FEWO Committee Report

Those who argue for women to have tax breaks to work outside the home are doing a good thing, and they make a good case, but those who are doing the care role at home also make valid arguments. The common ground women have is the right to choose how to contribute to society, and the state’s role should be to respect what we choose and to enable it.[22]

3.1 INTRODUCTION

According to Statistics Canada, “the main source of income for Canadian women is paid employment and self-employment income. In 2003, 70% of women’s total income was from these sources, while 17% came from government transfer programs, 6% from a private pension plan, 4% from investments and 3% from other sources.”[23]

This chapter is divided into three sections addressing the main income sources: paid employment, government transfers and income from savings.

3.2 LABOUR MARKET INCOME

The Committee has heard that “Canadian labour market outcomes for women compare very favourably with those in other developed countries.”[24] Over the past decade, women have continued to experience a growing labour market participation rate, rising from 57% in 1996 to 62% in 2006 at a time when the labour force participation rate for men remained stable at 73%.[25] Women have also made great strides in educational attainment, and “among university graduates under 26 years of age who are working full time, there is virtually no difference between the earnings of women and men.”[26]

Despite these gains, however, the Committee has heard that the annual earnings gap between women and men who work full time “seems to be stuck at 70%, and there’s been very little change in that over the course of the last decade.”[27] (Figure 3.1) This gap in earnings persists across all levels of education and professional groups.[28]

Figure 3.1

Female to male earnings ratio of full-time workers, 1967 to 2004

Witnesses told the Committee that women continue to assume a disproportionate share of non-standard work (part-time, part-year); that their unpaid work limits their ability to maintain a stable attachment to the labour force during the times they provide care to children and other family members; and that some groups of women continue to face significant challenges to their labour force participation.

3.2.1 Rise in non-standard work

One-third of low-income children in Canada have at least one parent in the workforce working full time, full year, and yet that family is not able to earn sufficient income to lift them above the poverty line. That number is up from 27% twelve years ago, so there’s an increase in terms of the number of working poor families.[29]

The rise in non-standard work affects both men and women. In its brief to this Committee, Campaign 2000 commented that one in every six Canadians working full time was in a low wage job where they are paid less than $10/hour.[30] The Committee heard that women are disproportionately affected by low-wage and non-standard work. For example, 22% of women are in low paid jobs compared to 12% of men. Women “are more highly represented than men in non-standard employment, particularly in part-time and temporary work. In 2006 the proportion of women in non-standard work was 40%, compared to 34% for men.”[31] Statistics Canada noted that close to 30% of all employed women worked part-time, compared to 10% of their male counterparts.[32]

In her presentation before this Committee, Lorraine Desjardins of the Association des associations de familles monoparentales et recomposées du Québec informed the Committee that the Federal Labour Standards Review Commission had tabled a report in the fall of 2006 which had proposed an increase to the minimum wage, among other things. That report contained the following description of vulnerable workers:

Vulnerable workers by definition lack either collective or individual bargaining power. They are therefore less likely than most to secure or retain a decent job, and more likely than most to work under conditions that most Canadians would view as highly inappropriate or even exploitative. Typically, they are paid low salaries and receive few — or no — fringe benefits, work unsociable hours or in difficult conditions, have limited or no access to training, enjoy poor prospects of career advancement and relatively short job tenure. And — as tends to be the case with vulnerable people — they often lack the knowledge, capacity or financial means to enforce whatever statutory or contractual rights they supposedly enjoy.[33]

The Committee heard that despite strong job creation and falling unemployment more and more families in Canada are working, but not finding jobs with sufficient pay, hours or benefits to help them escape poverty.”[34]

Some women work part-time to balance their home and work commitments, however the Committee heard that “ about one-third of women in the main childbearing years are working part time because they can’t find full-time work. That’s about the same percentage as are working part time because they’re caring for children.” [35] The Committee heard that, in an effort to earn enough to cover their expenses, some women work at several part-time jobs concomitantly. This is the case for many new immigrant women. Rural women also tend to supplement farm revenue with part-time work off the farm.

