. Chairman.

[English]

The Chair: Mr. Murphy.

Mr. John Murphy: I was remiss in not introducing our chair...or the director of our council. I'm the chair.

The Chair: Don't give up your chair.

Mr. John Murphy: I'm not going to give us the chair.

She is Joanne Roulston, who is our senior researcher and the author of this excellent document.

The Chair: Great. I think we're off to a good start, and I am sure members will have questions.

[Translation]

Do you have any questions, Ms. Gagnon? There's a little confusion on all sides, but we really have a non-partisan atmosphere.

Ms. Christiane Gagnon: I thought I had had a promotion.

The Chairman: You are always welcome, Ms. Gagnon.

Ms. Christiane Gagnon: I would like to ask Mr. Murphy and Mr. Brun some questions on family policy.

You say that the policy to help the poorest families or those living on welfare should focus particularly on child care and family support. Although the government is trying to find ways to slow down the growth of poverty, we all know that when it slashes the Canada Health and Social Transfer, social assistance comes under attack immediately, and families end up with a lower monthly income.

You are suggesting new ways to increase assistance. I don't think we need to look for programs that do not exist at the moment, but rather look at those that do exist and give the money back to the provinces, because they are the ones who provide these services. For example, we know that Quebec made a great step forward when it introduced its $5 per day child care policy. As far as welfare goes, however, it is apparent that the some $500 we give to recipients is not enough for them to live on. I know you are looking at the whole issue, but it is clear that when the government slashes as it has in recent years, poverty is very much a reality. Government has been undermining its programs gradually, and did not see this tremendous problem looming. In 1989, the House of Commons passed a resolution in which it made a commitment to reduce poverty. And yet, the fact is that in Canada today, there are 500,000 more poor children than there were then.

Quebec may be ahead of some other provinces in the area of assistance for families. I would like to know whether your proposals take into account the fact that some provinces do not do as much as others. I am very aware of this issue.

Mr. Armand Brun: The rise in poverty has definitely been caused by the government's cuts and attempts to balance its budget in the last five or six years. Money may have been saved in areas that should not have been touched, at the expense of most disadvantaged, poorest members of society. We must now correct the situation.

Our studies have shown that the most disadvantaged people, the poorest members of society, were lone-parent mothers, and that in order to correct the situation, we had to get these people into the labour market and help them by providing child care service, so that they could complete their education or join the labour force.

Second, our studies have shown that when both parents work, it is less likely that families will be poor. This is another argument in favour of child care. We must make it possible for all parents who wish to work to do so.

Third, we have seen that in modern society, starting to educate children in child care at the age of five is too late. In France and Sweden, children are given a basic education and social skills at a very young age. That is why we think it is important to establish standards.

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However, we are not saying that the federal government should be managing all the programs that the provinces have been running. Rather, we think the provinces should be running their own programs, in keeping with certain standards. For example, we should establish new selection standards to ensure that children in a particular child care do not drink coloured water, while those in another province are drinking orange juice. We must eliminate any possibility of abuse and make sure that corners are not being cut where they should not be cut.

This study is a starting point for the discussion.

Ms. Christiane Gagnon: I would like to come back to the issue of standards, particularly those for social assistance. It is all very well for the government to set standards, but if it decides to slash its transfers to the provinces five years later, the provinces will not be able to provide services, and will not be able to meet the expectations of those who had become accustomed to counting on welfare.

That is the problem facing provinces, because they have to deal with people's needs and demands. It is quite rare for groups from another province to come and protest after a budget is tabled in the Parliament of Canada, and to talk about their living conditions. Living conditions is something people talk about in the provinces, as is their discontent, and the provinces get the blame. The federal government's popularity does not suffer, because it can wash its hands of the whole matter and take almost no responsibility for the situation.

We know to what extent recent budgets have made things difficult for people. When we go back to our ridings, in our respective provinces such as Quebec, we try to make our constituents understand that Quebec has already established all the necessary infrastructure, but that it is often prevented from being more proactive in all sorts of social areas.

Mr. Armand Brun: That is exactly what we are saying. In our fourth recommendation, we call on the government to stop slashing social programs arbitrarily, and rather improve them.

We have to do our homework, and set up only programs that we can maintain and improve. We need to set aside the money required to do this in future budgets. We have to avoid aiming too high, too fast, and start rather by building a solid foundation that will guarantee ongoing progress.

The Chairman: Ms. Davies.

[English]

Ms. Libby Davies (Vancouver East, NDP): Thank you very much for coming today.

I would like to start off by picking up on a point that Mr. Battle made. I think you said that nobody's trying to sell the child tax benefit as a silver bullet that solves all the problems. I'm glad to hear you're not suggesting it's something that's going to deal with the massive problem we have in terms of growing poverty.

Unfortunately, I think what we have heard from the government is that it is the panacea. We haven't had anything else. I remember Mr. Pettigrew being at this committee—actually not this committee, the main committee—a year or so ago, and he said the child tax benefit was the most significant social policy since the 1960s. It made me worry, because I thought if that's all we have to show for a social policy since the 1960s, we're really in trouble.

One of the questions that really has disturbed me and my party, the NDP, is the fact that the child tax benefit hasn't applied to the poorest of the poor, those on welfare. I think the National Council of Welfare statistics have shown overall that only 36% of all poor families with children would actually get to keep the additional money provided by the federal government. I think this raises a very serious question about the money that gets clawed back. And here we get into the whole debate about the social union. What kinds of guarantees do we need to have to ensure this clawback is actually going into programs that will benefit low-income children, that they're not funds that are going into programs that have been cut by some other decision, so we end up again with a net loss? I think it's always important to do this overall balance sheet and see, after all of these programs are taken into account, whether or not we actually have a net gain or a net loss.

