:
Thank you very much, Mr. Chair.
I'd like to take the opportunity to thank the committee for the invitation to come and speak to you today. Certainly it's a topic that's near and dear to our heart.
I'm with the Canadian Council on Social Development. For those of you who don't know the council, I always describe us as the grand old lady of social policy in Canada. We've been around for 80 years. Our earliest concerns date back to the 1920s and to poor children in the post-war period. We've evolved over that time and are now a large national non-partisan research body that focuses on social policy issues and has done research in the area of poverty and poverty measurement.
As Richard said, I understand you're interested in poverty measurement. I've been asked to talk a bit about a study we've done on urban poverty, so I thought I would start my comments by setting that frame about the work that we've done on the issue of urban poverty. Then I'd certainly be happy to entertain questions that you might have about poverty measurement and the like. We're actually in the process of doing a piece of work for a federal-provincial committee on poverty measurement, so I'm happy to field any questions you might have about that and about how we measure or don't measure poverty in Canada, as the case may be.
As I said, I was asked to come and talk to you about some work we've done for many years on urban poverty in Canada. It's been an interesting process, because for many years we didn't actually have any way of understanding poverty at the community level. We didn't have the data to do that. About 10 years ago the council, together with a number of municipalities and community-based organizations, got together to purchase the data necessary to start to understand what was happening in communities. The research that we published recently is based on the 2001 census, and you're lucky because the income release from the statistics of the 2006 census is due out in May, in a few weeks.
The work we've done based on the 2001 census begins to unpack some of the complexity of poverty at the local level. This was an important thing to do around 10 years ago because the understanding was that as the dynamics and composition of poverty changed, poverty was emerging as a huge issue in Canada's large urban centres. Certainly the work we completed over these past few years on the 2001 census data bears that out.
I'd like to start by saying very quickly this isn't to say that poverty isn't a very real and pressing concern in rural areas in Canada, but that in terms of sheer numbers and the acute character of poverty, it has emerged in Canada as a specifically important urban problem. There are many factors, if you're interested, and we can talk about why that is, but certainly Canada's largest cities have the highest poverty rates in Canada. Through the work we've done, we've been able to unpack some of that.
You've probably noted in many of your communities that you now are seeing local poverty studies, and different patterns are emerging. What's interesting, it's important to note, is that while it's highest in urban areas in Canada, the composition of poverty in individual communities is very local. You have cities such as Toronto, for instance, where you are beginning to see the emergence of the suburbanization of poverty. Poverty is now becoming concentrated in the inner suburbs of Toronto. Then you have cities like Saint John, New Brunswick, for instance, where they have a very deprived inner city core and so forth. In Vancouver the dynamics of poverty changed substantially through the 1990s, and you're beginning to see enclaves; for instance, the cities of Richmond and Coquitlam, which historically used to have fairly low poverty rates, actually have much higher rates of poverty because of the concentration of new immigrants.
So when we talk about urban poverty in Canada, I think it's really important to understand that it is really still a very local phenomenon and has everything to do with the composition of the communities and with the patterns and the particularly vulnerable populations in those communities.
I want to touch briefly on one comment I made about the trend toward the suburbanization of poverty. I think sometimes we're very influenced by what we hear about the United States, and certainly that has been an enormously important force in the United States, where you see the hollowing out of major cities and concentration of disadvantage in the Midwest cities and the like. That same pattern hasn't emerged to the same extent in Canada, although we are starting to see it in places like Toronto and Montreal, where gentrification has taken hold in the core and poor people are being displaced to inner suburbs and the like, or in Richmond and Vancouver, where they're going out to other communities.
It comes back to the point that it really does reflect the composition of the population in communities. Our study shows in some detail--and I hope you'll be able to look at some of the profiles we've done for individual communities--the different rates of child poverty, poverty among seniors, poverty among new immigrants, and in the west, concentrations of poverty among aboriginal populations. That has been very important. In cities such as Calgary and Edmonton, which have enjoyed reductions in poverty through the 1990s and continue to enjoy that now, you'll find that acute pockets of poverty have emerged. That's certainly the case among the aboriginal populations in cities in western Canada. I actually brought the entire report, and I'm happy to answer any particular questions.