The Association des associations de familles monoparentales et recomposées du Québec noted that “Changes in the labour market in recent years have made life even tougher. There are increasing numbers of temporary and on-call jobs. It is hard to establish a schedule in advance, and work days are growing increasingly longer.”[36]

In their brief to the Committee, the Ontario Council of Agencies Serving Immigrants noted that “many women are in non-standard work arrangements where employers treat them as independent contractors and therefore do not make CPP and other payments.”[37] As a result, they are not eligible to receive Employment Insurance benefits when their contracts are terminated, or to accumulate pensionable earnings.

Recommendation 1:

The Committee recommends that the federal government reinstate the federal minimum wage and that it be set initially at $10 an hour.

Recommendation 2:

The Committee recommends that the federal government play a leadership role in improving labour legislation to extend a greater protection to the growing segment of non-standard workers, and that it ensure that the working conditions of non-standard workers are placed on the agenda of future meetings of federal/provincial/territorial Ministers of Labour.

3.2.2 Rise in Self-Employment

The Committee heard that “the number of women entrepreneurs has doubled in the last 15 years and that number is growing at a pace of 60% faster than their male counterparts.”[38] Other groups could turn to self-employment as an alternative to low-wage work with the proper educational and financing support. Jennifer Dickson of Pauktuutit Inuit Women of Canada told the Committee that “Inuit women have the ideas, creativity, commitment, and tenacity to succeed in business for themselves. What they may lack are business skills, technical information, and marketing contacts. Networking, mentoring, business partners, and access to funding opportunities would help in all these areas”.[39] Pauktuutit and the Métis National Council suggested that microcredit could help facilitate these small businesses and remove women from a situation of poverty. Similarly, the Certified General Accountants Association of Canada recommended providing women with greater access to capital, and targeting financial and entrepreneurial education to women.

Recommendation 3:

The Committee recommends that Industry Canada, in cooperation with other relevant departments, take measures to ensure the availability of microcredit opportunities to women in rural and remote regions, including Métis, First Nations, and Inuit women.

Recommendation 4:

The Committee recommends that Industry Canada establish a Centre of Excellence for Women Entrepreneurs to support women entrepreneurs, notably by providing additional financial and entrepreneurial education programs.

3.2.3 The impact of women’s unpaid work on their labour force participation

[w]e’ve seen a lot of positive things for women in the last 20 years; there’s no question about that. Where it breaks down is on the whole issue of caregiving, because women are still taking 10 days off a year for their family commitments, and men are still taking a day and a half. Until we can change that scenario, we’re going to end up in situations where women are working part-time because they’re looking after their elderly mother and their children at the same time.[40]

A number of activities in which people engage are unpaid. These activities include looking after children, caring for sick and elderly friends and family members, taking care of the family home and engaging in voluntary activities in the community. Historically, much of the work which women did was relegated to the sphere of unpaid work.

The large-scale entry of women into the labour force has created new dynamics in the way this unpaid work is divided within the household. Men are taking on an increasing share of unpaid work (see Figure 3.2), yet the Committee heard that women still take on a disproportionate share of unpaid caregiving work. Departmental officials from the Department of Social Development told the Committee that “[W]e know the
employment-related consequences of caregiving are not shared equally between men and women. Among men and women aged 45 to 64, almost twice as many women change work patterns to adjust to caregiving demands, and more women reduce their hours of work, compared to men.”[41]

Figure 3.2

Statistics Canada, 2006[42]

The unpaid caregiving work that women assume has an impact on the amount of time they have available to participate in the labour force. In her presentation to the Committee, Deborah Tunis from the Department of Human Resources and Social Development noted that:

Many women work part-time or take on non-standard work to accommodate child care or other family responsibilities. This is true in particular for women aged 25 to 44. We also know that one-third of women aged 25 to 44 who were not in the labour force in 2005 cited family responsibilities as a key factor in their absence from the labour force.[43]

