Proceedings of the Standing Senate Committee on
Agriculture and Forestry
Issue 9 - Evidence - Meeting of October 26, 2006
OTTAWA, Thursday, October 26, 2006
The Standing Senate Committee on Agriculture and Forestry met this day at 8:22 a.m. to examine and report on rural poverty in Canada
Senator Joyce Fairbairn (Chairman) in the chair.
[English]
The Chairman: Good morning, honourable senators and witnesses, and good morning to all of those who are watching our Standing Senate Committee on Agriculture and Forestry.
Last May, this committee was authorized to examine and report on rural poverty in Canada. For too long, the plight of the rural poor has been ignored by policy-makers and politicians. Until the end of the year, this committee will hear from a variety of witnesses who will give an overview of poverty in Canada's rural areas. This work will then serve as a basis for the committee's planned travel to rural communities across the country next year.
As the committee has already learned, rural poverty is a many-faceted problem, extending well beyond inadequate income to include disparities in access to services, economic opportunities and even health outcomes. Moreover, rural poverty is not evenly dispersed across Canada.
Today's witnesses are well equipped to speak to the multi-faceted nature of rural poverty, in part because they come from different regions of the country and in part because of their very different academic backgrounds. From the West, we have Mark Partridge, an economist currently with Ohio State University but also affiliated with the University of Saskatchewan. From Quebec, we have Bruno Jean, a sociologist from Université du Québec à Rimouski, who holds a Canada Research Chair in rural development. From the East, we have David Bruce, a geographer at Mount Allison University and Director of the university's rural and small town programs. Welcome, gentlemen. We are very pleased to have you here.
We have a little over two hours today to cover a wide array of issues with our witnesses, so I would invite my colleagues, as always, to keep their questions as brief as possible so that we can allow our witnesses to respond fully and so everyone has a fair chance for discussion at this hearing this morning.
Gentlemen, please proceed.
Mark Partridge, Adjunct Professor, Department of Agricultural Economics, University of Saskatchewan, as an individual: It is a great pleasure to be here today to discuss two very important issues. The first is reducing poverty, and the second is revitalizing our rural communities and improving economic opportunities for rural Canadians.
I know the committee has already heard from experts from Statistics Canada, so I will not repeat the same statistical facts. Instead, I will be more proactive in describing policies that can improve the status of rural Canada. In particular, I will focus on various myths that surround rural Canada and the urgent need to push beyond those myths in order to make policy that can enhance the quality of life for rural Canadians.
A popular myth surrounds rural Canada, and today I want to dispel the myth. Your grandfather's rural Canada is different from today's rural Canada. Rural Canada is much more diverse than what the myth says. I also want to talk a bit about the geography of Canadian poverty. I will then touch on how we should move beyond the myth in order to form policies to enhance the living standards of rural Canadians. In particular, I will talk about leveraging urban- centred growth that takes place in this country and how it can build supporting institutions so we can ensure rural Canadians participate in the growth process.
With that in mind, the first point I want to make is that rural Canada is much less dependent on farm and natural resource industries than it was 50 years ago. The second point I want to make in terms of the myth is that even most farm households are very dependent on non-farm activities, and that means that rural communities need to look beyond their natural resource-based roots if they want to have a prosperous economy.
This slide shows the share of employment in agriculture across the country. On the right is Canada; on the left is Ontario. Ontario is just a representative province. In 1931, about 30 per cent of Canadians were employed in agriculture. By 2004, it was about 2 per cent. Rural Canada has undergone this major restructuring, which has been very challenging for its communities. It is a different rural Canada than it was in the past.
That is Canada as a whole, but what about our rural communities? This slide shows the share of employment in rural and small-town Ontario. Rural and small-town Canada is simply any area outside of an urban centre of 10,000 people or more or any area that commutes into that urban centre, so rural areas without a lot of commuting linkages to cities. Even in rural and small-town Ontario, about 5 per cent of employment is in primary agriculture and less than 2 per cent in mining. By contrast, over 18 per cent is in manufacturing. More than twice as many rural Ontarians are employed in manufacturing than in the natural resource sectors. In Quebec, it is three times as many. This is a general pattern across most of the country and a major restructuring of what was rural Canada in the past.
Turning to farm communities and households, the typical farm household in Canada earns 87 per cent of its income from off-farm sources such as commuting and other sources. Even farm households are relying on the broader, rural economy. If we are worried about farm households and non-farm households, the broader rural economy is tantamount and a much more diverse economy than what it was 50 years ago.
Finally, if we are looking at household income and assets, poverty broadly defined, the typical farm household and the typical non-farm household in rural Canada are similar. Low income is a broad rural problem and extends whether we are talking about farm households or non-farm households. If we want to solve low-income problems in rural Canada, we must make tangible dents in the broader rural economy. The next two graphs make the point that household income and poverty are similar across non-farm and farm households.
Turning to the geography of poverty across the country, this map shows poverty rates as measured by the LICO, low-income cut-off, Statistics Canada measure. There are many measures of poverty, all coming down to talking about people who need more resources. Whatever measure we use, I think they are reasonably appropriate in that sense. Blue shows areas of high poverty, 20 per cent or more, areas of 10 are low poverty, less than 10 per cent poverty as measured by the LICO, and red is in the middle.
Across Canada, we see that it really clusters. In Atlantic Canada, we see a lot more blue and red, which demonstrates high poverty. The Windsor-Toronto-Ottawa-Montreal core has relatively low poverty clustered together. In Western Canada, we see British Columbia and Alberta clusters; but in Saskatchewan and Manitoba, we see a real checkerboard. I want to address that because I think it might interest the committee.