When I come away and think about some of the major findings, really it is that Canada is not a uniform country in any way. Our diversity is very much reflected in the urban poverty landscape, and that fact, as you think about the solutions, needs to be taken into account. Certainly we can talk about it, and it's critical to create strong foundations and institutional supports, but local poverty reduction initiatives are really important in that context because the nature and character of urban poverty and community poverty in Canada vary so widely. That was certainly our main conclusion, based on the urban poverty report.
I am conscious of the time, but I wanted to talk a bit about some of the findings with respect to kids and immigrants and urban poverty as well.
The situation with children has been interesting. The findings in our report--and these data are based on the last census--show that back in 2001 roughly one in five residents in large urban areas such as Ottawa, Gatineau, Toronto, and Vancouver were poor, but that roughly one in four children were poor. I don't think that statistic is a surprise, because child poverty rates typically are higher than average poverty rates. When we looked at communities across the country, the highest rates of child poverty were in Montreal and the lowest were in Vaughan. You see quite a huge range between cities, but interestingly enough, you'll find communities where the child poverty rate is actually much lower than the city rate would suggest, and those cities are in Quebec.
What is interesting in this finding, and the reason I bring it to your attention, is that public policy can make a difference in lowering rates of child poverty or in targeting rates. In Quebec, of course, there has been an introduction of public policies that have targeted kids, and we're starting to see some evidence that it's making a difference.
Conversely, when we look at immigrants--and immigrants, by and large, are a group who have higher rates of poverty--it is only those communities with large populations of recent immigrants that experience the very highest rates of poverty. There you see differentials of 40 percentage points between the poverty rate of Canadian-born citizens and the poverty rate of immigrants, particularly new immigrants. Again, those are in communities such as Vancouver, Montreal, and Toronto, and again it comes back to the whole theme of diversity and of understanding that different policy instruments will be necessary to tackle these very serious issues.
I was struck by the literature when we looked at where to.... Even among the advocates of very locally based poverty solutions, we see an explosion of interest in poverty reduction across the country by community groups that are mobilizing and taking leadership on this issue. I commend the committee for taking this on. All of these groups come together and point to the critical need for a strong federal response to poverty reduction to create the foundation so that local solutions can thrive.
I am quite struck that we have a need on the one hand for universal or general policies that target all individuals, and a need on the other hand for spatially focused initiatives such as you see emerging. I think that's going to be a critical frame for this committee as it considers the federal contribution to tackling issues such as urban poverty in Canada. Without strong programs such as OAS and GIS, without a strong child tax benefit program, without a progressive tax system, without strong support for public services in health and education, any locally based initiative is destined to fail. I think it's important to keep that in mind.
Even when you look at some of the experimental literature on best practices from other countries--and we can talk about that--when we look at, for instance, the United States, which has some exemplary anti-poverty programming, the absence of critical infrastructure such as public health and the like invariably signals failure. They've not been able to move on their problems of poverty in the United States in the absence of those critical foundational pieces such as public health care, access to high-quality education, public health, and housing. Housing has actually emerged as a critical issue in urban poverty, and you're seeing that in transportation--
We had been asked to focus, I had understood, on more the strategies and solutions related to women's poverty rather than the facts and issues. We did give you a written submission that includes documentation on some of the issues related to women's poverty and also the policy challenges.
We'll try to highlight today a few of the possible strategies or solutions that we think might address women's poverty, but before doing so, there are just two quick points I'd like to make in terms of the issues.
One, the gap between men's and women's income and the relatively higher level of women's poverty in Canada is persistent. It's been ongoing for a long time. That gap has not been significantly reduced. Women more than men are likely to be poor, children in considerable measure are poor because their mothers are poor, and older single women are disproportionately poor because of their marginal location in the labour market.
Other developed countries, particularly in northern Europe, have been able to reduce the gap quite significantly between men's and women's income and the level of women's poverty more than we have in this country. We think the European countries offer you some good benchmarks in that respect. We understand you'll be looking at some of them.
