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 DES ENFANTS ET JEUNES À RISQUE DU COMITÉ PERMANENT DU DÉVELOPPEMENT DES RESSOURCES HUMAINES ET DE LA CONDITION DES PERSONNES HANDICAPÉES

EVIDENCE

[Recorded by Electronic Apparatus]

Wednesday, June 06, 2001

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[English]

The Chair (Mr. John Godfrey (Don Valley West, Lib.)): Hello there, and welcome. I apologize for the end-of-term follies we're experiencing. There was some danger that we might not even have a meeting to begin with because of what's going on in the House, which is just too boring to talk about, really.

Mr. Roy Bailey (Souris—Moose Mountain, Canadian Alliance): What you call Bill C-28.

The Chair: Right.

I know that more folks are going to be joining us. I apologize for the somewhat ragtag way in which we are operating ourselves here.

We are very glad to have you here. I'll give you a little recap on the history of this subcommittee. It has evolved over time and we have, as you can see, some new members from the last time some of you have been here. So part of what we're doing in this period is catching up and making sure we're all operating from the same background, but we also want to take advantage to do the update, to figure out where we're going on various topics. And today we're talking about the national child benefit, la prestation nationale pour enfants.

I gather there has been a decision reached among you collectively that John Murphy is going to go first. Has there been a decision reached among you collectively as to who's coming next? Is there a divine order in things?

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I might as well just get arbitrary at that point. Why don't we just go down the line then with Ken, Joanne, and Andrew. Who wants to do clean-up?

All right, let's begin. I'd like to start by asking John Murphy, from the National Council of Welfare, to open the session. Thank you all for coming. And please be tolerant; if suddenly bells go off and our whole world blows up, you'll know what we're going through.

Mr. John Murphy (Chairperson, Canning, Nova Scotia, National Council of Welfare): Good.

[Translation]

The Chair: I believe we have an equal number of members. However, if you leave, then...

[English]

We're going to try to keep equal numbers and then we can stay where we are.

John, welcome.

Mr. John Murphy: Thank you, Mr. Chairman and committee members. We appreciate the chance to appear before your subcommittee to talk to you again about the national child benefit.

The National Council of Welfare is a citizen advisory body to the Minister of Human Resources Development. It is our job to give the minister a second opinion on the way federal policies affect low-income peoples in Canada and to suggest ways in which policies could be improved.

The national child benefit is an issue to which the council has given a lot of thought over the past few years. The National Council of Welfare wholeheartedly supports the federal government's efforts to reduce child poverty. This is an issue of grave concern to all of us here at this table. In our opinion, it is a matter of real urgency for this country.

Child poverty rates have declined slightly in the last years, but they are still nowhere near where they were before the last recession. The more we learn about the significance of providing children with the best possible early development experience, the more strongly the council recommends that child poverty become the priority of the federal government and of course provincial, territorial, and municipal governments as well.

We have struggled with the child tax benefit. When the NCB was announced, we applauded the federal government for taking on a significant new social program after years of concentrating on deficit reduction. We were particularly pleased that the policy was intended to tackle child poverty.

Our council also supports the work of the federal government to provide higher incomes to those low-income families that are in the labour force. We agree that it is important to support parents on welfare to make the transition into the labour force. But we also have reservations about the national child benefit and we have some recommendations for ways of improving it.

The council's main reservation about the NCB remains the clawback of the supplement and the reinvestment of the clawback moneys. The NCB was designed to allow provinces and territories to claw back the full amount of the supplement from those families forced to rely on welfare. Newfoundland and New Brunswick chose not to exercise this right, and we are pleased to note that several provinces have since announced they will cease at least part of their clawback.

Provinces and territories reduced their welfare payments by the amounts of the supplement, and then used the money they saved on the provincial or territorial programs for high-risk children, but not necessarily for those families that had lost money in the first place. The council is very concerned at the impact of the welfare reform on the incomes of people who rely on welfare.

Welfare incomes for single-parent families with children range from about 50% to 70% of the poverty line, which means a single parent with one child on an annual income between $11,300 in Winnipeg and $13,900 in St. John's, Newfoundland, in 1999. Couples with two children on welfare lived on incomes between 48% and 62% of the poverty line, with annual incomes of $16,000 in Montreal and about $17,800 in Charlottetown, P.E.I.

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The idea of trying to raise children in such poverty is unthinkable to most Canadians. We are very concerned about such major investment of money and goodwill that bypasses the poorest Canadian families with children. While we completely support the idea of creating incentives to work, we believe that the priority must be placed on getting adequate income to the poorest of the poor, and that means those people forced to rely on welfare.

The federal government did not require all provinces and territories to claw back the money. All it demanded was that the provinces and territories ensure that welfare recipients would be no worse off because of the clawback. Many provinces and territories just froze their welfare rates. Inflation did the rest. Welfare incomes are in fact generally lower than they were before the NCB was introduced.

You will see in our handouts the effect this has had. In Newfoundland and in New Brunswick, where there was no clawback, welfare income started to rise because of the federal government's investment in the NCB. If you look at other provinces, for the most part you see inflation eroding the value of welfare. If you look at Ontario's welfare rates, you'll see that the federal government's investment in the NCB came nowhere near to making up for the damage caused by the 22% cut to welfare in October 1995.

The clawback also means that the NCB bypasses most poor children in Canada. The council's estimate of the number of children on welfare in 1997 underestimates the number at almost 1.1 million children on welfare in March 1997. Our 1998 information from Statistics Canada tells us that 1.3 million children in Canada live below the LICO.

Improvements in the economy and more rigid eligibility rules for welfare programs may have resulted in moving some children off the welfare roles. This still means that most poor children did not qualify for the full benefits of the national child benefit simply because their parents were forced to rely on welfare.

Children of single-parent families are disproportionately likely to be on welfare. There were more than twice as many children of single parents as children with two-parent families on welfare in March 1997. There are about 13 single mothers for every single father. This points to a very serious problem of gender discrimination built right into this program. It is far more likely that a family headed by a woman would not qualify for the full support of the NCB.

Single parents are at a high risk of poverty as it is, and they already face serious obstacles in their efforts to raise their families above the poverty line. Parents without partners simply do not have the flexibility that families with two potential earners have. Even when they are in the labour force, women earn significantly lower wages than men, making it harder for them to bring home the income that would get their families off welfare. With only one potential earner in that family, the shortage of quality affordable child care creates even a greater obstacle.

It seems to us at the council a serious flaw to see the child poverty fighting program bypass the highest-risk families and those who face the highest hurdles when they try to enter the workforce. Instead of supporting these parents to enter the job market, the clawback reinforces the discrimination women already face in the labour market.

