HRPD Committee Meeting

STANDING COMMITTEE ON HUMAN RESOURCES DEVELOPMENT AND THE STATUS OF PERSONS WITH DISABILITIES

COMITÉ PERMANENT DU DÉVELOPPEMENT DES RESSOURCES HUMAINES ET DE LA CONDITION DES PERSONNES HANDICAPÉES

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, November 25, 1997

• 0909

[English]

The Chairman (Mr. Reg Alcock (Winnipeg South, Lib.)): Order. Let's get down to business.

Welcome to the ninth meeting of the Standing Committee on Human Resources Development and the Status of Persons with Disabilities.

To the five of you who are here, welcome. Some of you we've seen on other occasions and some of you we've seen very frequently. I appreciate your taking the time to come today.

• 0910

The purpose of the process we're going through right now is simply because we're in a new Parliament with a new and significantly larger committee, and we thought it useful, as part of our getting up to speed on the issues, to bring in folks with a depth of experience to participate with us in a discussion about the program areas in which they are particularly interested.

I understand Suzanne Peters is ill today and is unable to be with us.

Ken, you are a replacement or...?

The Clerk of the Committee: A late arrival.

The Chairman: That's why you're not on this sheet.

Richard Shillington, from the Caledon Institute of Social Policy—

Mr. Ken Battle (President, Caledon Institute of Social Policy): No, I'm from Caledon.

The Chairman: I'm sorry; I'm reading it backwards.

Richard, you're an individual.

Mr. Richard Shillington (Individual Presentation): Yes.

The Chairman: Okay. We have the individual, Richard Shillington; from Caledon, Ken Battle; from Frontier College, John O'Leary; from One Voice, The Canadian Seniors Network, Ivan Hale; and from Federal Superannuates National Association, Keith Patterson.

I suspect we're going to see more of the latter two over the next few months—and years.

Have you managed to negotiate among yourselves as to how you wish to proceed?

Okay. It's been suggested to me that we start with Richard Shillington, then go to Ken, and work our way through the list. We'll get some positioning presentations out and then see where the discussion takes us from there.

Mr. Shillington.

Mr. Richard Shillington: Thank you.

First of all, I would like to thank the committee for inviting me. It's flattering, particularly since I don't represent any organization or think-tank. But I have spent a considerable amount of time over the last many years thinking about various areas of social policy.

I want to thank the clerk, who had translation arranged. I'm an individual, and limited to one language. I did receive some assistance with translation.

I've handed out two documents that I will be referring to. One is called “A History of the Child Benefit System: Constructing an Illusion of Fairness”. The second one refers to questions one might ask about the national child benefit. I'll be referring to those. I'll try not to speak too long.

I want to talk first about the child tax benefit and the issue of deindexation, or partial indexation. Then I want to comment on the proposal included in 1997 budget.

Some of you, especially those who were just elected, may feel as though you've walked into a movie, and the movie is near the climax on the child benefit. I want to go through a bit of history. It might help you understand why people are behaving the way they're behaving around child benefits.

The child benefit system has been under heavy renovation since the early 1980s. It's never been static. It's never been standing still. But certainly since 1984 it's been changed dramatically from a program based on universality to a program based on targeting.

The budgets of 1985, 1989, 1992, 1996 and 1997 all had similar themes. Each budget talked about changing benefits so that affluent or wealthy Canadians would lose and low-income families, poor families, would gain. The moneys would be targeted more to those most in need.

There has been a consistency in those budgets and the official documents that went with those budgets to highlight, and I would say overstate, the increase in support for low-income children. The main method used for that is that all of those analyses, all of those documents released with budgets, ignored inflation when making comparisons.

The document I distributed on the history of the child benefit system basically pulls together a series of quotes from all those budgets; from the media coverage that went along with those budgets; and where appropriate, quotes from comments made in front of this committee, other similar committees, and the finance committee by political people and by officials.

• 0915

The quotes would lead any casual observer to assume that support for poor children exceeds what it was just a few years ago and that this is across the board. The reality is that the only across-the-board increase for poor children was announced in the 1985 budget. In that budget, increases that would be phased in over three or four years were announced. Since 1989 the only increases in the child benefit have been in the work income supplement, so the only increases in the base amount have been for the working poor. The across-the-board levels were set in 1985, were increased up to 1989, and then left there, and inflation has been eroding the value of those benefits since.

If you look at the third page of this document, “A History of the Child Benefit System”, a table compares the 1985 and 1997 benefit levels for a family with two children. The numbers are taken from the 1985 and 1997 budget documents, and the inflation rate statistics from Statistics Canada. For families with two children, a low-income family relying totally on welfare gets less benefit in 1997 than it did in 1984 by a little over $100, which is not a huge reduction in their benefits. But remember that these families were supposed to gain through all of these changes. These families were supposed to be the beneficiaries of the funds taken from high-income families.

I have one line for one family with an income of $10,000 in 1985, which would be about $15,000 now. They are winners. They'll be ahead by almost $900 once the 1997 proposal is put in place, because they will be beneficiaries from the larger expanded support for working poor families. A family with an income of $29,000 now is getting about $500 less support than they would have in 1984.

This is one of the areas where it is hard for me to stay calm: it's the extent to which not only modest-income families but families that are near or just over the poverty line are getting less support now than they would have had we left the system alone. These families are not wealthy. This system was sold on the basis of attacking wealthy and affluent Canadians and taking money from the “banker's wife”. But the losses were not limited to wealthy and affluent Canadians, and that's why I called that series of quotes “Constructing an Illusion of Fairness”.

If you pull these quotes together and look over the whole document, what do you find? In the quotes from the various documents, we see that support for poor children is being increased, that the losers are affluent and wealthy Canadians, and that federal spending in this area has been increased. You can find that in each of those budgets. There will be documents about how many extra hundreds of millions of dollars went into the child benefit system.

What those documents don't indicate anywhere—and I don't think you'll find an official document anywhere that acknowledges this—is the erosion of the value of the spending on child benefits or the number of poor children whose level of support is eroding, not all children but many, and the fact that support for modest-income families, those who make $27,000, $30,000 or $40,000 a year, has declined by hundreds of dollars.

What happens when advocates are rude enough to point these things out? On the deindexation issue, the normal response is “We're making adjustments ad hoc as necessary, so please trust us to maintain that”. When advocates talk about how much less money there is in the child benefit package now, the normal response is “We don't think your figure is correct”, but I've never heard anyone issue a correct figure. They simply attack your figure without substituting a “more accurate” figure.

So all this sleight of hand is done via deindexation. In a world of inflation, someone who is standing still could actually be moving. In a world of inflation, benefits can erode even though they appear to be staying the same.

• 0920

With that comment, I would like to move on and talk about the 1997 proposal. We have on the table $850 million in new dollars, but of course that's new dollars depending on where you pick your reference point. That's new dollars compared to what it would have been without that budget.

But it's not all new dollars when you compare it to 1993, when the Liberal mandate began, because you've had the erosion of support. How much of the $850 million is actually just catch-up for the erosion of support since 1993—indeed, since 1994? We don't have that figure in front of us.

I welcome the $850 million, as I'm sure all advocacy groups do. It's the most significant increase in support for this area since I've been working in this area. It's the most substantial new money. But let's keep it in context and recognize it for what it is: a lot of this money, or part of it, is just catch-up, it's not all $850 million new dollars.

The proposal leaves deindexation in place. The decision was made to not fully index the child benefit as part of the 1997 proposal. Why would you make that decision? Why would you put in place a system that will guarantee that modest-income families and families that don't have earned income will continue to see their benefits erode?

The families that are not going to benefit from the new supplement are those that don't have earned income. These are families that are on social assistance because of disability. They are less likely to have earned income. Aboriginal families in isolated communities are less likely to have earned income.

Take single-parent families. We know that about half of poor children live in single-parent families. If it's a pre-school child, there are many reasons why earned income in those families is a real problem. It's a special problem. They're less likely to benefit from the child benefit in the way it's proposed.

So I welcome the $850 million. I'm disappointed that some of those funds were not used to fully index the benefit so as to make sure the benefits do not continue to erode. You could have taken, I'm told, about $150 million per year from the $850 million to fully index the benefit. By doing that, there would be no losers. No longer would you have social assistance families and modest-income families continuing to see their benefits erode.

You could have taken the rest of that money and chosen perhaps to put some of it into the welfare wall—perhaps two-thirds or three-quarters of that fund—and then put some of the money also for the families that don't have earned income. This is so we wouldn't be playing into a popular myth now about welfare families.

I think that would have been a more judicious way of spending the $850 million: take a portion of it to fully index the benefit; don't put all the rest into the welfare wall; and put some of it also into support for families that don't have earned income, and also for families with incomes that are at what I call a modest level.

I hope I didn't take too much of your time for that presentation. I look forward to the discussion.

The Chairman: Perhaps, Ken, we can move to you. I understand that you are crossing both children and seniors a bit.

Mr. Ken Battle: Given the short time, I won't attempt to give a full presentation. I just wanted to talk a little bit about child benefit reform and then briefly about the seniors benefit.

I should warn the committee members who don't know me that I'm not a disinterested observer when it comes to these two reforms, since I proposed the seniors benefit. I worked with the government on that and the child benefit. I'm putting my cards on the table. I hope I can still be critical about those programs, but I'm certainly not an outsider on this one.

Late last week Caledon released a report that I want to draw your attention to. It's being distributed. It's called “Child Benefit Reform in Canada: an evaluative framework and future directions”.

This report was co-funded by Human Resources Development Canada and the Government of British Columbia. It provides—this is partly the way in which Richard was just speaking—a pretty sweeping look at the history of child benefits in Canada, the roots of the basic concept of an integrated child benefit that underlies the reforms that were announced in the 1997 federal budget. The paper actually tries to do a number of things.

• 0925

The reason why British Columbia helped pay for this is that British Columbia is the first province to have implemented the kind of child benefit reform that federal-provincial governments are working towards in other parts of Canada. This is the B.C. family bonus, and we have an entire chapter devoted to that new program.

One of the purposes of our report was to give the federal and provincial governments—not just British Columbia, but both levels of government, since they have been working together on the national child benefit—advice on two things, really. One is how we think the national child benefit should evolve, since the announcement in the 1997 federal budget was really only the birth of that program. There's a long way to go yet, I think most people would agree, so we put some fairly tough markers down about the way we think the benefit should develop. And I'll come back to that.