We have four core principles, because we think principles are important when you're trying to look at the issue of poverty.
Fundamentally, in relation to women's poverty, a high employment rate is very significant for low-income women in developing sustainable jobs. It is essential to reduce poverty. As we see it, work is the basis of welfare.
Second, supportive social policy includes a family perspective and gender equality. They're fundamental factors to promote women's security and well-being.
Third, social inclusion and equal opportunity for women, as well as men, require adequate, accessible, financial, and sustainable social protection. I think that's just echoing what Katherine said a moment ago.
The fourth point is that women's stakeholders should be involved in the design, implementation, and monitoring of social programs that affect their lives and their livelihood. Very often, as you well know, these are designed by men.
There are, on the basis of these four principles, five multi-dimensional proposals that we think, if they were pursued, would help alleviate the poverty of women.
The first is to revise the poverty line, or low-income cut-off, so that it is more comprehensive and reflects the reality of women's lives. As Richard mentioned earlier, and Katherine, we do have a publication on that particularly in relation to women. I think it's been given to the committee. We think a composite poverty line is important in order to establish targets for a reduction in the rate of poverty.
The second is a proposed reform of welfare and employment insurance. It's based upon the model of the Caledon Institute. We presume you have that. We would just try to echo it and say why we think it's a useful model.
The third set is a promotion of active labour market policies for women, based upon particularly the European experience and European research.
The fourth is a proposal to improve retirement benefits such as OAS, GIS, and CPP. Unlike men, women primarily draw upon those for retirement. That is not the case for a lot of men.
The fifth is a modification of housing supports and subsidies. We think these can be changed to improve the accommodation of senior women and women in general.
I'll go over a few of those things, just to explain them a teeny bit, and then leave the rest to the discussion.
With regard to the composite poverty line, we think it's possible. You're familiar, I'm sure, with the UN index. Other European countries have developed a composite index on poverty. The advantage of doing it is that it doesn't rely upon just income. The research that's been done in England around that issue shows that in fact when you use other indices, you get different results. By having a composite index, you probably get a better picture of poverty. For women, certainly, a lot of issues just don't get picked up with income issues, because it's based upon household or family data very often as well as individual data. For women and families it says nothing about how those resources are used within the family. Very often women are shortchanged on that one, for sure.
So a composite index is kind of important, we think, and we stress that in our report. We elaborate in the report on how we think that can be done.
The reform of welfare and EI is a model that's been put forward by the Caledon Institute. It's a three-tiered system, as you probably know. The first tier is basic income support for anybody looking for employment. The second tier is more geared toward services operated by the provinces. The third tier is for the disabled, who will, I'm sure, elaborate on that when they speak.
We think it's of value for two reasons. One is that it gives the federal government the main responsibility for the income transfers and the income support. That's the level of government that can sustain and support these things much more than the provinces can, particularly around the welfare problem. Other countries in the world have done that.
Secondly, it is a clear division, we think, of the powers or responsibilities of different levels of government. That is a distinction that this current government has been stressing and that we support.
The third area is in terms of active labour policy. Recent European research confirms that active labour market policies of various kinds, whether in relation to standards, discrimination, equity issues, and so on, as well as various types of support, show that women disproportionately take advantage of those programs in Europe and end up employed quite significantly at higher rates than men. So we think that sector certainly needs to be developed within Canada more.
As part of that, we think also that child care is a very important part, because without that, certainly single-parent moms are not going to be able to move into the workforce in any significant way. And it's important to keep in mind also in relation to that child care—because arguments are often made in terms of the advantage to children—that it is also an advantage in terms of labour productivity. So keep that in mind.
The fourth area is improvements in the OAS, GIS, and CPP. I won't get into the details of that, but we can get into that, if you want, during the discussion. There are various ways in which we think those programs can be improved to assist women in relation to both the OAS and GIS in terms of making it more accessible to some women who are currently excluded, and also in terms of CPP, in terms of opening up that program a little bit. One of the disadvantages is that for women who drop out of the labour force for caregiving reasons other than for children—for example, in middle age, to take care of a senior member of the household, or to take care of somebody else—it doesn't have the same dropout provisions as child care for a mother does.