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To me that's a very serious question of how we can ensure that the clawback is actually being used in a way that's benefiting the kids in the families that we're told publicly will benefit. As far as I can see, there's no accountability, there's no mechanism to ensure that this happens. I'm just curious whether the Caledon Institute or the National Council of Welfare have suggestions that we should be putting forward about how to address that particular issue.

Then I have a question on child care.

The Chair: Let's start with Ken Battle.

Mr. Ken Battle: You raised a lot of important questions and issues. Let me take the last part first.

In terms of how one figures out what's going on as funds flow from one place to another, as you mentioned, the federal government and the provinces have committed to a fairly transparent evaluative process. We haven't seen any of the results of that yet, but I think it's going to be important for everybody concerned—opposition parties, social groups, the media, and others—to take a tough look at the kinds of reports that come out that are made public on what has been happening with the child benefit system. For example, where is the money going? Where is the reinvestment money going? What was there before? What was there after? I mean that kind of thing. So I would certainly heartily support a transparent and very open evaluative process.

At the risk of repeating myself over and over again, the allegation that the national child benefit discriminates against welfare families is sheer and utter bunk. Let me just put it as simply as I can.

The Chair: I think we're going to have an interesting discussion.

Mr. Ken Battle: Let me say why. I don't want to be told that I think welfare families have adequate incomes. I've spent my whole life at Caledon and before, at the National Council of Welfare, trying in a variety of ways to improve the incomes of low-income families, including those on welfare.

Under the system that's being replaced now, welfare families got double the child benefits that other low-income families did—twice as much in child benefits. What we're trying to do is ensure that all low-income families, whether they get their income from welfare, work, employment insurance, or, as is often the case, a combination thereof—because “welfare poor” and “working poor” are artificial categories because of the dynamics of poverty—get (a) the same amount, and (b) more over time. That's the whole thing about raising the level.

The system now discriminates against low-income families who aren't on welfare. If they do go into the workforce, are able to find work and are able to find child care, they give up thousands of dollars in cash benefits and uncounted thousands of dollars in in-kind benefits. So the whole notion is to try to provide in-kind and cash child benefits that equalize low-income families. The fact that it's being done over several years for cost reasons, I lament.

I put forward the first proposal for an integrated child benefit in 1990 to the Senate committee. I repeated it again in 1995. That was to be a big-bang child benefit. It would have been enough money to blow welfare benefits out of the water. We would have moved quickly within two years, I had hoped, to a system that would be improving child benefits for all low-income families. That didn't happen for political reasons. One was cost, and the other had to do with federal and provincial dynamics. So I think it's important to try to put it in that perspective.

I think that's enough for now. The council's argument, if I got it right, that the next budget, the so-called children's budget, should defer the next instalment on the child benefit to put into child care is just folly. That's the worst advice I've ever heard the National Council of Welfare give a government.

The Chair: Gee. Mark, do you have a comment?

Mr. Steve Kerstetter (Director, National Council of Welfare): If I may, Mr. Chair, I gather committee members realize that Caledon and the council are probably on opposite wavelengths on this one.

The Chair: Why do you think we invited you?

Mr. Steve Kerstetter: It goes back a number of years, and there doesn't seem to be any middle ground as far as either Ken or I have seen over the years.

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I would like to go back to Ms. Davies' questions and take the last one first, on whether it's possible to account for money that is clawed back and reinvested by provincial and territorial governments, and whether it's able to determine definitively whether that money is new money or money that replaces or offsets a previous cut made by a provincial or territorial government.

The council members have looked at that question in some detail and found there's just no way you could ever determine definitively the course of all that money. There are just too many programs, policies, changes, and things going on in the social policy field to say definitively that the money is new money that has been reinvested in a particular program. There's a certain paper trail there, but there are just too many ways of circumventing that.

On the question of fairness, without getting into mud wrestling with Ken on this, I just don't understand the argument in any way. It seems to me the question of fairness has been skewed in a way that is misleading and dishonest.

There are actually two aspects here. From the very beginning—and this goes back to before John and Armand were on the council—our council members started talking about families and welfare policy, and taking a broad look at things. Members of the council seemed to realize almost instinctively you can't break up a family into its component parts.

One of the things we always objected to, in terms of an integrated child benefit or a unified benefit, was that some of the proponents said “Okay, this is a way to get kids off welfare. We can provide a federal or provincial child benefit that's equivalent to the amount a family would get on welfare if they had kids, so the kids will be off welfare.” Our members said “That's not true. You can't separate the kids from the rest of the family. You can raise a benefit and call it something else, but if the parents are still on welfare, the family is still on welfare.”

If the family benefit—say it's provided in this case by the federal government—is protected, there's nothing to stop the welfare part of it from being unprotected, and the family will end up in the same situation. So you have to look at family income in total and you have to look at the family as a unified unit in order for the social policy to make sense. I don't think the proponents of the integrated child benefit or the Canada child tax benefit have done that.