Across the Great Plains of North America, farm communities tend to have very low poverty. That is one characteristic; however, they also tend to be next to reserves in Canada or reservations in the United States, which have very high poverty, so you get this real checkerboard — especially in Saskatchewan, but also in Manitoba. High-poverty communities can be located near very low-poverty communities, and that is a little bit different about the Prairies.
Given that process, there are a couple things I want to note in terms of the research. With long-term poverty, as I noted, there is clustering; but another factor makes it challenging and that is that it is very persistent. Communities that had high poverty rates 30 years ago tend to have high poverty rates today.
A lot of that has to do with the demographics — education and those kinds of human capital factors. One piece of good news in terms of reducing poverty is that economic conditions today have much less impact on poverty than 10 years ago — the good news is that a community that is struggling today is not necessarily locked into a poverty trap. In that sense, today's economic conditions are not necessarily going to pull the community down.
Given that poverty has this geography and that the economy is much more diverse than a natural resource economy, what is the largest factor driving rural Canadian growth? One of the strongest patterns that we see from statistical analysis is access to urban centres. Proximity to urban centres is driving growth in rural Canada. It is a much stronger pattern than in the United States.
I think the key reason is that there are only nine metropolitan areas of 500,000 people or more in Canada, while in the United States there are about 100. The point is each city is very important in terms of Canadian growth, giving cities this important element. It is not just that the cities are growing, but city growth has positive implications on rural growth. When discussing how to redevelop rural communities through immigration, entrepreneurship, social capital and social capacity we must recognize this very important geography. We have to recognize that we have to build tighter access with urban centres to ensure that we can have this kind of development. For example, immigrants tend to want to locate in urban areas, so if we are going to attract them to rural areas, we have to build stronger links with our urban centres.
The next two maps illustrate my point. This is Eastern Canada's population growth from 1991 to 2001. Darker shades of red are population growth and darker shades of blue are population loss. I put 100- and 200 -kilometre rings around what I call five engines of growth — metropolitan areas of 500,000 people or more — Hamilton, Toronto, Ottawa, Montreal and Quebec City; and what I call a contender, Halifax, which is approaching that critical mass. One of the things to note is if population growth is taking place in Eastern Canada, and the same applies for Western Canada, it tends to be within those rings. Here again, I want to say what is good for Toronto or Quebec City is not just good for them; their growth spills out. In that sense, what the Conference Board of Canada says is correct about cities. What they do not put enough emphasis on is the fact that we need to build more supporting institutions and regular infrastructure to ensure that the rural areas participate in that growth. The other thing we need to do is get those rings bigger so more rural communities are participating in that growth.
There is some other good news. It is not just cities of 500,000 people or more, smaller cities can play important roles in spreading growth out into the rural communities.
This shows population growth from 1996 to 2001, which has the same colours — darker shades of blue are population losses. I put 100-kilometre, one-hour commuting rings around every urban centre in the Prairie provinces of 10,000 people or more. What we see, especially in Manitoba and Saskatchewan is that if there is growth in rural areas it is taking place within those rings. The point is that Lethbridge or Estevan's success has important implications for rural communities.
How do we enhance rural opportunities? We find ways of building tighter links with even the smaller urban centres. Much of this relates to commuting behaviour, but I want to stress it is not that we want everyone to commute into Estevan; we want just enough people to commute to keep our rural communities vital, to have enough people to offer important services such as health care and so on. It is building critical mass and leveraging urban growth to build rural development.
The path to a sustainable rural Canada includes access to higher wages and work for rural Canadians. The most effective way to achieve that, in terms of the research, is that we need to tighten links with urban centres and build regional growth clusters — build critical mass so rural Canadians can participate. We need more innovative governing structures, more regional approaches. We need to enhance transportation and regional infrastructure and we need to build regional leadership and broader identities.
One of the key areas of resistance to what I am saying is that in a small rural community, the people believe that they have a voice that is heard with the mayor or councillor. The concern is that voice would not be heard in a larger region. I point out that even though that is true the community is small and lacks the critical mass needed for 21st century survival. If you are in rural Manitoba, they will listen to you in Winnipeg at the legislature; they will listen to you in Ottawa if you work more closely and cooperate. The point is that builds a more effective voice, then the people can actually do something and have clout.
To conclude, a new approach is needed to enhance the incomes of rural Canadians. It has to discard these myths that rural Canada is much more diverse than it was 50 years ago. One of the key realities is that even urban centres as small as 10,000 people can be leveraged to build growth for entire rural areas and rural regions around them.
[Translation]
Bruno Jean, incumbent, Research Chair in Canadian Rural Development, Université du Québec à Rimouski, as an individual: Madame Chairman, I will speak in French.
The poverty of our rural regions has been an issue on the agenda in this country for at least half a century now. And we can thank the federal government during the post-war years for alerting the public to the fact that while Canada as a whole was enjoying enormous prosperity he swaths of the country, like the North, the Prairie provinces, Newfoundland, the Gaspé region of Quebec and other regions, were foundering in poverty. We are aware that the government responded with the ARDA and a series of measures that culminated in the creation of the Department of Regional Economic Expansion.
So if we continue to find poverty on the agenda here in 2006, does that mean that our regional development policies have missed their mark and have failed to produce the expected results? I think it would be going too far to make such an assumption; certain regions have seen major development, investments in their infrastructure, and job qualification programs. And even if such investments may have accelerated the outward migration of workers, they have nonetheless made it possible for these so-called poor regions to offer a better quality of life and to be more attractive, particularly for tourism.