The council's other concern with the clawback and the reinvestment strategy is the absence of clear accountability and evaluation for the way in which the provinces and territories spend the money they take from families on welfare. The provinces and the territories were obliged to spend money in the general area of high-risk children, but there was no obligation to ensure that the money reached those families with the lowest income.

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The council has no objection to most of the choices the provinces and territories have made. However, we do believe federally delivered funds should be clearly directed and accounted for within a framework that ensures the usefulness and quality of the programming. Under the existing conditions, we simply can't tell.

Our recommendations, then, for the NCB future are as follows.

First, we recommend that future evaluation of the NCB work with the federal government's plan for gender equality. We consider it a priority that the NCB be assessed by HRDC in collaboration with the Status of Women Canada. We also recommend a process of evaluation that builds in consultation with parents on welfare, who can reflect on the effects of the current NCB on their lives—and I would like to underscore that last sentence.

Secondly, we recommend that no further moneys be invested in the NCB until (a) the federal government creates a mechanism to ensure that provincial and territorial welfare rates for families with children keep pace with inflation—the erosion of welfare incomes since the introduction of the NCB does not indicate adequate protection for the current agreement between the federal government and the provinces and territories to ensure welfare recipients are at least no worse off; and (b) a complementary system of child care is introduced. Without child care, it is simply impossible for most single parents to enter the workforce full time and to make adequate incomes to get off welfare. Other direct services may also be helpful, but for us, child care is the most significant.

In closing, the complementary national program of child care, with the NCB, seems to us to be the most sensible child poverty fighting strategy. You may have noted, as we did, that the Toronto Star reported last Friday the results of Quebec's five-day child care program. It may well be responsible for a 37% reduction in the number of single mothers on welfare.

That's my presentation. Thank you, Mr. Chairman.

The Chair: Thank you very much, Mr. Murphy.

I'm assuming, Ms. Roulston, that Mr. Murphy has spoken for the organization and that when there are questions you're both available to answer.

Mr. John Murphy: Right.

The Chair: Ken Battle, welcome back.

Mr. Ken Battle (President, Caledon Institute): Thank you.

I've handed out some graphs that I'll be speaking to. They're in French and in English.

Today I want to focus on the future of the Canada child tax benefit. My argument is that the federal government should substantially invest in the Canada child tax benefit in the future to build it into a much larger and stronger system of income support for Canadian families with children. This would build on the successes of the national child benefit, and I think would allay some of the criticisms you have just heard about the national child benefit in its current phase.

In terms of the progress to date, I think the most important thing about the child benefit—and it's certainly a point of view that is not shared widely by social groups—is that it's part of a major restructuring of the social security system.

By the way, Canada is a leading country in doing this. We've just completed an international study of child benefit reform in four countries: the United States, Australia, the U.K., and Canada. Australia and the U.K. are certainly moving in the direction we are. In fact, as a result of our study, we had a meeting in London, and we invited people back. A group of MPs from the Standing Committee on Social Security came to Canada, and also a group of senior officials from Inland Revenue and Treasury and others, to look at the implementation of the child benefit. In fact, Britain has very much adopted the Canadian model.

The kind of restructuring I'm talking about is part of a broader vision of welfare that is really aimed at leaving welfare behind. This is a vision where we replace demi-grant universal programs, and we gradually replace needs-tested programs—the main one being welfare—with progressive broad-based income-tested benefits, of which the Canada child tax benefit and the growing group of provincial child benefits are the key examples.

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I think it's very important to take not just a purely static view of the impact of the national child benefit and the problems with the clawback. To me, one of the major advances it is making—too slowly and too gradually, but at least it's going in that direction—is to take out of the welfare system and replace a growing chunk of welfare income with a portable, non-stigmatizing, fully indexed income-tested benefit that has a political future, unlike welfare, which has no future at all.

So I would argue that although welfare families, unfortunately, for reasons that have to do with the irrationality of the old system that we're trying to reform, are not ahead in pure income terms, they will be better off as well just by virtue of the fact that they're getting more of their income from Ottawa than they are from the provinces, to be blunt about it.

We also see the reform of child benefits as simply the first step in a much broader project of reform—and I think this is going to take many years—of completely reforming employment insurance and welfare and coming up with a much stronger, more humane, and more effective system of income and employment supports for adults as well as children.

In terms of what has happened, if you look at figure 1 in the graph that I handed out to you, it shows the federal spending on child benefits over time. There has not been a dramatic increase, but at least we're seeing an improvement.

If you go back to 1984, we were spending about $6.5 billion—in constant 2001 dollars. That, of course, declined over time because of program changes and deindexation. With the NCB, and more importantly, the decision to fully index the child benefit, which is a crucial advance that's not really particularly part of the NCB itself, we're seeing benefits increase substantially, so that by 2001, we're at $8 billion, which is about 45% more, a real increase of 45% in the period of the NCB. So that's not bad.

If you take it at a micro level and look at figure 2, this is federal cash benefits over time for low-income families. I'm not talking about the old children's tax exemption or the non-refundable credit, but cash benefits, like family allowances, the refundable child tax credit, the Canada child tax benefit, over time. You can see that just after the war, the family allowances paid $1,564 for a family with two kids—in 2002 dollars—and by 2002, we're to $5,063. So in terms of federal child benefits, there have been some reasonable increases over time.

I think the NCB has been important beyond itself in terms of advances on the social union framework or what we call partnership federalism. I think it has created some successful bureaucratic and ministerial machinery that hopefully can be adapted to other areas of social policy. Indeed that's happening on disability, where there's a federal-provincial working group on supports for persons with disabilities.

It has given provinces a fair amount of flexibility and choice in what they do. Some people think that's a bad thing, but a lot of people think it's a good thing. Certainly they have flexibility, including the flexibility to pass along the increase to welfare families, which a couple of provinces have done.

I think it has been a success vis-à-vis Quebec. Quebec has stood outside the NCB officially, but it has actually participated. It fully supported the policy rationale for the NCB, and it certainly took the money.

As far as first nations as concerned, I've just put a question mark here. I, like others, am not an expert on this, but I'm putting qualified success because I'm hoping the separate track that has been established for aboriginal communities will prove to be another advance. I was talking to a researcher who's looking at reinvestments on reserves and is quite excited about what's going on. So we'll have to see what happens, but I don't know.

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The recent report talked about the fact that the federal money has levered provincial reinvestments, but there have also been provincial investments—not large—above and beyond the federal money. I would argue that although one has kind of a broad mix of reinvestments, it's eclectic. It's a mix of income and services, and that's the kind of policy mix that we've been talking about, even if you may not like what one particular province does compared to another.