The other thing we do in the paper is try to provide to governments and advocacy groups a set of criteria by which the progress towards, or lack of progress towards, the national child benefit vision unfolds in the years to come. We provide a critical assessment of the three objectives the federal and provincial governments put forward for the national child benefit. Those were to help prevent and reduce the depth of poverty, promote attachment to the workforce, and reduce overlap and duplication. We have some ideas about how the government's three objectives should be interpreted, but we also add four objectives to that list. Those objectives are the objectives of adequacy, fairness, promoting dignity and independence of families, and economic stabilization. So we actually put forward seven major objectives for child benefit reform.

We take that evaluative framework, if you will, and apply it to the current system that we're trying to reform. Not surprisingly, we find the current system wanting in a number of ways. We also apply it to the announcements that have been made by the federal and provincial governments about the national child benefit. And although we don't have a lot of information, we talk about what several other provinces are doing and what we know so far, specifically focusing Quebec. We know less about Saskatchewan's plan, and we know a bit more about Alberta's. We sort of go through the provinces that have already made announcements about how they're going to be playing their part in the development of national child benefit. And I should emphasize that Quebec has not formally been part of this process, for reasons that are well known to members of Parliament. The interesting thing is that from a policy point of view, Quebec is right there.

One of the fascinating things about a national child benefit is that it is a proposal crossing ideological, partisan and language lines. It's a very interesting proposal, and I would just underline to members that we regard the national child benefit as a much more fundamental reform than simply a badly needed reform and improvement of child benefits. It's going to be the biggest reform to the welfare system since we've had that system. It's going to help start the badly needed process of dismantling the welfare system, which is Caledon's objective; we think the welfare system will never work and has to be ripped down totally. We also believe a national child benefit holds out some promise for renewed federation and the future of the country, believe it or not—and I don't say that just as a rhetorical gesture.

I'll be happy to answer questions. Obviously I can't go through all of the detail of this massive report, although there are two things I did want to mention.

The markers that we put down have to do with adequacy of benefits. We put down three markers. One, the benefit and the threshold should be fully indexed. I guess Richard and I probably have spent more time in our careers than anybody else bemoaning the devious impact of partial indexation. We've done a lot of work on that, and I completely support what Richard said on that. We have an entire section devoted to the problems that are going to be caused by partial indexation in the new benefit, because it's carrying over from the old.

• 0930

So the benefit should be fully indexed, but we put down two targets. First, we argue that within two years the maximum Canada child benefit—that's the federal benefit—should reach $2,500 per child. That's up substantially from the initial amount of $1,625 for the first child and $1,425 for the second child. That $2,500 figure would be roughly the amount—and I say “roughly” because it would vary from one province to another—to displace fully all social assistance benefits for kids, which is the first objective of a national child benefit.

Beyond that, we argue that there should be further investment in the child benefit, for it to reach a level of approximately $4,000 per child—that would be subject to a study that we recommend of the cost of raising kids—so our child benefit system could offset a large portion of, or fully, the costs for low-income families of meeting the basic needs of their children.

That's the vision we have of the role of the child benefit system. It would fit into the rest of social policy for families with kids.

Child benefit reform is not a magic bullet. There are no magic bullets in the fight against poverty. It requires a broad range of programs: income programs, employment programs, services. It extends, to my mind, to fiscal and monetary policy. Anybody who treats the national child benefit as if this is the only thing the federal and provincial governments are going to do in order to do more to fight child poverty is deluded, and any politician who sells it that way is not telling the truth.

I will speak very quickly on the seniors benefit, because I know my colleague Keith Patterson will be talking more about it. Since the seniors benefit was proposed in the 1996 federal budget, there has been a slew of criticism of it, which is not surprising. Any time you try to reform elderly benefits you walk into landmines.

Much of that criticism has been, I think, ill informed. Much of it has been highly exaggerated. Some of it is to the point, but much of it has been hysterical. It has fed seniors' fears about change, and seniors have every right to be fearful of changes in benefits.

I think the attack has come from the left and the right. Some of the attack surprised me; the attack from the right surprised me more than the attack from the left. But attack there has been.

What I'm recommending to government—I've served as adviser to Ministers Pettigrew and Martin on this—is that some changes be made to the original proposal that was in the 1996 budget but that the essence of the seniors benefit go forward, because I think it's a fundamentally important change.

This is a proposal that is not going to bring the current government or the next government any good news politically. This is a change that has to be made for future governments, so future governments can maintain the level of support—and hopefully improve the level of support substantially—that past governments and the current government have managed to provide to low- and modest-income seniors.

I firmly believe cost increases of an aging population, not just in income security benefits but in health and social services, cannot be underestimated. Governments have a responsibility to be prudent, to be small “c” conservative in this, and to be looking to the future to create a sustainable program.

That being said, I think the critics have raised some valid criticisms of some of the design features of the original proposal, which I think need some compromise. I'm talking specifically about, one hopes, some larger increases in maximum benefits for low-income seniors. The program has to be phased in over a longer period to be fairer to near-seniors. Any major pension change needs a longer phase-in period. The reduction rate for the higher band of income, the 20%, is too high and should be reduced somewhat. One may want even to look at the level of the threshold, although that remains to be seen.

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The one change I would not go along with is any change in family income testing of the seniors benefit, because that's the essence of the reform, and without family income testing you don't have a seniors benefit. I know that's a contentious issue and I'd be happy to respond to it.

With those provisos, with some needed amendments to the original proposal, I'm hoping the government will go forward with legislation. I think the seniors benefit is a badly needed reform—and, I repeat, one that we don't need right now but that we'll need when my age group hits 65, which is not that far off. Thank you.

The Chairman: I think we'll move up the age scale to youth. Next is John O'Leary, and then we'll come to Ivan, and then, Keith, you can round it out.

Mr. John O'Leary (President; Frontier College): Thank you, Mr. Chair. Thank you to all the members of the committee for inviting me to be with you this morning. I have handouts about Frontier College and the issue of literacy, which I would like to briefly address, and then I hope to have some conversation with you.

To begin I would like to tell you a story. I'm a teacher, and I know there are other teachers in the room; it's one way to present this issue of literacy and illiteracy in our country.

In 1976 I was a young teacher in a federal prison in Winnipeg, Manitoba, Stony Mountain. With my long brown hair, my brown bell-bottoms and my paisley T-shirt...those of you who remember how we all dressed at that time know it was pretty frightening. I started a small literacy program in the federal prison. Most of the inmates then, as now, were young aboriginal men. I remember for the first week after I started the literacy class no one came. Now we know, and we knew then, that large numbers of federal and provincial offenders have serious literacy problems. I was a bit puzzled that no one was coming to my literacy class.

Finally one evening, a Friday, when I was packing up after waiting in an empty room for almost three hours, and was very discouraged, a young man came in, whose first name was Joseph. I still remember him. He would have been about 30 years old. He came in, and he didn't say to me, “Mr. O'Leary I am illiterate and I would like to become literate”. He came in with his AA book, his book from Alcoholics Anonymous, because his goal was not to become literate, his goal was to remain sober. He had concluded that through being able to read this book...some of you may know the AA program is based on a thick textbook written almost 40 years ago. In order to help himself have a better future and in order to maintain his sobriety, he needed to be able to read and to write. That's how we began.

I make that point because literacy is a tool. It's a tool that enables an individual to achieve personal and professional goals. Some of them are very ambitious, some of them very modest, but all of them are very important.

For a country, I think literacy, knowledge and education have the same identity. Our commitment to education, learning and literacy as a country is a commitment to the improvement and the betterment of our individual and community lives, the lives of ourselves and our children for the future.

I just want to set that tone.

[Translation]

I am the president of Frontier College, a volunteer-based literacy organization. We teach people how to read and write and we try to develop, in them, a desire for life-long learning. We go to where the people are and we meet their specific learning needs. In our opinion, literacy is everybody's right.

[English]

Literacy and education is a right for all.

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The college was founded 98 years ago, in 1899, by a group of young Canadian university students. In terms of your reference to youth, Mr. Chair, I think it's worth noting—and I wish that more parliamentarians and more citizens of our country knew this—that the first literacy program in this country was started not by teachers, not by social workers, not by government officials, but by young Canadians determined to serve others living in poverty and isolation through the power of knowledge and learning. They started to teach in isolated work camps throughout the northern part of our country, and that's where the name Frontier College comes from.

Today, our mission remains the same: to fight poverty and isolation through the power of knowledge, learning and literacy. We still recruit and train university students as literacy volunteers. Today, we have 4,000 university members at 40 campus sites in every province, and our goal is to organize at least 200 Frontier College members at every university in Canada by the end of 100th year, which is 1999. That would mean almost 20,000 young, committed literacy workers. That's our plan for the future that we're working on.

I want to make two brief points about the literacy issue. As I mentioned, I've been a teacher a long time, and I've been a literacy teacher for almost 25 years. The biggest progress in this issue, however, has been over the past 10 years. There has been a great leap forward in the past 10 years in terms of the awareness of Canadians about illiteracy, and in action in support of literacy.

In 1987, 10 years ago this fall, the first literacy survey in our country was published. It was called Broken words: why five million Canadians are illiterate, and those of you who remember it may recall that it caused quite a lot of turmoil. There was a lot of skepticism. People didn't believe it, but it led to some direct action.

In 1988, the federal government set up the National Literacy Secretariat. The United Nations Year of Literacy, which led to a lot of public awareness, was 1999. In 1991, partly resulting from the skepticism about the 1987 study, Statistics Canada did a follow-up survey, which confirmed that approximately 20% of Canadian adults do not read well enough to fully participate in today's society. In 1993, those of us in the field were delighted with the appointment of the first ever federal Minister with special responsibility for Literacy, Senator Joyce Fairbairn. The senator has been and remains one of the strongest advocates for this issue, and one of the most effective advocates. And in 1995, an international study was produced by the Organization for Economic Co-operation and Development. The IALS study, which I recommend to all of you, compared literacy rates among western industrialized countries, once again confirming the numbers.

