Proceedings of the Standing Senate Committee on
National Finance
Issue 14 - Evidence - Meeting of May 15, 2007
OTTAWA, Tuesday, May 15, 2007
The Standing Senate Committee on National Finance met this day at 9:33 a.m. to examine and report upon issues relating to the vertical and horizontal fiscal balances among the various orders of government in Canada.
Senator Joseph A. Day (Chairman) in the chair.
[English]
The Chairman: The Standing Senate Committee on National Finance was authorized in September 2006 to examine and report on issues relating to vertical and horizontal fiscal balance, that is, the fiscal financial arrangements between various orders of government in Canada, and to report back not later than June 30, 2007.
In the fall of 2006 we began our study, and issued a report entitled The Horizontal Fiscal Balance: Towards a Principled Approach as part of our ongoing study of Canada's fiscal arrangements for provinces and territories. The report dealt primarily with our study and recommendations with respect to equalization programs that exist in Canada, and was the subject of much debate. The committee is now looking at vertical fiscal balance specifically by reviewing the division of fiscal resources and spending responsibilities between various orders of government in Canada.
Today I welcome as our first witness, Nancy Peckford, Program Director, Canadian Feminist Alliance for International Action, FAFIA. The alliance is a coalition of more than 75 Canadian women's organizations. FAFIA's mandate is to further women's equality in Canada through domestic implementation of Canada's international human rights commitments. FAFIA published a review of Budget 2007 that discussed the proposed changes to the Canada Social Transfer, CST.
Ms. Peckford, our normal way of dealing with things is to ask you if you have introductory remarks and then we go to questions and answers.
Nancy Peckford, Program Director, Canadian Feminist Alliance for International Action (FAFIA): Thank you so much for having me. We are delighted to be here. I apologize for having to leave early. I am en route to Calgary within the next couple of hours so hopefully we will be able to do this in about an hour. Our member groups range in size from organizations such as Amnesty International to nationally based women's organizations such as the National Association of Women and the Law, the Canadian Research Institute for the Advancement of Women, the Fédération des femmes du Québec as well as small women's centres such as the Antigonish Women's Resource Centre and community economic development councils at various levels, either provincial or community.
We have been engaged in a reflective dialogue on what it means for Canada to be grappling with the fiscal balance. This past August we received modest funding from the government to consider that question more systematically. The way Canadians understand the fiscal imbalance and the way governments come to terms with fiscal realities is fundamental to women's human rights and to how women in Canada enjoy their human rights. To that end, one of our messages today is that Canada's social programs are vital to women's advancement. When we articulated the need to Status of Women Canada to talk about the fiscal balance in the ways that we understood it, we said that women have a stake in this debate because they are affected differently than men by tax and spending policies of governments. That can be borne out through international study or our domestic research. Your next guest, Armine Yalnizyan, authored a 10-year retrospective report for us on federal budgets that looked at the impact of resource expenditures and patterns of cuts to see who was impacted when the federal government reorganized its fiscal arrangements.
We believe that women have a great stake in this discussion. Information on the realities of women in Canada is available in Women in Canada, published by Statistics Canada in 2006, a retrospective report that comes out every five years. It demonstrated, with no doubt, that women for the most part have different labour market opportunities, family and community responsibilities and levels of economic security. There is significant of data on women's poverty and that was another reason we felt it was so important to be part of this debate. There is an impression in Canada that women's equality is a done deal. We have regulated ourselves both legislatively and politically to eliminate most forms of discrimination. While we have come a long way, the reality of women's lives is still distinct in many respects, in terms of their engagement in the family, community and labour force.
Regarding our mandate and then I will be eager to take your questions, Canada's social programs are vital to women's advancement and that is why we have spent so much time on the Canada Social Transfer. Recently, we have attempted to tackle the debate around the fiscal imbalance, as a political endeavour. We know that the infrastructure of social services and income support programs that Canada has created over the last 50 years has been essential to improving women's opportunities to enter the paid work force and to be involved in higher education and public life. These programs include things such as health care, social assistance, access to child care and legal aid. These programs have been an egalitarian force in women's lives. They are an essential means of implementing the human rights that Canada has committed itself to in the Constitution, the Canadian Charter of Rights and in Freedoms and international human rights treaties, which is an area we have spent particular attention. These rights articulated in UN conventions, include the right to equality, liberty, security of the person and to an adequate standard of living. In particular, we have noted that Canada ratified the Convention on the Elimination of All Forms of Discrimination against Women, CEDAW, over 26 years ago. In 2006 we had a twenty-fifth anniversary campaign to look at how far Canada has come since 1981 when we ratified that convention. We noted we have a significant way to go and Canada is incredibly well equipped to deliver on its intentions and commitments through that convention.
When we ratified CEDAW in 1981, Canada agreed to take all appropriate measures to ensure the full development and advancement of women.
In our view, the human rights that Canada embraced require governments to ensure that everyone can enjoy them and that budgetary allocations, in particular for social programs, are sufficient.
They also require governments in Canada to ensure that social programs are adequate and consistent across jurisdictions, which is another reason why we are so intensely interested in the federal role. We are glad that the committee is doing this work.
Because Canada's social programs are such an integral part of women's lives and their opportunities, the nuts and bolts of how the programs are paid for, what quality of services are available and whether they are provided adequately in every part of the country matters to every woman.
When Canada was reviewed under CEDAW in 2003 by the UN, the UN noted a particular concern that has been repeated in subsequent reviews under other UN conventions. That concern is that the federal government must ``reconsider those changes in the fiscal arrangements between the federal Government and the provinces and territories so that national standards of a sufficient level are re-established and women will no longer be negatively affected in a disproportionate way in different parts of the State party's territory.''
The UN said this to Canada because they heard such varied things from provincial governments, which submit their own reports to be part of a consolidated Canadian report that goes to the UN. The UN noted how highly variable particular services were.
For example, child care was better available in some places for low-income families than others. Obviously, we have the stellar example of the child care program in Quebec. They noted that in some places, legal aid for family and civil law was available in some provinces in a more generous way, while it had been eliminated in other provinces. Access to fundamental services had been entirely eliminated in particular provinces.
They said to Canada, and to the federal government in particular that they have a leadership role to play. When Canada signed CEDAW in 1981, they agreed to be the overseer of how Canada lives up to, realizes and makes good on these international human rights commitments.
Canada tends to go to UN bodies and play the jurisdiction card. It says that is not their jurisdiction and they cannot account for those differences. The United Nations said that Canada and the federal government has an obligation to women, wherever they live across the country, to think systematically about the programs and services available to them.
I will come to the nuts and bolts of this, but I wanted to articulate why we care so deeply about this issue. There are 23 recommendations from the UN committee on the elimination of discrimination against women that remain largely outstanding. They have to do with a range of social services, some of which are primarily the jurisdiction of provinces and territories and some of which are the jurisdiction of the federal government. We have been grappling for several years with how we can have Canada take responsibility for those recommendations.
With regard to our proposals around the vertical fiscal balance, one thing I wanted to share with you is how much we value the federal role. When we have done our consultations across the country with women's organizations, human rights groups and women-centered community economic development, CED, projects — we hear that women want the federal government to play a leadership role. They are not as captivated by the jurisdictional wrangling as I think maybe other Canadians are, or that we all find ourselves wrapped up in as a consequence of how governments are manoeuvring.
We hope that from your reflections and study here, you will emerge with a clear understanding of why and to what end the federal government intervenes and uses its powers of resource distribution for the larger societal projects of which we are all a part.
We want to note that in the 1990s, particular decisions were made — the elimination of the Canada Assistance Plan, which we all heard lots about — that changed the federal fiscal landscape in Canada. We want this committee and other committees and governments to revisit what the federal government should spend its monies on, and to what end. We feel that a human rights framework and, in particular, a human rights framework that understands and articulates women's equality rights is essential.
We also note — and we have done a lot of work on this — that we recognize Quebec's distinct status. In no way are we asking for, or wanting, Quebec to be treated similarly to other provinces and territories. We say that because we understand the historic evolution of Canada; we understand the way in which federalism emerged; and we recognize that it is entirely appropriate, given the distinct culture of Quebec, for the Quebec government to play the leading role in designing and delivering social programs and services for the residents of Quebec.
Having said that, we do not want to leave that role in the hands of provinces for the rest of Canada. We believe that Quebec, as a province, occupies a distinct place in our federation, and that the way in which they relate to the federal government and vice versa is the culmination of a historical evolution of Canada, and that makes sense. For governments outside of Quebec, however, we would not support that particular arrangement.
In working with women across the country to talk about the fiscal balance, we have asked them what they would imagine as a productive and constructive way forward, given what we think is a jurisdictional quagmire, and given, in some ways, the excessive focus on particular ways of resolving the fiscal balance.
We have had two pan-Canadian consultations with women across the country — including women in Quebec, Aboriginal women, women from rural and remote areas and women from urban centres. What we have heard is that there is support for the federal government reattaching designations to transfers to make it clear, when they earmark money, what that money is for and that they support ensuring that provinces and territories outside of Quebec meet established standards of equality and adequacy. That principle is fundamental to us.