There have been administrative efficiencies—which was the third objective, you'll remember, of the NCB—reducing overlap and duplication, in the sense that most of the provinces that are creating new income-tested provincial child benefits are using the federal personal income tax system to deliver them. So there are real efficiencies there of assessment of income and delivery.

I think that the full indexation of the personal income tax system and the Canada child tax benefit is incredibly important, as you've been hearing from most of the people on this side of the table for years. It stabilizes the increases. They become real increases, not taken on the one hand, given on the other; and they stop what you might call de-universalization by stealth, which was that we were seeing a reduction in the scope of CCTB because of partial indexation. And the federal government has made some small but significant progress in restoring child benefits for non-poor families—and I want to come back to this. This is a very important part of the picture.

That being said, there are a number of problems with the NCB. Clearly, as John just mentioned, there has been a pretty widespread backlash against the clawback. This is understandable, given the fact that the NCB happened in a period of years of both overt and covert cuts to welfare. So it did not come into being in the best possible time, although the clawback issue will end pretty soon, by the way. Once the feds have stopped raising the CCTB, that's the end of the reinvestment, and there'll be no more problem with clawback. I'm going to argue that I think the feds should keep putting money in, but that's what will happen. There will be no more problem with clawback once the federal government is no longer displacing any more welfare.

I think another major problem with the CCTB and the NCB—and I won't go into it—is that it's very poorly understood. That's in part because it is an arcane terminology. It's hard to describe what it is because it's hard for people to understand what the old system was. And I can tell you, trying to explain it to non-Canadians—let alone Canadians—was a real nightmare when we were doing this book. So it's certainly that, plus the very gradual and complicated increases in all the benefit levels have made the benefit virtually impossible. I have to look it up all the time to see where we're at. It's really a difficult thing to understand. Keep in mind that some of us had argued for a big bang child benefit that would have brought in a new child benefit system over two years and would have gotten rid of a lot of these problems.

Another problem I want to raise just briefly is the danger that politicians will want to claim too much too soon for the national child benefit. We got a whiff of this in the statement from the federal, provincial, and territorial ministers in the front of the recent NCB progress report, where there was a hint that, first, the NCB is directed to reducing the incidence of poverty, which is absolutely incorrect—that was never a stated goal and should not be a stated goal of the NCB in its current size—and, secondly, that the welcomed decrease in poverty amongst families with kids can be accounted for in part by the NCB. It would be nice to think so, but I rather doubt it. If you look at figure 3, you'll see what I'm talking about.

To use the language of the progress report, I don't think that the incidence of poverty is an appropriate direct indicator for the evaluation of the NCB, simply because no benefit the size of the CCTB can be expected to take a big whack at the incidence of poverty. It's depth of poverty that is the more appropriate indicator and objective, and indeed that's the one that ministers signed on to.

If you look at figure 3, you can see what happens. That the unemployment rate and the poverty rate are incredibly closely allied is no big secret. We could be putting more and more into the national child benefit. If unemployment goes up, the child poverty rate could go up, and people could say the NCB is a failure. Well, it could be a success. It could be improving the living standards of low-income people even though the incidence of poverty keeps going up. So I think that's a problem.

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There are two more issues. I'm not going to talk about them, just identify them. One is the criticism from some economists who are afflicted with what I call “marginal tax rage” that the high effective marginal tax rates created by the CCTB will create work disincentives. I think this is sheer bloody nonsense. It's completely unsubstantiated.

The Chair: You should speak your mind on this.

Mr. Ken Battle: It's a hilariously simplistic view of labour market behaviour, but it's a criticism that I hear all the time when I'm talking to some groups.

Finally, there's a special reinvestment issue in Ontario—and I'm running out of time, so I'll come back to that if you want to talk about Ontario. Because of the fact that part of the reinvestment money goes to the municipalities in Ontario, because Ontario still has a two-tiered welfare system, which is creating some...there's opposition to the clawback from the provincial NDP, and a couple of municipalities actually are not following the Ontario government's counsel on this.

I mentioned...and I want to quickly talk about this because it comes into my punchline at the end. If you look at figure 4, it compares federal child benefits in constant dollars—in 1984 under the old system of family allowances, children's tax exemption, and the refundable child tax credit, and the CCTB as it will be in 2004. You can see that the old system was not well geared to income, and it was totally universal even in terms of amount of benefit...very universal, not only in reach but in amount of benefit. The CCTB, of course, as compared to the old system is much more highly targeted.

If you look at figure 5, it shows child benefits as a percentage of family income under the old system and the new system. So it's pretty clear that low-income families have benefited the most in terms of federal child benefits.

Figure 6 expresses the change in child benefit as a percentage of family income. I do this because even though families with modest income levels and above have been losers, when you measure it in terms of the proportionate impact on them, it's really quite minor compared to the large increases for lower-income families.

I show that because, in terms of child benefits more broadly, there's a very, very important issue at stake. It's not just the anti-poverty objective of child benefits, which the NCB has been concentrating on. We also have the so-called parental recognition or horizontal equity function of child benefits, which is one that we need to address further in future. So we're talking about restoring and then increasing benefits for non-poor families, particularly modest and middle-income families.

Finally, what do I think we should do with the CCTB? Well, I think that we—“we” meaning the federal government—should be looking at a very substantial continuing investment in the CCTB way beyond what has been slotted for 2004, which is certainly as far as the Department of Finance will ever want to take it, to create a much larger benefit. There are a number of advantages of this.

The amount of the maximum benefit.... We put forward a figure of $4,200 as a very low-end estimate of what it costs to raise a kid for a low-income family. I don't think the actual amount is as important as the fact that one would create a much larger child benefit. What would this do? Well, in terms of the anti-poverty objective, not only would it have a much larger impact on the depth of poverty, but it really would be expected to start to affect and reduce the incidence of poverty. It would deliver real net increases to welfare families as well. They would start seeing some.... They would share in it, because we would be moving much above the level of the old welfare federal child benefit.

Non-poor families would see substantial increases in their benefits, so we would strengthen the horizontal equity objective. This would also serve what I call the lost objective of child benefits. For those of you old enough to remember Keynesian public policy back in the old days of family allowances during the war, one of the arguments put forward.... World War II, that is. I'm dating myself; that's the war I still think of. One of the objectives touted for the family allowance then was that it would act as an economic stabilizer by putting money in the hands of families, mothers in the first years, who would spend it. I think that's an objective that still has some relevance. I think that if we had a large enough child benefit, it really would be a very important cushion during recessions for families with kids. It also would counter, better than we're doing now, the growing inequality in market income, which a lot of us lament.