Finally, in relation to housing, again we won't get into details, but we think two aspects about that are important. One is to have a much bigger push in terms of shelter allowances, housing allowances. At the moment, almost all shelter subsidies are tied to social housing units. They're not free and don't go with the individuals. The other aspect is trying to move towards more mortgage accessibility for low-income women.
I'll stop there. Thank you, Chair.
:
I know this committee is interested in speaking about poverty definitions, but I'm going to say only a few words about that because I think it's a diversion.
I will illustrate with an example of why I downplay the definition of poverty. A single senior in Canada without an employer pension has an income of about $15,000: roughly $6,000 from old age security, on average $5,000 from Canada Pension Plan, and $3,000 or $4,000 from GIS. That is not a great deal of money. Roughly half of Canadians retire without a pension plan. This is the median: half are below that, half are above that. And 82% of single people who retire without a pension have an income below $20,000. Would we all agree that these people are living in straitened circumstances? Are they poor? It depends on your definition.
Let's talk about a single senior woman in Quebec with a median income of about $17,000. Some of them have pensions, some don't. I'm using the last year for which I can get comparable data, which is 2000. The poverty rate for single women in Quebec is 65%, with the median income at $17,000 and using the low-income cutoff before tax. If I had appeared before the committee 15 years ago we would have been done; we would have said the poverty rate was 65%. But we've made some progress. The after-tax LICO gives you a poverty rate of 38% for the same people. Their incomes haven't changed. Using the after-tax low-income measure, the poverty rate is 21%. Using the MBM, which was created by officials in the federal government, the poverty rate is 5%.
So we've made a great deal of progress. The poverty rate has come down from 64% to 5% and we haven't spent a penny. These changes in the poverty rate will of course have no impact on the well-being or standard of living of those women. The programs that influence the standard of living of poor seniors are not debates about poverty measures, they are programs.
So over the last 25 years, what have we done that may have influenced the income of those women? Old age security has been indexed to prices only since 1984 and hasn't changed except for that. With GIS, three years ago I would have said the same thing, but it was increased a couple of years ago by $36 per month. That's the only increase in GIS, the main program for low-income seniors, over the last 25 years.
CPP has gone up somewhat because of the increased participation rate by women and a greater participation rate in general. But the maximum CPP is $10,000, the average is $7,000, and the average for women is $5,000 per year, not per month.
We've made some tax changes. We've increased the age credit and the pension credit, and we've brought in pension splitting. None of that will have any influence on the women we're talking about. I think we'll all acknowledge that these people are not taxpayers.
We've increased the RSP limit--we found the funds to do that--in the last 25 years from $5,000 per year to $20,000-some per year. I suspect that won't have much influence on these statistics.
I'm going to talk about programs, but before I do, I've given the committee a poem, Poverty Is, from children in North Bay. These are not economists. They will not talk about before-tax or after-tax; they will talk about what it's like to be a child living in poverty. I want you to notice that they're not talking about malnutrition or housing; they're talking about social exclusion. That's what they see. If this committee chooses to think about poverty, they will think about social exclusion.
In my view, the anti-poverty measures we have brought in as a government fail because they are targeted at the poor. They are designed, implemented, and administered by an elite that has no contact with poverty and no understanding of the lives of poor people. I'm not exempting myself; I'm part of that elite, and I know I don't know.
We encumber our anti-poverty efforts with regulations and red tape because of our paranoia that they might be overly generous or abused by poor people. Our efforts to target them just lead to eligibility criteria clawbacks--disincentives that simultaneously help people up while holding them back. Virtually all our support programs targeted to low-income people encumber the recipients as the price for assistance.
These programs are narrowly focused to keep costs low. The narrow casting, based on mistrust and suspicion, creates inequalities, complex eligibility criteria based on income and asset rules that nobody in this room, I contend, knows in detail, creating marginal tax rates that are often more than 100%.
Most of the programs I'll talk about have parallel programs for comfortable Canadians, us, which are less encumbering and on which we spend more money and are more generous.
