Proceedings of the Standing Senate Committee on
Social Affairs, Science and Technology
Issue 4 - Evidence - Meeting of February 28, 2008
OTTAWA, Thursday, February, 28, 2008
The Standing Senate Committee on Social Affairs, Science and Technology is meeting today at 10:45 a.m. to examine and report on the impact of the multiple factors and conditions that contribute to the health of Canada's population — known collectively as the social determinants of health — and to examine and report on current social issues pertaining to Canada's largest cities.
Senator Art Eggleton (Chair) in the chair.
[Translation]
The Chair: I now call this meeting to order. Welcome to the Standing Senate Committee on Social Affairs, Science and Technology. Today we will be examining child poverty in urban areas.
[English]
Before we start our committee agenda, I want to point out that a photographer is here and flashbulbs are going. Most of us in the political scene do not have much objection to that. We have never met a photographer we did not like. The photography today is provided by the committee to obtain some action shots of us.
Our committee has two subcommittees, one on population health — which is chaired by Dr. Keon — and the other on the major challenges facing our cities, which I chair. Since the themes we are dealing with today — poverty, housing and homelessness — are issues common to both subcommittees, we are meeting as a full committee to feed the information into both projects.
We are also building on previous work done in the Senate on matters of poverty. In 1971, the report headed by Senator David Croll comes to mind, as well the 1997 report by Senator Erminie Cohen entitled Sounding the Alarm: Poverty in Canada.
At the same time, our study is intended to complement the work by the Standing Senate Committee on Agriculture and Forestry chaired by Senator Fairbairn, who is also a member of our committee, because at the request of Senator Segal, that committee is dealing with the issue of rural poverty. Again, we hope to pull a lot of these pieces together.
Today, we have four witnesses present. We have an all-star line-up in front of us today. As much as we would like to hear from them for a lengthy period of time, we ask that they keep their opening remarks as close to five minutes as they can so there is time for committee members to ask questions and dialogue with them.
Let me introduce our witnesses. First, someone I have known for a long time, we have Frances Lankin, President and Chief Executive Officer of the United Way in Greater Toronto. In November 2007, the United Way issued a report based on the study of families in Toronto entitled Losing Ground: The Persistent Growth of Family Poverty in Canada's Largest City. This study is the latest of a number of studies completed by the United Way on that subject.
This study clearly shows that the number of families living in poverty in the city of Toronto is growing, compared with their counterparts.
Gina Browne is Professor of Nursing and Clinical Epidemiology at McMaster University. She is a director of a research project involving the economic evaluation of comprehensive service intervention for vulnerable children, adults and seniors.
Rather than focusing only on income supports, her research stresses the need to provide families on social assistance with support services that, for example, enhance parenting skills and prepare for re-entry into the labour market. She will bring this perspective today.
Armine Yalnizyan is a Senior Economist formerly with the Community Social Planning Council of Toronto and now of the Canadian Centre for Policy Alternatives. She has worked with governments at the federal, provincial and local levels, with international non-governmental organizations and with community-based organizations and coalitions. In 1998, she authored a ground-breaking report on income inequality in Canada entitled The Growing Gap.
Ken Battle is familiar to members of the committee. He is president of the Caledon Institute of Social Policy and has been a great help to us on many occasions. In January 2008, the Caledon Institute issued a paper entitled A Bigger and Better Child Benefit: A $5,000 Canada Child Tax Benefit that calls for restructuring federal benefits provided to parents.
We will start with Frances Lankin, followed by Armine Yalnizyan, followed by Ken Battle and then Gina Browne.
Frances Lankin, President and Chief Executive Officer, United Way of Greater Toronto: Thank you very much Mr. Chair, and I appreciate the invitation. It is an honour to be here before honourable senators. I am a former politician, and so speaking in five minutes is a challenge. Let me give this a try.
Others today will speak to the specifics of policy answers and will give you a good feel for that subject. I want to back up and talk about the nature of the urgency of the issue. For many years, those of us involved in public life to one degree or another, and in public policy, have understood the concern and the pressing need around poverty, particularly children living in poverty, although I hasten to say, kids living in poverty are in families living in poverty so our policies must bridge the family unit.
I believe, however, that in the past few years with the most recent economic general well-being — not what we forecast in the next year or so — a sense has grown that conditions have improved overall for Canadian families. In fact, the statistics of the percentages of low-income families have improved nationally. In the province I come from, Ontario, they have improved provincially. In the city I come from, Toronto, they have not.
Toronto is Canada's largest city. According to the Mercer Survey of between 100 and 200 cities around the world, Toronto remains Canada's most expensive city. When you understand that, the persistence of family poverty and the growth in numbers of family poverty running counter to the provincial and national averages should give us cause for concern about one part of our country we often consider to be one of the economic engines of the country.
The report, Losing Ground, as was alluded to by the chair, builds on previous reports: Poverty by Postal Code came out of work from the strong neighbourhood task force of which the federal government was a participant and funder; and the earlier work, A Decade of Decline, was a Toronto snapshot building on Ms. Yalnizyan's work on the growing income gap. Losing Ground has painted a story that, despite times of economic growth and general prosperity in the greater Toronto area, despite growing populations and lots of positive things happening, the median incomes for families with kids under 17 in Toronto has remained flat and lags far behind where they were in constant dollars for 1990.
Therefore, we have not seen the economic rebound from the last recession benefit middle- and lower-income families. We see a continued growth in the percentage of families living in poverty despite improving averages nationally and improving averages in Ontario. We see huge gaps in actual dollar levels that families are living with nationally, provincially and even in the rest of the Greater Toronto Area — the 905 belt around Toronto. However, our research will show that the trends that have become established and entrenched in the city of Toronto are foreshadowed and coming quickly to the 905 area code and the Greater Toronto Area. In some of the trends we see, the rapid population growth there indicates to us that they will quickly catch up to the state of affairs in the city of Toronto. Again, that data should give us cause for concern because the urban economic region is not the city of Toronto. It is the larger census metropolitan area, CMA; the Greater Toronto Area with all parts combined.
You received an executive summary of the report, and I will leave a copy of the full report. Honourable senators, I know how much material you need to read, but if you have the opportunity to read the report, there is much richness in it that looks at employment trends. If we want to understand the challenges facing the economy and families, we need to understand what has happened with jobs: the loss of manufacturing jobs; the rise of temporary and precarious employment; lower salaries; fewer benefits; and percentages of workers now working multiple jobs. We need to understand what those changes mean to being able to raise kids.
In some of our research, we have been able to show that over 80 per cent of the poor families living in the poorest neighbourhoods in Toronto are working. This story is about the working poor, and so it remains important for us to look at income security across a range of social supports. Others will speak to that. It is also important for us to understand the economic forces around jobs, and what jobs provide for families to raise their kids on.
I have a couple of specific issues. We are at a point in Ontario right now with a provincial government that has made a commitment to the electorate and the public at large that they will engage in a poverty reduction strategy and will set targets and timetables. There is room at the table for all players. There is a compelling need for the federal level of policy-makers and government decision makers to engage with the province in a range of public policy issues. As you reflect on what role and level a national government can play, a compelling timing argument says it is important to act now in concert at least with this province. Others will know of initiatives going on in other provinces.
As we look at the costs of poverty in our city, we look at the growing number of consumer insolvencies and debt counselling caseloads. The rate of consumer insolvencies nationally is 18 per cent, and consumer insolvency in our city has increased to about 53 per cent in the same period.
We know that income security measures are important. At the federal level, there has been much talk about the need for the revamping of Employment Insurance. I know Caledon has completed good work to look at policy options that are broader than changing only the regional eligibility criteria. I urge action be taken to address the problem where in the last few years only about a quarter of unemployed workers in the city of Toronto were able to access Employment Insurance. As we head into the next recessionary period and see mounting job loss, that problem is of great concern.
As we look at this work of strategies to reduce poverty, the bottom line I would like to leave you with is the importance of understanding geographic specificity in the strategies that are employed. In a time when people comment that poverty levels are decreasing and things are improving overall in Canada, to see trends stunningly opposite in the largest city in Canada must make us question the role of general, regional and national statistics, and how those statistics level or smooth out the differences regionally.
In our plea to the provincial government involving their strategy development for poverty reduction, we said it is important to have a specific geographic lens through which they measure existing rates of poverty, set their targets and enact policies. That is not to say that Toronto is the only city I speak for.
In our province, Windsor is faces changes in the automotive sector. Northern Ontario faces changes in the resource sector and loss of jobs, and there are different challenges. In an urban setting, in a large city with changes in the economy and the nature of the work available there, the issues are different yet again. With large numbers of immigrant families making up the largest proportion of those families living in poverty, the opportunities and the strategies are different.
A geographic lens is clearly important that is not broad, not national, not provincial and not regional, but comes down to understanding smaller units and bringing a sense of community neighbourhood scale to the work we do. I ask you to consider that lens as you put together your recommendations.
Armine Yalnizyan, Senior Economist, as an individual: Thank you, honourable senators, for dedicating yourselves to this line of study, and explicitly linking it to Senator David Croll's path-breaking work in 1971. It is a genuine honour for me to appear with this distinguished panel, and I appreciate your time.
I also want to give you a big picture story. We are meeting at a time of absolutely unparalleled economic abundance in the country of Canada. We have gone 17 years without economic recession. That situation has not happened before in post-war history.
The World Bank has recently upgraded the status of our economy from ninth biggest in the world to eighth biggest in the world. That ranking is out of 183 nations, and we have a fraction of the population. We are the only advanced industrialized nation that has racked up 10 years of back-to-back fiscal surpluses at the federal level; all of our provinces are now in the black.
Economic growth remains strong despite financial storm clouds from south of the border and some sectoral weakness. As a nation, we have the economic and fiscal capacity to tackle any issue we choose to address.