The thing I really find quite galling and unintelligible is that our welfare programs are based on need, so a family qualifies for welfare on the basis of need. You look at the available income; you look at what might be reasonably expected of the family. If the family is judged to be in need they get a benefit, and that benefit goes to the whole family. It doesn't go just to the kids or the parent; it goes to the whole family. The reason they get that benefit is because they have been through a test of assets and income, and the family is judged to be in need.

I don't know why anyone would want to extend that and say that because a certain family is judged to be in need and the children get a couple of thousand dollars in welfare as part of that needs test, a family that isn't in need should also get the $3,000. I don't understand the logic behind that. The reason the children in a welfare family get a benefit that's paid through the welfare system is because the family is in need. Where does the fairness comes in? I simply don't understand that argument.

I think I should stop there.

Ms. Libby Davies: I have a brief follow-up. In your remarks, you're talking about a national family policy, and you make the point that a national child care program would be the single most important thing we could do. Maybe on another day we can have a debate about whether that's correct or is a pretty good idea. But I just want to be clear I understand what you're saying when you talk about intervention and direct programming.

Are you suggesting that with a national family or a national child care policy there wouldn't be program delivery by the feds? What are you actually envisioning there? I've heard you're actually looking at it to be more like the Quebec model. I think it would be helpful if you expanded that a bit in terms of what you mean by this inappropriate route and how it would work, given the state of provincial-federal relations and so on.

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Ms. Joanne Roulston (Senior Researcher and Policy Adviser, National Council of Welfare): We think the most efficient way to get those services to families is to put the money in the hands of the provinces and territories. We feel the provinces and territories are in the best position to decide specifically how a program should be administered. We think it's most efficient to have only one level of government doing the administration.

So we want to see all the new concentration of funding go into one national child care program. The provinces could deliver it and tailor it in much the same way as Quebec has done, but they may choose to use some other system. There are a lot of different ways to extend really high-quality child care that has the early education component. It could be an extension of schools, an extension of family resource programming with child care, or any number of other formations. Quebec has done it through early childhood centres that combine child care centres with child care in family homes. All of those strike us as legitimate, but we don't think the federal government should tell the provinces and territories what works best for them.

Ms. Libby Davies: But presumably you would advocate, if we went that kind of route, that there would be some objectives, principles and standards, so we don't again get into this terrible situation where in some places we have really good programs and in other places we have all form but no substance. Would you advocate that as well?

Ms. Joanne Roulston: We feel the federal government should work with the provinces and define some very basic national standards, like the number of caregivers per child, the size of groups of children, and health and safety standards that cover some basics.

The Chair: We'll move along to Carolyn Bennett.

Ms. Carolyn Bennett (St. Paul's, Lib.): Maybe I'll turn my questions around. To follow up on Libby's question, if we were going to have a national child care program, family or childhood intervention program, or whatever ends up being our goals and objectives.... At my social union town hall last week with Mr. Dion, Martha Friendly was there saying “Enough talk, let's get on with implementation.” I think we'll only know then whether the social union works.

Your document doesn't refer to the social union. I would hope that in the second phase of the social union everyone would be fighting to have their issue pushed through that process, whether it's my subcommittee on persons with disabilities, homelessness, or a national children's intervention program.

We need sectoral agreements on objectives, on all of the meat-on-the-bone stuff that's supposed to be there in the social union, because I think you want more than just safety standards. You want to know about penetration. What are the waiting lists? What's the affordability, the accessibility? How is each province doing on these things? If Quebec's doing way better than everybody, that becomes an informal national standard in that race to the top they talk about in the thing.

I'd like to know how you feel the social union fits in. How do you make sure that in these things that are on-stream in government, the National Council of Welfare is able to promote their issue in this structure that seems to be there? How would you see obtaining sectoral agreements or that sort of stuff, and also helping us in terms of what our hope is for the next budget?

How do you see the social union affecting your work? Would you be available to help set certain objectives in the kinds of things we'd want to see, in terms of outcome measures that would let us know whether we were doing a good job in accessibility, child care and family intervention?

I also don't see anything in your document on the children's storefront kind of approach, for families who don't speak English and where the mothers stay at home, the kind of intervention we need in terms of those kinds of realities in Canadian life. Also, there are some nannies who aren't particularly stimulating. So how do we make sure what we're offering kids is good?

The Chair: Outcomes and social union—who's going to go to bat?

• 1625

Ms. Joanne Roulston: I can start to address it—and tell me if I haven't answered everything.

We felt that funding to the provinces and territories should be tied to the number of spaces provided, to make sure accessibility was addressed. We also feel that families who live below the poverty line should not have to pay for child care.

We recommended a system that has at least three options in child care: child care that covered a parent's work hours if they were working all day; child care that covered half days; and child care that covered, say, three hours a day for a really good preschool-type program.

That might address some of the questions you're raising about what you do with the nanny who isn't particularly stimulating. That's one of the things that a lot of good family resource programming, in fact, still does now, but that kind of three-hour-a-day preschool approach also serves kids who have a parent who's staying at home with them.

We have suggested also that the federal government pay 55%, not 50%, of the costs of child care under this system, and that is to encourage the provinces to participate in this kind of system.

On the details of how you get provincial and territorial governments to negotiate it with the federal government, we're not experts on federal-provincial relations, but we do feel this is so important and so fundamental to making sure children get good early development, and also, it has been shown to be very cost-effective to put a lot of money into really high-quality preschool and to get parents back into the workforce. So our feeling is it just makes so much good sense that it's a great test of whether social union works. The point is to get the federal and provincial governments to agree, and this is a kind of system on which it shouldn't be very hard to agree.