If I have a couple of minutes, I want to quickly go through a raft of programs through which, I think, we could improve the well-being of low-income seniors. I'm not interested in debating whether or not their income would go across that imaginary poverty line figure.
OAS. Very quickly, is everybody here aware that the amount of OAS benefit you get if you're an immigrant depends on which country you came from? Generally speaking you'll get more money if you immigrated from a developed country than from a South Asian or East Asian country.
CPP. If you're low income, you get CPP. It's clawed back out of your GIS. There are problems with CPP take-up and retroactivity. I've been talking about this for eight years. It is overwhelmingly women who are eligible for CPP. The government knows who they are and where they live. They're eligible for CPP and they're not receiving the benefit. When they apply late, they do not get retroactive benefits despite the fact that this is a contributory program.
GIS. There is a 50% clawback. The new $3,500 exclusion is a good step. But why is it for wages only? Why is it not for earnings? Why are we allowing $3,500 of wages to be excluded, but not self-employment earnings? Again, it's a narrow casting. It's trying to be restrictive.
Widow's allowance. If you're 60 to 64 and you're low income and you're single, you can get a relatively very generous income support as comparable to OAS/GIS if you're a widow, but not if you're single, not if you're separated, not if you're divorced. What's that about? If he dies the day before your divorce, you're eligible. If he dies the day after, you're not.
Twenty-four percent of the private sector has an employer pension plan. Eighteen percent of the private sector has an employer pension plan that you would want. We are going to have a lot more people in the future, and we know the coverage rates for pensions plans are going down. We're going to have a lot more people. OAS is $6,000. CPP is $10,000, with an average of $7,000, and an average of $5,000 if you're female. GIS is $3,000 to $4,000. The more income you get from other sources, the less GIS you get.
Eighty-two percent of people retiring without a pension have an income of below $20,000.
Do I have two minutes? I'll go very quickly.
Prescription drug plan coverage. Deductibles and copayment rates are much higher for the public plans than for the employer plans. The public plans--I mean the plans that are administered by governments--have formularies, lists of drugs they cover. The employer plans that most of us would have don't have that list. If your doctor prescribes it, you're covered.
Employment insurance. There has been a cut in benefits by one-third in the last fifteen or twenty years, and by one-half for poor people. The poorer you are, the less likely you are to be eligible for benefits.
Maternity benefits. Under EI, which about half of new mothers get, there is 55% replacement, no more than $400 per week, with a two-week waiting period. Under the employer plans, there is 93% replacement, no two-week waiting period, and no maximum. Look at what Quebec's doing with the Quebec parental insurance program. It's superb. It's not perfect, but it's a huge step in the right direction. Again, here's a benefit program for low-income people that is much more restrictive, targeted, and less generous than a program for “valued” Canadians.
Learner bonds. What a wonderful idea. This is a benefit to go into RESPs for low-income Canadians. The last I looked, the take-up rate was still less than 10%. This is money available free for people who are low income.
Student loans, millennium scholarships. We're going to give people money. Let's make it taxable and then some provinces take it out of their student loan.
learn$ave. This is a demonstration program to encourage savings among low-income Canadians. After the fact, Finance has decided it can't live without this money being taxable, which means it's clawed back out of your child benefit and GIS.
Child tax benefit. This is a wonderful program and a wonderful initiative if you're working poor. But you probably know how people on welfare felt about the child tax benefit and how it influenced them and how they were used as sherpas to ship money to the province.
The working income tax benefit. It's not a bad idea. You can't get it if you or your spouse have been a student for three months in the last year. Why are we doing this? I don't understand.
Child care. There's so much that could be done on child care.
Social housing.... On welfare, which is not a federal responsibility, we can do better.
Thank you for your attention.
:
What we did was look at the initiatives of other countries to get some sense of what they were doing. They didn't in fact specifically focus on women, but they did develop composite indices. Then we looked at the research around women's income, both within families and individual women. On the basis of that, we developed four indicators that we felt were important--from our research, anyway--to add, because it provides a multi-dimensional....