Caring for family members with disabilities and older seniors also impact on the ability of women to participate fully in the labour force. In her presentation to the Committee Monica Townson indicated that people who provide care to senior friends and family members face challenges to their labour force participation, which they manage by taking early retirement, reducing their paid working hours, taking time off, or limiting their participation in the kinds of activities that lead to promotions.[44] A representative of the Department of Social Development told the Committee that “providing this care is costly for those who provide it. Less time spent in the labour force may limit women’s earnings and therefore the capacity to build up future retirement incomes.”[45]

The Committee heard that, because women are more likely than men to take time off work to care for children, they can be more economically vulnerable following unexpected life events such as the death or disability of their partner or the breakdown of a relationship. Statistics Canada told the Committee that “[f]ollowing a separation, a woman who has been outside of the job market finds it very difficult to get back in. This may be a group where women are in vulnerable situations.”[46] The Department of Human Resources and Social Development observed that “women are more likely to experience divorce or separation than in the past. As a result, they are more likely to experience financial hardship and become a lone parent. Single-parent families are five times more likely to live in low income than two-parent families, and over 80% of single-parent families are headed by women.”[47] In its presentation to this Committee, Statistics Canada pointed out that there are particularly high rates of low income among unattached women aged 55 to 64, and suggested that many of these women may be separated, divorced or widowed, but are not old enough to start receiving pensions.[48]

The potential vulnerability of women upon divorce or break-up has led some observers to emphasize that women should maintain an attachment to the labour force. Others, however, call for measures that recognize the value of caregiving work and mitigate risks to women. In her presentation to the Committee, Beverley Smith suggested that women should have viable choices in how they choose to contribute to society:[49]

Those who argue for women to have tax breaks to work outside the home are doing a good thing, and they make a good case, but those who are doing the care role at home also make valid arguments. The common ground women have is the right to choose how to contribute to society, and the state’s role should be to respect what we choose and to enable it.

Witnesses spoke eloquently about the value which caregiving providers to the Canadian fabric. Beverly Jacobs of the Native Women’s Association of Canada challenged the conventional definition of poverty, noting that “elders in my community would say they are not poor. They would say they are rich in their language, rich in their traditions, rich in their relationships they have with their community.”[50]

The Committee heard that the federal government has introduced a number of initiatives designed to support the informal caregiving activities of Canadians. Departmental officials informed the Committee that:

The federal tax system allocates an estimated $70 million per year to caregivers via the caregiver tax credit, as well as $6 million via the infirm dependant tax credit…Through the employment insurance compassionate care program, workers receive benefits to provide care and support to a gravely ill family member. Other federal initiatives include the Canada Pension Plan general dropout provision, the veterans independence program, and the first nations and Inuit home and community care program.[51]

Ruth Rose, of the Université du Québec à Montréal suggested that this should start with an acknowledgement that many women have families and need measures to help them combine their work and home responsibilities.[52]

Recommendation 5:

The Committee recommends that the Department of Human Resources and Social Development expand the maternity and parental benefits program to cover two years, and increase the benefit rate to 60%, in order to help parents balance their paid and caring work.

3.2.4 Barriers to labour force participation

The Committee heard that some groups of women, such as Aboriginal women, immigrant women and single mothers, have a more difficult time accessing the labour force. When they do find paid employment, many work in low-paying, part-time or part-year work.

The difficulties balancing paid and unpaid work were identified as a challenge for all Canadians faced with caregiving responsibilities. This difficulty is magnified for single-parent families who don’t have partners with whom to share the care work. It is magnified for rural women who don’t have access to affordable child care and transportation. It is magnified for new immigrant women who do not speak either official language, and whose credentials are not recognized in Canada.