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I think a larger child benefit would also enhance parental choice. This is not a phrase I usually use, but it's a phrase that has some political resonance. What I'm talking about there is that when you look proportionally at what kinds of families would benefit most from a big bang child benefit, those are single-parent families, because they tend to have a low income, and one-earner couples with children. Those are the ones that Beverly Smith was complaining about this morning on the CBC. She's the woman from Calgary who's always complaining about the disparity between one-earner and two-income couples. Because one-earner couples tend to have lower incomes, they would on a relative basis benefit more than two-earner couples from a larger child benefit.

I think the positive redistributive aspect is very important, and it has two parts to it: one, poorer provinces stand to gain proportionately more from a national child benefit program. Also, as I mentioned earlier, it would strengthen the tax transfer system's capacity to offset market income inequality. It would fully displace what remains of social assistance benefits on behalf of kids, because there's still quite a bit in the welfare system.

A larger child benefit like this would advance what I view as a desirable trend in the division of labour over social policy between Ottawa and the provinces. Ottawa would assume, as it does now even through the current CCTB, an even greater role in income security, freeing provinces to devote their full energies and resources to health education and social services, which I think is a division of labour that makes a lot of sense. Not that I don't think the federal government has an important role to play in restoring financing for health education and social services. Don't get me wrong.

Finally, if you look at figure 7, the kind of thing I'm talking about, and other groups have supported this, is not pie in the sky. Australia and the United Kingdom already deliver child benefits to their low-income families that are of the magnitude I'm talking about in an expanded child tax benefit.

I'm sorry this is a such a complicated graph. It's from the comparative study we did. Just to quickly show you, the thin line on the top is the amount of child benefits in the U.K. We're looking at 200 couples with two kids, in U.S. dollars, as it will appear when the U.K. has completed its integrated child credit, the one based on ours. You can see that it's at about $7,600 U.S. for two kids, which is more than the $4,200 Canadian per child we're talking about. Australia, the second line with the dots, is substantially more generous than Canada is. Canada is the dotted line in the middle. The United States is the bizarre, totally irrational distribution on the bottom, because they have a system much like we used to have before we reformed it. I mention this because I think it's important to acknowledge that other countries do spend more on family policy, including child benefit policy.

It does raise one issue, and it's one we're working on. I'll end on this, Mr. Chairman. There are some really serious dilemmas and design issues we have to look at in building a bigger child tax benefit. If you look at the U.K. and Australia, the way they've been able to afford a much larger child benefit for low-income families is by having what I call step systems. You'll notice that the benefit goes along as a steep drop, it goes along flat, and there's a steep drop again, not exactly but quite closely, whereas Canada actually has a much smoother decline in its benefits.

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With a Canadian-style program, if you increase the maximum benefit at the low end, you create a much more expensive program, because you're reducing benefits much more slowly than the Australians and the British do and therefore you'd have a much larger expenditure. So one of the ways of reducing expenditures is to go their route. But there are some serious design deficiencies with their approach, and I'll quickly mention two.

For the economists who worry about high marginal tax rates, you have phenomenal marginal tax rates over small income ranges in the Australian and British systems, much worse than ours. Secondly, there are problems of both vertical and horizontal inequity. You'll get people in the British system who have quite different incomes getting very different child benefits, and in terms of a smooth geared-to-income system, it's not as desirable as ours. I'm mentioning that simply because it's easier to talk about doing an expanded child tax benefit than actually doing it. I think it's an issue we're going to want to think about more.

Fortunately, now that we have this study where we're looking at the experiences of other countries, it's certainly given me some heart in terms of arguing for further investments in the NCB.

The Chair: Thank you very much.

I welcome Andrew Jackson. The Canadian Council on Social Development I think is probably best known to members of this committee for their annual progress of Canada's children report, and it leads to a certain amount of excitement and interpretation every time it comes out. I think it fits in beautifully. I think we should formally have you here, whether it's in a panel format or in some other way, every year after the report, so this is our best and somewhat ad hoc attempt to do so. Welcome.

Mr. Andrew Jackson (Director of Research, Canadian Council on Social Development): Thank you very much. We'd be happy to do that some time.

Today, in view of the lack of time, but also because the national child benefit's second annual report has just been released, I have decided to focus my remarks and presentation around the report itself and—

The Chair: Your report rather than their report.

Mr. Andrew Jackson: No, around the government—

The Chair: Their report.

Mr. Andrew Jackson: On that report.

I have perhaps a slightly different take on it from Ken's. I did want to look at the report with the question in mind of whether basically the national child benefit is beginning to have some impact. I take Ken's point very much around the poverty rate, but I think it would be expected that the national child benefit, in combination with changes in the job market, would be having an impact on the depth of low income and for that matter the low-income rate for working families with children. Clearly, the explicit intent of the program was to provide a significant income supplement to working families with children.

I think it's a mistake to focus on the poverty rate as a whole without separating out the intended beneficiaries of the program and then the impact it's having on them. I think one can sensibly do that, and it's what I'm trying to do.

The second big caveat is the old adage about monetary policy always having to operate with a rear-view mirror. For social policy that's incredibly the case, because the latest income data we have is for 1998, which is actually quite a long time ago. So 1998 was really the first year in which you might expect to see any benefit at all, or any impact at all, and it would be very modest. If you look at Ken's graph, total expenditures did rise by $600 million in 1998 over 1997, so one might begin to see some impacts from the program in that year.

I think it's really important to bear in mind that to the extent we were seeing impacts, they would be very much in combination with what was going on in the job market. After a very slow recovery in employment from the mid-1990s, 1998 was a very good year. And I think looking forward, and it's probably important to bear this in mind, we are going to have further progress on child poverty in terms of both the incidence and depth of child poverty in 1999 and 2000, and probably in 2001.

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Parliament has set itself the goal of eradicating child poverty by the year 2000. I think the good news at the end of the decade, if there is any, is we might have gone through the 1990s with no structural increase in child poverty if we're lucky. I think it's quite possible that by now the child poverty rate has returned to the level of the late 1980s. The economists would say that cyclically adjusted, nothing got worse, which rather abstracts from the fact that a lot of people spent a pretty miserable decade in the 1990s. Nonetheless, I think it is important to bear in mind that in terms of looking at the data, we're at the starting point of at least three years where things are going to look progressively better.