The good thing about the composite indices that have been developed in Europe particularly is that some of them show in fact that different people will turn up as being poor, depending upon the indicator used. And I guess it's reinforcing the point that Richard made--depending upon your definition, what you include.
We felt that for women in particular there were four areas: around education, because their level of education oftentimes is influenced considerably differently from that of men; health indicators, because life expectancy, maternal mortality, violence, and so forth affect women's ability to work; the quality of housing, and those kinds of measures, to some extent, have already been developed, particularly in the housing standards; and employment indicators, in terms of their employment, the record of employment participation, the longevity of their employment, things of that sort, and also in relation to the family support.
One of the astonishing things that still persist is this. Unfortunately I have not seen studies in Canada, but there are certainly studies done in most European countries and several countries around the world on the differential incomes within families. For a variety of reasons, low-income women are disproportionately disadvantaged in that respect. So we feel it would be important to have indicators related to what's going on within the family, around the kinds of supports they're getting, the kind of independence they have in terms of their income sources, and so on.
Those are the kinds of indicators we felt were possible. Those various indicators have already been tested to some extent for other groups in other countries, so they are possible.
:
Could I follow up on that briefly?
I think what's interesting in Europe is that a number of countries have actually adopted a suite of indicators to track poverty and material deprivation. In fact, I think one of the troubles or stumbling blocks that we voice in Canada...because we've obviously been in this place of limbo for many years around whether the LICO, for instance, the poverty line, is not a poverty line. I actually have to take Richard's point of view, that these sorts of things are a bit of a diversion. Any measure is going to be as good as it is designed. Measures are targeted to reveal particular things, and there will never, ever be one perfect poverty measure. I think what we need to understand is that we may well need different types of measures to track different types of important things.
The LICO, which is much maligned, actually is a very important historical measure. It has been a very credible and rigorous tracking of low income and income inequality in Canada for these many years. We do not have measures, for instance, for material deprivation, and that's what Glenn was talking about.
In Europe they've actually supplemented their relative income poverty lines with a series of deprivation indices, and they report on both. Ireland has taken this step and created a combined measure. If you look at England, when they announced their target to reduce child poverty significantly by 2020, they introduced three different income measures to track their progress, some of which were better targeted to actually tracking program outcomes, and others were tracking income and inequality outcomes, both of which were important.
The idea that we need one measure, I think, is wrong-headed, and maybe the committee could think positively and constructively of a suite of measures to move our agenda forward on this very important topic.
:
Thank you very much for taking the time to make your presentations this morning.
As you know, we're grappling with the federal responsibility where poverty in the country is concerned. I don't think we need to look much at whether there is poverty and what it looks like; I think we have a pretty good idea that it's there. As Mr. Shillington said, we have spent a number of years trying to define poverty and not really getting to actually dealing with poverty. In fact he makes a very good case that perhaps the exercise was trying to define poverty out of existence as opposed to actually doing something about it.
Katherine, you talked about local approaches to unique challenges in different areas in the country.
Glenn and Drummond and the Canadian Association of Social Workers talked about the fact that poor children, whom I think we've latched on to in a fairly dramatic way in the country, are always attached to poor families, and in most instances it's a poor mother trying to look after that child.
Richard, you talked about social exclusion. You had an experience at St. Christopher House in Toronto, where you actually came in contact directly with folks who are living in poverty and heard from them. And I think you did a wonderful piece in the Toronto Star at one point.
You also referenced a poem, which was first published by ISARC in Ontario, called Poverty Is. It's actually on my website, if you want to go there and check it out. It is a wonderful description of the day-to-day challenges of children as they grapple with the issue of poverty.
As quickly as you possibly can, what should the federal role be, in your view?
We can start with Katherine, and we'll work our way across.
:
I'm not going to repeat what Katherine said, but I wanted to highlight a couple of things that I think are important, to be brief about the distinction.
One, I think, is that there has to be respect for the division of responsibilities between the federal government and the provincial and territorial governments. That means, for me at least and I think for us generally, that we see various types of income transfers as largely the responsibility of the federal government. It has the resources to do that across the country. It can create equity across the country by doing that in a way the provinces can't. Historically, to some extent, it's been accepted.