Child poverty has declined over the last decade, but let us be clear: That decline is because the job market has not been this strong in 33 years. When there are jobs, Canadians take them. Today's rate of child poverty has returned only recently to 11.7 per cent. It was that rate in 1989, when parliamentarians stood up universally and unanimously, declared child poverty to be a national disgrace in a country of such abundance, and pledged to eliminate it. If it was not good enough then, I do not know why it is good enough now.
As Ms. Lankin said, child poverty is family poverty. Recently, the Canadian Centre for Policy Alternatives updated The Growing Gap work, and we see that, in income terms, fully half of Canadian families raising children have lost ground compared to their predecessors a generation ago.
I want you to stop and think about what that information means. They are playing by all the rules. They are better educated than families a generation ago. They are working more. They are spending way more time in the labour market. They are peddling as fast as they can, and half of them are either losing ground or barely staying in place.
Poverty, particularly working poverty, as has been mentioned, persists. Meanwhile, the incomes of the richest 10 per cent of families raising children have soared ahead in intergenerational terms. The great irony is that, as a group, that top 10 per cent actually spends less time in the paid labour market. Here is the rub: Growing inequality is no longer about the gap between the rich and the poor; it has become about the majority of Canadians. When we look at the statistics, we see that 80 per cent of families raising children today take home a smaller share of the pie they helped generate than their predecessors a generation ago.
Senators, this phenomenon is unsustainable. It is the other inconvenient truth of our era. Working more simply to hold your own or actually slide in income is a time-limited option. Here is another inconvenient truth for some: Conventional wisdom for the past decade or so is that taxes are simply a burden, and the best thing governments can do is get off the backs of its citizens.
Statistics show that it is not tax cuts but government programs of income support that have made the biggest difference for families raising children in this country. Since welfare and Employment Insurance benefits have been so devastatingly eroded over the past 15 years, it is safe to conclude that the implementation and expansion of the Canada Child Tax Benefit in the 1990s offset the free fall in earned incomes for the poorest families.
I provided charts in Power Point to give you this documentation and I am happy to speak to those charts, but I want to continue for a moment because it is not only what has happened to the poorest families. Government transfers for families raising children benefit the bottom half of families raising children. Income supports, not tax cuts, is what has made the biggest difference for these families in terms of pocketbook issues. Yet, we have spent hundreds of billions of dollars on tax cuts in the last decade.
We know that governments do more than affect personal incomes, whether they give money back or help put a little more money in your pocket. Governments create collective benefits that no household can purchase or create by themselves. Only by pooling resources can we build hospitals or schools. Only by pooling resources can we create a system of transportation or clean water. Only together do we provide networks of security and emergency response, and only by pooling our resources do we build systems of resilience for individuals, families and communities in good times and bad.
We know that poverty is about inadequate incomes, but we also know that reducing poverty is about more than an income fix. In 1971, the Croll report laid out critical non-income parameters, and they are the same today as they were then. Those parameters are housing, education, health care, debt and credit issues, and access to fundamental justice.
Your committee has linked poverty, housing and homelessness and for good reason, because look at what is coming up ahead. Around the world, a global diaspora of people is moving from rural to urban centres. They are coming from poor countries to rich countries, and everywhere they are coming to the biggest cities, the poles of growth. In all those poles of growth, we are confronting a crushing shortage of affordable housing. As baby boomers retire in record numbers, we want and need to welcome more immigrants, but what are we welcoming them to?
Polling by Evironics Research shows that 80 per cent or more of Canadians of every political stripe support governments that make certain basics more affordable and more accessible: housing, post-secondary education and child care.
You have Canadians standing with you. They think it is wrong that Canadians can work full time and for the full year at the minimum wage and still not rise out of poverty. Poverty can be reduced. We know what to do. Senator Croll's report pointed the way forward decades ago. The alternative federal budget, which was released by the Canadian Centre for Policy Alternatives on Monday — I brought a copy if you want it — has calculated the cost to move forward on these things. We see that not only can we afford to move ahead, it does not break the bank; it is totally affordable.
In parting, I want to leave words of inspiration for action. The words come not from me but from the most successful businessman of our time, Bill Gates. He said:
Humanity's greatest advances are not in its discoveries — but in how those discoveries are applied to reduce inequity. Whether through democracy, strong public education, quality health care, or broad economic opportunity — reducing inequity is the highest human achievement. . . .
He said these words in an address to students, faculty and alumni at Harvard last June at their commencement. At that time, Mr. Gates challenged us to do the most good for the greatest number, not when we have the perfect answers, not when we have enough money, but with the resources we have at hand now.
Senators, we have tremendous economic and fiscal resources to achieve whatever goals we set for ourselves. I hope your work will inspire us, citizens and parliamentarians alike, to make the changes that create safety, opportunity and hope for every child and every adult in this beautiful country.
Ken Battle, President, Caledon Institute of Social Policy: What I have to say will segue well from what Ms. Lankin and Ms. Yalnizyan have said. I will focus today on one of the most important but often misunderstood and underappreciated tools for combating child poverty and that is child benefits. By child benefits I am talking about cash payments to families on behalf of kids, which are delivered either in the form of cheques or income tax reductions. Both Ottawa and the provinces and territories provide child benefits of various kinds but I will focus today on the major child benefits, which are the federal ones.
It is important to go back to first principles and remind ourselves of the two core objectives of child benefits. The first one is to help reduce and prevent child poverty and the second, which has become a little bit lost in recent years, is to help parents with the cost of raising kids.
Under the poverty reduction objective, child benefits help fill the gap between the earnings of lower wage parents and their family's income needs because, in a market economy, we do not vary wages and salaries to take into account the number of family members dependent on that income.
The second objective, the parental recognition objective, sees child benefits as one way for society to provide financial recompense for the fact that parents with kids bear expenses that childless households at the same income level do not. Economists call this recompense, horizontal equity.
Federal child benefits have been around since 1919. They have undergone all kinds of changes over the years. Our report, A Bigger and Better Child Benefit: A $5,000 Canada Child Tax Benefit, has a discussion of that benefit for those who want detail. I want to focus today on the changes over the last couple of years in federal child benefits.
In 1993, three previous child benefit programs — family allowances, the refundable child tax credit and the non- refundable child tax credit — were combined and integrated into a single geared-to-income child tax benefit in 1993, which was redesigned into a larger Canada Child Tax Benefit in 1998. The Canada Child Tax Benefit is Ottawa's contribution to the federal-provincial-territorial national child benefit reform that started about a decade ago.
It is important to remind ourselves of the advantages and strengths of the Canada Child Tax benefit. First, the benefit is a non-stigmatizing, inclusive social program that delivers monthly cash benefits to the large majority, about nine in ten now, of Canadian families across the country. The program is portable, which provides a stable and assured supplement to income no matter where families live or work, or do not work in the case of those receiving EI, social assistance or other such sources of support.
The Canada Child Tax Benefit is a progressive program, and pays benefits that decline as family incomes increase. It pays the same amount to all families with the same net income regardless of the sources of that income and regardless of where they live in Canada. I will come back to that point later.
All low-income families receive the same maximum benefit from the Canada Child Tax Benefit. The Canada Child Tax Benefit is also used to deliver the Child Disability Benefit and the Canada Learning Bond. A number of provinces and territories use the delivery machinery of the Canada Child Tax Benefit to operate their own income-tested child benefits, which generates administrative savings.
Unfortunately, the federal government took a giant step backwards in 2006 with the creation of the Universal Child Care Benefit, which is based on the defunct family allowances program. The 2007 budget recreated the non-refundable Child Tax Credit, another flawed scheme resurrected from the 1980s.
Moving backwards from one to three programs causes several problems to the federal child benefit system. First, it is stealthy and misleading. Most families that qualify for the Universal Child Care Benefit do not end up with the much-touted $1,200 per child because they pay federal, provincial and territorial income taxes on their benefits.
Moreover, the Young Child Supplement of the Canada Child Tax Benefit was eliminated to help pay for the Universal Child Care Benefit. Because of the confusion and complexity of the new programs, I suspect few families who received the Young Child Supplement are aware that they lost that benefit.
Despite its name, the Universal Child Care Benefit is a child benefit, and not a child care benefit. Families can use the money as they see fit, whether for child care or some other purpose. If it is regarded as a child care benefit, it is a bad one.
The 2007 budget advertised the new non-refundable Child Tax Credit as being worth $2,000 per eligible child. This information is completely false. The same budget went on to acknowledge that the actual value of the $2,000 child tax credit is $2,000 times the lowest tax rate of 15 per cent, but it did not say what that amount was. It left budget readers to figure it out for themselves, and the answer is $300.
The child benefit system has now become inequitable. The after-tax value of the Universal Child Care Benefit varies according to the type of family. A one-parent family, one-earner couple or two-earner couple can have the same incomes but end up with different benefits. Moreover, families with the same net income but living in different provinces and territories typically end up with different after-tax benefits because the Universal Child Care Benefit is subject to variable provincial-territorial income tax regimes.
The non-refundable credit of $300 per child is inequitable. A family with income of $21,000, if they are single parents, receives $300 per child. A family with an income of $10 million, if there are any, receives $300 per child. Low- income families below $21,000 do not receive anything from that program.
Third, the child benefit system has become complex and difficult to understand, as should be obvious from me trying to explain it to you. Our reports go into the system in great depth. I will not go into it now, but the three programs, all of which operate completely differently than the others, do not fit well together. We knew of this problem, by the way, 20 years ago when we tried to reform the child benefit system, but we are now back to the same problems.