I want to go over a couple of tables here. I'll start with table 1 on page 4. To jump to my conclusion, the point I want to make is that while the incidence of child poverty has been falling—it fell from 1996 to 1997 and 1997 to 1998—the depth of child poverty overall has been increasing; that is, the extent to which low-income families fall below the poverty line. But when you further disaggregate and look at families with children in low income, depending on whether they have earnings or don't have earnings, you get rather a different story. What we are seeing is rather steep falls in poverty for working families with children and rather steep falls in the depth of poverty for those working families with children, but increased depth of low income for those not working, who of course are overwhelmingly dependent on social assistance.

Just to bear that out, in table 1 what we see from 1997 to 1998 is the poverty rate for two-parent families with one earner fell from 24% to 18%, a rather steep fall. And actually 75%, three in four, two-parent families with children living in low income do have earnings. So the great majority of two-parent families with kids do have at least some earnings in the year and thus are potential beneficiaries from the program.

If we turn to the depth of low income for two-parent families with children, what we find for one earner is the depth of poverty fell by $600 from 1997 to 1998, from about $7,800 to $7,200. Similarly, for lone-parent families with one earner there was quite a significant fall again in the depth of child poverty. You can't attribute that by any means to the national child benefit alone. The impact there is some combination of higher employment earnings, which probably would have come in the form of more weeks of work over the course of the year, but nonetheless the program was there and was supplementing the incomes of those families with earnings. And of course to the extent there was any impact, it would have increased further in 1999, 2000, and 2001.

So I do take Ken's caveat to mind about taking the poverty rate as an indicator. But to my mind, if you're really going to judge the success of the national child benefit, actually one key indicator would be what is the depth of low income of families with children and to a lesser degree the changes in the rate. Clearly what happens in an improving job market is that the poverty rate falls as those families with earnings get more weeks of work; as unemployment falls, they rise above the poverty line. Other families who previously have no earnings come in perhaps with relatively few weeks. But I think the benefit is having an impact there.

Turning to the next table, I want to take a look at provincial differences, because I think they are instructive. I think part of this debate around the clawback mixes together a number of different issues. One is if the NCB as a program was intended to benefit working families with children, we should analyse its impacts on that basis. The fact that there's increased depth of low income on the part of welfare families is a really critically important social problem and one that I very much think should be addressed. But we shouldn't really blame it on the national child benefit, because it wasn't the objective of the program to do anything about that directly, except of course through supports to employment.

• 1620

Looking at the three provinces compared, the main point I wanted to bring out.... And it's hard to hang your hat on preliminary numbers; they are for the first year. But it does strike me as being worthwhile to bring out the fact that there do seem to be particularly positive impacts in Saskatchewan, which was the first province to fully introduce the NCB. It's also the province that has invested most in both income supports and services for families with children, above and beyond the NCB obligations. So the dollar figures are there in the reports from governments. But Saskatchewan, on a per capita basis, invested significantly more than Alberta and Ontario. And I don't think you can sensibly interpret better news from Saskatchewan on the basis that somehow they had a better job market than either Alberta or Ontario. Alberta is clearly a richer province than Saskatchewan.

If we look at the low-income rate, in Saskatchewan there's actually been a stunning decline in the rate for single parents. The rate actually fell from more than half in 1993 to about a third in 1997, and to under 20% in 1998. There are some difficulties. The data does meet Statistics Canada release requirements, but data for a small province you do have to interpret with some caution. At the same time, Saskatchewan does have a program in place matching the NCB where they provide a provincial income supplement for working parents with children, so you would expect the benefits of the program to be there.

I think it's worth underlining that if we look at depth of low income for both two-parent and lone-parent families, depth of low income is really very significantly less in Saskatchewan than in Alberta and Ontario, basically because they cut welfare benefits primarily through not indexing them to inflation, but not through large, direct cuts, the kind we saw in Alberta and Ontario.

So my main conclusion is a fairly pedestrian walk through the numbers. Again, the caveat is we shouldn't hang too much on one year's numbers. But I think it is appropriate to develop some indicators that would allow us to look at what the child benefit is doing in terms of child poverty. I think this issue of the depth of low income for working families with children is where you would expect to see the impact, and it's there. I expect more good news will be there, as we proceed.

One very much has to add the observation that while the proportion of families with earners has been increasing in the recovery, we still have a quarter of two-parent, low-income families with kids with no earnings at all in 1998. Half of all women lone-parent families have no earnings at all. So for that group—they're basically all poor—the depth of poverty is very much determined directly by the level of social assistance benefits. I very much endorse the view of my colleagues that if we want to address that depth of poverty issue for non-working families with children, we clearly have to look at the level of social assistance benefits.

My plea is that when we look at the impact of programs, to some degree we should keep those issues somewhat separate. I think a program that was intended to supplement the incomes of the working poor should be judged by the impact it's having on those terms, and we should judge the impacts of welfare incomes relative to those on welfare.

• 1625

As one final thought along the same line, we shouldn't maintain, I don't think, in our minds too tight a separation between families on social assistance and the working poor. There's an awful lot of transition between those groups over time. Not all social assistance families remain that way. We do have, I think, an incredibly serious problem in Canada, where probably one in ten of all kids is long-term deep low-income, because they're long-term on social assistance. There's a much wider group of children who cycle in and out of poverty, depending on what's happening in the job market.

The Chair: Thank you very much.

Bearing in mind that we're under some pressure of time, I want to welcome back without too many flowers Richard Shillington, who keeps us all dazzled with his fancy footwork on figures.

Mr. Richard Shillington (Principal, Tristat Resources): I've been treated unfairly here. I was advised to come and be prepared to speak for five minutes. I gather nobody else was. I will do my best to keep to the five minutes.

The Chair: As with the academy awards, you get a television for the shortest acceptance speech.

Mr. Richard Shillington: I just want to highlight a few points and not repeat much of what I've heard.

We've heard a great deal about the distinction—and Andrew just said it well—between families on welfare and working poor families. Certainly, the contentious part of the child benefit has concerned the differential treatment of those two types of families. Andrew has just highlighted improving circumstances for working poor families and a deteriorating circumstance for welfare families. I think that's fair.

So one of the questions you could possibly ask is, what proportion of families is in those two groups? This is, I would have thought, a basic piece of information that would be readily at hand, but it's not. The Council of Welfare a few years ago said something like two-thirds of poor children were being clawed back, a figure which HRDC disputed, but I hadn't seen any data to get a better handle on that, until I saw this progress report, which came out while I was out of the country. I was glad to see it. If you look at my handout and the tables, you can pull those numbers out of the statistical annex. They confirm the numbers we had and I think I presented before this committee a year and a half ago, that roughly one million children are on welfare. The vast majority of them are in single parent families.