So we know we have a serious issue. We've made, in my judgment, significant progress over the past ten years. I want to acknowledge the efforts of the federal government through the National Literacy Secretariat. There was a significant increase to the budget of the secretariat in last year's federal budget. That does help; it does make a difference. That money goes to grassroots organizations across this country, enabling more people—adults, children and teens—to learn to read and to write. We have made very real progress, of course, but we have a huge distance to go because the numbers are very high.

I want to finish by making an observation on that. I'm sure that if you talked to your colleagues or your constituents about illiteracy, many Canadians would be shocked about how this problem can exist in a country as wealthy as Canada.

As I say, I work in an organization that was founded in 1899. If you come back to 1899 Canada with me for a moment, think of the lives of the people then. Looking around the room, for most of us those were the lives of our grandparents. In 1899, how many Canadians went to school for more than five, six or seven years? Frankly, I've never seen accurate data about that because in most parts of the country records were not kept, but I think most of us would acknowledge, just knowing something about Canadian history, that very few of our grandparents had the chance to go to school for more than five, six, or seven years. They went to work.

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Look at how far we've come as a country in less than 100 years. It makes me very optimistic, as an educator and as a citizen. Yes, we have a huge distance to go. There are almost 5 million citizens in this country who cannot fully participate. Never mind the new economy; they can't read your householders. They can't read the election materials you passed around to them last spring.

So we have a huge distance to go. But based on how far we've come in a very short time, I'm very optimistic we can mobilize the will and the action to go the rest of the way.

Finally, what causes illiteracy? What is at the root of it? There's a lot of debate and discussion about this. I was contacted recently by CTV news. They are about to do a major piece on illiteracy, which is good, and the reporter was just shocked. She said, “How can this exist, Mr. O'Leary, in a country like Canada?” I said, “Poverty. There's a direct correlation between illiteracy and poverty.”

Again, I ask you to consider your own communities, your neighbourhoods. You know the areas of your communities where, when you meet with people and when you canvass and when you hand out information, many of the adults can't easily read the material you are passing out.

I'm a constituent of Dr. Bennett, and you and I both know areas of our community where because of poverty people have less equitable access to education because of the circumstances of their lives. It's not so much what goes on in the school, it's what does not go on in the home and in the community. That's what is at the root of illiteracy, and I think that's what connects this issue to the general deliberations here.

My final comment is that I think our commitment to literacy has to do with our commitment to fighting poverty in our country. A friend of mine who is also a teacher once told me, you know, children and young people living in poverty don't need us to worry about them, they don't need us to express our concern about them, they don't need us to be afraid of them; they need us to help them learn; they need us to teach them. That's something all of us as citizens can commit ourselves to as one means of fighting poverty in this country.

Also, on the other issues you're dealing with as policy-makers, when you're doing health policy, when you're doing justice policy, when you're publishing information about changes to the UI system, please take into consideration the fact that a significant number of citizens are not able to read print material easily. Call me. Dial “O”. I would be happy to help with plain-language presentation of information.

As just one example, the changes that have been made over the last two years to the UI system and that were published in newspapers across the country were, in my judgment, written at a college level. It was absurd.

Citizens need information about these issues we're talking about today. We need to present them in a clear and easily understood fashion.

The Chairman: Thank you very much, Mr. O'Leary.

Mr. O'Leary, I'm still fascinated by the images in my mind of the love beads and bell-bottoms.

Mr. Hale.

Mr. Ivan Hale (One Voice—The Canadian Seniors Network): Thank you.

I would like to take just a second to introduce the organization I'm representing. It's called One Voice—The Canadian Seniors Network, and it has existed for some 11 years now. It has a very long and eloquent mission statement, but I like to summarize its purpose by saying that what we do is address national issues that are of concern to our aging population. That's why so often we find we're not looking just at the interests of today's retirees, or today's population over 60 or 65; very often the kinds of things we're addressing, things having to do with proposed changes such as the seniors benefit, will indeed have an impact on today's seniors' children and their children.

• 0950

So it's the long-range view, and frequently that means we are speaking really on behalf of the pre-retired population, which doesn't always have a voice and doesn't always do research and present its views.

I'd like to read two very short parts from the throne speech. One said: “With the nation's finances in good shape, we will soon be in a position to make choices and investments that support this Canadian priority.” he priority being referred to there was employment. It went on to say: “We want to make sure that no one is left behind in the new economy. All Canadians from all regions and walks of life must share in its opportunities and prosperity.”

Well, today I'm not going to talk to you about the seniors benefit. I think Ken has already started that discussion, and Keith will follow very ably on it. What I would like to talk about is the needs of the working-age population, 45 years of age plus, because workers aged 45-plus are now categorized by Human Resources Development Canada as being older workers.

To give you an idea of how many of these there are, today there are about 6 million Canadians in that category, representing about one-third of the population aged 15 and over, but in the next decade it's going to swell to about 8 million. I mention this because the point I want to make is that we are ignoring the needs of this population in developing employment strategies for the nation.

To cite an example, the ministerial Advisory Committee on the Changing Workplace, which was set up to clarify the priorities and solutions in the federal workplace initiatives, recently released its report called Collective Reflection on the Changing Workplace.

Issues regarding workers 45-plus have been incorporated into that only in a very, very minor way—in a secondary way. While there was a committee member and a chapter devoted specifically to younger workers, there was no committee member or chapter devoted to the issues, problems and potential solutions for workers aged 45-plus, nor were their needs properly identified.

We are an aging population. Today the 65-plus segment of our population is about 12%. It's going to rise quickly in the next three decades to at least 20%. The demographics are clear. The characteristics, however, of those who are 45-plus suggest that their retirement may not be as happy or as fulfilling as the retirement that many of today's seniors enjoy.

As an example, today if you are an older worker and you find yourself out of a job, it takes you, on average, 33 weeks to find re-employment; that is twice as long as a young person—twice as long. The second fastest-growing segment of the labour force is people 45 to 54 years of age, and of course we've coupled this with the fact that we're still predicting that Canada is going to have a shortage of skilled and experienced workers in the future. If we're going to remain competitive globally, we're going to need to find ways to include older workers in our labour force, and in a productive way.

Unemployment among older workers is not as bad as among youths; I'll allow that. However, it is not altogether a rosy picture either, and the trend is what's troubling.

During the recession of the 1990s, the unemployment rate among persons 55 to 64 years of age rose to as high as 9.6%, whereas in the earlier recession it was only 8.2%. The situation faced by older workers, if they find themselves displaced—and frequently they are the first to go in times of restructuring or downsizing—is not a happy one. There's a huge amount of lost earnings. Lost earnings estimates in 1994 are calculated at about $14 billion. There was a further $4 billion in lost income tax revenues, and $5 billion in unemployment insurance and social assistance benefits just didn't happen. Of course there are other negative economic consequences, such as reduced consumer spending, reductions in consumer taxes or consumption taxes, and diminished savings and investments for the future.

• 0955

Recent studies of the workplace are confirming that workers 45 and over are often singled out for job losses when the firms want to reduce their workforces. They're often overlooked or bypassed when it comes to continued learning opportunities on the job. A vast majority of workers 45 and older who lose their jobs do so in these lay-offs because of plant closures or seasonal employment. Only 15% of them choose to leave their previous jobs because of dissatisfaction or family responsibilities. We have a situation where about one-quarter of the retirees today are retiring involuntarily.

So about one-quarter of the people who are retiring today are doing so involuntarily, and when you look at the figures that are measuring unemployment, those figures of course do not include the discouraged workers, those who have abandoned their search for re-employment. Many of those are older workers.

For those who are older workers and do succeed in finding a way back into the workforce, the majority experience salary decreases upon being re-employed. Many over 55 are not ever able to get re-employed. You might say that these people are close enough that they can afford to retire, but it ain't so.

Of all the households that are headed by someone 45 to 54, about half of them are comprised of a husband and wife in a family with children still living at home. Two-thirds of households headed by somebody 45 to 54 still have mortgages to pay or rental payments each month. Only one-third of them own their homes with no outstanding mortgages.

So families are experiencing great turmoil as a consequence of this unemployment, and with the resulting income loss, many are drawing on their retirement savings for the future. Just to illustrate that, in 1990 these Canadians contributed about $2.5 billion to RRSPs. That sounds good on the surface of it, but the same age group withdrew about $0.5 billion. So in 1990, for every $5 that was contributed, $1 was taken out.

John O'Leary spoke about the educational requirements in the workplace, and of course we know that as time advances, we are requiring higher education in order to keep up—not necessarily to get ahead, just to keep up. Almost half of Canadians 55 to 64 have not completed high school and only one in ten has a university degree. Literacy is a big problem.

Some of you may have seen articles in the Toronto Star and the Globe and Mail last week on some research we released that had been commissioned with the University of Toronto. It was an employer survey. It surveyed close to 2,000 Canadian employers, I think, all across Canada.

I'm sorry to admit to you that it did discover significant amounts of discrimination in the workplace, a bias against older workers. Also of interest to this committee is the fact that there is considerable bias in the workplace against persons who have disabilities. That came out of this very same study. I'd be happy to provide copies of that research report to the committee. Older workers are given fewer opportunities for training by employers and thus less chance to upgrade their skills. There are a whole lot of myths here.

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In conclusion, I would like to suggest to you that unless Canada develops a plan and makes a sustained effort to support this working age population, the 45- to 65-year-old bracket, we're going to be faced with unemployment for this large and important segment of the population for many years to come. We'll have to live with the social, emotional and economic consequences that result, and I predict they will undoubtedly worsen.

However, by meeting the needs of the current generation of workers 45-plus, and by taking preventive measures, Canada will be better positioned to meet the challenges of our workforce into the future. The particular needs and characteristics of this population are not negative. They can be very beneficial to the workplace if we harness them properly and design our workplace appropriately.

Thank you.

The Chairman: Thank you, Mr. Hale.

Mr. Patterson.

Mr. Keith Patterson (Deputy Executive Director, Research, Federal Superannuates National Association): Thank you, Mr. Chairman. I'm very pleased to be here today and to have this opportunity to assist in familiarizing you and your colleagues with some of the upcoming issues you will have to consider.

The Federal Superannuates National Association represents retired members of the Public Service of Canada, the Canadian Forces, and the RCMP. At the present time we have about 100,000 members across Canada and abroad.