Ms. Carolyn Bennett: This afternoon's discussion worries me a little bit. I'm still not sure we have looked at why the families need the money. I'm always concerned that if we deal only with the income side, in Toronto where people are paying 50% of their income on shelter, no matter what we do, or in terms of food security and all of this stuff, and that people can't actually work unless they have daycare.... People honestly can't come off welfare when they lose their drug card, if there are kids with chronic illnesses, or those kind of things. I think Australia did that in terms of its welfare wall; they get a drug card for a year when they come off welfare.

So when I look at the graph on the poverty gap or those sorts of things, I don't know what we're showing in terms of how this helps us plan in terms of what's good for kids if we aren't actually giving the single mom who has to work or the single mom whose kid is so young maybe she should stay at home.... I'm not sure what we as a committee need to be wrestling with in terms of how we make sure they can afford a snowsuit, in terms of disposable income after they've paid their rent. How do we really plan for that?

I understand what Mr. Battle was saying in figure 2, where he said universal was irrational. I guess those little solitary grey columns there at the end are worrying, except that there are some people who feel that universal works. I mean, it raises adults, and these people go and do other things. I think that's why I went to university. My mother put that away, before RESPs. It was put into an account for me.

I'm just concerned that we are so focused on little stuff. I want the big picture plan. We've obviously decided to deal with the welfare wall, but what do we do? Was it intended? Did we know that the provinces would claw us back?

The Chair: Ken Battle, and then Libby.

Mr. Ken Battle: You've raised a lot of good issues. I'm going to try to respond to a couple of them, because everybody struggles with this sort of thing.

It's not income or services; it's income and services. If I have to pick two areas, because we still do have to pick, I would put money into child benefits and child care. If I have to pick the two things that I think are the most important, I would do that.

The Chair: Hurray! We've done the big deal.

• 1630

Mr. Ken Battle: But I don't want to trade them off one against the other; this is what I object to.

Talking in terms of money, if a large amount of money was taken out of the federal child benefit system over the years.... This goes back to the Mulroney government.

Just to give you the numbers, the federal government will be spending $7 billion on the Canada child tax benefit when the new increase is brought through. That's a 40% increase over the $5 billion, so it's not a bad increase. In 1984 we were spending $7.9 billion on child benefits. So we're just trying to get back to where we were.

I think the onus is on the federal government to devote a substantial amount of money to family policy, if you want to put it that way.

Let me bring in another element that concerns me about the development of the national child benefit more generally, not just the income part of it but what the provinces are doing.

Under the political agreement that's happening...and I stress that it's a political agreement. You're on the social union. You know that's the conventional wisdom these days about how we make the social union operate. It's a political agreement. It's not cost-shared; it's not CAP. I think those days are gone forever, or at least as long as I'm going to live. We're not in the era of carrot-and-stick federalism. That's not on any more. Most provinces are equal partners of the feds now, fiscally and in terms of power.

One of the concerns I have is that when we get to the point where the increase in the federal child benefit side will have more or less fully replaced the social assistance part of the child benefits and then we start going on farther than that, provinces will no longer be receiving any so-called reinvestment. Once the provinces—all but two of the provinces, the two that have very low welfare rates—have reinvested their savings, then we're going to be at the point where the provinces will get no more money from the federal government, and the national child benefit overall will have ended at that point.

I don't think we should end it at that point. I think the federal government should put a pot of money on the table and call it a child development fund—or I don't know, call it what we will—which would be a continuing source of funding for provinces to put into programs and services for low-income families with kids. Politically I think that's a starter in the sense that the provinces are going to want to do different things in family policy, one over the other.

You mentioned yourself that an incredibly important part of the welfare wall is the lack of supplementary health benefits for working poor families. A number of provinces under the national child benefit are going to provide that. That's an income in kind; it's a service, a health service. That's the kind of thing that I think we have to do to improve the standard of living for low-income families.

I'll end on one point. One thing we do know, and the psychological evidence and everything I know about social policy shows this, is that welfare is the worst social program we have in Canada. We know that. It's lousy. It's terrible. It doesn't work. It hurts people. It helps some people and without it they'd be worse off, but it hurts a lot of people.

I want to get rid of welfare. One of the ways of dismantling the welfare system, if we were able to start on the child benefit.... If close to half of caseloads have parents who are employable, I think they shouldn't be on welfare, nor should people with disabilities be forced to be on welfare. They should be getting benefits from different kinds of income security programs, better income security programs, programs that, for example, would do better than employment insurance—and the worst thing that has happened in years is the decimation of employment insurance.

I think we need to look at longer-term reform, a complete restructuring of not only the income security system but the labour market system, and employment development services as well. We have to look beyond social assistance.

Welfare is not fixable. Welfare cannot serve as an earning supplementation program, so we can't provide welfare to working poor. It doesn't work for all kinds of reasons. We have to work at getting rid of welfare.

• 1635

When Steve says that he looks at welfare as an organic system and the children are getting a benefit because they are deemed to be in need, are you telling me that children in working poor families, some of which have less income, are not in need, are not deserving? What's wrong is the “in need”. Welfare is a highly stigmatizing, policing, dependency-creating system. I'll be honest, it'll take a generation, but we have to look at trying to shrink the size of the welfare system to be the emergency, last-resort, residual program it was always supposed to be and isn't. It grew to become a front-line program. One in ten Canadians are getting welfare benefits.