This morning, I would like to focus on the measurement of rural poverty. Certainly there are farming communities — I am thinking of Western Canada — which are experiencing great poverty; and I think that this may relate to Canadian agricultural policy which, I believe, may have been poorly thought out — but I will come back to that later. I would prefer to focus here on Quebec, a province I am more familiar with. In Quebec, it seems to me that in recent years we have seen a reduction in rural poverty, not an increase.
L'Institut de la statistique du Québec has completed a number of projects...I do not intend to mention them all. I have included tables in the report I will be handing out. For example, the Low Income Measure, a fairly traditional parameter, shows that 14.7 per cent of families in the Gaspé, a so-called poor region, and 10 per cent in the Bas-Saint- Laurent region are accordingly on the poverty line. If we look at the city of Montreal on this same table, however, this indicator rises to nearly 20 per cent. This means, therefore, that there are 354,000 poor people in the Montreal area, while in all the outlying regions of Quebec — I am referring to the Gaspé, Bas-Saint-Laurent, Côte Nord, Saguenay, Abitibi-Témiscamingue —, we have, at the very most, 93,000 poor people. In other words, based on this indicator, poverty may be more common in the urban areas than in certain fairly remote rural areas.
I have quoted a physician from Montreal who recounts how he sees this poverty on a daily basis and how he believes that rural poverty may be easier to manage.
I will refer to another series of indicators — a variety of indicators are used to measure economic disparity. In the tables that I have inserted in the document, we see that between 1996 and 2001, in very small communities — those with fewer than 500 inhabitants — the average family income, if we consider the province of Quebec to be 100 per cent, was at 85 per cent in 1986. This is not too far off the average. And then it nosedives: the incomes in these communities are now at 62 per cent of the Quebec average.
Throughout this entire period, the earnings of people in small rural communities were apparently being eroded.
I quickly reviewed the issue of government transfers. Here as well, it is interesting to note that the transfer percentages, while extremely stable for the urban areas — 14 per cent of urban earnings in Quebec derive from government transfers —, totalled nearly 30 per cent, that is, 28.6 per cent, in 1986 for the small rural communities, the poorest areas; today these rural transfers total no more than 18 per cent. This is a somewhat surprising statistic that may also reflect changes to employment insurance programs and access to these programs in the rural areas.
I also referred to the Low Income Measure, which measures the narrowing gap between rural and urban poverty.
Which brings me to the conclusion that if rural poverty does exist it is certainly limited to specific zones that are likely affected by a combination of factors — for example, a farm income crisis or the forestry crisis currently hitting the province of Quebec — because over a slightly longer period, we see that rural poverty seems to be diminishing. Income gaps do remain, but it must be recognized as well that there are differences in the cost of living as well, that is; people in certain rural areas do not need as much income for housing and other requirements.
On page 4, I also look at the issue of public services. Our research showed that rural populations are extremely mobile and regard as accessible any services less than an hour's drive from their home. Looking at this situation, if we consider the province of Quebec, where the rural communities are fairly evenly distributed, and if we draw a circle around each town representing an hour's drive, it quickly becomes apparent that rural populations have access to a lot of services. Obviously, there are some isolated rural communities where these proximate services are threatened — schools, for example, and even private-sector services like gas stations.
We also looked at methods for maintaining services in rural areas. We observed that in an era where there is a lot of talk about private/public partnerships for delivering services — there are quite a few of them — what I would refer to as public-public partnerships are extremely difficult to organize — one thinks of a single building that could simultaneously house a post office, the local government administration and another agency. So public-public partnerships are not that easy to arrange. Public institutions prefer to work with the private sector.
In other words, when it comes to services — even if broadband, for example, is not yet accessible — I think we will manage. I'm relatively optimistic when it comes to services. Much remains to be done, but we are getting there.
I would like to come back to the issue of poverty, to look at methods for effectively measuring rural poverty.
At page 5, I inserted a small table. In Quebec, we have worked with a concept that we refer to as ``rural impoverishment.'' In all, there are 1,000 rural municipalities in the province of Quebec. We tried to find which indicators would enable us to categorize these municipalities and find out where this rural poverty is located. Which communities are undergoing what we will call here ``restructuring''? We concluded that there are between five and seven variables, which derive from data available from Statistics Canada, which can be used to develop a rural impoverishment index. This index allowed us to categorize municipalities ranging from highly dynamic to those in difficulty or in decline.
At page 6, we even conducted tests as part of a doctoral thesis that I directed, which involved several simulations of this impoverishment index based on a specific number of different variables. On page 7, we found that we could measure rural poverty using an impoverishment index comprising no more than seven organized variables: population changes in the two censuses available at the time of measurement, the proportion of persons aged 20 years or more who had failed to completed grade nine, the employment rate, the unemployment rate, the proportion of government transfers in the composition of household income, the proportion of people living in low-income households and the average household income. What is important to note here is that no matter which index we used, we found that rural poverty affected 20 per cent of Quebec communities. And I think that this percentage probably shows little variation across Canada.
In the time I have left, I would like to look at some solutions. I believe that we need rural policies that are separate and distinct from agricultural policies. The best rural policies are those managed in collaboration with the rural communities, which is the approach taken by Quebec's national policy on rural areas.
Thus, we must ensure that the federal government puts significant sums of money at the disposal of the provinces so they can develop rural policies worthy of the name, along with the resources necessary to implement them.