Depending on your choice of poverty line—we now have a smorgasbord of poverty lines we can use in this country—that would mean roughly 70% of poor children are being clawed back. If we had a program that was labelled as an income supplement for working poor families, I don't think anybody would object to that. If this is being described, as I think it is more often than not, as an anti-poverty program, then we have in Canada an anti-poverty that excludes most poor children. By excluding children based on employment, we also know we're excluding children based on the gender of their parents, because the vast majority of low-income single parents are on welfare.

I think most of us would have objected to an anti-poverty program that said, we are going to increase the income of poor Catholics or poor Protestants. I think we would have objected to a program that said, we are going to increase the income of poor lone parents, but not couples, or the other way around. I would argue that, effectively, we've done that by linking our anti-poverty program to employment, while doing very little about child care. We've excluded the vast majority. The data are in the progress report at the back. You can look at table 8, which tells you how many single parents are on social assistance and how many couples are on social assistance. Compare that to table 2, which tells you the number of poor families. I'm sure the Council of Welfare is right. I don't care if HRDC disputed the figures.

• 1630

I want to take you to the last page of my handout, just to show you how far in this town we can go in turning numbers on their head. That's a quote from a report. This is how Canada described the child tax benefit to the United Nations in a report on our social development:

...a new National Child Benefit (NCB) system was implemented on July 1, 1998 as a collaborative initiative by federal, provincial and territorial governments; about half of the beneficiaries are single-parent families headed by women.

I don't see how you can take a program that differentially excluded single parents, because of its use of employment as the gateway to an anti-poverty benefit, to a program that appears, according to that quote, to actually be targeted in favour of single parents.

There is a great deal of confusion about the child benefit, Ken is correct. With the area of the clawback, how much is clawed back, and how many people are affected by the clawback, there's a great deal of confusion, and it's taken some time, I guess almost five years now from the initial announcements about the child benefit, to get any data on how many people are being clawed back.

Thank you. I kept to my five minutes.

The Chair: You get the TV.

Let's move right into it. Roy Bailey.

Mr. Roy Bailey: Thank you, Mr. Chairman.

Thank you, all, for your presentations.

As you started dealing with this from a historical perspective, I remember as a child of the Depression that we didn't use such terms as welfare, we used the term relief. Of course, there was one good thing about that, everybody was in the same boat. Everybody was poor.

Very quickly, I want to get to a few questions. This clawback business has bothered me ever since it started. It didn't seem right to have that money placed with a certain person for a certain purpose, and then if somebody goes out to improve their lot a bit, to punish them. Right? It's a punitive thing, this clawback.

I want to illustrate it this way. We had a messy old yard next to me. My wife says, you can never buy it, don't bother with it. But I couldn't stand to look at it, so I finally bought the thing, and I've landscaped it and everything else. So this year, when the taxes came, they've tripled. It's kind of a punitive thing. The clawback is punitive too, isn't it?

I'd like Mr. Murphy to explain the clawback to me. I think I understand it, but I want to hear it from you.

Mr. John Murphy: Okay. I'll give you where we're at with the clawback. What we're talking about here is the supplement—there's the benefit and the supplement.

Mr. Roy Bailey: Right.

Mr. John Murphy: So the provinces were able, under this social union agreement, to claw back from people who were on social assistance and to use that money to reinvest in programs for high-risk children. We've contended at the National Council of Welfare, of course, that this supplement should have gone directly to the poorest of the poor. We don't really have any indication that the supplement that went into the reinvestment gets to the poorest of the poor. So that's, in a nutshell, what we're talking about here.

The Chair: Excuse me, I have a very strange announcement to make. I'm embarrassed to have to make this announcement, but for some reason the government members have been asked to go back to the—

Mr. Roy Bailey: Can we continue?

The Chair: Of course we can, and I'm going to ask Madame Guay to take over the chair.

Ms. Libby Davies (Vancouver East, NDP): But why are they asked to go back?

The Chair: It's totally bizarre. Actually, the three of you and two of us have no idea why—

Ms. Libby Davies: Why have you guys been asked to go back?

The Chair: I have no idea. Nothing extraordinary is happening that I know of, but I'm going to ask—

Ms. Monique Guay (Laurentides, BQ): You have to all be in the House, but not us, I guess.

Ms. Libby Davies: Is it because it's the committee of the whole?

The Chair: It's committee of the whole, and I have no idea what this is about. But I've asked Madame Guay to take over. I offer you my embarrassed excuses, but go for it, enjoy.

Ms. Monique Guay: Goodbye, John. You're welcome back any time.

The Chair: Oh, thank you, and thank you for having me.

Some hon. members: Oh, oh.

The Acting Chair (Ms. Monique Guay): It's your turn, Mr. Bailey.

Mr. Roy Bailey: Thank you.

I want, on this clawback, to mention another thing that has always bothered me. When a person is unemployed and they are at the low rate of income, and they pick up a part-time job, to what extent should the support be there? Why should they start taking away from the income? I'd like your comment. That's one thing that's always bothered me. If somebody goes out and works, God bless them. Don't take that $50 he or she earned and deduct it from what they're getting. These are fighting words, for me.

• 1635

Mr. Ken Battle: Perhaps I can comment, because you've raised a core issue about clawback. Forget about the national child benefit. Let's go back to where we were before the national child benefit—and we're still partway there.

Under the old system of income security for families with kids—and I'll just take it right from what you said—if you were on social assistance and you went into a low-wage job, which is more than likely if you went into the labour market, this is what would happen to you in terms of income security. You would lose the benefits you get from social assistance for your kids. That's thousands of dollars. You would lose income benefits for your kids, such as supplementary health care—or you used to until the national child benefit started to rectify that. You would pay payroll tax on your low wages. You would pay income tax on your low wages federally and in a lot of provinces.

Mr. Roy Bailey: CPP.

Mr. Ken Battle: Yes, CPP, by payroll taxes.

You would face work-related expenses, such as clothing and transportation. You wouldn't have decent child care. Subsidized child care is scarce, so even most low-income people are paying through the pocket.

That's how it was under the old system. In other words, the deck was stacked against people who went from social assistance, bad as it was, into the low-wage labour market. What the NCB is trying to do is increase the amount of child benefits for working poor families so that at least when they go from assistance into the workforce they don't lose thousands of dollars worth of income on behalf of their kids. That's the rationale for the child benefit.

I think it's important that a distinction be made between adult benefits under social assistance and child benefits under social assistance. I mean, there is nothing, as I think Andrew said, the national child benefit itself can do about the fact that all provinces are reducing their welfare benefits, through stealth, by non-indexation—and not even partial indexation but lack of indexation.