Mr. Steve Kerstetter: Can I agree with that last statement by my former boss here?

Mr. Ken Battle: Why don't you remember that relationship, Steve?

Some hon. members: Oh, oh!

Mr. Steve Kerstetter: You don't sign the paycheque any more.

I'm sure our members would agree 100% that we would love to see a system where welfare really was a residual program that was absolutely last resort and the numbers were much smaller and everything like that.

Caledon had a couple of reports on the welfare wall a couple of years ago that Ken and Sherri Torjman did, which I recommend to all the people who are interested in welfare policy because they are such well-written documents and they make so much sense.

For the record, those of you who know the work of the National Council of Welfare know that over the years we have fought consistently for a more rational welfare policy and for improvements in the policy and to try to mitigate the effects of the welfare wall and to try to remove people with disabilities from a needs-tested, welfare-type program.

We've argued for provincial and territorial governments to provide supplementary health benefits and to have more reasonable earnings exemptions and do all the things Ken had written about when he was at the council, and that the council has continued since his departure.

The sad reality is that a lot of provincial governments haven't followed through on those. There are a couple of governments that have. For example, the previous Ontario government, under the Liberals and the NDP, had a program called STEP, which really was a step forward—not to use a pun on that—in terms of mitigating the worse features of the welfare wall and trying to make it easier for people to leave the welfare rolls and to work in the paid labour force. But STEP fell on hard times in the years that followed because of cost-cutting.

I haven't seen a lot of other governments jumping on the bandwagon to provide the dental care, prescription drugs, and non-insured health care for all low-income families, not just welfare families. I haven't seen that happen. So if you talk about welfare as a failure, it's a failure because provincial and territorial governments have made it a failure because they haven't done what they could have done to make the system make more sense. I suppose from the council's point of view that's my ultimate regret.

We agree with Ken that we would like to see the system be a lot smaller and less intrusive than it is at the present time, and we regret the fact that at the present time there are so many people in Canada on welfare. But the sad reality—and this is maybe the saddest thing I'll say all day—is that, bad as the welfare system is, it would be even worse if it weren't there because all of those people on welfare would be starving to death.

The Chair: I know that Bonnie Brown and Madam Gagnon want to ask questions, and I myself want to. I'm in the odd position of being summoned to vote in another committee in about 10 minutes, so I'm going to intervene on my own behalf—there must be some perks with this job—and then ask one of my colleagues to take over, mindful of your obligation not to linger forever.

By the way, I think what we see is the Stockholm syndrome, where if we keep you here long enough a total reconciliation will have taken place.

I'm glad to hear as well that it is a mug's game to have to choose between income and services. I don't think anyone would disagree.

I have a question that is directed to both of you. But I want to talk first to Ken Battle as really the architect.

I think we have to recognize an extraordinary accomplishment on your part of a policy idea that you developed and pushed through, which is an advance, I think. What we are focusing on is trying to understand what works and how we'll know whether or not it has been a success and the outcome part. What I think some of us find encouraging, at least in the potential, is that the social union document specifically addresses outcomes and accountability. Now, on paper that seems to me to be a very good idea.

• 1640

The basic assumption behind the new child benefit system was that if you removed barriers to the welfare wall, people would migrate from being on welfare to working. What I want to know is whether we have any indication—and maybe this is something we should be asking the department that's doing the evaluation—small, large, or anecdotal, that this is actually happening. That's the first question. Are they actually doing what we wanted them to?

For political reasons—you might say it's flexible federalism or that's how we got the deal—we had this reinvestment strategy. At least in the part we're doing we can ask that question and we'll get an answer. But in the reinvestment strategy, the framework agreement is so vague that they could put in any old damn thing. So how do we evaluate whether anything was good when you read in the document about all the various things the provinces have done? If we were to do a phase two or a phase three—as you say, there is no more money to put into a phase two or phase three—how do we tighten up on that re-evaluation mechanism so that we can measure the outcomes of what the provinces say they're doing versus what's actually happening?

Unfortunately, we haven't had the advantage of reading your report yet. But I do think it would be wise of the National Council of Welfare to focus on this outcome issue so that we know we can really hold governments accountable for what they're saying. Otherwise, they're going to keep changing the policies if we don't put in some kind of benchmarking that really keeps us honest, not simple income stuff but, for instance, how the children are doing in daycare and all the rest of it.

Let me start with Ken.

Mr. Ken Battle: I will just answer very quickly, because you have asked very tough questions.

I'm very leery about expecting too much of the national child benefit, and let me explain what I mean. With regard to the notion that the national child benefit could be measured by changes in the welfare caseload, I would be very cautious about that purely from a methodological point of view, let alone a social policy point of view. The problem is that the depth of poverty changes. In other words, changes in the average income of low-income families is, I think, a very important measure. There are other reasons for that, which Steve and I can talk about, including the very worrisome attempts to redefine poverty lines. This is another issue this committee should think about.

But no matter how you measure low income, one should expect improvements in income security programs—not trivial improvements but ones that over the years are going to be substantial—to have an impact on the money living standards of low-income families. That's one thing we can measure and we should. My colleague Michael Mendelson did some early analysis of the B.C. family benefit in that regard—very tentative. Some provinces are in a much better position than others to look at that. I know that in Ontario they have very sophisticated welfare-tracking data, and they can actually model some things.