The Canada Social Transfer, which emerged out of the Canada Assistance Plan, to some degree allows for some limited allocation of monies for social programs. However, we have done an exercise to figure out what happens when that money, via the Canada Social Transfer, is allocated to provinces and territories. We have not had a lot of luck figuring out where it goes and if it is really administered in a systematic and coherent way: Is it achieving the ends that we as a nation want it to achieve?
We mention equalization payments in our paper and how we regard those payments as fundamental to a larger societal project, but I will leave that for now.
Finally, we think it is important that women are a key part of this debate. In some ways, we are glad that the representation of women in the Senate is higher than the House of Commons. That is good news. We note that in the House of Commons, only one out of five parliamentarians is a woman. The ways in which women engage in these discussions has been limited to date, in part, we believe, because they are engaged in the daily work of keeping their families and communities together. They are balancing work and life in heroic ways, in our view. Often, they do not have the same access to public space to articulate what is important to them.
This committee is an example of a way to extend the discussion outwards. It is why we are grateful to be part of it and why we came with such enthusiasm on short notice. We believe it is important to have women at the table so that, together, we can come to terms with some of these questions in a responsible and responsive way to women's realities and our human rights commitments.
The Chairman: Thank you for that brief overview. I know there is more we can talk about. I hope we can continue the discussion in the future.
Can you confirm that the material you have provided to us is a document in both official languages entitled Women's Equality and the Fiscal Imbalance?
Ms. Peckford: It is.
The Chairman: I cannot find a date on it. Is it recent?
Ms. Peckford: It was released in March of this year. It is a follow-up to a previous paper on the Canada Social Transfer that we released last year, called Strengthening the Canada Social Transfer: A Call to Account.
That paper has not been provided to the committee because it was particular to the CST, but I would be more than happy to provide it.
The Chairman: We could obtain a copy of that for any of our committee members who would like that particular document. I see that that is prepared by your organization, by Shelagh Day and Gwen Brodsky.
Ms. Peckford: That is right.
The Chairman: How is your organization is funded?
Ms. Peckford: We are a broad alliance of organizations across the country. Historically, FAFIA has been funded through a variety of ways, one of which is volunteer labour. Much of the writing that is done for us is done by volunteers, experts in the field who decided that the discussions in question are so critical that they want to make a contribution and they feel it necessary to do so.
We use a lot of volunteer resources at FAFIA through the pro bono work of experts, academics and, interestingly, women on the ground working in women's centres, in community service organizations, who want to participate in the discussion and feel they have something to offer.
In addition, FAFIA has been funded through contributions from member groups across the country. We have labour organizations and larger, better funded groups such as Amnesty International who have an independent funding base. In addition, for the last four years we have received funds from Status of Women Canada. They have a program called The Women's Program that historically has funded equality-seeking work across the country. We were fortunate in September to receive funds to better articulate and explore questions of the fiscal balance and imbalance. What enables us to do this work today, for your information, is that we were funded by the program at a time when advocacy was still an appropriate criterion for the work. Subsequent to our receipt of funds, the program has been changed dramatically to disallow that kind of work. We are lucky to be here, but it may be the case that in future years you will not see women's organizations able to take positions with federal funds in the future.
Senator Mitchell: Ms. Peckford, we appreciate your being here. While it seems that you cannot be an advocate under recent program changes, you are treading that line well. Thank you for doing that: There is much to be advocated. It is absolutely true that while some progress has been made, certainly not enough has been made. The great equality issue of our generation and generations past remains the question of women in our society.
I will start with your discussion of the Convention on the Elimination of All Forms of Discrimination Against Women. You mentioned that some obligations under the convention are provincial and territorial and others are federal. Many have not been fulfilled. Can you give us examples of the federal obligations and then several of the provincial obligations as well?
Ms. Peckford: Yes: Again, I have something that I can provide to the committee in both languages that I can leave with you. We produced a poster in 2003 that articulated and featured many of the recommendations from the committee. I will go through several of those.
It may be obvious to you in which jurisdiction they would reside, but I can underscore that information.
The committee urged that Canada must assess the impact of its anti-poverty measures better, and increase its efforts to combat poverty among women in general and vulnerable groups of women in particular. The committee noted that funds for women's crisis centres and shelters were still outstanding and incoherently delivered in many respects. They also noted that the funds were not reaching vulnerable populations. Aboriginal women, immigrant and refugee women, and rural and remote women did not have reliable access to shelters.
In Nunavut, there is one shelter for the entire territory. The committee noted the erratic nature in which we provide services to women in particular. They noted Canada's ongoing political under-representation of women. You must know that Canada's representation of women is stagnating. One key component of the convention when it was ratified in 1981 by Canada was that governments and State's parties would endeavour to increase systematically their representation of women. For 10 years now in Canada, we have stagnated and slightly declined in terms of representation.
They talked about employment and the ways in which women in some cases are more precariously employed, and the impact of that. The committee looked also at whether pay equity — equal value for equal work — was appropriately regulated, either at the provincial or federal level.
Child care was another area that they found worrisome. You may know that a recent report by the Organisation for Economic Co-operation and Development, OECD, ranked Canada low in terms of our provision of child care, social housing and access to legal aid. They noted the ongoing discrimination against Aboriginal women. Their language was strong. If you have had experience with United Nations bodies, you know that the UN itself is a highly politicized organization. They choose their words carefully. They talked about systematic discrimination against Aboriginal women here in Canada in a way that was notable to us. They urged Canada to accelerate its efforts and to pay attention to the remaining discriminatory legal provisions and their equal enjoyment of their human rights to education, employment, and physical and psychological well-being.
Other recommendations included immigrant and refugee women and how the new refugee and citizens act was not proceeding in a way that fully took into account the gender-based realities of refugee and immigrant women. They named Employment Insurance as being worrisome, particularly in regard to the eligibility rules and whether women can meaningfully access that program.
They talked about federal-provincial-territorial coordination and how weak it was in Canada and, despite the fact that Canada is regarded as a human rights leader, the reality is that Canada tends to sign conventions and does not come to terms with them in a meaningful way.
Senator Murray might know this: There is an official coordinating committee for human rights in Canada. It is a bureaucratic committee. It is charged to do exactly this work at a senior bureaucratic level. It has not met in about eight years, according to our information. It has been lax.
I encourage you to think about these incredible gaps.
Finally, in terms of recommendations, the committee noted what I referred to earlier, which is in some ways the absence of national standards in terms of particular programs that we may or may not fund across the country.
They also encouraged Canada to collaborate better with its civil society partners on questions of fulfillment and compliance.
Those were some of the recommendations that have emerged.
We have embarked on a systematic campaign at both the community level and with various levels of government, including the federal-provincial-territorial ministers responsible for the status of women, and various prime ministers regarding questions of fulfillment of human rights obligations.
I note that in 2006, all federal party leaders during the federal election campaign submitted a public declaration to FAFIA articulating their commitment to take concrete and immediate action to advance women's human rights in Canada as per these UN recommendations. We felt that was a small success. However, subsequent to that time, little has happened and in some cases we feel there have been additional setbacks.
Senator Mitchell: One of the additional setbacks has been the cancelling of the national child care early childhood education program.
That program is relevant in this discussion in a couple of ways. First, it was a concrete initiative to address at least some of the problems that you discussed, but it was also a model of getting past the problem with the CST where we cannot target.
Can you comment on that early childhood education program as a model because it did have national standards, they were negotiated and it was directed funding?
Ms. Peckford: I note that the committee said, under the convention Canada has an obligation to expand affordable child care facilities under all governments and that it had an obligation to report with nation-wide figures on the demand, availability and affordability of child care in its next report.
In terms of women's participation in the labour force and in terms of their rates of poverty, child care remains an incredibly challenging area. We cannot expect women to participate reliably in the labour force from the early age of when their children are born if they are not able to feel confident that they have access to good child care that they can afford.
It is remarkable because when we participate in international forums, we see that other countries have the capacity to go beyond their own federal jurisdictional complexes, for lack of a better word. They understand that their citizens require certain things, which are fundamental to the advancement of equality and the enjoyment of one's rights and to feel like a participant in a larger societal project.
One thing the UN has been particularly good at, in which various organizations like mine have intervened, are in UN bodies while Canada is being reviewed under a UN convention. I note that Canada helped to pave the way for that participation. At one point, it was not as easy to make a non-governmental submission to a UN committee.
Canada led the way on that participation, rightly so, and we applaud Canada for doing so. However, what we see in the Canadian context is an unwillingness to come to terms with our own human rights obligations.
The UN often notes that they are dealing with countries around the world, many of whom are federations. Within the group of federations with which we deal, many countries have gotten over their wrangling, they have gotten over their jurisdictional quagmires and they have been able to figure out ways creatively and with vision and focus that allow federal resources — and in this case, we are talking federal resources for the most part — to be allocated and to reach communities that need them.