Caledon wants to reform this mess and build a fair and rational child benefit. Our formula is relatively simple. We would do away with the Universal Child Care Benefit and non-refundable Child Tax Credit, and use the resulting savings to help build a stronger and more effective Canada Child Tax Benefit. We propose to boost the Canada Child Tax Benefit to a maximum $5,000 per child under 18, up from the current $3,271. A maximum $5,000 child benefit would go a long way to meeting the cost of raising a child in a low-income family, and has been supported by social advocacy groups like Campaign 2000.
Because we want to augment child benefits for non-poor as well as low-income families, we would increase the base benefit, that is, the part of the Canada Child Tax Benefit that goes not only to low-income families but also to the large majority of the non-poor families. Our proposed $5,000 Canada Child Tax Benefit would boost child benefits not only for the poor families, which would gain them about $1200 more than they receive now, but it also would improve benefits for modest and middle income families by around $400 to $600 per child.
This point touches on one that Ms. Yalnizyan made, which is that we cannot focus our instruments like child benefits solely on low-income families. We have taken that approach over the last 10 years. That approach made sense then because we wanted to address the anti-poverty objective first. However, it is important that we also improve this important source of income support to the modest and middle income majority of Canadians who, by the way, have seen little increase in their child benefits over the years. This change is a fundamental one in how we would structure child benefits because we would address not only the poverty reduction objective but also the parental recognition objective.
How much would this proposal cost? We have taken great pains to cost it out. Currently, the federal government spends $13 billion on its three child benefit programs. Our proposed $5,000 Canada Child Tax Benefit would cost an estimated $17 billion. Thus, the net cost for our proposal would be $4 billion. In other words, we would spend $4 billion more than what we now spend to finance our better benefit. To put that $17 billion total cost in perspective, we spend $33 billion on Old Age Security. Surely if we can afford $33 billion on seniors, we can improve our child benefits.
Our proposal also would have positive anti-poverty effects, and we have prepared some estimates. These estimates will remind you of how incredibly important a tool child benefits are to help reduce poverty. If there were no federal child benefits, the low income rate for families with kids would be 15 per cent of families. That rate is calculated by subtracting from the incomes what they receive from federal child benefits. Under the current system of federal child benefits, the low income rate for families with kids is 9.3 per cent. That decline from 15 per cent is huge. Under our proposal, we would reduce it another percentage point to 8.3 per cent. Instead of a 15-per-cent poverty rate if we did not have our proposal, we would bring it down to 8.3 per cent. That decrease is not great but it is real progress. In terms of numbers of kids, without federal child benefits, there would be an estimated 566,600 low-income families. That number is 352,800 under the current system, and it would fall to 312,800 under our proposal.
In conclusion, the chair mentioned some of the earlier reports that this Senate committee has prepared. One not mentioned is a 1990 report. I know it well because I worked on it as a volunteer. I was the Director of the National Council of Welfare. I wrote an appendix — Richard Shillington crunched the numbers for me — and it was the first attempt to design a federal-provincial integrated child benefit.
The fact that the benefit was in the Senate committee report was an important precursor to the National Child Benefit that came six or seven years later that we are talking about today. I do not underestimate the influence that this committee can have.
The Chair: Thank you. I hope you are right about the influence this committee has.
Gina Browne, Professor of Nursing and Clinical Epidemiology, McMaster University: I am so impressed with what Mr. Battle, Ms. Yalnizyan and then Ms. Lankin said that I think I better say something else. By now, I agree with everything they say.
You must wonder if I am a Canadian. I am. When I first came to Canada, 37 years ago, I said ``uh-huh'' and ``all right.'' Now I speak in full sentences with a beginning, middle and end. I am a Canadian citizen.
In addition to being a former intensive care nurse and critical-care burn nurse, I have also been a practising family therapist for 30 years. I want to put a face on some of what we are talking about. I will present one of my poor families on social assistance. The gentleman has a cerebellar-pontine tumour and it is cancerous. He will die. He cannot walk because of his imbalance, he is in a wheelchair and he receives social assistance.
That is his context. However, that is not the problem. I work out of a primary care office with six family physicians. Primary care should really be called chronic and long-term care because they have difficult cases.
He is married to a manic-depressive wife who will not take her lithium. In her manic state, she is sexually provocative to the two adolescent children who are involved with corrections. Then, we have one somewhat unaffected biological child that is eight years old. I want to point to you that the way I view so many of our issues is that we address slivers of people's predicaments and not the whole arrangement. Therefore, while I agree with all these pieces, I also advocate for a whole approach. I also advocate for recognition that there are multiple and interacting types of impoverishment. There is financial impoverishment. However, nothing could be worse than stressed parents, family conflict and dysfunction, ineffective parenting and poor and risky neighbourhoods.
There are multiple types of individual family levels and environmental levels. Mental health problems in parents express themselves over their life course as their own school failure, problems in unemployment, family conflict, stress, poor coping skills, marital breakdown and ineffective parenting. The interaction and accumulation of all these circumstances has a huge immediate and pervasive deleterious effect on a child. Also, it accumulates over time.
We know that effective mental health treatment for parents can reverse these outcomes. Let me also say I am working with some families with disabilities and complex needs. Those parents face poverty situations because their medically fragile children prevent them from taking promotions at higher levels of employment. I think some subsidies should be there for them.
These multiple interacting types of impoverishment result from, and can create, families with low incomes. Many people feel that people are sad and depressed because they are poor. However, as a nurse having studied 765 mothers and their 1,300 children in a study that was funded by the federal government, I would like to say that they are poor because they are sick.
Nearly 60 per cent of those mothers had two or more mental health conditions and 61 per cent of those mothers — 97 per cent were mothers — had children that were over six years old. However, all our programs are for children under six. In addition to their two mental health conditions, they also had serious depression. Depression absolutely interferes in one's life; it is like no other chronic disease. They simply cannot function; it is better not to have legs than to lose your mind because you can function without legs. In addition, they had three or more health conditions like fibromyalgia, hypertension and diabetes, and were living with children over six, 33 per cent of which were hyperactive.
I am trying to say that there are multiple levels of impoverishment. I am pleased you look like that, senators, because I am trying to strike you with the magnitude and interacting nature of things. The federal government has programs. Let me first acknowledge that this government has worked hard — much harder than we do down south — in trying to tackle these unfair or inequitable conditions.
The government has always done piecemeal work. There is the Community Action Program for Children, which is fabulous, thank you, but it is only for little kids. The Canada Prenatal Nutrition Program is fabulous, but they do not do housing. The Province of Ontario Healthy Babies, Healthy Children initiative is for newborns, but we do not care about the 10-year-old lighting fires or the 17-year-old on Ecstasy in the same household. It is a bad example to set for young children under six.
We deliver our programs with absurd slivers of predicaments. I will jump over my studies because you have other evidence on how this affects people's life chances. Thank you to the federal government for their million-dollar investment in our study entitled When the Bough Breaks. We wanted to call the study, All the King's Men and all the King's Men Couldn't Put Humpty Together Again. However, the ladies would not stand for it. They wanted, When the Bough Breaks, the Cradle Will Fall, Down Will Come Baby, Cradle and All. If we do not have a household approach aimed at all the circumstances in the household and not only one kind of impoverishment, we will keep missing the boat.
I want to thank the government for funding my study, among many. When children develop all these disorders, we have calculated the cost of services for children aged 10 to 17 in this primary care work I work with — which is the health service organization — and if the child has no psychiatric disorder, services used cost $300 per child per annum. If they have one or two psychiatric disorders like substance abuse and hyperactivity, services used cost double that: $600 per child per annum, in 1996 dollars.
Nothing in life is so pure any more. Physicians always want only one diagnosis. Nurses know there are multiple diagnoses. Many of these children had three to five psychiatric disorders at the same time, and they cost the system $2,800 per child per annum. This cost is almost a nine-fold increase.
While everyone is talking about investing and expenditure to help the problem — and I am not an economist — I try to make the point that, in Canada, these national systems of health insurance will lose money this year. Every time the province cuts counselling programs for welfare mothers, they come to primary care, and OHIP receives the bill.
I advocate for much more intersectoral work. I would like to see a federal initiative make the provinces work intersectorally. I have provided you with this box on my one handout. It shows my conceptualization of intersectoral work, which is new because if you look at the literature, ``sectors'' mean ``health,'' ``social'' and ``education.'' I am referring to those kinds of sectors. However, then you will hear ``primary care,'' ``secondary care'' and ``tertiary'' sectors and then ``public,'' ``private'' and ``not-for-profit'' sectors. I put them all in one box to show you what I mean by intersectoral work, which is to stimulate and create incentives for provinces to do more intersectoral work.
The savings that resulted from social assistance, community and social services investing in children and the not-for- profit sector — YMCA — investing in services for children created savings to health: Half the use of physician specialists, and 90-per-cent reduction in the use of parole officers for children 0 to 20 years of age still residing in the home.
Health economists have acknowledged that we spend more now because we are not doing what we should do. It costs us more this year; not 7 years or 27 years from now. However, the cost is immediate and people will use something that is insured, even inappropriately. That is why these mental health problems appear at the offices of family doctors and they do not know how to deal with them.
In regard to levels of intervention, we need to function at all these levels of opportunity structure — employment, schools and higher education. This economic structure is the one we have been discussing. I advocate for family structure interventions and a human service care structure of interventions that bring together many independent human service agencies to help people.
As a nurse, I have seen first hand the value of creating a natural opportunity for children on welfare to come into mainstream programming arranged in our study by 29 other youth services programs. That integration is how we save. That program paid for itself by reducing the use of Children's Aid Society workers, police, social workers, emergency room visits, et cetera.
We pay a great deal for our lack of attention to the problem.
The Chair: Thank you for all your excellent presentations.
Ms. Lankin, you mentioned that in your studies you find the city of Toronto has a disproportionate amount of poverty — or children in poverty, I cannot remember which — in either the provincial or national statistics. What reasons have you found for that disproportion? Do you think it might apply to other big cities in the country, or is it something peculiar to the situation in Toronto?