I am not a specialist in agricultural policy, but I would say that the hypotheses that underpinned our agricultural strategy may not have been all that viable. Based on agricultural earnings in recent years, it would appear that we have not achieved the results we expected.
The political independence of any country is linked to an adequate level of food self-sufficiency. The generation of wealth occurs in the second or third transformation and not in the production of agricultural raw material, egg, wheat, unprocessed milk, and so on.
If Canadian agricultural policy were designed to achieve such self-sufficiency, I think that the agricultural sector would benefit, as we have seen in Quebec. I will take the liberty of citing the following words by a Head of State, and I challenge you to tell me who uttered them and when:
We are a blessed nation because we can grow our own food and, therefore, we are secure. A nation that can feed its people is a nation more secure.
That same Head of State continued by attacking irresponsible liberals who are prepared to relinquish food production to unstable countries like those in the Third World.
I think that the sceptics among you will be proven wrong, because these are in fact the words of Georges W. Bush in April 2003 during the adoption of the ``Farm Bill,'' which included measures to support American agriculture. And I think that what is good for the United States is good for their Northern neighbour as well.
No one should underestimate the changes that are occurring at this period in our history. In French, we say ``Manger local'' [Eat locally]. This consumer ideology is changing our bio-food systems, with highly positive repercussions for the rural employment picture.
I will offer you one example. At one time, a huge dairy cooperative operated at Trois-Pistoles, in the Bas-Saint- Laurent region. Fifteen or twenty years ago, it closed down and threw hundreds of people out of work. On that same site, a farmer started a Basque micro-cheese factory. Today, his micro-cheese factory has grown into a profitable little SME that employs 30 people. And other micro-cheese factories have sprung up. I believe that this economic fabric is very strong and in harmony with local needs. These people are working in local markets and have created good jobs.
This is a significant trend; in Quebec, we are seeing an explosion in the demand for local products. There is an abundance of opportunities to create wealth in our rural areas.
If we want to win the fight against poverty, we must generate wealth. And to create wealth, even in our most far- flung regions, we must work diligently to define local agricultural and agri-food strategies, as we have tried to do in a region I will speak about in a text in annex.
I do not want to take time away from my colleagues so I will move to my conclusions. I had discussed some aspects of my experiences in other countries, but we will take a look at this issue in our discussions.
And so to conclude, when we speak about rural poverty, we are talking about 20 to 25 per cent of rural municipalities, but obviously there are more in the more remote regions, in the North, and in Aboriginal communities. These communities are in decline, as evidenced by their negative demographic development and according to indicators of rural impoverishment. These municipalities are deteriorating, in the process of destructuring or perhaps restructuring, but in all cases they urgently need a vigorous state program that can do for them what the Marshall Plan did for the reconstruction of Europe following the Second World War.
Consequently, we need a revitalization plan that will enable these communities to once again become attractive living environments; even now, in fact, through their primary resources, agricultural, fishing, forestry, mining, and now wind, they offer a path to national prosperity.
We must ensure their development not through specialization but rather by diversifying their economies and enhancing the multifunctionality of these agricultural lands.
I will conclude by quickly proposing a few ideas for your consideration. I believe that we must move from a ``people- based'' approach to a ``place-based'' approach.
What this means is that we must increase the resources and the capacities of the Canadian Community Development Program. The structure is already in place and has enjoyed a great deal of success. It has proved its worth. Using this structure, we could implement a program to support the next generation of entrepreneurs who will run the multitude of rural small businesses which form the foundation of the economic fabric and which are currently facing a number of succession problems.
Second, we have to develop a rural community revitalization program in collaboration with the provinces. I think that there are lessons to be learned from our experience here in Quebec. This program, which I alluded to several times in my presentation, could be delivered by existing regional development agencies, for example, ACOA, FedNor, Western Economic Diversification Canada and other agencies that have a role to play in revitalizing rural areas in difficulty.
And third, we should restore the Canadian Advisory Council on Rural Issues to gain a better understanding of what is happening on a daily basis in the different regions of this country. I believe that the type of advisory council instituted by the previous government was useful in determining what was happening in Canada and in completing certain analysis projects.
We must implement an agricultural policy designed to ensure national food self-sufficiency, a policy based on the recognition of agricultural multifunctionality and the new functions of agriculture.
Agriculture is undergoing a number of changes. In the future, agriculture will have new functions relating to energy production, wind farms, bio-fuels. It will also have new ecological functions like carbon storage. It is evident that in the future agriculture will be utterly transformed.
Finally, as an academic, I would say that we must encourage quality university research into the wide-ranging problems that rural communities in this country will have to address; thus, we should launch a research initiative into the challenges posed by Canadian rural development. This could be done with the support of the Social Sciences and Humanities Research Council.
[English]
David Bruce, Director, Rural and Small Town Programme, Mount Allison University, as an individual: I will do my best to stick within ten minutes, as the real value in these sessions is the interaction between honourable senators and those of us who have some ideas and opinions to share.
Thank you very much for the invitation to be here today. I want to underscore that I am not an agricultural sector expert. I qualify myself as a broader rural generalist. What I hope I bring to the discussion today is an extensive period of research and community development work primarily in rural and small-town Atlantic Canada.
I did take the opportunity to look at the range of questions in which this committee is interested. I want to focus on three specific questions. First, what measure of poverty might be appropriate for consideration? Second, what are the impacts of poverty on rural communities? Third, what policy suggestions might the committee consider? I will treat these questions in sequence. We will move through them reasonably quickly and I look forward to discussion afterward.