They are incredibly sympathetic towards Canada playing the jurisdictional card systematically. They think that we are a smart and wealthy nation, we have great minds and we should be able to go beyond this.
Senator Nancy Ruth: I want to ask about your desire to have more designations for transfers. The child care example is an exception rather than a rule. How do you reckon the federal government should do this in a way the provinces would tolerate?
Ms. Peckford: Can you repeat your question?
Senator Nancy Ruth: You want capital transfers to be designated to particular social programs. Provinces do not want this. How do you suggest that the federal government do it?
Ms. Peckford: I think, in some instances, when we look systematically at how women have fared in Canada and we look at the realities with which they deal on a daily basis, and we look at popular support for some of these programs, it actually transcends intergovernmental wrangling.
We do not advocate a bulldozing approach. We think that in some instances, the federal government can begin to demonstrate leadership with a couple of provinces. Inevitably, as has happened with other key social programs, other provinces may want to come on board.
We also think that Canada can intervene in a way that articulates its own obligations to all its citizens under UN conventions. I think in some ways, and some may believe we are naïve, I understand jurisdictional realities. I was born and raised in Newfoundland and Labrador. Therefore, I am not a central Canadian. I deeply understand what it means to be attached to a province, to feel a unique identity and that the province might have been hard done by in terms of the federation.
I understand all of that. However, women in Newfoundland and Labrador, regardless of their nationalism as it might pertain to the province, want to ensure that their families and communities have access to services and programs that they deserve. They themselves are willing to get over what may be complicated attitudes around Canada or the federal government, to ensure that the resources we collectively own are well distributed.
I think the federal government has an obligation to demonstrate some vision here. I think it can call upon its international human rights obligations and it can point to domestic realities. When women in B.C. do not have any meaningful access to civil legal aid in dealing with family matters, I do not know how many people will object to some sort of collaborative arrangement in which we ensure women that access.
Therefore, I argue that it takes some courage, vision and a better understanding of what we owe each other. I think the human rights framework is one way to do that.
Senator Nancy Ruth: Have you had a chance to talk to those one or two provinces that could be a test sample of whether they would be willing to do that?
Ms. Peckford: No, not at this point: I will tell you what we have done. We might have test cased in a different way.
When these recommendations came out in 2003, one of the things we thought we should do immediately is establish dialogue, not only with the federal minister but with ministers responsible for the status of women across the country in the provinces and territories.
We told them that they were the lead ministers in their provinces and territories for the status of women. These recommendations are directly pertinent to their portfolios. We want to enter into a dialogue with them in order that they better and more systematically consider how we can fulfill these obligations.
We recognize these ministers are a set of junior players. We get the game. We understand that these ministers are not high-profile and that they themselves may be marginalized within their own cabinets and are carrying dual portfolios, but we felt it was appropriate that the conversation start there.
We began that discussion in Newfoundland and Labrador in 2004, and we continued it in Regina, Saskatchewan in 2005, at which point we were able to have a two-hour meeting with representatives from most provinces and territories. We had a discussion about many of these recommendations, about what the gaps were in terms of delivery within their own provinces and territories and what they might want to see from the government. There were territories and provinces in those discussions that were intensely interested in how we could better leverage our own federal resources.
Subsequent to that time, there has been a change in minister at the federal level who is less interested in being part of that dialogue. That situation has been challenging for us, but we continue to seek out those conversations.
You also may note that Canada will be reviewed again under this convention in two years. Canada's own report is due at the UN as we speak. The report will go back to the UN and explain either inaction or action. We said to ministers at all levels that we do not want to go back to the UN as a civil society organization and despair about what has not been done. Let us imagine a collaborative project that will allow for some movement, one we can take pride in. We can use this as an example for further future action.
To date, that project has not happened in the ways that we would like. We have seen particular provinces, certainly in terms of antipoverty, moving ahead on initiatives to meet some of the needs of low income families better. We applaud those efforts but organizations such as The National Council of Welfare, the Canadian Centre for Policy Alternatives and organizations further to the right and left have noted that on some of these larger social policy issues, the piecemeal approach in some cases is inefficient, and in others ineffective. It does not allow us to harness the creativity that we have as a nation. I am pleased Newfoundland has adopted an anti-poverty strategy. Why would we keep it in Newfoundland? Why not think creatively about how other provinces could adapt those strategies to their particular needs and have the federal government play an active role ensuring provinces have the resources and capacities to meet their objectives.
Senator Ringuette: Thank you for your knowledge of these issues and their effect on women, children and generally people living in poverty. I can sense a lot of depth to that knowledge. You have put in a lot of energy and it shows. I sincerely appreciate that.
I also can appreciate your request to have national standards and provincial accountability. In the last year or two, we asked the Auditor General to ensure provincial accountability regarding federal funds that were transferred. Her response was that provincial colleagues do the auditing and we should refer to them when seeking provincial accountability, and never mind national standards. I look at the issues of child care, cuts to the programs for literacy, status of women and the Court Challenges Program. This was in the past 18 months. In the last two months the shift for social transfers will be on an equal per capita basis. That shift will be the biggest crunch or setback this country has ever seen.
I look at your example of women's shelters. When transfers are made on a per capita basis there will not be more than one shelter in Nunavik. There must be a Canadian conscience somewhere. It seems that we are in this one-track, no-return mind frame. We are only setting the stage for elections. Elections are based on numbers and they need the numbers. I am not targeting the current government particularly. I am looking at the political landscape. Social transfers on a per capita basis are absolutely not acceptable. Has your group looked into the devastating consequences this shift will have?
Ms. Peckford: We did a federal budget analysis after this particular budget in part because we were intensely interested in the questions around transfers. Many of our members, as did we in our budget response posted on our website, signalled our concern around the switch to per capita transfers. We work a lot with rural and remote women and they thought, ``Oh no, what will this end up looking like for us.'' We are concerned about the implication for particular provinces for services, as reported in our current budget report.
Senator Ringuette: Can you provide a copy of that report?
Ms. Peckford: Yes, I will be happy to. That analysis exists in both languages. I will be happy to provide it. It is less focussed on the general question of transfers.
The Chairman: If you can provide it to the clerk, then we will see that it is circulated. If there are any documents that are not in both official languages, we can ensure they are available in both official languages before we circulate it to our members.
Ms. Peckford: Because we work so actively with our Quebec organizations, we tend to translate almost everything. In some cases it is generated in French and translated to English.
Senator Di Nino: Thank you and good morning. Let me first of all understand your organization. Are you a not-for- profit organization? Are you an NGO?
Ms. Peckford: We are a civil society organization founded in 1999, four years after Canada signed the Beijing Declaration and Platform for Action. This was yet another international exercise in which countries came together from around the world to consider their equality obligations to women. Out of the 1995 World Conference on Women, came a federal plan for gender equality. The reason for FAFIA's existence is that organizations who have been active participants in the Beijing process from a civil society point of view, and whose participation had been facilitated in large part by the federal government, grew increasingly frustrated with a gap between what the federal government said it would do as part of this international exercise and what was actually happening. It was a period of some difficulty in Canada. There was a great emphasis on cutting the deficit. As a consequence, many of the fiscal arrangements that historically had benefited women including the Canada Assistance Plan, amongst others, were eliminated. Consequently this organization was born. We are an alliance of women's and human rights organizations. We keep one eye on international developments and one ear to the ground. We are looking at international human rights and how they are applied here. What does it mean for Canada to be part of a global community? What does it mean for women?
Senator Di Nino: You referred to the 1995 Beijing conference and also the UN report. What was the name of that UN report?
Ms. Peckford: The report dated January 2003 issued 23 recommendations. Canada was reviewed for its performance under that key human rights treaty for women. Any time Canada signs an international treaty it is subject to periodic reviews and, in this case, it was the Convention on the Elimination of all Forms of Discrimination against Women. That was a treaty for which we were being reviewed under the UN body.
Senator Di Nino: You said that we did not fair so well in this review.
Ms. Peckford: No, we did not, especially given that we were enjoying tremendous federal surpluses at that time in 2003. We had had many years — nearly 25 of them — to take more seriously what the obligations of the conventions suggested was necessary in Canada, so, no, we did not do so well.
Senator Di Nino: Your frustration has been growing for many years. Is that right?
Ms. Peckford: Some might call it frustration. I represent a range of organizations, both large and small, all of which are deeply committed to Canada being the human rights actor that it wants to be — and that it sometimes is, internationally.
On the domestic front, much more needs to be done. If Canada wants to remain credible as a human rights actor, it is incumbent upon us to ensure that Canadians here at home have the same access to human rights that Canada, as a government, wants other countries to have.
Senator Di Nino: One thing I wanted to put on the record is that my two colleagues were specific about their criticism of the last 18 months of the present government. I understand you to say that as far as you are concerned, the failures, problems, disappointments and frustrations have been going on for years — certainly a lot longer than the last year or so.