For all of you, the budget this week did not mention the word ``poverty.'' There was nothing relevant to poverty or housing. Indeed, the Minister of Finance has indicated there will not be much opportunity to add different programs in the days ahead. The focus of the government's concern is on economic decline and the possibility of recession.
We all have different political views about the economic and fiscal strategies of the current federal government and I will try to steer away from politics. However, if we are to continue on this course for some period of time, we may continue not to hear much about poverty and housing. Therefore, what can be done given the current government's strategy? What can we do in that framework?
I was interested in Mr. Battle's suggestion to eliminate the Universal Child Care Benefit and substitute the Child Tax Benefit maximum of $5,000. I think he said it will save $13 billion while spending $17 billion, and the costing is much less substantive to the fiscal framework. However, it will have an impact in reducing child poverty.
Are there other thoughts — consolidations or changes — that might shift the priorities and help address the issues you are talking about, given the fiscal situation and the policies under which we currently operate?
Ms. Browne talked about intersectoral work and the top-down or bottom-up approaches. A few years ago, something was developed called an Urban Development Agreement. There is one in both Vancouver and Winnipeg. It helps bring different levels of governments, communities and businesses together. It is a bottom-up approach. Is that something to look at in dealing with the intersectoral challenges we face?
Ms. Lankin: I will address questions one and three and leave those with more policy analysis to speak to question two.
From our work with partners in other large urban economic regions across the country, they see similar trends in terms of what urban poverty means. The trends are often about concentration of family poverty into certain neighbourhoods within those cities, often driven by access to the most affordable housing available. The challenge with the concentration of family poverty in those cities comes down to the intergenerational legacy passed on.
There is great research by Clyde Hertzman and others about the longitudinal impacts on kids growing up in poor families and poor neighbourhoods. To make a long story short, the effects of growing up as a poor child, in a poor family, in a poor neighbourhood are much more onerous on their future than a poor child, in a poor family, in a mixed income neighbourhood.
In shorthand, they refer to this effect as ``the sharp elbows of the middle class.'' That is, the ability for communities to organize themselves for civic capital resident engagement — to start the local soccer club, to keep the pool open in their neighbourhood, and to provide the human capital that comes together and creates a sense of neighbourhood.
Often, in the city I come from, the families we are talking about work two and three jobs and live in poverty. Two and three families live under a roof because even in the most affordable areas, housing is not affordable. The stress on family and the lack of ability to move outside the apartment unit they may be in or to think about the broader community means those children are impoverished in many ways.
You asked about the reasons for poverty in the city. A city where large numbers of people are socially excluded is the flip side of a city that will not be as successful in terms of their economic prosperity. These things are linked together. It is not as easy as the chicken and egg dilemma, wherein if you have more jobs, then there will be general prosperity and fewer people in poverty. A linear argument is to be made there. However, for a region to be economically prosperous and competitive, the social well-being of the people in that community is a critical component to the economic competitiveness.
Richard Florida's work on the main attractors of people who will contribute to the vibrancy of the economy of an area include the sense that a city feels safe; the sense that arts and culture is thriving; the ability to attract people who are the entrepreneurial and driving economic force to live and feel comfortable there; and general standards of health and education.
Many other issues go into determining healthy cities. However, the more concentrated the poverty and families with a sense of social exclusion, the greater the problems will be in the social indicators of health.
Tracking issues in the neighbourhoods we have identified, there are higher rates of diabetes, higher rates of teen pregnancy, lower birth weights for the children born, and a higher youth involvement in gangs, guns, violence and kids dying.
We have mapped where the shooting deaths are in the city of Toronto. They overlay, in the majority, the neighbourhoods we have identified for priority investment.
In terms of social well-being of the families in our city, we need to link the understanding of economic prosperity and economic competitiveness and the investments we make, and ask to make, with what that investment means to the prosperity also of the country.
In the full report you will see statistics that show the massive growth in precarious employment and multiple job holders in the city of Toronto and how that differs from national averages again. That change in the economy is a major contributor. New immigrants, by and large, come with higher levels of education and professional accreditation than ever before — certainly higher than the average Canadian-born family — and our economy is unable to absorb those people, their skills and their contribution to the economy appropriately.
For the poorest families in the highest poverty neighbourhoods, over 60 per cent are new-immigrant families. Over 70 per cent in our city are families of visible minority, whether or not they are new immigrants. That finding speaks to issues of race and a connection between race and poverty.
I again come to the geographic focus that is necessary because issues in Vancouver of downtown communities living in poverty are as oppressive but different from the issues driving poverty in Toronto. In Winnipeg, the focus on supports and life conditions of urban Aboriginal populations are different from the issues in Toronto, though equally oppressive and difficult.
I use those two cities to link to your comment about urban development agreement. The Strong Neighbourhoods Task Force was a task force supported by tripartite government investment in the city of Toronto and the community, business and social services sector. One of our recommendations is based on their work. They identified the need for urban development agreements that would bring about a focused and coordinated response from levels of government and the community sector not only to new investments — because in varying times, new investment dollars may not be available — but the coordination of current investments and policy structures that can be driven by that kind of ground-up approach. We think those agreements could be important vehicles.
The jury is out on how effective the Vancouver or Winnipeg agreement has been. They come from different histories in terms of how they evolved, but we see that vehicle of a tripartite government agreement with community at the table as having great merit. From our experience with a program that was funded initially in pilot by the federal government called Action for Neighbourhood Change — one that has shown tremendous positive impact on local communities — I argue that the organizing, support and voice of residents in the community involvement at the table of such an urban development agreement is an important component as well.
The Chair: On the question of the economic policies that we currently operate under, with the budget in the last few days and my particular example of the Canada Child Tax Benefit of $5,000 mentioned by Ken Battle, do you have any other thoughts along those lines?
Mr. Battle: I do not want to forget another policy instrument that I hope has some future, which is the Working Income Tax Benefit. This benefit is an earning supplement for the working poor. The idea has been around for decades, and several provinces have run various kinds of wage supplements. Quebec has had one for over 20 years.
Ralph Goodale, in his last economic statement, floated the idea with an illustrative design of a Working Income Tax Benefit, and Mr. Flaherty implemented that idea in the first Conservative budget.
We hoped that this budget the other day would boost the Working Income Tax Benefit. It did not, although there was a rumour to that effect. The instrument is an important one because it provides income support for low-income people who are working; the so-called working poor.
We raised a criticism that even though the program is federal, the federal government is willing to allow provinces and territories to vary the design of the program to suit their own circumstances and needs and to better fit with their income security systems like minimum wage, social assistance and provincial wage supplements and so on. Those things are good.
What is not good is that the program right now is so meagre that it does not even help full-time working poor. They would not qualify for a benefit because their incomes are too high. It is focused on helping people off social assistance and on people with part-time earnings. That objective is important, but we would like to grow this program into a large one that would provide general support to the working poor.
I do not have any hope for the current federal government changing its mind on child benefits. If you want to talk politics, I can. I only hope other governments will support our view. The NDP have supported it already.
The Working Income Tax Benefit has bi-partisan support and general support among the social policy community. Again, it is not a magic bullet but it is an important instrument. I hope to see growth in future to make it a more generous program that reaches a larger group of working poor.
The working poor have always been the silent poor, the unknown poor, in Canada. The changes to child benefits were to try to bring working poor families up to the level of welfare families in terms of child benefits. I mentioned the WITB as something to keep pushing on.
Senator Munson: When is a working family's income considered too high to receive that benefit?
Mr. Battle: For a single person, it ends around $9,000, which is incredibly low. For families, it is approximately $12,178. It is targeted to the bottom end.
Senator Munson: The benefit is how much?
Mr. Battle: The maximum is $500 for individuals and $1,000 for families.
Senator Munson: It seems like an arbitrary cut-off.
Mr. Battle: When they start a program, typically they start it small and grow it over time. That is what was done with the Canada Child Tax Benefit. That is okay, but we want to grow it, not leave it there. It will wither on the vine. The way it is now, it will not have enough take-up to merit the expenditure.
Ms. Yalnizyan: I want to comment about what you can do. There is a moment when you can act. You asked what you can do in this context. There is plenty you can do.
Before I tell you what you can do, there are two reasons why you should do what I recommend. First, the growing gap between rich and poor is about the labour market. Whether we talk about child poverty, family poverty or whatever, we must understand what is happening to people's earning power; not only the poorest, but the bottom half. That point has something to do with what Ms. Lankin has spoken about. The fact is, people are pedalling as fast as they can. This economy is as good as it gets, and people are falling behind.
We built our post-war approach on how we make a good country where we have shared prosperity based on full employment. We are almost at full employment. We are talking about what kind of income supplements to put into the game to supplement people who are pedalling as fast as they can.
Something is wrong with the labour market but I do not suggest you try to fix it. I suggest that you do what you can do, which is to make life more affordable.
It is not only about the poor or the middle class; it is about the fact that the rich are getting a lot richer and the rich set housing prices. We do not have a national housing program any more. We have not had one since 1993. When markets are the only thing that determines the affordability of housing, people struggle to find decent housing. Then they go into the neighbourhoods that Ms. Browne and Ms. Lankin talked about.
What makes a low-rent neighbourhood? It has no services, no public transit and lousy schools. It is not some place where one wants to live; that is why it is low rent. You can do something about that. Housing and transit are integrally connected, and there is a federal role in these things.
At the city level, which is ostensibly what this larger ambit of study is about — where people live — cities across this country, especially big ones, force their electorate to decide, do they want to cut services or do they want to raise taxes? That is where we are. It is not a big question, can they afford it or not? It is, if they want to hang on to what they have, they must pay more. If they do not want to pay more, we have to cut something. That conversation takes place at the local level.