I do not think there is an absolute best measure of poverty. We can spend a great deal of time debating the appropriate threshold of income required, but regardless of the threshold amount, we will still find that one person living in poverty is one person too many. When we consider poverty, we realize it is a relative issue. Even if we move the income threshold up or down, some people will still feel excluded or marginalized in our society. From my work and volunteer experience in rural communities, in minor sports, for example, I have learned that poverty means much more than just an absence or insufficiency of income. It also means that someone cannot participate in minor hockey or an after school program. It means that someone is missing a chance to interact with a school friend. We need to keep that in mind when we talk about a measure of poverty. It is not only about an absence of income but also about the inability to feel included in a community. I am sure many of us can think of personal examples of individuals that we either grew up with or know of that did not fit in for some reason. In many cases, the root cause was poverty.
The recent approach explored by Human Resources and Skills Development Canada in something called a ``market- based measure of poverty'' is worth further exploration. Essentially, the market-based-measure approach looks at a broad basket of goods and services that an individual, a household or a family requires to be included in a community. It goes beyond the basics of food, clothing and shelter. It talks about the real cost of transportation, medication and all the other things that we often take for granted and assume that we can afford because we have the income to do so. In looking at that broader basket of goods, we find that it becomes a much more realistic picture of the real income required to survive and be above or out of poverty.
A family of four in rural Canada, after taxes, would need $24,000 to $28,000 to make a go of it and be included in their community. That equates $13 to $16 per hour after taxes either as a wage that one bread-winner brings in or the combination of two wages. We know that many new jobs created in rural Canada over the last 20 years have been at the lower wage level in the service sector, such as Tim Horton's, et cetera. We must find a solution to address that gap between what the market is paying and what is really needed.
It is important to underscore that the market-based measure resulted from a piece of work commissioned by the ministers of social services across Canada in the late 1990s. I urge this committee to pursue why social assistance rates have not come up to reflect what that market-based measure has told the social services ministers or their equivalents. There is an obvious gap. Of course, it is a structural issue because the provinces are responsible for social assistance or welfare but the federal government has some policy and revenue levers to deal with it.
It is likely that senators will hear from the National Council on Welfare at some time during this study. The council has done a great deal of work to document the gap between the social assistance rates and the true cost of living in a community.
One of the curious things about social assistance rates is that there is no differentiation between urban and rural. There is a province-wide flat rate. Each province tinkers with what is in and out and what kinds of benefits are included, et cetera, but the fact of the matter is that social assistance rates paid to individuals fall anywhere from 50 per cent to 80 per cent below the poverty line.
If we want to provide people with some kind of stability for a short-to-medium-term period to get back on their feet, the current provincial social assistance programs are not giving people that opportunity. I am not here to advocate ``just dump more money into social assistance and everything will be fine'' because, as I will mention later, it is not just about the money. It is also about policy interventions that will put people back on the right track.
I know the committee is interested in the farm aspect of this issue. I do not have statistics with me to show the number of people that are contributing to or are part of the poverty issue. However, it is important to spend a couple of minutes talking about the fact that, whether we are talking farming, fisheries or other primary sector resource-based activities, some of those activities by their very nature are seasonal and contribute to income instability or lack of security of income in our rural communities. That is as great a challenge as is the actual amount of income that is earned over a 12-month period.
I would like to underscore that we need to be very careful about what we do with reforms to employment insurance programs that penalize workers and industries for being seasonal. We all know that many of our urban counterparts, many in this room, benefit from the goods and products produced by our seasonal industries, whether we are talking about a nice salmon dinner at the restaurant down the road or some other aspect of that productivity. We cannot penalize people in those industries. On the one hand, we want the product from those seasonal industries but on the other hand, we want those employees to be a mobile workforce and move to communities where those seasonal jobs are available. There have been experiments to determine whether we can do that but how many people can we uproot three times each year and rotate them through three seasonal industries in three different areas of rural Canada. If we value the products and want the products from seasonal industries, then we need to not penalize people for being seasonally employed in such industries and for being rooted in the communities in which they grew up.
Before I turn to the impacts of poverty, I want to say that we are on the cusp of witnessing an expansion of poverty into higher income levels. Primarily, I am considering the impact of high student debt load coming out of post- secondary education. We have heard many stories about people lamenting the fact that so many have to go to Central Canada or to the tar sands in Alberta for a minimum number of years just to reduce their student debt to a manageable amount. It is becoming a big part of what is driving the out-migration from rural communities. Of course, another part of it is the natural mobility of labour, which we cannot stem. However, when people do not have the opportunity to return to their hometowns to begin their own businesses or to be gainfully employed because they are carrying such a heavy student debt load coming out of post-secondary education, then we need to look seriously at alternative ways of nurturing the next generation workforce. We have to nurture the next generation without unduly burdening them with exceptionally high student debt.
I know that the committee is interested in the impacts of poverty on rural communities. Much work has been done by many different researchers in many different disciplines, from health and psychology to agricultural economics. The impacts are quite visible. People with lower incomes do not have the capacity to provide the healthy lifestyles that are required so as not to place a burden on the health care system. People with lower incomes generally tend not to place the same kind of value on life-long learning and nurturing on the next generation to get a leg up and so on.