Ms. Peckford: Absolutely: We have been deeply concerned for over a decade. We think particular measures over the last 18 months have not been helpful. In fact, we could argue vociferously that they will be detrimental. When we compromise the access of low-income people to the courts, I do not think we are doing ourselves a favour as a nation that prides itself on its human rights record.
Senator Di Nino: That remains to be seen; but I wanted to put on the record that your organization came out of the fact that at the 1995 Beijing conference, we made some commitments. You said in 1999 that this is enough, we will fight this.
Ms. Peckford: Absolutely: we do not believe that any government since Canada signed the convention in 1981 has done enough to take its obligation seriously. We have not emerged as some body over the last 18 months to respond to a particular government. We recognize that governments come and go. Women's organizations in this country have worked with a myriad of governments at many levels for many years. We issued harsh critiques of previous governments, and we will continue to issue harsh critiques where they are to be issued.
Senator Di Nino: As I think you should: I agree with that.
Ms. Peckford: Believe me, we have. If you look at our website, you will see a series of submissions that were made between 1999 and 2006 that really tell the tale. This is not a partisan exercise, but the reality is that we need to tell it like it is. We need to tell it like our member groups on the ground, who work directly with women, see it. No government has been perfect, but when actions are taken that are problematic, they must be named.
I will put this on the record — and this is a little bit courageous for me to say: Governments want people to believe that we are being partisan. It is in their interest to say, oh, that is only an organization that is uncomfortable with this particular party in power. They want that. They want us to appear as if we are out to get a particular party or a particular leader.
Our record, I assure you, suggests that is not how we function. We use international human rights norms as a standard. We are looking to how Canada can be the best it can be, given the resources, needs and realities of the country. We intervene reliably, regardless of party.
However, lots of people out there would like to portray us as a particular entity that wants to ensure that a political party never enjoys political power in Canada. That is simply not how we function.
Senator Di Nino: That was the purpose of my question. I think you have put it on the record very well, so good for you.
Let me ask a couple of specific questions.
The Chairman: We are running out of time and we have one more questioner. Can you ask them quickly?
Senator Di Nino: Let me ask one question then, Mr. Chairman.
Under the recent budget, the CST has been earmarked 25 per cent for education and 75 per cent for social spending. You would like to see a further breakdown of that 75 per cent, I guess.
Ms. Peckford: That is correct.
Senator Di Nino: Are you talking about being specific — so much for this, so much for that? Maybe you can explain further.
Ms. Peckford: I would be happy to. Particular programs have been chronically underfunded in Canada. As a nation, we need to look at what those programs are. What is the degree to which that program may be available in one part of the country but not the other? I think it is the responsibility of the federal government, when they decide to allocate significant amounts of money to this particular federal transfer mechanism, to see where that money can best go, given what we know about how people access or do not access those programs across the country. The government can do that within a human rights framework.
Something like legal aid is basic. The fact that lots of women in this country currently do not have any meaningful access to legal aid for family and civil law is mind-boggling. I think that the federal government could say collaboratively, in good spirit, to provinces, we recognize this is a gap: It has been noted international, domestically, regionally and locally, and we are using this opportunity for the next couple of years to take this amount of money from the CST for this purpose.
Senator Di Nino: You understand that the provincial governments guard jealously their authority under the Constitution of this country. It must be something both levels of government agree on. The federal government, regardless of which party is in power, cannot unilaterally impose its will on the responsibilities of the provinces.
Ms. Peckford: I think that argument is shallow. I think we can go beyond jealousy, as a nation. We can think more strategically and creatively about how we meet the needs of the Canadian population. When good leadership is shown — as it has been on things such as healthcare, child care and the extension of employment insurance to maternity and parental leave, which all provinces eventually signed on to — action is taken.
Governments will do what they will do.
Senator Di Nino: It is a collaborative action. It cannot be unilateral.
Ms. Peckford: There are ways to earmark the CST that could be collaborative. You begin dialogues well before you put it in the budget. You do not surprise people.
Senator Di Nino: We have no disagreements on that.
Senator Murray: All I can do is make a few comments. If you do not have time to reply now, feel free to send us a written note.
I am still trying to get my mind around your written brief. A lot there needs to be discussed and I will come to that in a minute. I also intend to read the transcript of your remarks today because you packed a lot of stuff in there that I want to think about some more.
On block funding, as you know the Canada Assistance Plan was set apart and left alone in 1977 when the government put health, hospitals and post-secondary education into a block transfer. That worked reasonably well for a while — including the tax points, which were equalized, with an additional cash payment that amounted to $1.5 billion the last time I looked. That approach is gone by the boards — or at any rate, is at risk and needs to be revisited, as you know.
Then, in 1995, the government eliminated the Canada Assistance Plan. That idea had been around for a while. They lumped it into the Canada Health and Social Transfer. Now the various components are separated out. We have a Canada Health Transfer, and I hope the next step will be a separate transfer for post-secondary education, although it is not within the federal government's power — I suppose it is, but it would need to be collaborative, as Senator Di Nino says. There is not unanimity among the provinces as to whether there should be a separate post-secondary transfer.
This brings me to the brief and the question of asymmetry in our system. I am amazed by how baldly this brief sets it out. You say that you are in favour of asymmetry where Quebec is concerned, but you seem to buy into a myth that is prevalent in Quebec, which is that everything outside of Quebec is one big monolith.
You know that in terms of social conditions that is not the case. You need only to look at those provinces that have a disproportionate number of Aboriginals, Aboriginals off-reserve, or old people, or those provinces with the problems of integration of immigrants and English as a second language. If you make the tour of provinces and ask premiers what the social needs are of their provinces, you will find that the top three will vary considerably from one to the other, which speaks to a need for asymmetry in federal programs.
My friend Senator Mitchell spoke about the child care agreements negotiated by the previous government. He claimed more for them in terms of ``national standards'' than actually exist. If you want that kind of national social program, I support it all the way, because one thing I noticed in those child care agreements — and I read all of them — is that there is much asymmetry. There is room for a great deal of asymmetry on the part of the different provinces that signed the agreements.
Finally, with regard to earmarking, they have earmarked in this budget but you and I and everybody else knows that until they have some collaborative arrangement, the earmarking means precisely nothing. Block funding is block funding and that is it. It is almost unconditional.
On the question of the social union, you are familiar with the Social Union Framework Agreement signed by Prime Minister Chrétien and nine of the provinces way back in the early part of this century. What do you think about that? What the present government plans seems to be almost identical to what was signed back then. In fact, the assistant deputy minister of finance was sitting a couple of weeks ago where you are sitting now and she said it is the same thing. The present government may want to legislate it. It says: New cost shared programs in areas of provincial responsibility have the consent of the majority of provinces to proceed — that is one of the elements in both the Chrétien government's agreement and what the present government is proposing — and provinces and territories have the right to opt out of cost-shared federal programs with compensation if they offer similar programs with comparable accountability structures. I want your views on that proposal sooner or later.
This will be my final comment. I said that your brief favours a great deal of asymmetry for Quebec but none for anybody else. I am all for asymmetry, but it must be available to others. You say: For women living in the provinces outside of Quebec, a federal leadership role on social programs and services remains essential, that is, women's programs. That is one aspect. However, in general, the federal government can and should have a different relationship with Quebec than with other provincial governments — yes, depending upon what that means. Then you say that the federal government should reattach designations to the transfers to make it clear what the money is for, as well as requiring that provinces and territories outside of Quebec ensure that social programs meet established standards of quality and adequacy.
I was once part of a proposed constitutional amendment that did not go nearly that far and we were pilloried by some of the people you represent here today. I am not bitter about that. At least, when it had a proper realistic government, Newfoundland and Labrador was onside with all that. Those are personal comments.
I am serious about your brief and your presentation. I want to read it more carefully than I have done and take more time with it. If you have time to comment on any of my points, please do. If not, write me.
The Chairman: We have gone five minutes over your time. I do not want you to miss your flight. You determine how much time you can put into this.
Ms. Peckford: Times change, people change and understandings change. We have come to a place in terms of our collaboration with our Quebec partners where we recognize the specificity of Quebec and its historic role in the federation. We are not advocating a homogenous approach to the other provinces and territories. We are saying that the way in which we understand Quebec within the federation must be different, and that is appropriate at this juncture.
Given where I come from and given my experience within Canada, I am familiar with the fact that we need to customize: to think strategically about where people are living and what their needs are. We are highly supportive of a federal role in those other provinces and territories in ways that would be the most useful for the citizens in those provinces and territories, point blank.
We have taken pains over the last decade to be much clearer about Quebec and how Quebec sees itself and how, frankly, women's organizations have fared within Quebec. They have done a lot better on key indicators. We understand that within the societal project of Quebec, gains have been made that have not been made outside of that province, and that our Quebec sisters, as do we, want to ensure that Canada more or less achieves a level playing field for women.
I should leave it there. I will be more than happy to have a longer conversation. These times are complicated. The times have always been complicated. We are happy to have been invited to be part of the conversation today.