We are also a member of the Coalition of Seniors For Social Equity. This is a coalition of seniors organizations. One Voice is a member of that organization also.

While I believe they would generally agree with what I will be saying here today, I'm not here on behalf of that wider organization. However, when the legislation comes before you we will probably be appearing. That coalition will probably want to appear.

Certainly one of the more important pieces of legislation that will likely come before the committee next year is the seniors benefit. That was proposed in the 1996 budget. It will replace the old age security, the guaranteed income supplement, and the age and pension tax credits. It will be income-tested and begin in 2001, with the exception that those aged 60 and over on December 31, 1995, will have the option of retaining the old age security benefit in its current form, if they so desire. However, they will lose the age and pension tax credits.

There are a number of issues that concern seniors very deeply and that you will have to consider when this legislation comes before you. The first issue I want to touch on, however, is the amount of intergenerational conflict going on at the present time. It's being engendered by the public discussions of this proposed legislation and the changes being introduced to the Canada Pension Plan.

To a large extent this conflict is the result of people becoming aware of the effects of a rapidly aging society and the increase of providing pensions and other social benefits for them, particularly health care. In 1994 the government had proposed to publish a paper on the implications of an aging population. Presumably a considerable amount of research would have gone into that paper. Unfortunately, that paper, which would have shed considerable light on the subject and serve to mitigate the acrimonious debate now going on, was never published.

Along the same line—and here I want to reiterate what Ken was talking about—we find that a considerable amount of the material being published, particularly in newspapers, on the seniors benefit focuses on some rather narrow aspects of the proposed seniors benefit relating to private savings behaviour. Most of the stuff published is based on emotion. It's not based on serious analysis. The result is that the issue has tended to so dominate the public debate that many critical aspects of the seniors benefit are not receiving the attention they deserve.

I might add that many of the claims about the negative impact on savings are simply wrong.

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If I might digress here for a moment, if you look at the stuff that has been published by people who claim to be experts in this area, you wonder if they have ever read any of the economic literature on the impact of social policies on savings—and social security in particular—that has been published in Canada and the United States and elsewhere for the past 30 years. If you look at that literature, you will find just the opposite effect—that in fact if you reduce a benefit to seniors, you're going to encourage people to save more.

Indeed, the latest piece published was in the June issue of the Canadian Journal of Economics, in an article by John Sabelhaus from the U.S. Congressional Budget Office, I believe it was. He asked why savings amongst wealthier Americans rate lower than that amongst wealthier Canadians. His conclusion was that wealthier Americans get larger public pension benefits in retirement than wealthy Canadians, and consequently Canadians save more to make up. The conclusion of that is that if you reduce benefits to the middle- and upper-income Canadians, you'll simply encourage them to save more. So the economic literature on the subject leads you to exactly the opposite conclusion than what people are hollering about.

That is something that will come before you. You will have many groups here, and many people here will be telling you all sorts of things.

I was with the Economic Council of Canada for 16 years and was at the time specializing in pension issues. I have never seen an issue in that area come to public debate that had so much misinformation and misguided views being expressed on it. I know you agree. That is a serious issue that you will have to deal with.

I do not want to go into detail at this time on what our organization sees wrong with the seniors benefit. We would, of course, like to come before you when the legislation is out so we can go into more detail, because we expect there to be changes. I simply want to outline some of the improvements we would like to see.

Basically I only disagree with Ken on one issue: continuing the age and pension income tax credits for those who retain the OAS after 2001. We would like to see those continued, basically because when the legislation was introduced, or before that, the government had said they were going to protect seniors benefits. Then they bring in the legislation and they say, well, yes, for seniors that's okay, you can keep what you have, but unfortunately you can't keep everything you have. That's one of the issues.

The main issue I disagree with Ken on is the issue of the family income testing. As long as the income tax system is based on individual income, so also should the seniors benefit be.

You have a tax transfer system that is essentially one system. Part of that is based on individual income, and the other part of it is based on family income. Consequently, you can have two families who earn exactly the same amount of income, but because of the way the income is split between members, one family will pay a larger portion of its income in income tax. What we're saying is that if that's so, that family should receive a larger benefit vis-à-vis the other family. We think there are some serious problems in this area.

We also would like to see reducing the 20% reduction rate to something lower, perhaps around 15%. There are many reasons why we think that reduction rate is too high. One of them is not the negative impact on savings, because that is quite the opposite, but it's simply too high for a number of other reasons. When we come back to you after the legislation has been brought forward, we'll give you more detail on that.

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As I noted earlier, the seniors benefit was to come into effect in 2001—that is, with a five-year lag to allow people to adjust. That adjustment has effectively been reduced to three years because the actual legislation has not yet been introduced. It's very difficult for those nearing retirement to plan on the basis of proposed legislation that will likely change significantly by the time it's introduced. Again, Ken has mentioned to you he believes that the time delay period should be greater, and we think it should be greater also. If you're going to have a five-year period it should begin when the legislation is introduced, not when it came in through the budget.

Just to reinforce what Ivan has said about the people in their forties and fifties who are having difficulty in the workforce, these are the same people who are being told they have only five years to make that adjustment from two years ago, and that is incredibly difficult for them because they're hit with two kinds of things at the same time. They're expected to adjust their savings behaviour on the one hand, and on the other hand they're having trouble in the workforce.

While I've noted some of the things we would like to see changed, I would be remiss if I did not also note some of the good things in the seniors benefit. In particular, those are the full indexing features, which the old age security doesn't have because the clawback is only indexed at inflation minus 3%. There's the fact that it will be a non-taxable benefit. There's also the fact that its lower future cost will make it more sustainable, and that it does direct more income towards lower-income seniors, although the actual increase again is rather small.

Finally, I would like to note that as the seniors become a larger proportion of the population there is an increasing need for a seniors department that would have full responsibility for the delivery of services to seniors. At the present time, seniors have to get services from quite a number of different departments. Many seniors are now being asked to go for their benefits to employment offices, and this is causing a considerable amount of distress amongst seniors. We think that a seniors department that actually focused on the needs of seniors and didn't have all these other issues for other income groups would serve them much better. It may even, in fact, save the government money.

In closing, I'd like to mention that the restructuring of the public pension system that is proposed, and I include here changes to the Canada Pension Plan, has a great many seniors very concerned. Many do not understand what is happening or why, how the changes will affect them, and they are very suspicious of what government is doing. There is considerable need for government to provide more information to seniors and to increase the amount of dialogue with seniors and their organizations under the proposed changes.

Thank you very much, sir.

The Chairman: Thank you, Mr. Patterson, and I would like to thank all of you for your presentations. We've certainly covered the waterfront in terms of the kinds of issues this department deals with.

I'll begin the questioning with the Reform Party, Mr. Johnston and Mr. Anders. Mr. Johnston.

Mr. Dale Johnston (Wetaskiwin, Ref.): Thank you.

I noticed in a couple of your presentations you talked about problems with illiteracy and how that is linked with poverty—and if not poverty, the lack of being able to hold a job or to change jobs and to remain employed. I also think it has a large amount to do with the percentage of incarcerated people. I'm really interested in where you set the yardstick as to who is literate and who isn't.

Mr. John O'Leary: That's always been a challenge. I know that when I started teaching in Canada, if you had a grade 9 education you were considered literate, and if you had less than a grade 9 education you were considered illiterate. We knew that measurement was just grossly inaccurate.

• 1015

As I mentioned, there have been three major studies in the past ten years. Each of them uses a definition—and I do have it here; I'll dig it out and send it to your office, if I could. It's based upon a very practical, day-to-day vocabulary in English or French having to do with functional activities. So that's, for instance, being able to use the yellow pages and understand medical information.

I know that in at least one of the tests that have been used, they do use federal government documents about unemployment insurance, child benefits—the issues we've been talking about—information going to seniors, pensions, and so on, in terms of whether an individual can understand those documents and how it applies to him or her.

So it's not a literacy test based on literature and comparing the use of irony in James Joyce and Proust; it really is a very practical, day-to-day, functional test. I will send samples to all members of the committee.

Mr. Dale Johnston: Thank you. I think that's one of the more practical definitions of literacy or lack thereof.

Just to comment, as you mentioned, around the turn of the century certainly our grandparents were really quite functional in their literacy, yet lots of them didn't get past grades 4, 5, or 6. If you had a grade 8 education at the turn of the century, you were considered fairly well educated. We've certainly seen a lot of extremely successful people who didn't have any more education than that.

But I think you made another point that certainly clicked with me, and that concerns documents written in what I call “bureauspeak”. I don't think there's any need for that whatsoever. I think those sorts of documents should be written in understandable language. It shouldn't be the sort of thing that can only be interpreted by the writer. These things that come out from governments are supposed to be for the information of all constituents, so they should be written in language that all constituents can understand. I think you made an excellent point.

The Chairman: Mr. O'Leary, do you want to respond to this?

Mr. John O'Leary: Yes, If I could do so briefly. Again, I hope this is among the things that, as members of this particular committee, you will take forward when you are communicating to the Canadian population, as you make changes to policies that affect seniors and youth in their day-to-day lives.

This issue does come up frequently. Ken Battle and I were on the social security review several years ago. I remember the meeting at which the participants and officials involved in that process pledged to make a document available to Canadians about the social security review that would be easily readable and understood. That document, like virtually every document coming out of this city, was written by and for people with a university-level education.

This is the interesting thing. Let's just consider health issues. Say I'm a person who doesn't read very well, and my nurse or doctor gives me information about nutrition or parenting. I don't understand it, but I won't say that I can't read it, because I'm ashamed and embarrassed. It's the same for you as members of Parliament. When you go door to door and hand out information about your position and your party, I'm sure you've experienced this. People won't say at the door that they don't understand this and ask you to help them understand it.

Again, I'll send it to the members: how many Canadians can read and understand the Canadian Charter of Rights and Freedoms? It's at the root of our democratic process and public policy-making. Canadians have to be able to understand the issues that affect their day-to-day lives.

The Chairman: Thank you, Mr. O'Leary.

I'll just note that if you want to send material to the members of the committee, just send it to the clerk, and we'll distribute it internally.

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[Translation]

Ms. Gagnon.

Ms. Christiane Gagnon (Québec, BQ): Mr. Dumas would also like to ask a question.