Services and programs should be and are the responsibilities of the provincial and territorial governments and they should remain there.That's why, for example, in terms of our housing proposals, if you understood them, what we were saying is that both the allowance and the mortgage benefits are essentially income transfers of one sort or another, and we saw that as a federal responsibility, not a provincial responsibility. In the housing sector there are lots of initiatives. Most initiatives are really provincial responsibilities in relation to housing, but there can be income transfers in the housing sector that clearly pertain, at least, to the federal government.
The other thing I would say around the poverty measures is that I think there is an advantage in the federal government's developing a composite poverty measure. I would say that there's an advantage politically, because one of the results of the experiences in Europe is that in developing these composite measures they more and more engage the public in defining these things. In fact, once you're just focused on income, people tend to yawn or take a disinterest and say, “I have that level of income and I can get by, so the other person can't get by with $10,000 or $7,000 or whatever.” But when you start asking people themselves and engaging people in that exercise, it begins to change political attitudes about poverty. That was a significant development, a side effect so to speak, of the development of policy measures in Europe. I think it would be a side effect here as well. And I think that is a federal responsibility because again it's national in scope.
The final thing I would say is in relation to demonstration projects. There are still lots of things that are best practices, based upon other countries and what has been done in other countries, where the federal government could take the lead.
:
I have a couple of comments.
I happen to know that there are about 150,000 people on welfare in Canada who are 55 to 64. I just have a habit of remembering numbers. We know that most of them are probably not going to bounce back into a job. The welfare regulations will strip them of any assets and any hope of improving their circumstances, so this is probably, I would say, serving no useful purpose.
I mentioned in my presentation, and I'll come back to it, that there's a widow's allowance program, which is for people who are 60 to 64 who meet an income criterion, and it gives them about $13,000 a year. It's not a lot of money, but it is perhaps double what they would get on welfare.
There are about 20,000 or so people getting the widow's allowance. There are about 120,000 people, single people on their own, who meet the income criterion for the widow's allowance but who don't happen to be widowed. There has been a Supreme Court challenge of the widow's allowance on the grounds of marital status discrimination. There's a perfect example of what you're talking about. The federal government is already giving it to widows but not to single, divorced, or separated people. Those people, if they're on welfare in Ontario, would be eligible for $6,000 a year, serving no useful purpose.
I know that the Caledon Institute published a paper recently on the cost of making the widow's allowance broader. So there are some papers out there, and there's a precedent with the widow's allowance.
:
Well, I can start the discussion on that.
I think there are several countries in Europe.... The committee would well know that the Scandinavian countries in general are quite ahead of us in this regard while maintaining high economic growth. Both at an economic level and a social policy level, they set a kind of standard. In addition, England, certainly during the Blair administration, moved quite dramatically to address a lot of these issues, some of them successfully, some of them less so, but nevertheless they did experiment and have come up with some measures of success.
It so happens that Wendy Thomson, who is one of the people who headed up that initiative in England, now lives in Montreal--McGill University. It might be worthwhile talking to her to get some better sense of what's going on and what went on there. She certainly is in touch with what's going on there currently, so you'd have a good sense from that.
Other initiatives have been taking place, both in France and in the Netherlands, in terms of these kinds of initiatives now. France has run into a lot of difficulty because of their income security programs--the high level of them--and as a consequence, they are trying to get people back to work, and so on. Again, one of the programs there that have been relatively successful is for employment of women, particularly middle-aged women.
One of the problems you talked about is not only the 55- to 64-year-olds, but particularly when you get down to the lower ranges there, women still can contribute quite significantly to the economy, so you don't have to write it off as an income transfer there. Perhaps with the 60- to 64-year-olds that's the case, and I would agree with what Richard said earlier, that the allowance and trying to extend that down to single women and so on would probably take care of that cohort.