Senator Murray: It has been great to have you. Thank you.
The Chairman: Thank you for your participation in the committee. If we have further questions, would be it be acceptable if we sent those questions to you?
Ms. Peckford: We would welcome them and we will make sure that we send the information to you that I said we would.
The Chairman: We appreciate the work you do in the Canadian Feminist Alliance for International Action. We wish you well.
Honourable senators, that discussion was interesting and I am sure we will continue with another interesting discussion with Armine Yalnizyan, Director of Research with the Community Social Planning Council of Toronto and research associate with the Canadian Centre for Policy Alternatives.
The Community Social Planning Council of Toronto is a non-profit agency engaged in research, policy analysis, community development and capacity-building work.
Ms. Yalnizyan has published a report entitled The Rich and the Rest of Us, which examines the nature of the gap between the rich and the poor in Canada.
We will proceed with your presentation, which will be followed by questions and answers.
Armine Yalnizyan, Director of Research, Community Social Planning Council of Toronto: Thank you. It is a true pleasure to be here personally speaking, and a privilege organizationally.
I want to provide background on the two organizations that I represent. I am the Director of Research at the Community Social Planning Council of Toronto, and we have been funded primarily for the last 50 years by the United Way and the City of Toronto. We pick up fee-for-service for projects we undertake with various groups.
We work directly with the community sector, which is comprised of over 1,300 human service agencies in Toronto that deliver programs to hundreds of thousands of residents that literally affect the lives of everyone that lives in Toronto, one way or another.
As Senator Day said, we do both research and policy analysis as well as community capacity building. Therefore, we deal with city-wide and neighbourhood-based issues, and we are unlike any other social planning council on the continent.
The Canadian Centre for Policy Alternatives, with which I am a research associate and for which I have published work on income distribution, fiscal policy and economics of public health care over the years, is a membership-driven organization that has been around since 1980. It has over 10,000 institutional and individual members. It has a national office and five regional offices and it offers non-partisan, independent research and looks at the linkages between international and domestic policy.
Both organizations were thrilled that the views I will present were sought by this committee. May I applaud the committee for taking a constructive way of looking at the issues of fiscal federalism, first by looking at equalization, which is about addressing the fiscal capacity of the provinces?
Second, and perhaps more importantly, thank you for providing a forum in which we can look at the issues of vertical fiscal balance. We are talking about how to meet common goals and objectives for every citizen from coast to coast to coast on both social and economic parameters, whether it involves developing the conditions for economic prosperity or the development of full human potential. In both senses, I applaud you and I say, ``Go Sens Go.'' I had to get that in.
I want to preface my comments by saying context is everything. I want to offer some thoughts on three contextual issues that are the backdrop of all your deliberations about vertical fiscal balance issues.
First, we have seen 20 years of unilateral change to funding relations, change that has been federally driven, and we are presiding over an unparalleled fiscal surplus in this country's history and around the world.
Second, we face an impending labour shortage, which involves the retirement of the cohort of baby boomers. Canada had the biggest baby boomer cohort of the industrialized world, and they are about to leave the labour market. We are seeing skilled shortages around the country. They will not go away. They will accelerate.
Finally is the issue that Senator Day referred to, the fact that we have rising inequality in good times and bad in a country that has more than enough resources to distribute and redistribute incomes better.
In short, your conversation takes place in the context of Depression-era politics, though we are living in an era of unprecedented affluence. The responsibilities and risks have been off-loaded to municipalities and to individuals, particularly the most vulnerable individuals who have inadequate resources and are begging for support from both an individual and a collective level, but at the most risk-prone level.
Those contexts are the wallpaper behind our conversation. The three things I want to present to you are the three desperate changes we need in the fiscal role of the federal government, all of which require planning and not only money.
We need changes in the funding relationships with cities, we need changes in the transfers to provinces for social programs and we need changes in transfers to persons.
In short, we do not need only income supports but supports to make the basics more affordable for people living in this country everywhere. Access to the basics of life are more at risk and in jeopardy than ever before, even though we have more money than ever before.
I want to tease out briefly these contextual issues I have raised. With respect to the 20 years of federally driven change in fiscal relations, from the mid-1980s to the mid-1990s we had changes to the formula for established programs financing, EPF, that was unilaterally reformed by the federal government; a cap on the Canada Assistance Plan, CAP, in the early 1990s; and four rounds of changes to Employment Insurance, which made eligibility tighter and benefits smaller: and cuts to transfers to provinces in support of social programs.
Since the mid-1990s, we have had primarily unilateral changes, but this time in the context of more funds. These changes have taken place in many cases with negotiation from subsidiary levels of government but in the end the federal government decided how or if to restore health funding, provide gas taxes to the city and invest in infrastructure. Though many of these decisions involved multi-year funds, they have been one-off. Whether they are two-year, five-year, seven-year or ten-year plans, they are not formulaic. We have lost the multi-lateral fora for having these discussions, and we have lost conditionality as well as accountability for these funds. We are the only G7 nation with a fiscal surplus and back-to-back fiscal surpluses for 10 years. This is the context in which we have witnessed a devolution revolution in this country.
The second impending change that I want to refer to, as I have said, is that Canada is facing the biggest cohort of baby boomers in the world about to retire. We already have critical labour shortages, and those shortages will accelerate. Fascinatingly, we have been watching this happen like a slow-moving train. We have no national strategy to deal with these skill shortages.
Governments have a mandate to deliver health and education, if nothing else, and there is no national plan on how to replace the retiring health professionals and workers in every part of the country, and no plan on how to deal with teachers at every level of education.
Instead, governments rely on immigration. We are perhaps one of the most open industrialized countries in the world. We are seeing something that is happening all over the world. The global diaspora that is playing itself out all over the world places a greater emphasis on big cities in every country. People are moving, within countries, to big cities. We are seeing this in Canada as well. People are also moving between countries, and coming to the big cities. That means policies, or lack thereof, both through commission and omission, have an impact on place, face and race. That is how policy developments need to evolve.
The clerk of the committee was kind enough to send me transcripts of your committee's recent sessions. I know Thomas Courchene's name has come up a couple of times in your deliberations. He is perhaps one of the key intellectuals in this country to advance the agenda of policy development towards emphazing greater people prosperity rather than place prosperity. This de-emphasis on place has, ironically, accompanied the devolution revolution.
These propositions are not either-or ones. We cannot have people prosperity without place prosperity. We have thrown up our hands in terms of place prosperity and simply said, let people go for the gold and get as far as they can; but we have not even provided the opportunities for all citizens to attempt equally to improve their ``people prosperity.''
The last contextual point is about inequality, and I refer to this point as the other inconvenient truth of our era, is that it continues to rise constantly, in good times and bad, and one wonders how sustainable that is. It is now at a record high level in Canada. Even though we have had 10 years of strong and sustained economic growth, inequality is rising under conditions where it should normally and traditionally be falling.
There is a poverty link to this trend, but also an affluence link. The poverty link is as follows: Last week Statistics Canada said that the rate of child poverty has now fallen to 11.7 per cent nationally, which some believe should be reason enough for the anti-poverty activists to uncork the champagne.
However, it is not yet time to celebrate. Why? Because 11.7 per cent is precisely the rate of child poverty that we faced in 1989 when parliamentarians in the House of Commons unanimously rose up and said 11.7 per cent, one in eight children facing child poverty, was unacceptable in a nation as prosperous as ours. Those parliamentarians committed to eliminating child poverty by the year 2000, a project that has been undertaken by other nations with the consequence that child poverty rates have radically dropped in those places. In Canada, there is no reason to celebrate that we are now back at the 1989 level again in 2006.
As I said, rising affluence also is an element of growing inequality. It is not only about poverty because the affluent set prices in markets, most notably in housing markets. It is not only about the poor when half the population sees their income stagnant or declining, functioning in a housing market where prices only augment and at rates that far outstrip inflation — in fact, the economists of our country say that 20 years hence, we can expect housing markets and the price of housing to double, but you will not find one economist or banker who forecasts that incomes will double over that period.
Therefore, we are looking at a situation in which the basics — such as putting a roof over one's head — are increasingly in jeopardy for many people, not only the poor.
It is not only about housing. It is how real estate markets affect community development. We see this in Toronto and in other cities across Canada. Social analysts describe this situation as deprivation amplification. People who are on low incomes or find themselves with stagnant or declining incomes, or live on insecure sources of incomes can choose only certain low-cost neighbourhoods in which to live. The reason why those neighbourhoods are low value is because they lack access to basic services: transportation, child care, health care, recreational facilities and parks, banks and decent groceries. You name it, those basic services are not there. This is what we mean by deprivation amplification for people who have little money.
This phenomenon is accelerating in the bigger cities because of how global diaspora takes place. Canada welcomes about 250,000 people per year. Half of these newcomers come to the Greater Toronto Area, GTA, and half come to the City of Toronto where they are forced, due to housing shortages and housing prices, to go to the poorer parts of town.