Will we be receiving the French translation of Child Benefit Reform in Canada? It seems to me that the documents tabled in committee must be in both official languages. I would therefore like to obtain a copy in French because I feel that it may contain some useful information.

You appear to be very concerned about the quality of life of young people, seniors and children, but are you also interested in the quality of life of women? You talked about single-parent families. We know that a large proportion of single-parent families are headed by women. Could we not add women? I see that there are not many woman on the various research committees. This is not a criticism, simply an observation. Moreover, we also know that it is women who are very often the victims of government-imposed cutbacks.

I will go back to the more general issue of children, young people, women and seniors. You know that the government introduced a series of measures so that cutbacks could be made: there were cutbacks in unemployment insurance and in the Canadian Social Transfer. Consequently, the provinces were forced to slash spending in the sectors of health, education and social assistance.

We're talking about how to improve the situation for certain people who don't have a job. The funding provided to organizations was reduced as well. Even if the government provides a child tax benefit of $850 million, I think that the harm that has already been done is terrible. The deficit was reduced on the backs of the most needy. We are now realizing this in various provinces, not only in Quebec, where we have a sovereingtist party. Ontario, for instance, has been subjected to terrible cutbacks as well.

I wonder whether the reform you are proposing to the government could be construed as an attempt at restoration . I noted that the taxes remain the same. We pay $30 billion in taxes in Quebec, however, with the Canadian Social Transfer, the state is reducing its involvement and we can view this as direct program assistance. We do not want a duplication of programs; we want assistance that will enable the provinces to implement programs.

We have talked a great length about child assistance programs. On the one hand, provinces are off-loading services to the municipalities and, on the other hand, the federal government appears to be extricating itself from the deficit. What are you going to be proposing to the government in terms of reform? Are you not going to tell the government to stop impoverishing the provinces, because it has greater spending power and, when you get right down to it, it is not delivering the goods?

[English]

The Chairman: Before someone begins to respond to that, I should say, Madam Gagnon, on your opening comment about the make-up of this group, this group was not self-selected. We selected them. You asked why there are no women with this group. They are not responsible for that. We're responsible for that. The one woman who was included in this phoned in sick. So the responsibility lies here, not there.

Ken, would you like to begin?

Mr. Ken Battle: You have made some very important points. Obviously when we've been talking about child benefit reform or seniors benefit reform...there's a much broader context to what has been going on since the late 1970s. That's where I date it, although I'm probably dating myself. Social policy has been in a process of constant change, as Richard mentioned earlier about child benefits; it never stays straight or level.

The one change I think it is important for the members of the committee to remember—and I know you know about this, but keep it in your mind—is the Canada health and social transfer. This is the legislation, as you know, that which replaced the Canada assistance plan, which had cost-shared provincial social assistance and social services and replaced established programs financing, by which the federal government shared part of the cost of provincial health and post-secondary education.

The Canada health and social transfer, which came in in 1996, brought with it—estimates vary—about $6 billion or $7 billion in cuts. I should point out that's on top of a number of cuts made since the late 1970s, actually. They have accumulated over the years and we're talking big money. That's what you're referring to. That has cascaded down to the provincial level, and in some provinces to the municipal level, in terms of its impact on tax burdens, services and so on.

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Just to be specific, when we look at the money that's being talked about for the child benefit, the federal government has already committed $850 million above and beyond the $5.1 billion that it already spends on the federal child benefit.

The Speech from the Throne and the government's second red book talked about another $850 million. Hopefully that will come too. If it doesn't, this thing is going to be stillborn, but that's a substantial amount. It's close to $2 billion, but it has to be seen in the context of $7 billion worth of reductions in federal transfers, part of which certainly funded social assistance.

Some people, like my colleague Michael Mendelson at Caledon, argue that basically the Canada health and social transfer cuts federal funding for welfare because the amount of the reduction is pretty much what the federal government was sharing for the cost of welfare. So I think you're right when you say that it's important to look at this additional spending in the context of ongoing cuts.

Our organization recommended a couple of things on this. When the Canada health and social transfer was announced, the details of course weren't shored up. At the time, under the previous established programs financing, the federal cash transfer to the provinces was on a downward slope because of changes that were made under the Progressive Conservative government.

In effect, it was a form of partial indexation. The federal cash transfers to the provinces were already going down and even if the Canada health and social transfer had not come into effect under the old system, federal cash transfers would have disappeared. It varied by province, but in Quebec it would have disappeared as early as 2002 and in some provinces by 2004. The federal government would no longer be sending any money to the provinces for health and post-secondary education. That would have meant that the Canada Health Act would have had no teeth, and medicare would be kaput because there would be no way to enforce the conditions of the Canada Health Act.

What the government did do in response to criticisms from a variety of organizations and individuals was to establish a cash floor underneath the Canada health and social transfer. That was a very important amendment because it meant that even though the Canada health and social transfer is bringing a large reduction in federal transfers, it's pretty much stabilizing that amount. And indeed, in the election campaign, the government added another $1.5 billion. In other words, it's not going to cut as much as it said it would originally.

That cash floor is in effect only for, I think, four or five years, and then of course it would have to be renewed. From my point of view, this is a good thing. But the bad thing that will be enduring—and I'll just end with this because it's something that's not widely understood, but it's crucial when we talk about the biggest social policy changes that have gone on—is that with the ending of the Canada assistance plan, the federal government turned its back on the welfare safety net, and provinces now have carte blanche, with the exception that they can't impose residency requirements on welfare.

Don't get me wrong. Under the Canada assistance plan, the federal government—and as Keith was mentioning, there are myths about the seniors benefits and it's the same with welfare—wasn't telling the provinces how to run welfare. The strings were very few and very loose, but the most important string was the fact that the federal government would only share half the cost of provincial welfare if it was made available on the basis of need.

In other words, provinces were not allowed to disqualify certain groups from social assistance, as they used to be able to do before the Canada assistance plan came into effect in 1966. Provinces could say they're not going to make welfare available for single males aged 18 to 20 if they wanted to, or to single mothers or whatever. They could exclude people on the basis of category.

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That's a very, very fundamental protection that was in effect between 1966 and 1996; the provinces had to provide welfare to people on the basis of need. That protection is no longer there, and provinces can now exclude groups. They can also impose work for welfare if they wish, something that was effectively prohibited under the previous system.

I'm just emphasizing that this was one of the biggest changes in social policy, and it has had ripple effects on other parts of social services, programs for seniors, and programs for people with disabilities. This federal guarantee of a social safety net is an important thing to remember as we try to rebuild the social security system in Canada. I think that has been a bad thing, to be blunt.

The Chairman: Thank you, Ken.

One of the problems I have in chairing a meeting like this is that I get fascinated by what people are saying and lose sight of the fact that one of my functions is to control the time here. I would ask respondents to reduce their responses. Of course, I note that lengthy questions also produce lengthy responses.

I'm going to quickly come back to you, Madame Gagnon. Do you have a follow-up question to that particular response?

[Translation]

Ms. Christiane Gagnon: I simply wanted to say that we have to leave because we have to vote on a bill in the House. We were asked to go there to vote against the bill.

However, the vote does not concern this issue. It deals with the postal services. So I'll have to leave you.

The Chairman: Alright.

[English]

Libby.

Ms. Libby Davies (Vancouver East, NDP): First of all, I'd like to thank you for coming today. As a new member of the committee, I'm glad we're having a round table discussion about social policy issues and some of the specific programs that you've mentioned. I'd just like to say that I'm the member for Vancouver East, which includes the poorest urban community in Canada, known as the Downtown Eastside. Mr. Battle talked about the changes that have taken place since the 1970s. I've been involved with that community since the 1970s, and I've seen very significant shifts in federal policy towards poverty issues.

I'd just like to pick up where Mr. O'Leary left off. I think this debate on the issues that we're discussing today really should be about poverty. The questions before us are whether or not the programs we're looking at and analysing really do begin to eradicate poverty or whether they are simply illusions; and whether or not the federal government, in some cases with the co-operation of provincial governments, is really actually moving towards clear, achievable targets of eliminating poverty.

I would agree that not only has the federal government turned its back on the welfare system, but every single program that we've spoken about today—UI, the Canada Pension Plan, the new seniors benefit, or even, to go back into history to look at things, the family allowance and other programs that were universal and accessible—are now characterized as being more and more exclusionary.

I think one of the real issues we have to deal with is that as programs become more fragmented and we're faced with shifting ground, we really get into a kind of mindset in which we begin to say there are deserving poor and there are undeserving poor, or there are deserving people. In other words, it's okay to talk about poor kids and child poverty, but somehow those kids are divorced from their parents and are not part of the family group. I think that's a huge mistake that we all slip into—and that includes some of our national organizations.

I'd just like to focus my comments. There are too many issues to cover, but because the national child benefit is an issue before us, I would say that I think there is a very real question as to whether or not this benefit actually is designed to alleviate poverty in this country. I think it is really appalling that the program will not apply to people who are on welfare. People on welfare are the poorest of the poor.

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In fact, even in your analysis, Mr. Battle, I was very distressed to read some of the comments you've made about the program. It seems to me it's being characterized that somehow the expectations of people on welfare have been too high and the real job we have to do is to have an aggressive communication program to lower their expectations. I wouldn't agree with that.

Mr. Ken Battle: Can I respond to that? That's absolute nonsense.

Ms. Libby Davies: Excuse me. I would like to finish. I'm giving you a point of view, and the whole idea is that you can then respond to it, if you would let me finish.

That's what I pick up on in this analysis you've done. If we truly are creating programs that are targeted to eliminating poverty, then it's very important not to separate out people and say, because you're on welfare, you won't benefit from that program.

So I think there is a question. For example, we've been told that 2.5 million children would receive higher federal benefits, but I think there is a question of how many of these children would receive reduced provincial support. Has that been calculated? How much of the $850 million increase in federal support is offset by a reduction in provincial income support? Again, I think there is an illusion that we are dealing with poverty, yet we're leaving out a whole group of people.

That's just one issue around the national child benefit. There are other issues, but that's one of the major ones I'm concerned about. I would like to hear what your response is to that.

The Chairman: Mr. Battle, I think you were starting to respond.