On a day-to-day basis, communities with higher rates of poverty have fewer people spending money in the community, and you end up seeing a downward spiral of businesses closing because they cannot turn enough dollars in the till on a day-to-day basis. That contributes to the spiralling effect and now becomes even more costly for people in that community because they have to travel further for the basic goods and services, whether retail or personal services.
Part of this has been driven by low incomes and income instability. Part of it has been driven by the uncoupling or separation of the economic activity from the community in which we have that activity located. The ongoing restructuring in agricultural economics has meant, for example, that the local farm dealership is no longer local. It is owned by some multinational conglomerate, and it is easy to lock the door tomorrow and say they will run it next door or in the next community. Therefore, you have fewer people spending money in the local community, buying the farm implements or fertilizer, et cetera. Again, that has an impact on jobs and the spiralling effect. Some of that is just the natural force of economics, but it is the reality in terms of the lack of spending in some of our agricultural communities.
Let me move on to talk about a few policy considerations, which hopefully will be a springboard for some discussion. There are no magic bullets, no magic solutions. We will not wave the wand and tomorrow solve all the problems of the world.
Many people that advocate in the poverty world have pointed out that this is not just an income issue, and they are right. It is not just an income issue. It is about looking for the right mix of policy and program interventions that combine raising people's incomes to an appropriate level and supporting them in their efforts to move that income up the ladder. In other words, it is not good enough just to say, ``You need to go out and get a job. Here is an education program for a year. Go get trained, and then you can get a job.'' What if there is a single mom with two kids and there are no child care services in her community. How will she take that eight or 12-month program to make herself employable when she has a three-year-old and a five-year-old at home? The mix of policy and program interventions must take into account what we can do to raise the income level and the other supports people need to become re- employable or employable in the community or region in which they are located.
We can introduce some programs that address what contributes to or leads people into poverty. Those are things like making post-secondary education more affordable. Whether that is free public post-secondary education, I do not know. I do not know if we can afford that as a society, but we need to find a strategy to make it more affordable so that when people graduate they do not have those heavy debt loads.
We need to find ways of increasing the supply of affordable housing in both our urban and rural communities. The cost of building materials and labour has gone through the roof. The cost of land is going through the roof. People now coming out of university and the so-called ``middle class'' cannot afford to buy a $250,000 home in Halifax. We are not talking about Airdrie and Calgary; we are talking about Halifax. That spills over to Truro, Sackville, and Fredericton and so on, where I do work. We need to find ways to bring down those costs. We need to invest in affordable child care options for families so that they can get the training they need and have a safe place for their kids while they become re- employable and get themselves off the treadmill of living in poverty.
We need to re-examine some of the parameters of the unemployment insurance program so we are not penalizing people for working in seasonal labour. I am not advocating for a handout, but I do say we need to find the right mix for those people involved in the employment insurance program.
We need a few policy interventions that address some of the outcomes of poverty — people that are already there: How do we get them out? A reassessment of social assistance rates in the context of market-based measures is worth some discussion, and I urge honourable senators to bring before them, if possible, the various social services ministers across the country. In particular, I am worried that, in many cases, people are penalized as they move from social assistance, where there are some benefits for transportation and child care and so on, to equivalent wage employment without any benefits. There is a disincentive built in there so that when you do take a job, you have then lost your basic medical care, so people, by default, opt out of gainful employment and further reduce the productivity of our rural economies.
Finally, in addition to reducing the cost of affordable housing in some of our communities, we need to revisit the supply of social housing in communities across Canada, both urban and rural. In particular, I am thinking about a re- examination of the housing co-op program which was highly successful when introduced in the early 1970s and which was terminated in 1993 as part of the major cutbacks introduced in housing at that time. A number of studies clearly indicate that people with lower incomes living in social housing and co-op programs and projects benefit greatly from the interaction with a mixed-income group and end up moving out of social assistance and other types of income support and into our society as gainfully employed people.
Let me end on those points. I look forward to some discussion and debate.
The Chairman: Thank you very much. You certainly will get some good discussion here.
Senator Oliver: I thank all three presenters for three excellent papers. Mr. Partridge and Mr. Jean, I would like to put my first questions to you both because you touched on a number of similar subjects. You talked about the need to build some kind of rural infrastructure. You used the word ``infrastructure,'' Mr. Partridge, and Mr. Jean mentioned revitalization programs, both regional and provincial. I know what the word ``infrastructure'' means, but let us say you have a small rural community of 200 people, mixed farming, retired people, and so on. What kind of physical infrastructure were you thinking about to join that to an urban centre?
Second, is it your view that instead of having 50 head of cattle and a few vegetables and a few apple trees for your mixed farming, the farm of the future will have wind farming, produce biofuel, carbon sequestration and so on? Will that be the future of the new rural farm instead of the cows, pigs, chickens and apples? Is this the future?
[Translation]
Mr. Jean: You have posed a number of questions, and I am not sure I understood them all. When we refer to infrastructure in the rural areas, we mean large basic infrastructure elements like roads, airports, hospitals — These amenities are covered in large part by the programs I just mentioned. For example, I observed beautiful road networks in north-west New Brunswick.
In my opinion, the issue of major infrastructure services in Canada has now been more or less dealt with. Obviously, we now need to maintain these amenities. As we know, structures can occasionally collapse. Maintenance poses a major challenge.
For the small towns you are talking about, infrastructure is a daily fact of life. There are hundred of small towns where there is a constant struggle, for example, to maintain postal services.
And there are hundreds of small towns in the province of Quebec. When we refer to infrastructures, we are talking about maintaining our postal services, which often exist in private-sector infrastructures. In these communities, when the corner store closes and there are no more gas stations where you can fill up your car, it is a problem. It is an enormous problem in these people's daily lives.