Evolutions of cities tend towards increased density or urban sprawl. Housing and transit strategies are integrally linked. There is no national strategy for either one of those areas. We have no training, housing, or transit strategies at a national level. Their absence affects people's lives, where they live.
With respect to the three changes to the federal fiscal role that I now turn to, I believe your committee needs to take each one of these areas and develop them further. You cannot do this fully in your report on June 30. One of the great privileges of working with committees in the Senate is that place can take a sober, second look at the things that change the lives of Canadians everywhere. Each one of these issues merits its own study.
First, funding is needed for cities. You have heard about this from other witnesses. Three things need to happen from the federal level to support cities. I start with the need for bigger capital budgets for infrastructure. Most of our infrastructure deficit, which you have heard ranges between $60 billion and $120 billion, occurs in cities. There is no reason why the federal government cannot reprise its historical role in building Canada as it did between 1948 and 1970, when it had a ``hands on'' and directive level of investment in public assets and infrastructure for Canadians everywhere.
In particular, the economies of scale and the lower risk premium that come from the federal government raising revenues and debt reduces costs for all taxpayers. It is crazy that we are not using the strength of the federal government to invest in this critical infrastructure deficit, given historically low interest rates. Concurrently, we intend to do everything to retire debt rather than roll it over and invest it where it is needed.
Second, growth revenues are required for growing cities with growing demands for social and physical services. This revenue can be raised either through an income or consumption-based sharing of revenues, but conditionality is an issue. I will not go further there.
Third, a place at the table is needed. Senator Murray mentioned this issue and has been a proponent since the Social Union Framework Agreement was brought into existence. This issue is not only an exercise in who does what, as we went through in the mid-1990s in Ontario. We are now looking at reviewing downloading and discussing uploading possibilities. Cohabitation at every level, and in every order of government, now exists in many policy spheres such as immigrant settlement, emergency preparedness, crime prevention and safety and the environment. We cannot withdraw one order of government so there has to be more meaningful places at the table for cities.
There is the issue of funding transfers to the provinces. I will focus on the CST, though I will mention two things first.
Training is an area in which there is an opportunity for a federal role. Training has been provided primarily through Employment Insurance funding but there are clear and strong opportunities for the federal government to play a funding role in assuring we maintain the skills, and upgrade the skills, of the existing cohort of workers.
With regard to the CST, I will mention a few points. I concur with some of the comments that occurred in a previous session. First, there is a need to break out the post-secondary education, child care and what used to be the Canada Assistance Plan — all the social services, social assistance, child support and abuse work as well as access to legal aid. All that needs to be broken out separately. These discrete areas of intervention require their own conditionality, national standards and objectives.
Second, the 3 per cent escalator is insufficient. CST has been placed well behind the health transfer and all these things, arguably, are the social determinants of health and should be funded equally.
Third, the equal per capita cash, not tax points, as you have mentioned is a Contact C time bomb in our way of looking at how we provide funding. This proposal will cast a huge shadow over the negotiations that will take place when the current funding arrangements for the Canada Health Transfer come into play in 2013-2014. The CST, with the equal per capita cash approach, raises the issues of association with equalization and conditionality when we go to norms and conditions that apply to all citizens from coast to coast to coast. What are the standards we are trying to achieve by providing federal funds?
What are the national goals and objectives for these different funding mechanisms that provide funds to the provinces to meet their social objective? The current context is a government whose stated desire is to return to the definition of a federal government that is defined in the British North America Act of 1867. This desire raises certain challenges on how to deal with the norms and expectations of citizens from all coasts.
I will address the inadequacy of income supports for working-age adults. We have made much progress for seniors and we are starting to make progress on child poverty because of the expansion of the Canada Child Tax Benefit. With due respect and I am not trying to be partisan, I know Senator Di Nino has sat on poverty task forces, Senator Nancy Ruth has championed the issue for women and the law and Senator Murray has taken a huge leadership role in these issues. The Conservatives of this generation, however, have spent large amounts of money on the Universal Child Care Benefit and the tax credits to families with children in the last budget. It is questionable whether these benefits are reaching the people that most need the assistance among families raising children. We are unsure this huge amount of money is going in the right direction. The distribution of these benefits tends to go to those north of the $30,000 mark and that is opposite to its intended target, or what that target should be.
We applaud the Working Income Tax Benefit introduced this year and the attention to the issues of poverty, particularly working poverty. These issues have moved towards the centre of some of the federal government's current deliberations and was squarely at the centre of the budget speech. However, in Toronto, as elsewhere, climbing the welfare wall is more than about money: It means not losing access to drugs and dental benefits, forms of security that the working poor also seek. Further, the WITD misses the mark for those working full time, full year at minimum wage that cannot make ends meet.
In summary, we need four national plans: we need housing, training, transit and child care plans. We have not managed to meet these basic supports, though we are swimming in surplus revenue. We have greater economic and fiscal capacity than any generation has seen before in Canada.
These elements of a comprehensive anti-poverty strategy would meet the concerns of the majority of Canadians and not pit the near-poor against the poor. We signed on to these important basics in international covenants and declarations. John Humphrey, a Montreal lawyer, penned the terms of the Universal Declaration of Human Rights in 1946. I contend we are further away in 2006 in meeting those basic needs, than we were in 1948.
That is the bad news. The good news is the government does not need to raise taxes to reach these goals. They can reallocate existing surpluses. We had $26 billion in tax cuts alone in last year's federal budget and an additional $7 billion this year that could fund most of these initiatives. The further reduction of the GST by 1 per cent, which is on the books, could annually meet the cities' request for additional revenue support. Debt reduction through surplus funds, worth over $22 billion over the last two years, would be a good start on how to finance infrastructure needs. The resources are there. Let us use them more wisely.
I want to quote from Budget 2007, ``It's time to aspire to a stronger, safer, better Canada. . . . with a standard of living and quality of life that are second to none.'' I could not applaud that logic more and I look forward to the fruits of the Senate's attention to this file beyond June 30, 2007.
The Chairman: That is all you have to do — give us a little cheer at the front and we will cheer you. Ms. Yalnizyan, thank you for that wonderful overview.
Honourable senators, we have this presentation in writing in point form. It will be translated and distributed to you tomorrow so you will have that as a record.
Ms. Yalnizyan, you have gone through a lot of interesting points here that will require us to do some thinking. You mentioned the Universal Declaration of Human Rights and John Humphrey. I cannot let the moment pass without informing you that John Humphrey was born in Hampton, New Brunswick, which is my hometown. He is buried in Hampton as well, so we know lots about John Humphrey.
Senator Ringuette: That was an excellent presentation and I enjoyed the perspective you bring to the task at hand and your knowledge.
One item that I enjoy researching is the workforce issue that you mentioned. Occasionally, I go through the federal government website into Human Resources and Social Development Canada, HRSDC. We have put in place a bureaucracy in regard to different sectors that is enormous, and I have not seen any concrete action in the workplace.
A few years ago, I was part of a task force looking at seasonal employment, all the issues of EI, the retirement of the baby boomers, the lack of trades and certification of immigrants' credentials. It seems that we are passing the buck federally to the provinces. We say, here is the money, do what you should be doing. In turn, the provinces — for instance, Ontario — seem to throw that responsibility back to the different communities.
If I take your presentation, together with the presentation that we had prior to your presentation, and I look at the workforce issue, I want to know if you have a specific recommendation.
Ms. Yalnizyan: Yes, I do. I have written about it briefly in other documents, so I am happy to share that with you.
I think there are a series of interconnected issues, but we have to look at it from sector to sector. As a public sector, there are mandated requirements by law that citizens should have access to both health care and education. If there are not enough people in the public service to provide those services, if you cannot start there as a basic requirement of governments, you are not doing your job.
If you are running government as more of a business than it has been run previously, you are not running your business very well. Whereas businesses need to look at the quarterly returns, we have to look at the decade-long or 20- year profiles, and we are not ready to meet that test.
Instead of elaborating on it further, I would be happy to discuss this with you more and present materials to the clerk of this committee as to how to address those issues through EI or through transfers for scholarships with return service possibilities. There is a myriad of creative ways to have the federal government play a role that do not intervene in provincial jurisdiction but meet the test of good governance and stewardship of access to basic services so that we do not have jurisdictions — provinces — poaching trained professionals from jurisdiction to jurisdiction. This includes not poaching from Third World nations when it comes to health care workers. In my view, it is unethical that we have job fairs in hotel lobbies all over the world, where we can afford to be net exporters of health care rather than net importers of health care professionals. I would start there.
I think you need to work with the sectoral councils that currently exist in other industrial sectors but, frankly, the essential first test — assuring access to basic services — is not being met and I think we need a national strategy for that.
Senator Ringuette: What do you think about minimum wage?