Mr. Ken Battle: I'm happy to respond to substantive comments. What I take great exception to is your saying I have said the government should have a public relations program to lower expectations of welfare recipients. I really take exception to that. I've never said such a thing in my life.

I was a director of the National Council of Welfare for 11 years. Do you think I would be telling welfare recipients they should reduce their expectations? I'm sorry. I've never dreamed or thought or said anything of the kind, ever.

As to your point that the national child benefit will not benefit welfare recipients, we talk about it in our paper. It's a very contentious issue, I agree with you.

One of the myths going about is that somehow welfare recipients don't receive the national child benefit. Well, they do receive the national child benefit. A decision was made, and this was a very difficult political decision, and one can take exception with it—Richard did in part—that in lowering the welfare wall in attempting to equalize child benefits to families on welfare and other low-income families such as the working poor and employment insurance families, one had to proceed in stages. The first stage would attempt to create a common equalization, a more equal benefit for all low-income families, and then—and this is the argument of our paper—that should be increased over time to increase benefits to all low-income families.

I think one can very legitimately say, and Richard took that point of view, that...well, I disagree with that strategy. I think instead of reducing the welfare wall first and then moving to increase child benefits for all low-income families with kids, one should reduce part of the welfare wall but also increase net child benefits to families on welfare.

One reason the federal and provincial governments have decided not to do that is the cost, in that in equalizing benefits that is going to increase costs enormously, because basically you're extending to a larger group of low-income families an equivalent level of benefits available to families on social assistance. If one were to increase child benefits to welfare families at the same time, one still would have the differential child benefit that is part of what has been termed the “welfare trap” or the “welfare wall”.

What I'm saying is one can disagree about the tactics one is taking, but I don't think we want to lose sight of the fundamental objective of treating all low-income families fairly. This notion we have that there are families on welfare and then there are families of the working poor is a bit of a.... We all talk like that. I do, and we're all guilty of it. But the evidence shows that families cycle on and off welfare, employment insurance, the labour market. There's a lot of movement off welfare.

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To me, one of the arguments for a child benefit that is not delivered through the welfare system—because welfare families get part of their child benefit from welfare—is that you would replace that with, I think, a more secure form of income than welfare. We have been talking about the changes to welfare. The child benefit will be beneficial for welfare families as well, once it's phased in and we get a decent level of benefit, because they will no longer have to rely on welfare for part of their income. They'll get it from the same source as other low-income families.

If they go into the labour market, if they're able to get a job, they won't lose their welfare benefits for their kids, because they won't be getting welfare benefits for their kids.

So that's the basic objective.

The Chairman: Thank you, Ken.

Richard, you wanted to make a comment.

Mr. Richard Shillington: A very quick comment.

One of the reasons some of the advocacy groups reacted to the child benefit proposal the way they did, in talking about creating two classes of poor children, is that the proposal appears to buy into a lot of the poverty bashing going on in society. Anybody who reads the Op-Ed pages of major newspapers knows that there's a war on attitudes toward the poor, and that this war is particularly a war against the attitude toward parents on welfare.

By the government proposing the child benefit proposal the way they did, although they may not have intended it they seemed to buy into an attitude that says we've done enough for welfare families. I think that if we had made it fully indexed and put some of the money into an across-the-board...that would have flowed a lot better.

That's all I want to say.

The Chairman: Thank you.

I have time for more than one round here.

Mrs. Bradshaw.

Mrs. Claudette Bradshaw (Moncton, Lib.): Thank you.

I feel at home here. I've been on a committee with Mr. O'Leary, and I was on the National Council of Welfare when Ken was executive director a long time ago. I've certainly spoken to Mr. Shillington as well.

I have two areas of concern.

First, John, my concern is the fetal alcohol syndrome issue. Having worked with poverty for 30 years, I am ecstatic that two and a half years ago we started putting it on the platter...after visiting Vancouver with the National Crime Prevention Council.

We found that with our literacy classes—and we would be high risk in our program—out of thirteen parents who were following the literacy program, six of the parents were FAS and hit the plateau at grades 4 and 7, as you would find in the school system. So what happened to them in the school system happened to them in our literacy class. They learned, and then, pow, nothing went in. We kept them on, and they're still there, because we don't want to get them out.

Are you developing anything at all regarding literacy for adults or for children with fetal alcohol syndrome?

Mr. John O'Leary: Certainly, especially our work across the country with urban literacy.

I just came back from Winnipeg, where several years ago we started the Beat the Street program in the inner city, where most of the people participating live in desperate poverty. This is definitely something we see.

As a teacher, I think there are certain consequences, again, of addictions and of illness. Your colleague Dr. Bennett, and other people with medical expertise....

The short answer to your question, Claudette...or Ms. Bradshaw. I guess now I can't call you Claudette.

Mrs. Claudette Bradshaw: Yes, do.

Mr. John O'Leary: I think this problem does cause disabilities in terms of the ability to learn. We need to be doing a lot more.

My response to someone, whatever age they are, whatever disability they have, whatever circumstances they're living in, is to provide them with good, effective, and, if possible, one-to-one teaching and tutoring. That's what the voluntary community can provide. When we can do that, we do see results.

You and I, and possibly people like Dr. Bennett and others, could possibly form a little interest group and do some work. A lot more needs to be done with FAS in particular.

• 1045

Mrs. Claudette Bradshaw: What worries me with fetal alcohol syndrome adults is exactly what happened to them in school. So what we've done is we've introduced computers in our literacy program, so that's giving them the one to one and they're staying.

But I'd like to work on that. It's something we should work on.

My other question is for Mr. Battle. The child tax benefit we could probably spend a week on, and I'm not sure all of us would agree to disagree on that one. But having worked with poverty for 30 years at the community level, my bible was Maslow's hierarchy of need. That was the bible we used in our agency. And one of the things that's very strong in it is housing.

Look at the child tax credit and at where we've been putting the money. If you look at people on social assistance in our province, for example, if they have social housing at 30% of their net income it gives them an extra $4,600 a year that is hidden, that we don't see. And I wonder, Ken, if we've looked at putting in programs such as housing through CMHC for the working poor, based on 30% of their net income, where they could have an independent home. Instead of coming out with the cash, have we looked at trying to ensure that every child living in poverty, whether on welfare or working poor, would have a nice, secure housing unit? In my view, that is one of the basic needs. Is that not where we should start looking at where our funding is going, into something concrete like that, by which we know the child is going to be benefiting from the programs we're putting in place?

I was very disturbed when the Mulroney government...we had a minister of housing and we lost it, which disturbed me a lot. And I'm seeing housing being given to provinces and CMHC getting fewer responsibilities. So I wonder, Ken, if you're looking at anything like that.

The other one, too, is that having worked with people on social assistance, I know they want to work. They want to be out there with us, they want to be integrated with us, and they want to be part of their community. They don't want to have something for nothing. Have you looked at anything at all on the top-up and paying them a salary? For instance, in New Brunswick they can make $200 a month, but big deal, we're so low that it really doesn't pay them off all the time.

Also, are you going to look at a way whereby some of the federal funding—because everything has gone to the provinces—will be able to go back to community infrastructure? As you know, we talk about the cuts that happened, but we've also made a mess of our community private non-profit organizations across this country. So are you looking at that area also?

The Chairman: I'll take a response, and then, Carolyn, you're next.

Mr. Ken Battle: Do I have to answer? Just kidding.

I'll make one quick general comment because I think it applies to the point Claudette is raising, which I think is really crucial. I said it earlier, but there is no single strategy to reduce poverty. We have to do so much on so many fronts. It sounds like a cop-out but it's not. I really believe that. I think we need stronger income programs, but we need better housing, we need better social services, better employment, and so on.

You gave the answer on the housing one: the feds are out of the business. To the extent that they were even in the business, it was fairly small. I'm not an expert on housing, so I'll leave that to others who may know more. But I guess we have to pick our victories where we can get them, and I see the child benefit improvement as a victory. I hope it will work. But I certainly don't see it as the answer to child poverty.

On the housing thing, unfortunately I don't think the feds are going to touch it with a ten-foot pole. I could be wrong. So we are talking about a provincial area. And I completely agree with you; I take your point about how crucial housing is and how it can easily eat up any income supplement you send to low-income families, whether working poor or on welfare. We don't want to be silly about it, but frankly, from a federal point of view, I don't think there's much hope right now on housing issues.

Another point about what you were saying is the national child benefit's so-called reinvestment strategy. This is this notion that as the federal government increases its federal child benefit, provinces are allowed to reduce social assistance benefits on behalf of children, which raises the problem of welfare families not ending up better off with child benefits. But they have agreed that they have to keep that money within the realm of low-income families with kids and put it into other kinds of programs, such as social services or income programs, provincial or whatever.

• 1950

Conceivably—I'm just mentioning that conceivably—depending on how broadly that reinvestment framework is interpreted, that could include things such as housing. I haven't seen any indication of a province saying it's going to do that, but I'm just looking for pressure points that one may be able to work on.

The Chairman: Thank you, Ken.

Carolyn.

Ms. Carolyn Bennett (St. Paul's, Lib.): I too would like to thank everybody for coming and for the round table that was put together today. One of the best bits of being elected is that you finally get to meet all your secret heroes in life. I am delighted to be here.

The Chairman: We're all dying to know who your secret hero is. There are lots of choices here.

Some hon. members: Oh, oh!

Ms. Carolyn Bennett: The welfare wall is something I felt every day in my practice. I always wanted a stamp in my office, for every welfare form, that said “Would rather be working; highly motivated”.

In the long-term solution, I have some concerns that Mr. Shillington is asking us for quick fixes that look better on a table, because we can always throw stones at a table and say somebody always does worse or better. I do feel that the long-term, “over many generations” approach is the only way we're actually going to win, by dealing with the whole welfare problem. Having practised at the Wellesley, I looked after third-generation welfare people. We have to find them a way out.

I would like to know what solutions we see next. What do we do next? Obviously it was a hugely political issue, talking to the minister, in terms of what the provinces would buy into and what they wouldn't in dealing with the people who are on welfare and are extraordinarily poor—way poorer in the maritimes than in Ontario.