The problem is that when you look at what affects welfare caseloads, obviously income security benefits, availability of child care, extended supplementary health benefits, all of those things can so easily be swamped by local labour market conditions, because jobs are a fundamental part of the welfare wall argument. So I think we have to look very closely at the range of factors that can affect welfare caseloads.

I go back to my original piece about the need for qualitative research. What affects people's decision as to whether to try to work, to stay on social assistance, etc., is very complicated. I think you can only find out by asking people. We have to get past statistical analyses into actually talking to recipients of welfare or the working poor to find out what are the factors that actually affect them. Those are some of the things I think are crucial for an evaluation.

Steve, I'll turn it over to you.

Mr. Steve Kerstetter: One thing that is of concern to the council, and which applies to a variety of government programs, is the lack of detailed information that's available. When we did our second or fifth report, or whatever it was, on child benefits, the Child Benefits: Kids Are Still Hungry report last fall, we published the first estimates. They are rough approximations, and we would be the first to admit it, of how many people would be net beneficiaries of the Canada child tax benefit, and we estimated that 36% of all poor families with kids would get to keep the increase in federal benefits.

• 1645

Putting that aside for the moment, the sad part about that is that we have not seen any estimates from the federal government, from our own department, on what the impact of the Canada child tax benefit is, and I could say that for a number of other government programs, where there's just not good information available.

The Chair: Let me just understand the crucial issue here. There's a statement of belief about behaviour, right?

Mr. Ken Battle: Yes.

The Chair: If you offer incentives to people, you give them the opportunity, you give them the ladder—

Mr. Ken Battle: If you remove barriers.

The Chair: Or you remove barriers, okay.

Mr. Ken Battle: It's more removing barriers.

The Chair: Okay. If you do that, people will behave in a certain fashion, right? That's the assumption behind this change. So then I ask how can we prove at some point...? Part of it will be qualitative, through the kinds of focus groups that—

Mr. Ken Battle: But I'm afraid that's not going to happen, Mr. Godfrey. That's my point here.

The Chair: It can't happen?

Mr. Ken Battle: No, no. I'm not convinced that the kind of qualitative research I'm talking about, which involves longitudinal research, which is costly, by the way.... We have to follow groups of families over time to see how the child benefit and other things affect them. Caledon is running a program in Ontario looking at the impact of the Harris government's changes in social policy, and we're looking at 40 families. That's all we could afford. We're following them over three or four years: the changes to education, health, social services, tax, the whole range of them. It's that kind of thing one has to do. It's not just let's have a focus group here or there; one really must try to get at it.

Some families, if they can find work—which is another crucial variable—will be better able to do that, I think, because they won't stand to lose so much from leaving welfare. Other families will, as they do now, choose to remain on welfare. There are families who consider welfare as a wage to pay for their ability to care for their kids in the home. They make a conscious decision. I've heard that for years from single mothers: “I've sacrificed my own well-being, income, and everything in order to care for my child at home, and I'm using welfare as a state wage.” Those choices will still be available to people.

Ms. Libby Davies: One thing that just drives me nuts is that there are so many contradictions. On the one hand, we use language and we talk about dependency, and in effect I think we blame people on welfare and say—

Mr. Ken Battle: Right. I agree with you completely. I don't use the word “dependency”; I hate it.

Ms. Libby Davies: But it's so pervasive—

Mr. Ken Battle: I know. I agree.

Ms. Libby Davies: —and we say, “Well, you know, there's the welfare world. How can we push people? How can we give incentives?” And yet we don't recognize that in this market economy we're talking about part-time low-wage jobs that no one in their right mind would be able to survive on. So to me the whole debate is skewed because it makes this assumption that somehow it's the fault of the individual, that they just don't have enough “pull yourself up by your boots straps”....

But the other contradiction is just what you phrased in terms of choices, in terms of women, for example, saying “I have to raise my kids”. We seem to accept that elsewhere in society, but if you're on welfare, you're going to get penalized. The contradictions are incredible.

The Chair: I'd like you to answer. Unfortunately, that was really an impassioned intervention rather than a question. But the purpose of this, which I acknowledge—

Ms. Libby Davies: For poor-bashing.

The Chair: I'm going to turn it over to Bonnie Brown, who I'm sure will treat subjects that will allow this to be amplified and expanded.

Ms. Bonnie Brown (Oakville, Lib.): I have a couple of questions that can be answered pretty simply. On your charts, Ken, are these dollars, in other words, in 1946—

Mr. Ken Battle: They're constant dollars. They've been adjusted for the change in the value of the dollar, yes.

Ms. Bonnie Brown: They have been adjusted in the sense that the $4,000 at the end—

Mr. Ken Battle: Is real, yes.

Ms. Bonnie Brown: —is $4,000 real dollars.

Mr. Ken Battle: Yes.

Ms. Bonnie Brown: And the $1,000 in 1946, or just above that, is $1,000 in 1946 dollars.

Mr. Ken Battle: In today's dollars. Back then it was a couple of hundred dollars. It was worth—

Ms. Bonnie Brown: Okay, I just wondered about that.

• 1650

Mr. Ken Battle: it's important. And every time you see a graph by the Department of Finance, by the way, it will not be in constant dollars, it will be in current dollars.

Ms. Bonnie Brown: Okay, thank you.

Mr. Chairman, I'm more than a little disturbed today, when one considers that those of us in the political realm who spend most of our time fighting for more money for poor people, and particularly for children, are at a meeting at which two of the leading policy think-tank spokesperson groups are seemingly at odds over certain things. We have a new report from one group, and the other group has referred to some of the thesis in it as “bunk”. I find that very, very disturbing, because I know that the forces—

Mr. Ken Battle: That's not what I said. Can I just clarify?