Is broadband getting there? It is currently being installed, it will come, it is an essential service. The infrastructures I have been talking about are perhaps not so complicated — the maintenance of large infrastructures, and some smaller ones, a job that the private-sector can occasionally perform. In the Advisory Committee on Rural Issues, on which I had the chance to serve, we examined this issue and soon realized, particularly with respect to Internet infrastructure, that it makes sense to have the private sector build infrastructures in the city because the private sector has the tools to do the job properly. Consumers will benefit from low prices, the marketplace will work effectively — it is a good system. But in the rural areas, we have to accept that infrastructure is a public responsibility; the population density is not high enough for us to ask the private sector to do the job. This is a matter of citizenship. Do rural Canadians enjoy the same status as other Canadians, or are they second-class citizens?
I would like to conclude by looking at the future of agriculture. It is a fact that a picture of this future is emerging. I believe that in future agriculture itself will be diversified — that is what will make it interesting and that is what we must aim for. We should focus on having a maximum number of model farms within a given area. Whether there are small ecological businesses, whether there is enough space for large farms — our best bet is to have diversity and to avoid homogeneity. When our rural areas are diversified, there is enough room for large farms but the family farm still has a niche. Undoubtedly, there will be a demand for new activities surrounding the production of bio-fuels. We still do not have a clear idea how this will be done.
[English]
Mr. Partridge: I have a different take on some of that. I would argue that in many parts of the country right now the road infrastructure is inadequate to support the movement of people and goods between rural and urban areas. In that sense we will build stronger regions where rural and urban areas are working closely together. I would argue for more basic infrastructure.
Senator, you raised an important example. You have a small community; your example was 200 people who require health care. One of the problems that community and governments have in general is that we cannot put a state-of-the- art clinic in every single community across the country. We cannot afford to do that. One of the ways we need to do this is by building regions and put state-of-the-art facilities in certain areas to ensure that every person has access in a timely fashion. We cannot build state-of-the-art facilities in every community, but we can build regions with state-of- the-art facilities to ensure that the entire population has access.
I spoke about hard infrastructure such as roads and airports. We could talk about information infrastructures that are important. I want to mention soft infrastructure, which is governance. I spoke a bit about voice. One of the things right now is that there is inadequate participation among rural and urban communities in terms of working together as a region. It would be important in building soft infrastructure that we build governance where both rural and urban areas are working together. Governance and building trust and breaking down the so-called rural-urban divide are important.
In terms of biofuels, that is an interesting policy question. There is a lot of excitement about biofuels and a great deal of potential. I would encourage more research in that area because eliminating dependence on unstable energy sources is important. In terms of our rural communities I could see certain farmers benefiting from that. One of the points of my presentation is even if we doubled the size of the agricultural sector in Canada through biofuels, which has gone through this intense downsizing, it would have a relatively small impact on the broader rural economy. In that sense it is not a solution for broader rural areas, though it does not mean it is not a solution for other kinds of problems in terms of alternative energy.
The next thing I want to note is a bit of caution on the excitement surrounding biofuels. A lot of that originates from the United States, where they are doing a lot of expansion on ethanol and so on. That has created a very special policy environment that there may not be the will to create here in Canada. In the United States, there is a significant tariff on Brazilian ethanol that keeps it out of the U.S. Without that tariff there would not be a U.S. ethanol industry. It exists in a very special policy environment with subsidies and tariffs. It is unclear whether other countries would want to replicate that kind of policy.
Senator Oliver: There is also wind farming and other modern things that farmers can do to use their land.
Mr. Partridge: As far as wind farming, I did not mention that because in certain parts of the country wind power is not as popular. In other parts of the country, it is.
The Chairman: In my part of the country it is there all the time.
Senator Oliver: There is one thing I am a bit surprised that the three of you did not emphasize or speak about in terms of revitalizing rural communities and that is what I call ``agri-tourism.'' That is, attracting more tourists and tourists leaving their dollars in country B&Bs. Could you comment on that as one of the tools that could be used to help revitalize rural Canada?
Mr. Bruce: That is a good question. I think I could speak for all of us in saying that 10 minutes is not a lot of time to cover everything. As a topic matter or a strategy solution, I think that is where individual communities need to look at what they have to offer and package that in a creative and marketable way. There are very good examples in different parts of the country where quality agri-tourism programming has emerged. For example, in the Montmagny region and the Eastern Townships in Quebec and other parts in Canada, that is working well.
Senator Oliver: It is a component. There is functionality as well.
Mr. Bruce: It must be community driven and community decided.
[Translation]
Mr. Jean: I did refer to this in the paper, but in my opinion the concept of multifunctionality encompasses tourism. More and more visitors to Canada want to discover nature and natural landscapes. This is certainly a path worth exploring. We should not think that focusing — I have been speaking about diversification and not specialization. Tourism is one of many opportunities open to us. A lot still remains to be done, some interesting things are being done right now, but that is not an answer.
[English]
The Chairman: One comment struck me on what Mr. Partridge was saying on state-of-the-art health facilities in rural Canada. One of the biggest difficulties, for instance, in the small communities surrounding my hometown of Lethbridge, is to find even one doctor who will set up a practice. Yes, they come into my city, but it is almost one of those stable requirements in any community, rural included.
Senator Callbeck: Mr. Bruce, you talked about education and I certainly agree with you that a lack of education is one of the causes of poverty.