At the national level we have plenty of room. It is embarrassing how much room we have. We do not need to force communities into this discussion because we have such huge surpluses that the only thing happening at the federal level is to give people back their money. People have already paid. They do not want to pay more again at the city level; they only want their taxes used.
Recently, Finance Minister Flaherty said that we are back at the taxation rates of the Pearson era, which were roughly 16 per cent of GDP at the federal level. However, we are not at the spending rates of the Pearson era. We are roughly 2 percentage points below what we were at that point.
If 2 per cent of GDP were added to federal spending, how much money would that mean every year? It would be about $30 billion more than the alternative federal budget would have cost, and more than simply rolling back the GST cut. We have the capacity; we should use it. We should harness this amazing economic engine for shared prosperity.
This is the year of poverty reduction strategies. In Newfoundland, Quebec, Ontario and Nova Scotia, two federal parties have drawn a line in the sand on what they want to see poverty reduction. In fact, the federal government is the only federal party without a strategy on poverty reduction. I think committees like this one can raise the alarm and say, we cannot afford not to act.
The committee might not get anywhere, but if it does not start kicking up a fuss, we definitely will not get anywhere. There is lots of momentum; my presentation to you was based on building momentum. I urge you to look at the last few slides. We can do a lot. We are not hampered for action.
The Chair: I need to move on to my colleagues. While I lead the focus on the cities, the vice-chair of this committee, Dr. Keon, focuses on population health. Of course, there is a lot of overlap and common areas of interest, so we will lead off with Senator Keon, from the city of Ottawa.
Senator Keon: Mr. Battle has already answered this question and answered it negatively, so Mr. Battle can go last on this part of the question and first on the second part.
I have said, why do we not have a minimum family income? It takes a family to raise a child, it takes a village to raise a child and it takes a community to raise a child, so why not have a minimum family income?
I have seen good presentations where we can accomplish that minimum within the existing structural framework in Canada. We do not need to introduce something new. I will not belabour that point too far. Instead, I will move to something else from a population health point of view.
Despite the hundreds of policies, programs and initiatives from the federal government, provincial governments, civic governments and NGOs in Canada, we still rank about sixteenth in the world in health status. I have been wondering over the last 10 years why this is so and I have come to a conclusion.
It is interesting that Cuba, an impoverished country living under embargos, has a health status as good as ours. We went there and asked how they do it. The major difference is that they take their programs to the ground where they can deal with the 12 determinants of health, including poverty. Cuba takes their programs to the ground and the programs are plugged into all the levels, right up to Fidel until a few days ago.
On the ground, polyclinics deal with health, social services including housing and all of those factors, minimum income, sport and education including early childhood education and even more importantly, maternal health. Top researchers from their research institutes must rotate and spend a mandatory amount of time in the polyclinics to see what the research institutes can contribute to making the health status of Cuba better. Why can we not have polyclinics in Canada?
Ms. Lankin: The state of affairs is different from province to province, as you well know, senator. In Quebec, there has been a program for many years to combine community health centres with community social services programs. I cannot speak to the breadth of the programming — if it covers all the things you talk about — but the philosophy behind it is such.
In Ontario, community health centres initially funded by the Ministry of Health, over time have grown to take on programming to address the social determinants of health in the neighbourhood in which they serve. We see programs, for example in Toronto, aimed at homelessness, teen pregnancies or diabetes — a range of programs, but related to the challenges that the residents in their service area face.
In our work with the Strong Neighbourhoods Task Force as one of the partners, the organization that I work with, United Way, has developed its own complementary strategy to determine our contribution to an overall neighbourhood strategy in the city of Toronto.
In addition to the Action for Neighbourhood Change that I referred to, we have identified sites for community hubs in these neighbourhoods that are the highest poverty neighbourhoods, the ones with the most negative or poorest indicators on health and other social indicators of health, and the ones with the least social service infrastructure.
In creating those community hubs, we said, why wait for 10 or 15 years for a community health centre to grow itself to a multi-service centre? We approached the Ministry of Health, who was about to make investments to expand the number of community health centres.
We talked to the ministry about the importance of placing those new community health centre resources in these neighbourhoods. We made a commitment to fundraise, and we are in the process of bringing that commitment to life, to double the amount of space there, and then to work to bring together the social service and other kinds of community program supports into those community hubs.
That partnership between the private charitable sector, private sector donations and government is terrific, but it is not a policy framework. I think what you speak to is the importance of having a policy framework that would help us all understand the importance and value of these community hubs. We need a plan to develop these initiatives that is one of public policy, not one of private philanthropy-driven strategic initiatives, which is what we see right now in our city.
Outside our city, there is not as much capacity in the philanthropic sector to drive these kinds of partnerships.
Ms. Browne: The idea is an excellent one. The manuscript Ensuring the Best Start in Life supports this idea of hubs, and talks about whether programs should be targeted or universal. In our study, we enrolled the children in age- appropriate quality child care, our recreation and our skill developments. We enrolled them in mainstream programming so that the poor kids met the rich kids and friendships developed among the mothers, who arranged trade-offs and helped each other out. For example, someone who had a car could pick up someone who did not. Someone would clean a house for a roast. These people are innovative because they cannot receive more income, so they barter.
I like hubs but it is important to mix. For example, in poor areas, they might not have ballet or guitar, as a way to encourage the arts. The programs that the federal government funded paid for the transportation and the costs to go to all these places.
There is so much waste of money. The $400,000, which was $100,000 per year, that the federal government gave us for age-appropriate child care grew to $1.5 million in services provided, the multiplier effect. Often, when one mother wanted to do mom-and-baby swim, there were two openings in the program, and it costs no more to work that second child in. That freed up two units of service so we could buy ballet from the private sector for another child. That is how that went. We went back to budgets and ground up stuff. We have more than 18 studies showing that regardless of the setting, population or whatever, when we help people with all the things that determine their health in a whole household, it is more effective and less expensive the same year. The evidence is overwhelming and it is Canadian.
Therefore, I simply do not agree that it will cost more. The recreation did not cost more — give them a coach and they do not need a psychiatrist. I am big on not pushing professional treatment services, and prefer to opt for natural opportunities. I do not know whether I want people to receive a child tax benefit. If they do not have housing, they will use the child benefit on housing and not on the child. I would like a place where kids of all walks of life and ages can go there and meet multicultural groups. In that way, perhaps we could develop a more civil society.
Ms. Lankin: The Province of Ontario is looking into the root causes of youth violence. The review is conducted by former Chief Justice Roy McMurtry and the Honourable Alvin Curling. I had the honour of advising them a bit on their work. The criminal justice system is part of what they are looking at but the greater part of the work presented to them by many groups supports the concept of natural opportunities.
I believe that the Ontario Ministry of Children and Youth Services, in looking at services for children and youth, is beginning to understand that, although they may not use the words, mandated after-school services, programming offerings supported at universal points of access, like schools and libraries, in hours outside of school hours are probably the most universally available and accessible to kids. Those offerings probably have the highest impact of any programming we could do that is connected with community organizations, volunteer-led and otherwise.
We do not have a comprehensive approach or even a policy framework approach that supports such an idea in most places across the country. I think that approach would be an important policy framework development that would help us to look at how existing resources are allocated and how to leverage others.
Ms. Browne: Agencies funded by this ministry must be acknowledged for the savings they create, and that is not happening. A huge study showed that if we treat someone old and alone that attends a heart specialty outpatient clinic we can save nearly $34,000 per person per annum by giving them a nurse to talk to that costs $4,000. The amount of savings for two of those patients would pay for a whole nurse but the hospital had to fire all of them to balance their budget. Agencies are not rewarded for saving the other sector money. Do you see? That is the problem. Agencies are not rewarded for the savings they create for others and at different levels of government. Everyone is competing. I do not know about government but are you talking about the federal budget, the provincial budget or the municipal budget? I do not know what budget you are talking about but I take a societal view.
Senator Keon: It is all of the above.
The Chair: The horizontal links are a big challenge.
[Translation]
Senator Pépin: Ms. Brown, you are suggesting that we provide comprehensive and integrated services directly to low income families rather than waiting for them to request those services. Can you tell me why that proactive approach is so important?
[English]
Ms. Browne: I want us to reach out to these vulnerable families because they do not have the energy and the mental health to reach out to us. They cannot reach out. For any mother, it takes a lot of energy to handle programming for three children, figure out how they will get there, et cetera. A person with depression and three illnesses does not have the energy or the time to do that. The late Dr. Orford used to say that our programs reach only the middle class and do not reach the most vulnerable.
For example, public health nurses used to say that half the people they see are on social assistance. However, they only had 4,600 visits, and at the time, 100,000 people in Hamilton were on social assistance in the early 1990s. Only 1 per cent of people on social assistance ever saw a public health nurse. We are not reaching out. The Community Action Program for Children in Hamilton decided to adopt our approach because they were not receiving any clients. No one was asking for them. People need to know about the program and they need the energy to use it. The most needy families do not know how to use the program.
Our mothers did not want to go to municipal parks and recreation because they felt degraded by the need to prove their low income, whereas our coordinator approached the mother by telling the mothers that they are entitled to this program for all the children in the family, and the mothers are helped with the paperwork.
[Translation]
Senator Pépin: Your work is focused particularly on families receiving social assistance. However, it appears that now poverty is manifesting itself increasingly amongst families with one income as well.
Do you think that the conclusions that you came to regarding families on social assistance could also be applied to poor working families? Or perhaps that would end up benefiting the various governments?
[English]
Ms. Browne: Absolutely; no one is poorer than the working poor. If people on welfare need antidepressants, at least they can get their medicine. No one is poorer than the working poor.
I was pleased to have the chance to advise the City of Edmonton on their Families First Edmonton program, and they are replicating my study with the working poor and the welfare poor. It is a magnificent program, and it is funded by the federal government to be evaluated for $3 million. They pooled about $9 million to $12 million worth of human services at many levels of government, so it is a fantastic experiment.