The Chair: Yes.

Mr. Ken Battle: I wasn't talking about the child care report at all. I haven't even seen it. I was talking about the allegation that the national child benefit discriminates against welfare families as bunk.

Ms. Bonnie Brown: Well, I just took time to read some of this, and that statement is pretty well in here, that the national child benefit does discriminate against welfare families. I have just read it.

Mr. Ken Battle: Oh, I'm sorry, I thought you were talking—

Ms. Bonnie Brown: I read it just before you said it.

So that is pretty dangerous stuff in the sense that the other side, the people who aren't here today but are probably bearing witness over at the finance committee, begging them to lower taxes and shrink government—usually through the Business Council on National Issues, or whatever that group is called—usually sing from one songbook. They don't just sing at committee meetings, but they own the major media outlets, so they sing loudly, clearly, and to every Canadian because they have advantages that people on our side of the debate don't have.

Somehow or other I think we had better figure this out, so that we are actually all singing from the same songbook when we rush off to the finance minister and make our demands and requests for the next Speech from the Throne and the next budget.

I have to ask Mr. Battle, who I know is one of the architects of the national children's benefit and who obviously must believe in the welfare wall, if in fact he really does want people to get off welfare, that terrible system that happens to give people food and shelter in a lot of cases, if he really does want every parent out there working. It seems to me that the national children's benefit is of that mind. Is it really better to have, for example, a single mother of preschoolers out there in the marketplace, probably in a low-wage job? Is that bias something you believe in, and therefore it's okay to have it built into the administration of the national children's benefit?

Mr. Ken Battle: No. You know, one of the problems of social policy.... I guess people are impassioned and inferences are made as to what you think I'm saying. I'd say read what I write and then you'll know what I'm saying.

I would be the last person on earth to argue that we want to shove...even that the national child benefit had enough power that it could push people from social assistance into the workforce. I don't think the child benefit reforms themselves could ever have enough power to actually push people from welfare into the workforce. But we don't want to penalize people who move from welfare to work. The current system penalizes parents if they move from welfare into the workforce. They lose thousands of dollars worth of benefits, and that strikes me as wrong. That's something we want to change.

Speaking for myself—I'm not speaking for the government here—I don't see the child benefit as a way of either enticing or pushing people from welfare into the workforce. I think people should have a choice to make, and I think they'll continue to make the choice. I think some people, even if they said “Well, gee, to go into the workforce, I'm not going to give up the thousands of dollars in child benefits that I get now on welfare”.... That probably wouldn't affect them. So I think there has to be choice there.

• 1655

But welfare is not the only fallback position. The argument I was trying to make before is that I see things like the child benefit as trying to help us move along.

By the way, we're disagreeing over means, not ends. I think Steve and I would agree.

We have to look at means that will replace the welfare system, that would be more humane, more dignified, a kind of income support system. As it is now, by the very nature of a needs-tested system—which has some advantages, by the way, in terms of individual flexibility and so on—the way it has developed historically, it's very punitive and it's very demeaning to people.

So to quickly answer your question, I'm not saying by my support of child benefit reform that I think all parents should be in crummy jobs. I don't think that.

Ms. Bonnie Brown: Can I say one more thing? Mr. Chairman's leaving. I guess I can talk forever now.

I think I understand where you're coming from, because your work over the years is well-known to me. But I think what you're talking about, which is the enhanced system, a system where all poor people, whether working poor or on welfare, have more opportunity, have more supplementary aids to give them a dignified life, to me seems like the ideal. I think we have to think about the ideal in order to get there, but considering today's political climate and the tax lowerers who are out there, considering the governments of Ralph Klein and Mike Harris, which as an Ontarian, for example, I have to deal with, do you not think it's dangerous to say things such as that welfare is the worst possible system? I see those people listening to that line, because it plays to their own beliefs, and then doing things like saying, yes, welfare is a bad system and people aren't motivated to get out of it; therefore we have to cut them down to the bone, we have to cut off glasses and passes on the bus and all this kind of thing to get them to school and back, because we just have to drag them off welfare.

Mr. Ken Battle: I know what you're saying.

Ms. Bonnie Brown: I think you're thinking up here in some ideal world. We're dealing with the reality of today, but there are people who are trying to drag us backwards in time to before the Dirty Thirties.

Mr. Ken Battle: No, I agree. I agree with you in terms of being careful about language when I'm talking in the committee. One does have to be careful, I agree. With or without a national child benefit, the Harris government would have done what it did anyway. It did it two years before the national child benefit. It cut welfare benefits 21.6% in December 1995 for all but the disabled.

I don't think the national child benefit can either prevent or be seen as the cause of cutbacks in the welfare system overall. We have to fight that, no matter what. We have to keep fighting against it. And I don't see the vision we're talking about here as dreaming at all. I think it's realizable. We did it with guaranteed income supplement for seniors. All it takes is money. And that's not a naive statement. All it takes is money. And we can put more money on the table. We spend more on RRSP tax deductions than we do on the child benefit system, even enhanced. There's already money in the system. It's just going to the wrong people.