The Committee heard that “one of the major barriers for heads of single-parent families is that, in addition to working, they have to have access to all child care services, transportation and housing. So there are a lot of barriers to getting out of poverty.”[53]

The inability to communicate in either official language was identified as a labour force challenge for some immigrant women. AWIC Community and Social Services suggested that measures be taken to make it easier for new immigrant women to learn one of the official languages, suggesting that “[t]his could greatly resolve problems of exploitation, long-term dependency on social welfare, lack of participation in the labour market, and even social isolation.” [54]

AWIC identified a number of barriers to learning English or French. They told the Committee that Canadian citizens and refugee claimants are not eligible to attend Language Instruction for Newcomers to Canada (LINC), that only some LINC centres provide child-minding services, and that there are waiting lists child-minding.

Many immigrants to Canada are unable to access the labour force because their credentials are not recognized. A recent Statistics Canada report concluded that by the late 1990s, one-half of new immigrants experiencing chronic poverty were in the skilled economic class, and 41% had degrees (up from 13%in the early 1990s).[55]

Dr. Anuradha Bose of the National Organization of Immigrant and Visible Minority Women of Canada proposed that new immigrants require access to financing “in order to be able to upgrade themselves, because the longer time you spend in a McJob, the more deskilled you get. Therefore, you have to be able to get here and requalify as soon as possible.”[56]

The Committee also heard from the National Alliance of Philippine Women in Canada about the vulnerability of workers who come to Canada under the Live-in Caregiver Program (LCP):

Many Filipino women live-in caregivers face long hours, low wages, physical and emotional abuse, deskilling, isolation, and low self-esteem. The program requires them to live in their employer’s home 24 hours a day, which subjects them to work more than the mandated working hours; to come under temporary worker status, which makes them vulnerable to arbitrary deportation; and to have an employer-specific work permit that ties them down to a single employer at any time, making them vulnerable to abuse and arbitrary demands from their employer. [57]

Persons with disabilities face a number of challenges in accessing the labour force, often incurring expenses for medication and support services, as indicated by Carmela Hutchison of the DisAbled Women’s Network of Canada:

Often, one of the greatest barriers to work is that if we don’t have access to our medication or if we don’t have access to our home care, we don’t have access to those supports that are linked to income. When the income becomes too high, the supports are gone, and then the person can’t participate in the workforce. That’s kind of shooting ourselves in the foot all the way around. [58]

Organizations such as SPHERE-Québec suggested that employability and development are the main levers for getting women with disabilities out of income insecurity. They noted that programs such as the Opportunities Fund for Persons with Disabilities “make it possible to experiment with new intervention models for improving the employment of women with disabilities and thus providing the means to make them self-sufficient”[59] and recommended that additional funding be allocated to this program.

Recommendation 6:

The Committee recommends that Citizenship and Immigration Canada, in consultation with provincial and territorial governments, expand eligibility to the Language Instruction for Newcomers to Canada (LINC) program to Canadian citizens who have immigrated to Canada, and to successful refugee claimants. The Committee also recommends that more support for child-minding services be made available to participants in the LINC program.

Recommendation 7:

The Committee recommends that the federal government explore and implement options that have been identified in past studies which would allow new immigrants to access financing to upgrade their skills, including in situations where their credentials are not recognized. This should be done in collaboration with provinces and territories where specific agreements exist, as well as other stakeholders.

Recommendation 8:

The Committee recommends that the Live-in Caregiver Program be reformed to ensure that the human rights of immigrant women workers are better protected and that the live-in requirements of the program become optional.

Recommendation 9:

The Committee recommends that additional funds be allocated to the Opportunities Fund for Persons with Disabilities.