That's a serious issue, but that's not an issue the national child benefit can do anything about. The flip side of the clawback is that the original core policy rationale for the NCB was to equalize child benefits for all low-income families. Under the old system you got different benefits, depending on whether you worked or were on assistance. If you worked, you got half of what you got if you were on assistance.

The issue I mentioned earlier in my presentation, and Andrew mentioned at the end, is extremely important, the portability of the new benefit. If you're a low-income Canadian, or even middle-income, whether you're on welfare, employment insurance, in the workforce, or whatever, the national child benefit will give you a secure, stable source of income that cannot be reduced on the basis of your source of income.

[Translation]

The Acting Chair (Ms. Monique Guay): Ms. Roulston, would you care to respond as well?

[English]

Ms. Joanne Roulston (Director, National Council of Welfare): Yes.

I disagree, actually, that it's not the part of the NCB to deal with the fact that the provinces are allowing inflation to erode welfare incomes, because one of the conditions under which the provinces were allowed to do the clawback was the condition that welfare recipients be no worse off. One of the points we would want to make is that there needs to be some sort of enforcement of that agreement they had with the federal government. One of those enforcements may be no further money unless you decide to live up to the agreement you've made with the federal government. It's not enough to leave the provinces to their own devices. We've already seen what happened, their saying it wasn't their fault, it was inflation.

The other point about welfare walls is that our welfare system has become a little bit more flexible. People can work full time and maybe not make more than what they got on welfare. It's conceivable that, given very low minimum wages, somebody could be working full time and have enough dependants that she'd still need a top-up from welfare. Because there she is, working as hard as she possibly can, and she's still not making enough to support her family. So she gets a top-up from welfare.

• 1640

Mr. Ken Battle: Well, she gets a top-up depending on the province and depending on whether she applies for it.

Ms. Joanne Roulston: That's right.

Mr. Ken Battle: A lot of people won't apply for social assistance, so don't assume.

Ms. Joanne Roulston: That's true, each province has its own welfare system. There are lots of wrinkles, but that's still a situation that could happen, that you could get the top-up from welfare. You may choose not to, it's true, but if you choose to take the top-up from welfare, then you lose the supplement from the national child benefit, even if you're working full time and as hard as you possibly can.

So it still is, in our opinion, anomalous to.... It just doesn't match the intention of creating an incentive to work.

The Acting Chair (Ms. Monique Guay): Roy, we'll we'll come back after, all right?

Mr. Roy Bailey: Yes, that's fine. Thank you.

The Acting Chair (Ms. Monique Guay): Libby, c'est à vous.

Ms. Libby Davies: Thank you very much.

I guess you guys have all been here before. We seem to go around and around on this, over and over again, in similar debates.

My own feeling is that the national child benefit in some ways is like a huge scam. I remember the former minister, Mr. Pettigrew, sitting in this room and telling us that the national child benefit was the greatest social program—social program—since the 1970s.

On the one hand, we get told that it's not really an anti-poverty measure. Even if you look at it from the point of view that it's meant to be a wage subsidy for people who are in dead-end jobs and getting bare minimum wage, and measure it from that point of view—and maybe there's been some success—it still raises the question, why are we not dealing with all of the other low-income families who aren't benefiting from it, who are still living in poverty? So on those grounds, it fails.

I can tell you this: any time I or any other member—not frequently enough, unfortunately—raise a question about poverty during question period in the House of Commons, the standard response is the child tax benefit. That is the government's only answer. So again, we get into this incredible contradiction. On the one hand we're told that it's not really an anti-poverty measure, but when you ask a question about poverty, that's the only response you get.

I actually find it incredibly frustrating that when you look at the statistics...and I hear what you've all said today. I know just from talking to people in my own riding of Vancouver East that the people who are really getting screwed are the poorest of the poor. I just feel so mad about this, that it goes on and on.

Mr. Battle, you raised the question that the clawback will actually end when the federal government ends its contribution. I don't know if that's true, but maybe people would comment on that. What happens at that point? I don't know what information you have—

Mr. Ken Battle: That was the whole intent of my presentation. I agree with you, Libby, this debate is going to go on and on. It is stuck in the past. Let's move forward with the child benefit and let's build—

Ms. Libby Davies: Okay, but what's your indication of what will happen when that contribution ends and the clawback ends?

Mr. Ken Battle: I'll tell you what's going to happen: nothing is going to happen. The Department of Finance does not want to increase the child tax benefit beyond the 2004 amounts they committed to. What I'm saying is that I think social groups should move beyond the clawback issue, which they're never going to agree on. If I could once get a social group to even address the issues I raise, it would be amazing. Nobody ever does.

So it's a fruitless debate. What we have to do is build a stronger child tax benefit that will benefit all low-income families. That's where we have to go, not keep going on and on about the clawback.

Ms. Libby Davies: Fair enough, but I'll tell you, for families who don't get that money, this affects their daily survival. So to say it's fruitless.... I deal every day with families who are struggling because they don't get whatever the hell it is you want to call it. They're actually sinking lower and lower, and I think we've had evidence of that today. Yes, let's get beyond the different camps we're in, but the reality is that the depth of poverty is increasing and income inequality is increasing, even with this program.

• 1645

I guess the question I put to you is what should we as a committee be putting forward to the government in terms of lobbying, hopefully with some sort of united front, to say that we should be dealing with this as an anti-poverty measure? To me that's the bottom line, because poverty is increasing. Maybe people would comment on that.

[Translation]

The Acting Chair (Ms. Monique Guay): Ms. Roulston, followed by Mr. Jackson.

[English]

Ms. Joanne Roulston: One way we've been thinking of it is that it is a program to support modest-income families to get a toehold in the workforce and stay there with better incomes. But the biggest problem we see is that it's so difficult for someone, especially a single parent, to even get on that ladder at all. Our feeling is that's where direct services come in. This program may work to do that, to help people who are already on the ladder to move up and into the mainstream, and that could be very effective.

What we're really concerned about are all those people who just don't stand a chance to even get on the ladder. Without child care it's just not going to happen for single parents. So our other really overwhelming concern is what does that mean for women, and how does that fit with Canada's other commitments to gender equality? This is why we're saying that we feel it's really important to consult with the kind of people you're talking about who are living in your riding and saying this isn't working. I think we need their advice and we need to look at this from the basis of gender issues, as well as general labour force issues. The labour force has some really serious problems for women. Unless we address some supports to low-income women in the workforce, we exacerbate those problems for them.

The Acting Chair (Ms. Monique Guay): Mr. Jackson.

Mr. Andrew Jackson: I have just a couple of points.

First, this may be a bit simple-minded, but it does seem to me that if we're looking at people on social assistance and the adequacy of benefits, then the people whose feet should be held to the fire on that issue are really the provincial governments. There's absolutely nothing about the national child benefit initiative that would preclude any province from raising social assistance rates.