The Peel region repeated the study I conducted for their welfare people. They did not want to use the subsidized places because they wanted to keep those places for the working poor, so I went to their council to ask for money for the other spaces for the kids that were on welfare. The region had a more entrenched population than my study included, in the sense that after the Harris government eliminated the crème de la crème of the welfare, they had a more entrenched population. Repeating my study there, they had a 23 per cent greater exit from social assistance. That means for every 100 mothers that are offered a program, 80 per cent will take it up, according to my study. With the federal government's self-sufficiency program, which was $25 million to pay mothers to leave social assistance, for every 100 mothers, only 24 will take up that offer. We cannot look at effectiveness if something is not even acceptable.
My reason for starting the social assistance in so many places where I speak about this is that usually in the Province of Ontario, social assistance was devolved to the municipal level, so first they needed to free up money so they could spread it to the working poor. The process was a staged one, not that we are not interested in the working poor.
Senator Trenholme Counsell: It has been an enriching and experienced presentation this morning.
I want to ask one point of clarification from Ms. Yalnizyan. On the definitions for Canada under ``poor;'' the bottom 10 per cent of families raising children earn less than $9,500. That figure must be a mistake.
Ms. Yalnizyan: It is not.
Senator Trenholme Counsell: Then you say $23,500 after tax.
Ms. Yalnizyan: That is because in the bottom 10 per cent, some families have no earned income at all, so the threshold has dropped over time. It has gone from $14,500 to $9,500 of earnings and lower, because some people do not have any work at all, so that figure happens when they divide up a population into 10 equal slices.
Senator Trenholme Counsell: Why do you put in brackets, $23,500 after-tax?
Ms. Yalnizyan: After-tax includes any income supports. Taxes are applied to all sources of income, and that includes Employment Insurance benefits, social assistance, child tax benefits and so forth.
Senator Trenholme Counsell: I am in favour of the concept and the absolute necessity of bringing services together. For Canada, I would not like to use the word ``polyclinics'' because one goes to a clinic when something is wrong. I much prefer the community health centres.
I would love to see a community health centre side by side with the family resource centre, but we know in Canada the family resource centres are for children five years old and under. I believe they are funded under that principle.
The concept must begin with the various government departments working together, namely, the intersectoral approach. It is starting to happen, and I am wondering about bringing new models into some of the communities that you have mentioned, Ms. Lankin, and described so well. We would have a community health centre with a family resource centre and that centre would include a mental health centre. We should not have mental health centres standing alone to eliminate the stigma associated with mental illness. I would like your comment on that idea.
Mr. Battle, I struggled listening to your discussion of increasing the Canada Child Tax Benefit. That suggestion is good but we are painfully reminded of resources and budgets because we must make choices, with fewer resources, perhaps. We received that message recently from the Minister of Finance.
I looked at what Quebec has done with their family programs. They have made major investments in families through child care and early childhood development. I recently returned from New Zealand where I was fortunate to spend a good deal of time with the minister of education and people there with their centres and their approaches. The government there has made a huge investment, and put money directly into programs and services — in most cases, universally, but certainly in the ones I was most interested in.
If we must make a choice, should the money go to families through enhanced benefit? We have no way of knowing how that money will be spent or whether it will be spent in the ways that will improve development, hope, education and the ultimate outcome. Should we instead put our emphasis on programs and services, that is, in community enrichment? Of course, we want to do both. In Canada, we look at what Quebec has done, as an example, but can I have your reaction, please?
Ms. Browne: This evidence and all the evidence I have read shows that if a program is not aimed at children, children will not benefit.
Senator Trenholme Counsell: Do we have copies of that evidence?
Ms. Browne: No, it came out only in December, and it is a good summary of all the Canadian evidence of cost- benefit.
Senator Trenholme Counsell: I would like that study.
Ms. Browne: Yes, I will send it. In my study, I also found that when public health nurses helped mothers with mental health problems, it did not help their children. However, when we put children into recreation programs — one hyperactive child was in nine programs at the same time — you can imagine that those programs provided relief for the mother. In the study, the more intensely problematic kids were more intensely enrolled in as many programs as they wanted to be in. Therefore, only when programs are aimed at the child do they change the child. These families are so poor that the child will not enter those programs. The family must have a home. Money must go to the mortgage; it would have to go there.
Ms. Lankin: That is the reason there are so many aspects to a public policy framework to reduce poverty. As Ms. Yalnizyan and others have said, housing and a whole range of issues need to be addressed.
However, community social infrastructure is a critical addition of supports to families and their capacity for healthy child rearing. Community social infrastructure does not replace lack of income, but it is critically important. With respect to the challenges to develop a community hub, from the community sector we have advocated this concept for a long time. We are very much in accord, Senator Keon, with your thoughts because so many different parts of programs are funded by different places in government. Over the years — you have heard this issue before, I am sure — funding was focused on programs with no aspect of core funding. That focus on program funding makes it difficult to bring space together. Someone must pay for the building or rent. Someone must pay for electricity, heating, insurance and janitorial services. Those sorts of things have become a critical barrier. In our community hub projects and strategies in Toronto, we compensate with charitable raised dollars to ensure those things can be paid for. Governments put dollars into the programs they want to support. Unless we have the space, we face the inability to network those programs together in one place to support the whole family, as opposed to moving individuals from place to place.
Finally, you made reference to family resource centres, which are part of an early-years strategy framework that has been adopted nationally and in every province. People have a concept of the importance of early years, and have put some of the strategies in place. In this country, we do not have a comprehensive national or even multi-provincial policy framework strategy for middle years and youth. Some of the approach Ms. Brown described would be the pre- eminent part of that policy; access to mandated services and supports for kids. Yet, we do not have a cohesive policy.
We know from research we have done that many other jurisdictions have moved to creating policy frameworks for middle years and for youth as well as for early years. We could push for that framework in this country as an important addition to coordination and delivery of services to families.
Ms. Browne: I echo that suggestion, because the zero- to six-year-old child is the least of the mother's challenges. The biggest challenge is the 10-year-old lighting fires.
Mr. Battle: This question is not new. How many times have we been told we need to pick one or another? We do not need to pick one or the other. Poverty is a complicated heterogeneous phenomenon; we know that from the hearings today and over the last decade. It is a complicated issue, and it requires a range of solutions; a wide range of services and key income programs. We have never argued that income support programs are the answer to poverty; it is only one answer to poverty.
As to whether we can afford programs, let us take child care as an example. The current federal government thinks that a $100-a-month income program that families can spend on anything they want, child care or otherwise, constitutes a child care program. I think that child care is one obvious service that we do not want to replace with income. We do not want to say that people must use their child benefit to buy child care; rather, we need an increased supply of decent child care.
On choices governments make about how they will spend and tax, the GST cut, which has been condemned by almost every economist, costs many billions of dollars that we no longer have to spend.
We have argued about debt repayment for years. Canada's debt-to-GDP ratio has declined steadily over time. As long as government runs a balanced budget and there is any kind of economic growth, we will see that kind of decline. The billions of dollars that governments spend on debt repayment accelerate that decline by only a fraction of a percentage point. Those billions of dollars could be spent on child benefit programs, fixing up the Working Income Tax Benefit, improving benefits for seniors, et cetera.
Through tax deductions for contributions to registered retirement savings plans and registered pension plans, we continue to spend billions of dollars on tax breaks that benefit high-income Canadians. The new $5,000 savings account is another expenditure that is supposed to encourage middle-income Canadians to save, who cannot even put money into registered education savings plans or RRSPs now. Higher-income Canadians do not need a $5,000 vehicle.
Choices are made all the time by governments, and I do not buy the argument that those of us who deal with poverty must make the choice between services and income. Ms. Yalnizyan can give you the figures better than I, but billions of dollars have been misspent.
Senator Keon: Mr. Battle, why can we not eliminate all this junk and have a minimum family income?
Mr. Battle: I understand that Senator Segal's committee is looking at this issue, and I will testify before them. By minimum income, I think you mean guaranteed annual income.
Senator Keon: Yes.
Ken Battle: We need to consider whether a guaranteed income is an end or a means. Is it something we are trying to achieve, or is it a way of achieving something? The position I have always taken is that it is an objective, not a means. In other words, we want to create a decent income floor for Canadians.
How do we create that income floor? Often people who are enthusiastic about a guaranteed income think that we should eliminate all the federal and provincial income programs we now have. The programs are complicated. Why not eliminate all those programs and replace them with one program? That approach is the guaranteed income as a means as well as an objective.
It would be difficult to eliminate all the programs we have now. To come up with a guaranteed income program that would fit with the programs we have now would be difficult. The whole point of a decent child benefit is to help provide a guaranteed income for families with kids. The child benefit does not help the parents, because it is meant to deal with the kids. The parents should be helped with adult benefits, and Caledon and others are working on adult benefit architecture.
We have a guaranteed income for seniors. It is not huge, but it helped reduce the poverty rate among seniors over the years. I am talking about the federal and provincial programs.
People often look for a magic solution. They think that if we eliminated everything and had a guaranteed income, everything would be okay. I think we would end up reinventing much of the existing system, because a single guaranteed income would not suit all needs of all low-income people. That being said, the problem is a perennial one, and it is back in vogue again, so we will look at it with a non-jaundiced eye.
The Chair: This committee will look at it as well in the context of this study. We plan to hold a one-day round table on the issue.
Ms. Yalnizyan: We have lots of resources. In the city of Toronto, 100 schools are now defunct. There are not enough kids. Some people talk about polyclinics. Our school system was built so that kids could walk to school, so there is a school in every neighbourhood, and we have a declining fertility rate. We have a public asset that was paid for a long time ago sitting in every community within walking distance. These schools could be one-stop shopping venues for services and programs that are not only for kids, not only for teenagers, not only for the elderly and not only for newcomers, but a common public space that is open for everyone.