Generally I would say most northern European countries have welfare systems that frankly, on the whole, are not much better than our own, but they have far fewer people on welfare than we do. And it's because of these other kinds of initiatives, particularly employment market initiatives and other kinds of income transfers for family and child care, that they keep people out of welfare, including these people you were talking about.
:
I'll jump in, because I actually did a fair bit of research for Senator Kirby, which was used, and I have actually in my paying life, my salaried job, done a lot of work on pharmacare coverage.
Generally the pharmacare problem is a maritime problem. You're talking about people who do not have coverage whatsoever, basically people who are of working age in the Maritimes. Actually, some provinces are now moving into that area, thankfully. I believe Nova Scotia and Newfoundland are. Many of the provinces have it. Certainly the prairie provinces have reasonable coverage, but the deductibles are extraordinarily high. You have $800,000 deductibles for a public plan targeted at the need, whereas I think your deductible is $60, if that.
So we have a program that is far less generous for the poor, which is standard. This is what we do with maternity benefits, child care, everything. The programs for the poor are less generous.
The federal government has an initiative around catastrophic drug coverage, but that's strictly for catastrophic. That's for your $4,000 to $5,000 drug care, and we're talking about life and death here, you know that.
So we move that ahead. What I would do is this, and I have no idea if it's in your jurisdiction. There are formularies attached to all these drug plans, and I would say that in each province the formulary for the publicly administered drug plan should be the same as the formulary of the person who administers the program--his employer health benefit. I've always liked to latch on to self-interest, which is why Canadians understand why we don't want two-tier medicine. The reason we want one-tier medicare is so we're all sharing the same program. And we don't do that on dental.
I have one last quick comment. This poem about kids is about hot dog days, it's about field trips. How early does a child who is low income in Canada learn that they're low income? I suspect they learn very quickly. If they haven't learned by the time they're in kindergarten or grade one, they learn there, when they discover that they're not going on the field trip or they can't take art.
Did I use his time? I'm sorry.
Somebody here said that all poverty measures are relative in that even the market basket we have today is different from the market basket in Pakistan, different from the market basket we had 20 years ago. Actually, to me the critical issue--one that nobody has mentioned--is with regard to when the market basket is adjusted, if you accept that should happen, to reflect the living standards of Canadians in general. If our standard of living goes up 20%, does the poverty line go up at all, or is there no influence? Some people would argue that there should be no effect. Other people would say, no, we're richer; our obligations to the children change.
A critical question, because actually it's political, is whether that adjustment is automatic or ad hoc. The low-income cut-offs are called “relative” because every once in a while they get re-based. That's what makes them relative. If they're not re-based, they're not relative. They're back to being an absolute measure of poverty, where the standard of living doesn't change in time.
The low-income cut-offs were started around 1968. They're re-based every seven or eight years. As you well know, they have not been re-based since 1992, which is one of the reasons why reported poverty--if we use LICOs for poverty, even though we're told we shouldn't--is going down. It's because they haven't been re-based. If you re-based them, I guarantee you the poverty rate would jump.
Statistics Canada, basically on its own, as far as I know, decided not to re-base it. It decided on its own to turn a relative measure of poverty into an absolute measure of poverty.
The market basket measure of poverty, created by HRSDC, was created at the behest of the provincial ministers of social services because they thought LICOs were too generous. I'm not just saying that; I can show you documentation where that's said. It was designed to reflect living standards of low-income people, not general living standards. That was part of the control. So it's not a relative measure of poverty, it's a measure of poverty for the poor. And changes to that basket will be subject to the approval of the provincial ministers of social services, who set welfare lines. That's a wonderful system for them. They can control welfare rates and they can control the poverty line against which they're compared.
The question is, who gets to do the adjustments? Nobody has really talked much about the low-income measure--effectively the half-median--that's the international standard for a developed country. You heard evidence last week that there is no international standard. I disagree; it's LIM, the low-income measure. The problem is that the LIM doesn't do geographic adjustments at all.
So I would recommend, if I had to come up with a poverty measure, the half-median with some reasonable adjustments for geographic differences in housing costs, the way MBM did. I would recommend that it be adjusted not ad hoc, not subject to the ministers of social services, but annually. That would be my preference.