3.3 GOVERNMENT TRANSFERS TO INDIVIDUALS

Compared to men, a larger share of women’s total income comes from transfer payments. According to Statistics Canada, “in 2003, 17% of the total income of women came from transfer payments, double the figure of men who received only 9% of their total income from these sources.”[60]

Figure 3.3

Government transfer payments as a percentage of the total income of women and men, by age group, 2003

Source: Statistics Canada. Women in Canada: A Gender-based Statistical Report, 2006, p.136

Statistics Canada also notes that “there are considerable differences between the primary sources of income of seniors and those under the age of 65. In 2003, for example, well over half (55%) the income of senior women in Canada came from government transfer programs, compared with 15% of that of women aged 55 to 64, and 10% or less of that of women in age ranges under age 65.”[61]

Statistics Canada data suggests that “Old Age Security (OAS) payments, including Guaranteed Income Supplements (GIS), make up the single largest component of government transfer benefits received by women. In 2003, 5% of all the income of women came from this source, including 4% in regular OAS benefits and another 1% as GIS supplements. At the same time, 4% of all women’s income came from the Canada and Quebec Pension Plans, while 3% were Child Tax benefits, 2% were social assistance benefits, and another 2% were employment insurance payouts.”[62]

What people find interesting about our system is how much we spend on low income. The guaranteed income supplement, which was mentioned, is not a feature found in many other countries. Canada has made a decision in the design of its system to include this benefit, which is up to $7 billion right now in benefits paid to low-income seniors, which is not a feature found in many other countries.[63]

Social assistance is a last resort for people in Canada who are unable to support themselves. The Committee heard that

Of the total number of children in families receiving social assistance, 71% are in lone parent families. This is equivalent to 339,000 children across Canada (National Council of Welfare, Welfare Incomes 2005). The vast majority (over 90%) of lone parent families receiving social assistance are led by lone mothers.[64]

The National Council of Welfare and Campaign 2000 spoke about the gap between the various social assistance benefit levels and the low-income cut-off:

When parents are unable to be in the workforce and are not eligible for employment insurance, social assistance — welfare — becomes the program of last resort. The work of the National Council of Welfare shows that welfare incomes are far below the poverty line.[65]

3.4 RETIREMENT INCOME FROM SAVINGS AND PRIVATE PENSION PLANS

In the last fifteen years, pension savings in Registered Pension Plans (RPPs) and Registered Retirement Savings Plans (RRSPs) have increased greatly. In 2005, there were 15,336 employer pension plans with 5.7 million members. More women than men are members of public-sector pension plans and that the opposite is true for private-sector pension plans. The proportion of employees participating in a registered pension plan is on the decline.

Private defined-benefit pension plans are on the decline. There are hardly any new ones being created, and many of the old ones are actually in trouble. This is also a problem, because obviously our retirement system was geared on having the three legs of OAS/GIS, the CPP, and having the private pension. But if you can’t get into the private pension plan because you’re working in a job that doesn’t have one, then obviously your retirement is not going to be as good as it was for people in the past, who had jobs in companies that had good pension plans.[66]

Since the majority of adult women are now part of the paid labour force, we might implicitly assume that they are able to save for their retirement and avoid poverty in their latter years. Yet the extent to which a woman can save depends on her income, income stability and the need to contribute to family income and provide for dependents.

Every country comes to a different position as to how much they should replace after a person retires. The standard around the world is that about 70% of pre-retirement earnings should be enough to live on in post-retirement. Canada’s public pension system itself covers off about 40% and private pensions, RRSPs, and other elements of our system cover off the remaining 30%.[67]

A number of witnesses confirmed that, in many cases, it is difficult to save. Private retirement savings are concentrated in a limited percentage of families: 25% of families account for 84% of these savings, while three in ten families have no private retirement savings.[68]

Women entrepreneurs recommended innovative measures relating to pensions and savings plans. Representatives of the Certified General Accountants Association of Canada argued that greater flexibility in tax measures relating to savings plans could enhance their economic security.

Increasing RRSP contribution limits and allowing RRSPs to serve as collateral for "qualifying" private ventures are strategies that could make a difference.[69]

Farm women pointed out that:

… one of those solutions is for farm women to have their own private pension plan, very similar to nurses, teachers, lawyers, and anyone else who is deemed a professional.[70]