We will talk about how to dispose of those things. We are currently dealing with that issue, and it involves 100 schools in the Toronto District School Board where they are so strapped for cash, they are talking about selling the real estate and the land. When the ``baby boom echo-let'' comes along, we will need to figure out where to buy the property and build the schools for the next batch.
In the meantime, we could use those resources after hours and during hours to provide public services in the manner in which you speak, such as for health care, mental health care services and some of the things Ms. Browne mentioned.
We are nuts to continue divesting public assets that my parents' generation built with a fraction of the income we have now. Somehow, we have trouble maintaining them, let alone expanding that access, but they exist.
It would be great to have a federal program that retrofits them and hangs onto them. These buildings are our heritage and what we built together; let us not give them away for real estate. They are capital gains; let us use what we have and use it better.
That is one answer to the polyclinic. The potential is there for hard infrastructure. Returning to what Ms. Lankin said, not one program that provides services for kids in Toronto is not wondering how they will pay for heat, lights and the caretaker. That situation is crazy. Governments can pay for a program, but if they do not pay for the building that houses that program, are we supposed to fundraise for these things?
I think the federal government can develop a formula with respect to funding. When we came back from the war in 1948, we built these schools. Can we not keep them open with a little bit of help?
Ms. Lankin: The federal government commissioned a blue-ribbon panel to look at the administration of grants and contributions, $24 billion in federal dollars. I chaired that panel, and we reported to Prime Minister Harper and his ministers with a number of recommendations.
Within that report, recommendations deal with the full-cost accounting of delivery of programs and of understanding — it would be out of fashion to call it core funding — understanding the real needs of the costs of delivering program supports. As the government chooses to deliver programs through third party entities, there needs to be a full recompense for the costs involved.
There are places to look to for recommendations that are currently before the government.
Ms. Yalnizyan: I want to address the query regarding guaranteed annual income. As Mr. Battle said, this idea never quite arrives or goes away. We have been dealing with this issue for a long time. I have written a short paper on it, and I would be happy to provide it to the clerk.
We have had two attempts at introducing guaranteed annual incomes in practical terms within the last two decades. The first was the Macdonald Commission Report, which elected to call it a universal income supplement program. The second was the House report from Newfoundland in 1993.
Both those guarantees in current dollars would be less than $6,000 a year for the poor and less than $3,000 a year for their children. They would need to roll up all the programs, such as Canada Pension Plan, Employment Insurance and family allowances to fund this guarantee. I ask you to consider how you would spend $6,000 over the course of a year on your own.
I want to return to the point about affordability. When standing at a point in our economic history where a massive wave of people will retire from the labour market, we will invite more immigrants to come in and fill those job vacancies. They will come to the big cities. If we do not have an existing housing program, the housing crisis will accelerate. Even if people earn more, a bigger and bigger bite comes out of their after-tax incomes on housing. Statistics Canada reported on this issue earlier this week.
If government does not do something to make the basics of life affordable for Canadians, we are in trouble. It is not an income problem; it is an affordability problem. It is not only a problem for the poorest; it is a problem for an increasing swath of Canadians. It is incumbent on the federal government to deal with the basics, such as clean water, housing, education and health care. All these things are in peril.
Governments can throw as much income into people's pockets as they want, but if there is nothing to regulate affordability and accessibility of those basics, it does not matter how many times governments crank up the income supplement, people still will be left scrambling for the basics. Forget about the things they need to raise their children and forget about saving for a rainy day or for retirement. They cannot make ends meet now.
I urge you to see that solutions are not an economic or fiscal impossibility in terms of our resources. The ability is there. It is about being clear-eyed about the big problems on our horizon. Forget about an economic downturn. What are the big problems over the long term? Housing is a huge one, and that is why it is terrific that this committee has chosen to link poverty and housing. Once we deal with housing, we free up all sorts of income for people to take care of their other needs.
Senator Munson: This timing is perfect because I had written notes previously on what you said about markets setting the rates, the rich becoming richer and so on. You came back to that housing business again in terms of regulation and the government becoming involved.
In this democratic environment we live in, can you give us models of regulations where government can intervene and address this affordable housing issue?
Ms. Yalnizyan: There are several models, and I urge you to hear from housing experts. You know there is a surplus in the Canadian Mortgage and Housing Corporation fund. That money could be used to build without entering into negotiation with provincial partners, and they could start building.
We know through building that the issue is not only buying land but intensifying the use of land in downtown cities. We know there are regulations that can free up existing space in large buildings already. We know that we can harness the energy of this colossal housing expansion in this country that has driven up rates, by working with cities and different jurisdictions to ensure that some proportion of that massive build is affordable.
There is no reason for governments to build all the hard infrastructure. The market will build it. The government's role is to ensure that people can afford it and that they are not turfed out of areas that become gentrified. No one knows where people end up as a result of gentrification because it is not followed.
There are dozens and dozens of models on how to create larger stocks of affordable housing. I am not an authority on that issue. Many options are available if you are interested in a national housing policy. It is not only for the poorest of the poor. It is not only about homelessness.
However, it includes women having a safe place to move to. Many people stay in their housing because they have no place safe to go. There are shelters, transition facilities, affordable rents or social housing. There is a cafeteria of approaches, and the federal government should have a voice in all those approaches because the issue is not only about poor renters, poor homeowners and the elderly. We need a decent housing policy. We had one from 1948 to 1993. We are the only nation in the world that does not have a federal housing policy, and we desperately need one.
Senator Munson: I assume people are coming to the committee to address these issues.
The Chair: We have had people in already, but this week we are focusing on child poverty, although we recognize the issue is really one of family poverty. We have had a couple sessions on housing, and we will have more.
Ms. Yalnizyan: I am happy to provide the committee with a list of names, references and organizations, if you wish.
Senator Munson: Briefly, Mr. Battle, you talked about the Universal Child Care Benefit. You used the words ``it is a bad one'' at the beginning of our conversation.
Have you conducted any surveys on this benefit? The argument has been given that families should be at the forefront of helping their children. Why is it ``a bad one?''
Mr. Battle: Basically, it resurrects family allowances, and there were real problems with that program. There are differences as well. It is particularly bad when compared to the Canada Child Tax Benefit.
For that program, as I mentioned in my opening remarks, what you see is what you get. In other words, if a family receives a certain amount of child benefit, the family keeps the amount that is paid.
Under the Universal Child Care Benefit, the benefit is taxable, not only federally but both provincially and territorially.
The longer paper will give examples of the net after-tax Universal Child Care Benefit in every province and territory in Canada. Families receive different amounts. It does not make much sense to me to have a federal program that, in reality, pays differential benefits not only to people from one province to another but from one type of family to another. Families can have the same income, but if they are a single parent, they receive less or more benefit, depending on the income range, than a two-parent family with exactly the same income and same number of kids. It does not make sense. It is unfair and irrational.
Senator Munson: If it was used towards child care, would it pay for a few days or a month for a typical family?
Mr. Battle: It depends on location. I have not seen any polling on the Universal Child Care Benefit. However, in speaking recently with welfare recipients and workers, when I raised the issue, they laughed at the $100. Obviously, people will take the $100. The other day I was on the federal government website, and interestingly enough, they are running their own poll, funded, no doubt, by the taxpayer, inviting families who receive the Universal Child Care Benefit to write to them with stories about how that benefit has helped them.
Senator Munson: I will go online then.
Ms. Lankin: On the point raised by Ms. Yalnizyan around the challenge of affordability, talking about housing and a number of things in general, I want to talk for a second about some of the costs of being poor, beyond the health and other implications we have heard. There are interesting statistics in our full report, but I want you to know that in the city of Toronto from 1999 to 2006, the number of applications for evictions for nonpayment of rent increased by 26 per cent. That increase is during a period of time of economic growth and benefit, thus the issues around affordability are a challenge.
During that period, there are all sorts of stats around arising indebtedness and consumer insolvencies. Some of those stats are Canada-wide. In the Toronto area, we know the number of insolvencies between 2000 and 2005 increased by 22 per cent. One startling thing we found when mapping the growth of payday loan and fringe lending institutions was that over a similar period of time, or over a decade-plus, we went from — it was hard to find historical data — approximately 37 to 40 payday loan institutions in Toronto to — the result of a driving audit done by staff and volunteers of United Way over last summer — 317 of these organizations located on main transit roads, subway lines and in the poorest neighbourhoods. These institutions have rates of lending and rollovers ranging from 300 per cent or 400 per cent annually to over 1,000 per cent annually in cost. These costs are for being poor and unable to manage family finances. The niche market that has grown to meet that problem ends up adding a burden of costs.
There is business disinvestment in these neighbourhoods where grocery store chains move out and people must purchase at convenience stores at a higher cost. When banks are not present, people use payday lending at a higher cost. A number of things suggest the inability of families, not only living in poverty but at the median income level, to afford life in large urban cities. I am not knowledgeable around the rural challenges at this point in time. However, I echo what Ms. Yalnizyan said, that these issues are a key area for your report to focus on and bring policy suggestions. That work would be of tremendous benefit.
The Chair: On the housing issue, previous panels before the committee have included officials from CMHC, the Canadian Housing and Renewal Association, the Co-operative Housing Federation of Canada and Derek Ballantyne from the city of Toronto. Before us next week we have the Big City Mayors' Caucus Working Group on Housing represented by Mayor Anne Marie DeCicco-Best of London, Ontario, together with representatives from Vancouver, and Sean Gadon, from the Affordable Housing Office, City of Toronto. We will dealing more with housing issues.