That takes me to my second point—and Claudette and I are in the same hymn book all the time—which is the housing issue. No matter how much income we give people, if they're paying 75% for rent, I don't know how we can help this. In my practice there were tonnes of people with a job and a place to live, who then ran out their UIC and were on welfare, and their cheque was $20 a month after the cutback in Ontario. I don't know what you can do, other than shoplift, turn tricks, and so on. I don't know how else you can live on that. And it was the housing that was taking the big hunk.

Even though the feds are supposedly out of housing, isn't there something we could be doing, if we're actually going to deal with poverty?

The Chairman: Richard.

Mr. Richard Shillington: I'm a little bit perplexed, because you're suggesting a longer point of view, and to me, the longer your point of view, the more you're concerned about the effect of inflation. In fact, the way we have increased child benefits in budgets—budgets that always seem to be just before an election, coincidentally—it's only when you take the very narrow....

Benefits this year are $850 million more than last year. That's a very narrow view, and that's the way you create the illusion of progress. The longer view is where you adjust for inflation. It's in the pension world where everybody talks about the importance of indexation, because that's the longest view. So if you're interested in maintaining benefits over the long run, then to me, it's just self-evident that you would fully index benefits.

So I don't understand how the long view.... I'm accused of being narrow-minded because I'm caring about indexation.

The Chairman: Does anybody else want to respond?

We've heard you on housing, Ken, but....

• 1055

Mrs. Carolyn Bennett: As you know, the women's caucus has been interested in the seniors benefit and the discussion around whether or not the cheque should go to the lower-income earner. I would like to know if the panel has any views on that.

Mr. Keith Patterson: As far as the seniors benefit is concerned, one of the serious issues relating to family testing has to do with the impact on women, because in many ways it actually deprives a number of women who would have been receiving the old age security in the future and who will not. That is one of the serious problems related to that issue.

As I mentioned before, the problem is if you're going to have an income tax system that is individually based, you should not have a benefit system that is family based.

The issues relating to women are much more serious than that. In part they do relate to the Income Tax Act; for example, the prohibition in the Income Tax Act against splitting pension benefits except for the CPP and the seniors benefit. So women's issues related to the seniors benefit are in fact quite important and will need to be looked at in much greater detail than what I rushed over today in my presentation.

Not only that, but a number of women will have a low income and will want to save and do have an RRSP, and then they find that again their benefit, even though their own personal income is very small, adds to the family benefit and the level by which the seniors benefit is going to be reduced.

These are very important issues and they will have to be considered. I know on the one hand you have the need to contain costs, and a large part of that is financing it on the basis of a family income, but again, it does have some rather negative impacts for certain people, particularly women.

The Chairman: Mr. McCormick.

Mr. Larry McCormick (Hastings—Frontenac—Lennox and Addington, Lib.)): Thank you, Mr. Chair; and to the panel, again, thank you.

Mr. Patterson, regarding the seniors benefit issue, I recognize, as everyone has, the aging population and the need for sustainable benefits into the future. You're the one who mentioned—and I appreciated hearing from you, and all of you, with so much experience, but why this time there's so much misinformation....

Well, I've looked at this and I see examples of this across the country and in our own communities, and I wondered if this is a natural thing that follows when you have a change in government—political parties and so on. It may have been a perception, but it seemed almost like a crime—I'm going to put it on the table—if you had a former finance minister who was writing articles.

As for the seniors—again we touch on literacy—perhaps they can't all understand all that's being written, but the fear that goes into their lives and into their homes...and I'm thinking, of course, of one individual and how this individual, from this fear, stockpiled food. I'm not sure that would be the diet they would want if they had to keep themselves going for a few years, but it's very touching that they would stockpile food they probably never had when they were young.

I would just like to give you this opportunity to think out loud about why you think there has been more misinformation on this issue—I know it's such a large issue—than there is at other times on other issues.

• 1100

Mr. Keith Patterson: There are a number of reasons for this. If you look at the late 1970s or early 1980s when the whole issue of retirement income was studied, you'll find that a huge number of reports were issued. There was the federal task force, commonly called the Lazar report. There was the Economic Council of Canada report called One in three: pensions for Canadians to 2030, which essentially took a long view and predicted the actual crisis that some people think we're having right now—and I was associated with that report at the time. You had the Ontario royal commission, a Senate committee report, and so on.

So when that debate started, a tremendous amount of research material was made available to the public. Now you don't have task forces looking at it. There was a task force looking at the aging society, but nothing has come of that. You don't have the Economic Council any more because it was disbanded in 1992. The main research organizations, with perhaps the exception of the gentlemen next to me, tend to be financed by big business, and consequently they have a particular point of view. You don't have that large amount of middle-of-the-road research that people can look at and relate to.

I think it's really a pity that the paper on the aging society did not come out, because that would have mitigated much of this debate. People could have looked at that and said, here is evidence and here is the research that was done. But you can't do that now. Consequently, what a lot of people in some organizations are doing is simply looking at the issue and getting very emotional about it, but they don't have the information being made available to them. That is one of the very serious things.

It may also be simply related to the newspapers, because most of it comes from the public press. I'm sure you all know that if I stand up and say that you're a very nice gentleman, you give to charity and you do all those things, but by the way, you maybe lied about this little thing here...what's going to be in the newspaper? It's going to be your lying that's in the paper, not anything else. That is one of the things. What attracts the newspapers and many of the reporters is how sensational the story is going to be, not how accurate it's going to be. That, I think, is one of the tragedies we're facing right now.

The Chairman: Thank you, Mr. Patterson.

Mr. Shillington.

Mr. Richard Shillington: I'd like to pick up on the same theme for a moment. It actually does link a few things together here—the literacy issue, and both the child benefit options and the seniors benefit. The seniors area is probably one of the most complex areas to try to understand. It really would be very difficult to get documents made available that would be accessible to the general public.

I have a comment. I know Mr. Patterson used to work at the Economic Council of Canada. I think this country desperately needs a source of information about public policy that is non-partisan, because we've lost the Economic Council of Canada. If you want to read stuff about the seniors benefit, the child benefit, poverty or any of these issues, you can listen to one rant from one end of the spectrum or one rant from the other end of the spectrum and you can try to decide where the truth is amongst all of that.

These issues are outrageously complex, and we just need a source of information, something like an Auditor General, something like—maybe it's the Library of Parliament—a place where a member of the general public can go and say, “Just the facts, please.” Since these issues are so complex and information is so plastic and pliable, anybody with a little bit of training can take available data and turn it on its head by just reporting half of the information or this and that. You can make black look grey and red and green. The only thing stopping you is a little bit of integrity and a belief in candour. We desperately need a place in this country where people can get some reasonable, objective information.

• 1105

The Chairman: Yes, Ken.

Mr. Ken Battle: I'll just follow up. We're certainly all in agreement on this, but let me get more specific—

The Chairman: Let's whack the press!

Mr. Ken Battle: —more political.

An hon. member: Let's yank the government.

Mr. Ken Battle: One of the difficulties—and it extends beyond the seniors area, as Richard said—is that the changes that have been made in the last several years have fundamentally changed the elderly benefit system. Most people are still back at the old universal old age pension. They don't understand the changes, and it's not surprising that they don't.

The problem encountered by organizations actually trying to talk about these things in a reasonably objective manner—and I include myself; even though I'm a partisan on certain views, I try to get an analysis of pros and cons—is that to do the kind of analysis of a program like a seniors benefit, or a child benefit for that matter, that gives you a complete look at the impact of that reform requires how many people at different income levels: single parents, females, family type, age, and so on. You want to say what the impact of the change would be on them, but that kind of information is basically stuck in the Department of Finance.

We can do our own estimates. To give you an example, Richard worked with me on seniors benefit options, but we had to use a model that was different from the one used by the Department of Finance, because the Department of Finance model, which is the model used by the government to make policy, is not made public. Indeed, even other departments have to go begging to Finance to get information out of that model. This is an old song amongst policy analysts. I just repeat it because we appeared before the finance committee on CPP reforms last week—and that's another area.

The impact of the changes to the CPP on people with disabilities, on women, on lower-income workers in particular, and on pensioners has not been made public. The government is pushing through changes to the Canada Pension Plan while essential information is not being made public. Indeed, I doubt it's being made available to members of Parliament. So there really is a problem here.

I'm not a Finance basher, but as Richard mentioned, I think part of the solution would be something public. As happens in Britain, as happens in the United States, the public, researchers and people outside of government, should have access to the same analytical tools as the government uses.

The Chairman: Thank you, Ken.

Mr. Hale.

Mr. Ivan Hale: I'd like to respond briefly, because I think there's another phenomenon that's happened here in the last five to ten years, and that's a severe weakening of the capacity of national voluntary social service organizations in Canada. The severe cutbacks brought about by government have thrown many of these organizations into risk of peril, so the opportunity to do thorough research of some of these issues impartially and outside of government, outside of special interest groups—having it done by what I would call public interest groups—isn't there right now. The whole fabric of a civic society is severely weakened at this time.

I just mention this because as we now appear to have an opportunity in terms of better fiscal health in this country, I would hope some of that dividend would be applied to providing both core or operational support to this sector, as well as to research. Some really focused work could then be done and put into the public domain. That's an essential step if you're going to have informed dialogue.

I think the other thing to point out is that many of the organizations that we expected to foster and promote such dialogue in the past don't even have the funds to bring people together now, even if they did have the right documents. This sector is very fragile right now, and I would suggest to you that there should be a federal responsibility to bolster it.

• 1110

The Chairman: Mr. Anders.

Mr. Rob Anders (Calgary West, Ref.): I have three questions.

One goes to Ken Battle, basically to the Caledon Institute. It's with regard to the funding you received for the presentation of your report. It says there was financial assistance from the Government of British Columbia and Human Resources Development Canada. I'm wondering how much funding there was. As well, what program, initiative, nook or cranny within the department was used in order to secure the funding?

The second thing I'm wondering about is on page 78 of your report. The first full paragraph on that page begins with:

The Child Tax Benefit provides a very powerful incentive not to report oneself as part of a couple on the tax form.

I was wondering if you would comment with regard to the discrimination against families that's evident in the child tax benefit as it currently stands.

The third question goes to Frontier College. It's with regard to your first page. You mentioned how, for example, your trained tutors work with newcomers to Canada. How much of your program is involved with that? What are the needs there? How many resources does that take, and so on? Would you comment on those issues?

Those are the three questions.