Ms. Yalnizyan: One issue about growing inequality is that we all set our sights on shooting for the gold. We also all think that those who are doing well should have cleared the way to do a lot better. We think the average worker should not ask for more than inflation because that is inflationary, and that the minimum wage should never be raised because we lose jobs. We get what we expect, as in any relationship. If that is what we expect, what we will get is the growing gap — the rich and the rest of us, where the rich are the only ones making solid gains in the labour market, year after year, and the rest see their incomes stagnate or drop in value.
One thing the Government of Canada must do as a leader is to raise the federal minimum wage to living wage standards. There are not that many federal minimum-wage workers. The government will not lose a whole lot by raising the minimum wage, but it sets the tone.
The federal government is like a conductor. There are many jurisdictions, all with their own melodies and counterpoints: This jurisdiction sets the tone for governance. Whether it pursues human rights, labour market changes or setting the rules for health care and whether the rules will be enforced or not enforced, a great deal is gained by having a federal government that is willing to act on the minimum wage.
Senator Murray: Elsewhere, I have been a little bit cutting about the Minister of Finance's budget, where they talk about earmarking funds under the Canada Social Transfer. I have said, in effect, that the business of earmarking is bafflegab. We all know it is unconditional and so why pretend. However, listen up, Senator Nancy Ruth and Senator Di Nino. I will say a word in defence of your budget.
In this budget document on restoring fiscal balance, for example, for some of these increases that they talk about where they are earmarking, they say that the money will begin to flow not this year but next, depending on agreements with the provinces. On their investments in post-secondary education, they say they will add $800 million, but that will start in 2008-09 ``following discussions with the provinces and territories on how best to make use of those new investments and ensure appropriate reporting and accountability to Canadians.''
A bit later, when they talk about the $250 million they are putting into the creation of new child care spaces, this money will flow through the CST beginning in 2008-2009, upon completion of discussions with provinces and territories on how best to make use of those new investments. Onward to training, another area that you have properly mentioned: Once agreements with these provinces and territories — those that do not have agreements — are reached, all the approximately $2 billion in the EI labour market program will be delivered across Canada by the provinces and territories.
I think we must acknowledge that Mr. Flaherty has kept a hammer, which is that the money will start, not now but a year or two from now, and it will start only when we have an agreement. Do you summary agree with that interpretation?
Ms. Yalnizyan: Yes.
Senator Murray: I have never been in favour of the federal government imposing its own standards because national standards are what the federal government and the provinces agree they are in areas of provincial jurisdiction. They are not what the federal government from on high imposes by way of legislation, in my interpretation of things.
I want to ask you about conditionality. You were talking about federal-provincial transfers and the need, I think, for more conditionality.
I presume you are familiar with the child care agreements that the previous government signed with the provinces and territories. You perhaps heard me say earlier that one thing I liked about those agreements is that they left room for a lot of asymmetry in terms of provinces being able to respond to their own needs and conditions.
Is that the kind of conditionality you are talking about in other social programs, or are you talking about something more sinister such as the federal government bringing the hammer down by way of legislation in provincial jurisdiction?
Ms. Yalnizyan: I think what has happened in child care is an important start. Those four pillars that were negotiated were a key way of gaining consensus towards progress among a variety of jurisdictions with varying levels of access to child care.
What I am saying is, what are your national objectives? What do citizens from every part of the country need, irrespective of whether they live in rural, remote or urban areas, or what province or territory they live in? In that sense, standards are important. I think it can be agreed to without huge amounts of fuss with the provinces. However, once we have national objectives, for example the Canada Health Act and the five principles of the Canada Health Act, do you enforce them? Having conditions is moot if you do not bother enforcing them.
When you look at issues such as public administration, and the Canada Health Act is enormously porous as a piece of legislation, lots of room to interpret what public administration means in the use of those funds —
Senator Murray: Let me interrupt. I did not realize we were going down this road. Our old friend, Senator Kirby, used to argue, which made an impression on me, that of those five conditions, four of them are patient-centred and the one you mentioned, public administration, is not and therefore, should be considered as something we could change without doing violence to Medicare.
Ms. Yalnizyan: That is unless you wish to spend money unnecessarily.
Senator Murray: That is a fiscal argument, is not it?
Ms. Yalnizyan: Totally: However, we are talking about fiscal relations here and not wasting the taxpayers' money, a fiscal approach for which I applaud the current government. Why spend a dollar when 99-cents would do, as Tommy Douglas would say. Then, multiply that by many billions. This savings is a billion dollars we could use to house people. It is not immaterial when we lose a penny on every dollar we spend.
The principle of public administration has two interpretations. One is single payer modality, where we save costs through the insurance mechanism. Public administration is also, why spend a dollar on profits when we could spend that dollar on service? Why are we using public funds to finance for-profit facilities that do not provide us with any different service. they only come up faster? Why do we not do it in the not-for-profit private realm?
So there are lots of issues here today about prudence and due diligence on public funds that I do not think are moot when we talk about transferring huge quantities of dollars to the provinces. What is the expectation of how that money will be used? I think the taxpayer deserves to know where the money goes and that the money is used in the best possible way, which includes the best economies of scale, the best bulk purchasing, the best consolidation of risk pooling, et cetera.
Senator Murray: The provinces must negotiate with the teachers, the professors at the universities, the doctors and the hospital boards. What do you say about their accountability? Their political accountability is as real to their electors as, I was going to say, ours is, but you know what I mean — our brothers and sisters in the House of Commons — as it is at the federal level. When the electors become restless, they change governments at the provincial level much more frequently than they do at the federal level, I have found. We have a number of new governments in place in the provinces now and a couple of close elections are being fought in two of our provinces.
I think we have to recognize that the provinces are accountable, especially in their own jurisdiction, to their own legislatures and to their own electors.
Ms. Yalnizyan: However, what the devolution revolution means is there is inadequate resources at the provincial or municipal level to have the bricks and mortars investments that we need, and to make sure that we have the residencies that we need in healthcare, that we have return service processes so that students do not leave school with $24,000 debt on average from colleges and universities and that we have adequate investment in upgrading incumbent workers skills. We have no plan on any of these areas and it is not up to an individual province to determine, for example, what a national plan should be in that area.
Senator Murray: No, but the plan must be collaborative.
Ms. Yalnizyan: Completely: The Province of Manitoba has the most aggressive strategy to train nurses out there and the nurses are going to Alberta because Alberta pays more. That kind of inter-jurisdictional poaching does not do anyone any good. We have a national nursing shortage. Let us deal with it on a national basis.
Senator Murray: How?
Ms. Yalnizyan: You can determine the number of training seats that you need and the kind of practicum required all over the country.
Senator Murray: There always will be competition among the provinces.
Ms. Yalnizyan: Indeed there will be, because of the labour market, but if we do not put enough bodies out there to meet the retirements that are coming up, all we do is crank up prices. We have done nothing else.
Senator Murray: The disappearance of a great number of nurses, not from one province to the next, but to a country, our neighbour to the south, was a function of the cutbacks that took place, and a bad science in terms of predicting what the need would be down the road, I think.
I do not want to keep you, but when you talked about revenue sharing with the municipalities, the question of conditionality came up there too, in the sense that you referred to it without becoming specific.
My last question: I invite you to be more specific about how we will exact some conditionality, if that is what we want to do, from municipalities on matters such as the gas tax or even a point of the GST, if we want to dream.
Ms. Yalnizyan: May I say that you can appoint growth revenues knowing what citizens of every municipality need. They need access to clean water, decent waste systems, access to public transit because that is an issue everywhere and access to affordable housing because that is an issue everywhere. We can have conditions as clear or as fuzzy as we want.
I said the issue of conditionality comes up. Does the federal government become only a blank cheque writer for the municipalities? Clearly, that is not desirable. The federal government will want some political visibility for what they are doing as a federal level of government, but they also will want to make sure that the taxpayers are receiving value for money, and the money is for, fill in the blank. How we enforce that is another element of conditionality.
I want to go to the point that I made, which is, I believe, federal financing for cities,federal financing transfers to the provinces for social programs and transfers to persons for training for income support and all the rest of it, are three separate files. All are elements of the vertical fiscal imbalance, each requiring a huge amount of attention and this is the perfect committee to do that. However, I do not think you can do everything in one —
Senator Murray: On the business of transfers to persons, I thought you said you were not talking about income support here, that it was taken care of.
Ms. Yalnizyan: No, I said it is not limited to only income support. It is not limited to income support because I mentioned the inadequacies of the newly introduced Working Income Tax Benefit, WITB, in reaching full-time full- year workers at the minimum wage. It touches a small group, but we know for the group that it does reach adequately, part of the welfare wall is continued access to dental and drug benefits and a whole array of other things that are available through programs of social assistance. It is not only about money, but it is about money too. It is about income supports, whether it is the minimum wage, unemployment insurance benefits or wage supplements, effectively.
Senator Murray: Your definition of WITB is not income support, it is something else.
Ms. Yalnizyan: No, I am sorry it is. I am saying only that the WITB is an important step in a particular direction, which is to help people move from welfare to work, and supplement the wages of workers that have a tenuous relationship with the labour market, and much more can be done in that direction, should the government choose to go there. However, part of that barrier is not only about income, it is about access to a range of services that make life more affordable, and that affects the working poor as well who are not touched by the WITB. I am sorry if that was a bit confusing.