Senator Fairbairn: I will be quick. I listened to all of you and look at all of you, particularly Mr. Battle, and see my life passing before my eyes. From the number of times we have been at these kinds of meetings over the years, I cannot let the morning pass without raising the question of literacy, knowing that it is embedded in many of the things you said. However, we are still looking at a huge deficit in this country. Of all the good things available to people, if they cannot read, they will not find them. In all these discussions over the years, it was going along nicely and now it is not going well at all. There have been changes, and the connecting links that had developed over the last decades are living on the edge; in fact, some are closing down. Do any of you have thoughts on that subject?
Ms. Yalnizyan: I want to connect literacy to the immigration issue. I know the connection is not obvious. I was Director of Research at the Social Planning Council where I worked for 10 years. Many more Muslim kids are coming to Toronto now. One of the huge, striking stories is the number of preteen and teenage boys sitting in class without adequate training in English as a Second Language. They are warehoused over the course of the school year and do not learn anything or understand what is going on in class. They do not develop but are passed from year to year, illiterate and unable to engage. They engage in cultures and home communities, which is deeply troubling because this situation is happening because of a lack of money.
I completely agree that literacy is a huge issue. Communicating effectively is a huge issue for anyone, whether they are poor, middle class or high income. If you look at this dimension of poverty the federal government is tasked with, immigration policy it is not only an issue of giving money to settlement services. We greatly appreciate in large cities that more money is available for settlement services, but part of the right of citizenship or landed immigrant status in this country is that when they come here, they learn one of the official languages, if they do not already know one, on the federal ticket because, by crikey, we need them to work and to fit in. If that is not part of the welcome to this country, the issue is a huge one that will bite us not long from now.
Ms. Lankin: The issue is huge, senator, and one that we are beginning to lose ground on, which should concern us. I echo the comments of Ms. Yalnizyan, but on a broad national basis it is more than the new immigrant experience and English as a Second Language. In our work, which is at a neighbourhood level with a focus on youth and success, I tie it to school attainment, school achievement and educational achievement. Recently, we have been working a lot with supporting programs like Pathways to Education, which had phenomenal results in the one neighbourhood it has been run in. United Way has partnered with the program to expand to other neighbourhoods, and some experience is beginning in other parts of the countries beginning as well. The program has a focus on combined mentoring, tutoring and social interaction, as well as potential saving scholarships for school. A lot of incentives have been brought together. Our testing is to look at the barriers that need to be overcome in other communities with good community development work.
One other thing that we need to understand is that access to Internet computing capacity is critical, and we do not provide it equally in our school systems. When we go into a school in a poor neighbourhood and one in a middle- income to well-off neighbourhood, in public schools, not private schools, we see differential deployment of the equipment because of what is expected by the parents and what is demanded by parents. Parents are prepared to fundraise above and beyond to supplement equipment. Some of the basic tools of learning that are great equalizers are denied to certain segments of the population.
Only yesterday, I was at a breakfast meeting hosted by the President of the University of Toronto and attended by Michael Dell, the President and CEO of Dell Computing. One thing we talked about is a program they have in partnership with the Government of Mexico where the Government of Mexico has mandated that all Grade 5 and Grade 6 curricula in every school is a technology-based, technology-assisted curriculum. They commented that in parts of country that mandate means delivering their hardware and equipment by boat and by donkey. However, once there, once up, once connected, the learning experience of children is aided by the access to technology and their exposure to the technology, then followed up by programs like the UN program around one computer per child and the $100 laptop. The results of that enabling is, in their view, catapulting or leapfrogging those kids in Grade 5 and Grade 6 in Mexico to beyond standards of high school students in many parts of North America.
There are opportunities for that investment, and I come back to the middle years, not only the early years, and youth policy framework around a range of things. However, education, literacy and school achievement, staying in school and moving on pathways to post-secondary are huge equalizers in terms of intergenerational issues of poverty.
The Chair: I am down to seven minutes, and Senator Callbeck and Senator Cordy want to ask questions. I suggest that both senators ask their question, and then I will throw it to the panel to answer them until one o'clock.
Senator Callbeck: I have two questions, and they come out of the brief from Ms. Lankin. You talked a few minutes ago about the tremendous rise in fringe banking, the payday loan business, cheque cashing and so on. We have seen this rise all across Canada. In my province, there has been tremendous growth in the last few years. The federal government has passed this issue over to the provinces. Some provinces have regulated the business. I believe B.C., Saskatchewan, Manitoba, Nova Scotia and Quebec have strict regulations. Is there still there a role for the federal government? When this bill came to the Senate, I was absolutely shocked at the fees, the charges and the interest rates that these people pay. It seems to me that they are caught in a debt cycle. They do not understand what is in the document they are signing, or they do not take the time to read it. Is there a role for the federal government in terms of making people more aware, or can the federal government do something with the Banking Act to make the banks more open?
Senator Cordy: I agree with the comments of Mr. Battle and all of you that the most vulnerable people are always the ones asked to make choices; do they want this or that? Then we look at choices for those who are much better off; do they want to put their money into a retirement savings plan, an education plan for their children or grandchildren or the new and improved $5,000 a year in a savings plan? One of you commented that no one is poorer than the working poor. I want to talk about those families who are in poverty, specifically related to Employment Insurance. We always think we have the Employment Insurance safety net so those who lose their jobs can receive benefits. Then we hear that one quarter of the people you work with do not receive it. They are not able to reach out and receive benefits from Employment Insurance. That responsibility is federal. What can we recommend as a committee in terms of Employment Insurance? When I looked at the budget this week, it unnerved me even more in terms of Employment Insurance because I see Employment Insurance going almost to privatization. What can we do from the federal perspective, because EI is federal, to ensure that people can access the benefits they deserve?
Mr. Battle: I will talk about EI. I think about 44 per cent of unemployed Canadians receive Employment Insurance, and it varies by province. In some provinces, it is even lower, which is extraordinary. When we look at EI coverage by major cities, it is also unbelievable — 20 per cent, 25 per cent, 30 per cent or 35 per cent depending on the city. Here is a main-line social program that clearly is not doing what it purports to do. The program is a complicated one. I think it is the most complicated social program I have ever looked at, but that has to do with why people are not eligible. The eligibility rules are not only about how long someone has worked to be eligible for the program, but the rules also vary by the 50-odd economic regions across Canada in terms of their employment rates. It is a complicated situation where, depending upon the employment region, a person may receive EI in one region, while in another area that person would not receive EI. It can be as extreme as that, which is unbelievable for a federal program.
How do you fix it? A lot of the problem relates to the fact that recent immigrants and people with part-time jobs are not able to work enough hours to qualify. There are two ways of fixing that problem. One is simply to ease the restrictions and the rules and go back to a more generous system. The other one, which we have been working on at Caledon, is splitting EI into two programs. One program would be a classic Employment Insurance that would be a social-insurance-based program where they need a certain number of hours to be eligible, the way it is now, but we would eliminate the regional unemployment rate problem by having a standard rate. The second program would a new, income-tested program that would provide benefits for unemployed Canadians who are not eligible for Employment Insurance. The U.K. provides this benefit within their system. They have a working income tax benefit that does the same thing as this program would do. We are working on that idea. I see merit in having a social insurance program but it is incapable of serving the needs of all unemployed Canadians, so we are looking at creating another federal program to be financed through general revenues.
Ms. Yalnizyan: In the late 1970s, the credit card businesses in the United States and Canada convinced our federal regulators to remove usury laws, which put an upper ceiling on how much interest could be charged. I am ignorant on what the limits are at the federal level, but I do not see why the federal government cannot put an upper ceiling on interest rates charged. A good topic for discussion would be, why is the sky the limit for interest rates, and what is the role of a federal regulator?
In terms of the Employment Insurance system, one of the big issues touched on was the growth of people not getting enough hours as well as the fact that more and more people are told they are not an employee but that they are self- employed and on their own. I think that issue merits a huge study, not a two-minute intervention. I hope you look at that issue.
Ms. Lankin: We ask you to look at our full report, not only the executive summary, for some of the regional differences. While I agree with Mr. Battle in terms of a longer term solution, right now the fact is that the government applies differential standards on large regional numbers. I have made the point that large areas and average numbers hide specific challenges and problems. In Toronto post-SARS, we had the phenomenon of workers in the tourism and hospitality sector who are not only new immigrants and do not have enough hours. They work year-round with the seasonality, as do seasonal workers in Atlantic Canada, but because of the regional rates of employment outside the city of Toronto, and we are putting it all together, they were not eligible to draw Employment Insurance. We needed to build a charitable response. There was terrific support from the hospitality industry and corporations in that sector, along with United Way, to build a fund for a rent bank to help those workers maintain their families in their homes. The alternative was access to emergency shelters, and the city was worried about that. There is a need for that kind of change immediately around Employment Insurance, as well as to look at the longer term.
There is no reason why the payday loan sector could not have been part of a federally regulated finance sector. The government chose not to regulate the sector federally and put the responsibility on the provincial government, thus we have a patchwork and differences when the federal government could have regulated it. Regulations around the banking sector cover these sorts of things federally. Because this sector is unregulated except for what provinces have done, there have not been those kinds of usury protections or other sorts of things.
On education, I think there is a real opportunity here. If you think about the response from the liquor and beer industry toward public education around drinking and driving, and the way that was led by government pressure on the industry, and the successful interventions made in changing public attitudes and knowledge, there is an opportunity to educate the consumer about the real choices and traps in this sector.
The federal government could invest in that education and work with organizations like the Canadian Foundation for Economic Education that have good economic literacy programs. Delivering a set of programs like that one into communities through the kind of community hubs we were talking about could go a long way to helping families build the skills to interact with the finance sector.
The Chair: We have run out of time. On behalf of my colleagues, I thank our panel. You have given us a wealth of valuable information today, and it will help us in our deliberations on this matter.
The committee adjourned.