Ms. Libby Davies: But there has been no increase in federal transfers for welfare payments since 1985.

Mr. Andrew Jackson: Well, I take the point very much about federal social spending and where it's going. But my point about Saskatchewan was that it does show.... In Saskatchewan they have been prepared to significantly increase provincial spending on programs for children and on income supports for children, although not actually on the social assistance side, unhappily enough. But the level of provincial spending does vary a great deal by province.

Provincial policy really does have a big impact. Quebec has just made some positive moves. So it seems to me a bit foolish to get into a debate where you blame everything on one federal-provincial program. It seems to me that the big onus around the level of welfare incomes is directly on the provinces.

I have just one other point, which Libby has raised, about whether income supplementation is the appropriate model for social policy for the future. I think that's a really important question, because I think that while in many ways that is the way to go, we should also have a view of what the labour market should provide to people in terms of incomes as well, rather than say we're just going to supplement whatever the labour market provides.

It seems to me it's important to start from the proposition that a minimum wage should at least raise a single person to something approximating a reasonable poverty line. Then you have some building blocks to build on. But again, the purpose of the child benefit ultimately is to take those additional costs of having children out of that labour market equation.

We should be a bit more explicit on what we expect from the job market itself. To move things forward we should be creatively thinking a bit about this kind of model—its virtues and defects—and how it might apply to other high-risk groups. It seems to me, thinking about people with disabilities, for example, income supplementation is a very useful way to go. If the reality is persons with disabilities are not going to be able to get anything other than a rock-bottom, minimum wage job that isn't going to get them to where they would be even under social assistance, then yes, we should be providing supplements in that area as well.

• 1650

[Translation]

The Acting Chair (Ms. Monique Guay): Thank you, Mr. Jackson.

I'd like to pass along a word of information to my House colleagues.

Mr. Roy Bailey: Some Members still have questions.

The Acting Chair (Ms. Monique Guay): Yes, I'll come back to them right after my announcement.

There will be a vote at 5:10 p.m. and the bells will not sound.

[English]

There will be no bells.

[Translation]

Therefore, we'll have to adjourn at 5 o'clock sharp to make our way to the House for the vote.

I also have several questions, and perhaps several comments. First of all, I'd like to thank you for meeting with us today. I'm someone who believes that the child tax credit is a useful measure, but not the only solution to poverty. We keep hearing that one in five children in Canada lives below the poverty line. That's a shameful statistic indeed. It was recently announced that the whole question of the poverty line would be revisited. Personally, I hope the government doesn't decided to lower this line, just to say that there are fewer children living in poverty. That's not the solution to the problem. We need to come up with a different proposal. However, we have heard rumors about this lately and all members plan to keep close tabs on the situation to ensure that this line is not lowered so that the government can claim that now only one out of every ten children lives in poverty.

Having said this, some provincial policies are extremely effective. Take Quebec, for instance, and its $5 a day daycare program. The percentage of single parent families in the province is quite high. Quebec women receiving social assistance will benefit from a newly created program which helps women re-enter the job market by increasing their income. A women who decides to return to the work force will receive, during the first year, $3 more per hour than the minimum wage. The amount will gradually fall to $2 more during the second year, and $1 more during the third year. This policy seems to be working well for us in Quebec.

I'd like to see the other provinces adopt a similar initiative. How can we go about this, while ensuring that we don't interfere with sound, existing provincial policies and while continuing to provide a tax credit? There is an $18 billion surplus in the EI account. Couldn't some of this money be invested in a child tax credit? How should we manage this surplus in the coming years? We need to hear some concrete proposals from you so that we too in turn can make suggestions to the government.

The floor is yours. I see that you are at somewhat of a loss for words.

[English]

Mr. Richard Shillington: Over the last couple of years one of the things that's increasingly becoming important to me is finding a way for the voices of the poor to be heard inside these rooms. It became clear to me because of the work I did on the employment insurance changes in 1996 and the ones that were made just two months ago. Criteria were changed in ways that made it more difficult for people who work part-time, particularly women who work part-time, to collect benefits. You could see how in Ottawa, in our tall buildings and nice boardrooms, it's easy to lose sight of the fact that there are people who work part-time, that many people don't work full-time. People work part-time because they're parents and they want to balance these things.

You talked about the surplus. Those changes in Bill C-2 that were passed a month ago perpetuate a situation. Women who return to the labour force will be protected from the re-entrant rules if they get maternity benefits, but not if they just had a baby. So if you have a baby and you don't get maternity benefits, you won't be protected. Again that reflects the narrow-mindedness in this town. This is more often than not a reflection of the fact that the voices of poor people are not heard.

I don't think any of us four can speak for poor people. I don't think any of us are poor—I shouldn't say that—or have ever been poor. Certainly I haven't. But none of us has a membership that is poor people. And you will debate that. I think we need the voices of poor people heard in this town, and I don't think we're hearing them.

[Translation]

The Acting Chair (Ms. Monique Guay): I believe that's true. We are always receptive to these people's views, because they visit our constituency offices, particularly women. Because we're women, they feel comfortable discussing their personal situations with us. Quite often, we remain “connected”, so to speak.

• 1655

[English]

Roy, do you have one more question?

Mr. Roy Bailey: Yes, I do.

Who establishes the poverty line? Is it the same in all regions of Canada?

The reason I ask those two quick questions is this. I move about my constituency. I see two parents—both working—two children. They want to show me their income and so on. Then I go someplace else—two parents, two kids, working. So you'll always have these great variations. But why would anyone establish a poverty line and charge people income tax when they earn less than the poverty line? That is in itself an absolute contradiction within society. I have to go, but I had to say that.

Mr. Richard Shillington: Yes. I'll make it very quick.

I mentioned earlier today to a member of this committee that it is strange that HRDC has created a new poverty line called the market basket measure, which they're going to deliver at some point, and to my knowledge, no low-income people have been party to that exercise. This has been an academic or an economic exercise. You're deciding on a market basket. You're deciding whether or not their children should be going on field trips with their school or having cable TV or computers, Internet access—

Mr. Roy Bailey: Pizza.

Mr. Richard Shillington: Pizza, whatever.

Mr. Andrew Jackson: That's all in the residual.

Mr. Richard Shillington: Well, I'm not comfortable making that decision on behalf of low-income Canadians.

Mr. Roy Bailey: No.

[Translation]

The Acting Chair (Ms. Monique Guay): Thank you very much. Thank you as well for coming. Unfortunately, we have to adjourn, but we look forward to further developments in the future. Thank you.