Senator Murray: No, it was only telescoped a bit.
Ms. Yalnizyan: Yes: I would happily come back here three times for three different files.
The Chairman: Senator Murray, I have been lenient with you in your line of questioning, having in mind that we were not able to give you sufficient time at the last meeting, and also noticing that the next senator is Senator Di Nino.
Senator Di Nino: You hit a cord with one comment you made. If I may, Mr. Chairman, I will borrow 30 seconds. The Standing Senate Committee on Foreign Affairs and International Trade reviewed Canada's relationship with Africa, and I believe that the Vice-President of Mali said something like, ``The colonizers came and stole our natural resources and now they are coming to plunder our human resources.'' That problem is serious in many of these countries. It has nothing to do with today's meeting, obviously, but I thought it was telling.
I want to understand correctly if you said that you believed that the further promised cut in the GST rate should not proceed and that the plan to eliminate the debt should also be put aside and the money used for other purposes. Is that what you said?
Ms. Yalnizyan: Yes, sir.
Senator Di Nino: You do not believe that by putting money back in the hands of the public, people will go out and buy more appliances and dine out more frequently, thereby creating general economic activity. Would that not be a way to increase the opportunities for people at all levels: the wealthy, the poor or the middle income earners?
Ms. Yalnizyan: The GST cut accrues more to people that spend more. If I am a mother on welfare and buying a winter coat for my child for $100, I will save $1 from this change. If I am wealthy and buying a Lamborghini, I will save about $6,000. The cut is geared to high spenders. However, that same amount of money — more than $5 billion and climbing — could meet basic needs such as access to affordable housing, transit, whatever you name — the things that are not discretionary in the lives of poor people or working people. People need a place to live, a place to work and child care. We are talking about discretionary items that have opened up suddenly to people because they have more spending power. It is true, sir, that a one per cent GST cut raises economic opportunities for those who already have buying power. It is also true that not making that cut presents a huge opportunity to address issues where people do not have economic opportunity and, in fact, no economic choice. At a time of so much affluence, it is a true squandered opportunity to make a difference in everyone's life. The interesting thing is that those people spend all their money in the local economy. A fridge might come from the United States, China or Korea, and a car might come from North American but it also might come from elsewhere. All the things you mentioned can lead to economic opportunity, but not necessarily in Canada. We can give a poor person a little bit more spending money because we have reduced the cost of transit or housing and they will spend it on milk at the corner store or on something else for their children. It would make a difference in their lives right here in Canada.
Senator Di Nino: We will have that debate another time when we have more time. I do not totally disagree with you but I think we could have a meeting of the minds half way on the issue. I have one specific question for you. As you know, taxing is viewed as a negative action by governments and politicians, in effect. For the federal government to tax and redistribute, it must accept a certain negative impression by the voters. Do you think that for cities, to be responsible for their own actions, should be given some taxing powers.
Ms. Yalnizyan: As I mentioned before, I believe this conversation to be profound because you are changing the constitutional fiscal make-up of the country. We could have an extremely extended conversation about that, and I do not want to go there. However, I want to address your comment about taxing being a negative activity. In truth, taxing is one side of a coin: the other that leads to services. That connection between taxes and services has been profoundly broken in most people's discourse on taxes. Taxes are referred to as a burden without talking about what is received in return for paying taxes. An individual with another dollar in their pocket from a GST cut cannot buy a mile of road or a child care space. As Oliver Wendell Holmes Jr. said, ``Taxes are the price we pay for a civilized society. `` By the way, he was a Conservative and a judge, so I am not talking about partisan positions but rather an approach to what we want the collective good to provide to everyone. I believe this discussion is an important one about the proper role of taxes.
Canadians are way ahead of you in terms of reconsidering that the next tax cut means a service cut, and they do not want service cuts, sir. They want better services. They do not feel that they have enough services in the communities in which they live. The municipalities have seen much downloading but almost no trickle-down of growing revenues. Municipalities today have much more responsibility for providing the civilized society that we all seek but without the adequate resources to do it. That is why I was talking about growth revenues. Whether a share of income tax or a share of consumption tax, we need something that grows with the population. That is a deep and prolonged conversation that I think we can touch on only briefly in the time that we have remaining.
Senator Di Nino: I agree, although I disagree with parts of your position. It is really a question of balance.
Ms. Yalnizyan: Excellent.
The Chairman: The last word in the second round is to Senator Murray.
Senator Murray: Please feel free to comment, but I do not have the impression that the government is pursuing aggressively a pay-down of the debt. Certainly, the total debt as a percentage of the GDP is declining, thank goodness. At one point, a while ago, in the middle of a recession we were reaching toward 70 per cent. That has gone well down and the public debt charges, which were in the vicinity of $40 billion when I had more information on these matters than I have now, are still high at about $33 billion to $34 billion. We spend that amount each year on interest payments. I believe it was $34.1 billion last year, $33.8 billion this year and will be $33.7 billion the year after. One hopes that the situation you referred to earlier with close to historically low interest rates will continue because if it does not, those public debt charges will go up and consume a bigger share of our revenue and expenditure dollar. Even as a continuing Progressive Conservative, I am enough of a fiscal Conservative to think it a good idea to pay down the debt and pay it down aggressively, as you or I would do with our personal finances. Otherwise, we get into a terrible hole. It is an awful thing to look at an interest bill of $40 billion and think about the things we could do with some of that money.
Ms. Yalnizyan: May I respond?
Senator Murray: Please.
Ms. Yalnizyan: Often the analogy of the household serves us well in thinking about this issue. To pay off our debt is to pay off our mortgage but if our roof is leaking and our foundation is cracked, then it might not be the best use of our money because we could pass on a crumbling infrastructure to our children. They might be debt free but they do not have a habitable abode. I think this situation is what we talk about when we talk about reducing the debt. No nation that I know of has zero debt charges. The question is: What is the magic number for debt charges. The other side of taxes is services and the other side of a debt charge is building public assets or investing in them. A debt is a bad thing if it is seen only as a debt. We need to connect it to what we are building with that debt. There is no large corporation that does not have corporate debt. If debt were such a bad thing, corporations would never have any debt. We cannot build, we cannot maintain and we cannot expand a nation without incurring debt. You are absolutely correct in saying that the debt-to-GDP ratio would go down if the federal government did not pay a penny because the economy continues to grow. I would say simply that this is the ideal time to borrow, given that we must borrow for those investments. Investments such as clean water, waste management and electricity are not optional.
We need all of those things and someone has to pay for them. There is no free lunch. The best way to pay for it is where the debt charges are the lowest and that is at the federal level. This is why I refer to the 1948 to 1970 glory years of the federal government cost-sharing of investments in public infrastructure because it was the cheapest option for Canadians. The same things were needed from coast to coast to coast. I fully appreciate your concern about a $33 billion-dollar charge per annum on debt but you have to pay for it somewhere. Would you like to pay more? The issue is how much more do you wan to pay? It will cost more if the federal government does not take it up. If the provinces or the municipalities do so at the subsidiary level of government, the higher the risk premium, the higher the cost of servicing the debt. It is actually a brain dead argument.
Senator Murray: Previous generations got into the habit of wracking up debt in order to pay the operational expenses. That helped get us into big trouble.
Ms. Yalnizyan: I concur.
Senator Murray: I do not want to criticize them. To some extent what happened is they committed themselves to large expenditures — much of it was on social programs — on the basis of buoyant revenues and buoyant economies that could not continue. I do not wish to be complacent about the debt. I am not of the opinion that the present government is very aggressive at paying it down.
Ms. Yalnizyan: I agree it is not all that aggressive but $22 billion over the last two years could have bought a lot of infrastructure solutions.
Senator Murray: A portion of the $34 billion we are paying in interest would also have bought many infrastructure solutions.
Ms. Yalnizyan: That will not go away or disappear to zero. Your comments, similar to Senator Di Nino's, are that taxes are a burden. Public debt charges are a burden. What do you get for it? The federal government reducing its debt simply means that a subsidiary level of government takes on more. These investments need to be taken and the municipalities, as creatures of the provinces, have no ability to incur debt. I wish I had another opportunity to discuss with you some of the remarkable trends in bailouts from the province and raiding the reserves at the City of Toronto alone. They are not sustainable curves. You may get rid of your debt and the provinces may get rid of theirs but the debts are appearing at the municipal levels because that is where the need is being met.
The Chairman: You make your points forcefully and well. We appreciate on behalf of the Standing Senate Committee on National Finance your attendance here today and providing us with this interesting morning of discussion. We look forward to continued dialogue. If we have any further questions we will respond. If you could help us with your insight that would be very much appreciated.
Ms. Yalnizyan: Thank you very much. This was a great pleasure being here this morning.
The Chairman: Thank you.
The committee adjourned.