Ms. Bonnie Brown: I have one more question for both sides here, for both groups. Considering the new climate of federal-provincial relations and the fact that people have to come around the table and decide on things, the whole concept of national standards, essentially imposed by the federal government, is long gone. The only kind of national standards we might get would be if social ministers could agree and then convince their premiers and prime ministers to sign on. But just using the national children's benefit as an example, because it is the forerunner of other programs, from that perspective, are you satisfied with what you know about the results of the reinvestment strategies of the different provinces? Or are we not seeing a reflection of those various governments' sets of values? In other words, suppose we like Roy Romanow and his minister and we think, yes, Saskatchewan has done a great job, $4.1 million reinvested directly into good child care—as you know, that hasn't happened everywhere. And then we could look at the Mike Harris thing, which is, I think, money to individual parents to pay the lady next door to babysit their kids.

• 1700

If we put more money into children's systems and we're going to have some menu from which provinces can choose and administer in their own way—as Joanne said earlier, they're in the best position to administer—how can we be sure what our responsibility is that all Canadian children have some kind of equivalency in opportunities to succeed?

Mr. Ken Battle: Can I just respond quickly, because I have to go and pick up my daughter from child care.

My answer on the latter part, on the reinvestment, is that sadly we, meaning the federal government, have no control over whether the provinces do what we like. I think we have to track it and look at it, and I think social groups have to hammer provincial governments on them. But as to what Ottawa can do, given the terms of the agreement, not a lot.

On national standards, the absolutely most rock solid national standard that we have on social policy in Canada is the federal income security program. That at least is a national standard. We pay all seniors in Canada, wherever they live. We guarantee them a certain minimal income. I see an analogous thing for the Canada child tax benefit in that at least through the income security system, which is, given the terms of the social union, historically the federal government's strongest lever, that's one way we can, however inadequately, improve national standards—at least through the income security system.

I'm very sorry I have to leave. Thank you very much.

Mr. Steve Kerstetter: Madam Chairman, I'm sorry Ken had to leave, but it's interesting that he raises the issue of income security in terms of seniors benefits, because there's no federal-provincial agreement that allows provincial governments to claw back federally paid seniors benefits. We really can't see, as members of the council, why there should be provincial or territorial clawbacks of federal children's benefits.

For the record, in case there's any misunderstanding among members of the committee, our group was one of the first to praise the federal government for committing $850 million in phase one and $850 million a year in phase two for children's benefits. John and Armand have told the minister privately, we've told him publicly, and we've said in interviews that we're pleased as punch that Mr. Martin was able to come up with additional money, beginning at a time when money was still pretty tight and before the federal budget had been balanced. We're just pleased as punch that he was able to come up with additional money for kids.

There's a very easy way to end our objections to the way the national benefit is structured now, and that's just to end the clawbacks. It would not cost the federal government one penny more to say there will be no more clawbacks of federal child benefits authorized by the federal government. The system could remain in place exactly as it is today, with the proviso that there would be no clawbacks by provincial or territorial governments. It wouldn't cost the federal government one penny more and it would satisfy members of our council as to the inherent fairness and sensibility of the new federal initiatives.

[Translation]

Ms. Christiane Gagnon: The province of Quebec offers $5-hour- day child care, and Quebec taxpayers do not pay enough to claim refundable tax credits. How can provinces with a more integrated family policy recover unused credits? Some members of Parliament have suggested that the federal government increase the refundable child care credit to $7,000.

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Could we consider providing compensation for provinces with an integrated child care policy of the type you have proposed? It would be unfair if, on the one hand, a province were to do its homework and establish a child care policy that allowed families to pay less and get lower tax credits, and if, on the other hand, the Canadian Government were to decide to increase refundable child care credits from $5,000 to $7,000. Such a policy would mean that Quebec residents would lose out, and we would not be able to expand our child care program and offer it to two and three-year olds.

[English]

Mr. Steve Kerstetter: I think the council's report says basically that we would see the tax credits, such as the child care tax deduction on the income tax forms, becoming a residual type of program over the years. The council's vision of a national child care program is very much in line with the Quebec government's vision of its child care program in the sense that it's focused on the program side rather than the tax side. The system is a broadly based and very affordable system, and it's financed through parental fees to a certain degree, but mostly by governments.

The report we issued yesterday provides a framework for that kind of system—on the program side, not on the tax side. It's very much in line with what's already been done in the province of Quebec. The details would vary from province to province according to their assessment of how their constituents could be best served. The general program, we'd say, would have a small portion of the cost from parental fees. Government should provide the rest of the money.

The further caveat in the report was that the fees parents are required to pay as part of the system would be based on ability to pay, so poor families would pay nothing, and well-to-do families might pay 50% of the actual cost. It's a little different system from the $5-a-day configuration in Quebec, but the principle is basically the same. I guess the salient feature is that we don't see much of it being done on the tax side of things. We see things being done on the program side.

Ms. Joanne Roulston: What we actually said specifically about the child care tax expense deduction is that it should be turned into a tax credit and be available only for people whose kids are outside of that two- to five-year age range. So it would be for people whose children are under two years of age, or the six- to sixteen-year-old children, for example, who have a disability that makes it impossible for them to use the standard child care system.

The Acting Chair (Ms. Carolyn Bennett (St. Paul's, Lib.): Thank you all very much for coming. I hope you will help us in our pursuit of a social union, and with all your issues at the top of the dance card, particularly the issues around mobility and citizen involvement. I think it will make us happy to see you have a loud voice when Canadians are consulted on their social priorities.

Thank you. This meeting is adjourned.