Mr. Ken Battle: On the funding, I'll have to get back to you with more details because—I can't remember—I think the amount was something like $40,000, which was shared between the two levels of government. I'll get you the specific amount of the contract. We actually haven't submitted the expense claim yet.

Actually, this project got delayed. It took longer. I'm not trying to be deliberately vague; I really can't remember the exact amount. I think the federal share of it was through Human Resources Development. It would be the policy branch.

As for the B.C. side, again, I'll have to get the precise thing for you. I'll do that and get it to you.

The second one was the issue we raised about this business of family definition with regard to the federal child tax benefit. We raised it because it also applies to the B.C. family bonus. It's built on the federal apparatus. Indeed, the Saskatchewan program that's being planned will do so as well. We raised it as an issue because we don't have any hard evidence to go on. It's something we think government should look at.

To the extent that both the federal and some provincial governments are putting more into these kinds of programs, one can argue that the problem we're talking about becomes a large problem. What we're getting at is the fact that there have been rumours, accusations, or whatever, that some people, some couples, pretend they're single parents. They're married or they're a common law couple, but they behave as if they're single parents. Therefore, if you behave as if you're a single parent, you're able to get a larger benefit from the child tax benefit than if you're a couple, because it's based on family income.

Mr. Rob Anders: Is there a particular change that you would recommend or prefer to see with regard to the provision of the child tax benefit so that this doesn't happen?

Mr. Ken Battle: To be honest with you, we didn't have any great solution to it. It's a kind of administrative issue with which we don't claim to have great expertise. We raised it because we thought the federal and provincial governments, specifically Revenue Canada, should at least undertake some estimates of the extent of this problem.

Maybe it's an illusory problem. Maybe it's not as big as we think. But we think that some kind of evidence has to be brought together before any decisions are made as to what to do.

• 1115

Basically, from what I understand—and again I stand to be corrected; I always get nervous when I get into stuff with Revenue Canada—it is up to taxpayers, the parents, to give the name of the other parent, and then the government can match up the records. If they don't do that, presumably it's a contravention of the Income Tax Act, but how do you monitor it? So that's the issue we're talking about.

Richard, do you have any comments?

Mr. Richard Shillington: I'll add a very quick comment.

Parents self-declare. You are instructed to provide the social insurance number of your spouse. You're not necessarily legally married; you could be common law, living as a couple for tax purposes. If you don't, then the question is what are the chances of Revenue Canada catching you?

If you have different surnames and are smart enough to use different mailing addresses—in a rural area, it's very easy; my family has two mailing addresses, one, the street address, and one, the post office box—and then use a third one for your accountant, I think Revenue Canada would have a very difficult time realizing by computer that this is actually a family.

I don't think it's just a rumour. We know that is going on a fair bit. We know because governments have costed out programs based on statistical information that's available, and then when the program is put in place the costs come out to be much different, because they are underestimating the number of couples who are apparently single parents.

The incentive is substantial; it's thousands of dollars and, as Ken says in his report, soon to be many more dollars. So the only answer really is in more rigorous auditing.

The Chairman: Thank you, Mr. Shillington.

Mr. O'Leary.

Mr. John O'Leary: As I mentioned, the service we provide is to recruit and train volunteers for adults, children and teens who want to improve their reading and writing. We have approximately 10,000 volunteers across Canada right now.

Of that number, Mr. Anders, I think approximately 1,000 are involved in what we would call English as a second language, ESL, working with newcomers. Of that 1,000, approximately 500—and I've made a note and I will send you a more detailed reply—are working mostly in Toronto, here in Ottawa and in Winnipeg with adults, newcomers who need to improve their language proficiency, most often for a workplace-related reason. Some of them are in language classes once or twice a week, but they want to accelerate the rate of learning because of their workplace situations, so we provide them with a tutor to assist them to do that.

Our other volunteers are working with, again, children and teens living in poverty on after-school enrichment programs. These, again, are children whose parents may not be proficient in either of the official languages.

To give you a brief example, there's a new program we're starting in Toronto, and I hope here in Ottawa in the new year, that I'm calling, for want of a better phrase, “cab college.” There are large numbers of taxi drivers who need to and want to improve their literacy skills or their proficiency in English and/or French. This is a common situation in most cities across the country. But they work seven days a week, 10 to 12 hours a day, and so they can't easily fit into the regular education training system. That's where we come in. So we're experimenting with some interesting models about providing learning and language-skills opportunities to people who are in that situation.

Another example is our hotel and hospitality service staff, kitchen staff, maids, and so on.

The Chairman: Thank you.

Mr. Tremblay, you have a question.

After everyone has had a chance to ask a question, we'll go to you, Madame Gagnon.

[Translation]

Mr. Stéphan Tremblay (Lac-Saint-Jean, BQ): I'll give my time to Ms. Gagnon.

[English]

The Chairman: Mr. Bonin.

Mr. Raymond Bonin (Nickel Belt, Lib.): Mr. Chairman, I have a question that is of interest to me, and it's on literacy. I think we've studied this so long we sort of know the causes and the effects.

You mentioned that parents have a lot to do with teaching their kids, and I wonder if you can draw a parallel with teaching, for example, French as a second language in English schools. The federal government has put an awful lot of money into this, and we have smart kids with no hang-ups who, after 6 years of having 40 minutes a day, are totally illiterate in the second language. The causes and effects don't apply, but the result is the same. Have you studied the correlation between the two?

• 1120

Mr. John O'Leary: From my experience as an educator with children, children have tremendous facility and ability in language acquisition. A good program in a particular school, combined with the appropriate enrichment in the home and community, can produce some outstanding results. I don't know if you have a particular example in mind.

Mr. Raymond Bonin: If you go to Wal-Mart, an anglophone teenager will tell you “I don't speak a word of French”, and they had 40 minutes of French a day for a number of years. This is not a few individuals. This is widespread.

Are the parents teaching more than the schools? Anglophone parents can't teach French to their kids, and they're smart kids. I'm talking about intelligent individuals here, who are not picking it up. Is it because parents are teaching more than the schools? Is the school system failing us? I suspect the same is happening in Quebec the other way around.

Mr. John O'Leary: I'm sorry, I'm not sure of the exact point of your question. I know children who are involved in immersion programs who are quite comfortable in both languages. Maybe it's—

Mr. Raymond Bonin: I'm not talking about immersion. With immersion there's a commitment. I'm talking about individuals who get 40 minutes a day of a language and who are totally illiterate after six or seven years of it.

Mr. John O'Leary: After what amount of time? I know people who are taking 40 minutes a day of a second language and after six months are reasonably proficient. I think it has to do with their interest, their motivation and, as always, their social circumstances.

If we're talking about children living in a community where they don't have appropriate enrichment in the home and the community, they're probably less likely to acquire the second language because they have other priorities—they're hungry, or their frightened, or whatever. It seems to me from my experience that children in homes where most of us come from, in communities where most of us come from, flourish when exposed to appropriate languages—you know, different second languages.

Mr. Raymond Bonin: Yes, but the difficulties you identify are the causes of the illiteracy in their first language. It just doesn't apply to these. We have to research the reason for this in order to respond to illiteracy, fundamentally.

[Translation]

The Chairman: Ms. Gagnon.

Ms. Christiane Gagnon: In view of all the questions that have been asked here by the various committee members, I am convinced that we could adopt an integrated approach to try to resolve the problems or to try to find solutions to poverty.

Earlier, I listed several cutbacks that have been made. Although it was said that the cutbacks in social housing were introduced by the Conservatives, we know that the Liberals cut off all funding for social housing. We also talked about community organizations. I believe it was Mr. Shillington who said that the fabric of civil society had been weakened by community groups. Right now, we need to take an integrated approach which would enable us to deal with these problems and to help with the most needy families. We must bear this in mind.

Earlier, Mr. Battle pointed out that the social security net in the provinces had been badly weakened. Once again, however, it's a question of money. It's all well and good to say that it is the provinces that are weakening the social security net, however, once again when—and it is true that we in Quebec are somewhat thin-skinned—, when the federal government adopts national standards, it must provide the money needed for such standards.

It's all well and good to have wonderful principles and preach about virtue, however... take a look at New Brunswick. Why was there such an upheaval in New Brunswick during the election? It was because of the very thorny issue of employment insurance cutbacks.

We are talking about a drop in the ocean, because the $850 million for the child tax benefit we were discussing this morning constitutes a drop in the ocean. I would like to refer to the table you presented this morning. I think that the government should give back to the provinces the same benefits they had beforehand.

• 1125

According to the table and the data scale that you prepared, it seems to me that there is a big gap between someone earning $29,000 and someone who earns $30,000.

Would it not be possible to have a data scale in percentage terms, such as the one for taxation? Someone earning $30,000 is heavily penalized compared to someone earning $29,000 when in fact there is not a very big difference in income. Perhaps I misunderstood the table and I am wondering whether or not there is a more precise data scale.

[English]

Mr. Richard Shillington: I suspect you've misunderstood the table.

[Translation]

Ms. Christiane Gagnon: Yes. That's what I wanted you to clarify.

[English]

Mr. Richard Shillington: Look at the line of the table that shows $20,000 in 1985.

The purpose of this table is to show what benefits these families with two children get from the federal child benefit in 1997 compared with what they would have had in 1984, when we started making this system more efficient and giving more money to low-income families.

Where the first income figure for that family is $20,000, that's in 1985. Today they'd earn about $29,000, if they're lucky enough to keep their income matching inflation. They got $1,673 in 1985, which in today's dollars is about $2,426. Out of the current system, they get $1,886. So they're getting $540 less from this improved, better-targeted program that expresses our desire to address child poverty.

Does that help?

[Translation]

Ms. Christiane Gagnon: Yes. I hadn't understood like that.

[English]

Mr. Richard Shillington: I'm sorry for the confusion.

[Translation]

Ms. Christiane Gagnon: Alright. Thank you

[English]

The Chairman: Thank you very much.

That brings us to the end of our questions and, I think, to the end of this session. I would like to thank all of you for appearing today. I appreciate your taking the time to come down here and do this.

The committee has before it some work that no doubt in the near future is going to bring a number of you back before us. We'll have part I of the labour bill in February, I guess, and we expect to have the seniors benefit bill very early on in the new year. We look forward to meeting with you again at that time.

We are adjourned.