In the rural areas of my own province, the percentage of graduates from high school is less than in urban areas, and I assume that is the same all across Canada. We need to find ways to encourage our young people to graduate and then go on to university.
One of your suggestions here is that you make post-secondary education more accessible for rural students of lower- income households. I think we have to do it right across the board. Are you suggesting that we have a different program for rural students?
Mr. Bruce: In some cases that is warranted because most of our post-secondary education institutions are located in larger urban centres, although not all. In Quebec, there is a wider network of universities located in the rural regions, for example, Chicoutimi, Abitibi-Temiskaming and so on. If you look around even Atlantic Canada — Halifax, Fredericton, Moncton — there is a cost burden above the actual cost of tuition to go to these institutions whereas urban residents have the opportunity to stay at home and take the public transit bus down the street to Dalhousie University, for example. That is one element of that situation.
Regarding your bigger comment about the lack of completion of high school programming, I am not an education system expert, but my general observation is that a number of students could probably benefit from completing high school in programs that are not necessarily geared for moving students on to university but more for entering the trades programs and other kinds of meaningful employment that is required in our society.
On a completely separate matter, we know that there is a huge labour crisis coming in the construction trades. Part of the crisis has been driven by a change that took place in most of the provinces a number of years ago to downsize the programming geared to move students into construction trades and getting them interested in IT. That is coming back to bite us big time. Again, that is an area of provincial jurisdiction, but there is an opportunity to encourage some changes there, with the hope of catching more people and keeping them in the school system.
Senator Callbeck: I certainly agree with you that we need to emphasize skilled labour because there is a shortage right now, and it looks as though it is going to get worse. Do either of the other witnesses have any comments?
Mr. Partridge: I have a comment. I am in the profession of higher education, and I believe in its importance. A lot of research suggests that the highest returns come with early childhood education and providing that service in Senator Oliver's hypothetical community of 200 people will be one of that community's biggest challenges. A community of 200 people has few resources to offer high-quality, early childhood education, but it goes back to more communities working together gaining that critical mass. Then we can provide early childhood education. I would stress early childhood education but each little community cannot provide it themselves.
[Translation]
Mr. Jean: Mr. Bruce mentioned the highly specific case of Quebec. In fact, a number of universities in the province of Quebec are located in rural areas. This makes Quebec fairly unique within Canada.
I am firmly convinced that a university exerts a real influence on a region's economic prosperity. For those of you familiar with the province of Quebec, I have often cited the example of the Bas-Saint-Laurent and Gaspé regions. To quote a former rector of the Université de Rimouski, the tragedy of the Gaspé is that it has no university.
At one time, the Bas-Saint-Laurent region found itself facing serious problems. Fortunately, like the Gaspé, it was able to reap the benefits of the Agricultural and Rural Development Act (ARDA) and the programs of the 1960's. Over the past 15 years, 20,000 new jobs have been created in the Bas-Saint-Laurent, a region where there previously existed only 74,000. This represents an increase of 26 per cent in jobs in this region.
Did they discover a gold mine in the Bas Saint-Laurent? No, nothing of the sort. What happened was a different sort of phenomenon. The city undertook a campaign of modernization, at every level, in traditional sectors. For example, they began manufacturing top-quality products from peat which were designed for biofiltration and a range of other uses. Premiertec created thousands of jobs in traditional sectors such as the peat moss sector.
The small city of Rimouski created a centre for the new economy and a multitude of jobs. And this produced a diversified economy. There were jobs in all sectors, that is, agricultural, forestry and new technologies. We believe that the university played an extremely important role in helping organizations, individuals and private companies within this region. The university therefore had an enormous impact on the region.
In some rural municipalities, the community colleges are having a real impact on regional economic development.
[English]
The Chairman: I strongly agree. I come from a rural area, and when I was growing up, we had neither a university nor a community college. Now we have both, and they are just hopping. People are coming in from the smaller communities and getting into both of those institutions, whereas before, that journey all the way up to northern Alberta was not on.
[Translation]
Mr. Jean: I myself left Rimouski when I was still young because it had no university. The college and the university were established later. Then I came back to my hometown because of the university. So you have before you a living example of that impact.
[English]
The Chairman: There you go. Good for you.
Senator Segal: Yesterday, in the Senate of Canada I was advised by Senator Mahovlich that less is more and more is less, so I will ask two brief questions, and I will ask the members of the panel to reflect on them.
[Translation]
When Professor Jean quoted George W Bush, he did so in an absolutely positive way. For Americans, giving farmers financial support in their communities is an issue of national security. Here in Canada, if we look at the amounts of money granted to regions like the Northwest Territories, it is clear that we are spending a lot of money per capita for reasons of national security. It is a matter of protecting our sovereignty.
[English]
My question is directed to all of you. Do you view government imperatives relative to rural Canada and sustaining that population as a viable economic base as a matter of national security? Do you think we should be looking at our investment in that context, or do you think that is overstating the proposition? The corollary to that question is: Do we care about the depopulation of those areas? The mix of rural income, farming and other, is insufficient for people to stay there so the trend to urbanization, which is already quite massive, continues to the point where more and more communities become non-viable.
My second question relates to money. If you add up all of President Bush's subsidies to various categories of farmers, support for rural communities, transfer payments, plus the aggressive action of the U.S. government with respect to agricultural imports into the United States, it would be hard to conclude that they have not actually decided that the American farmer deserves a guaranteed annual income. They do not call it that, for ideological reasons, but if you add up all the pieces, that is what you have, whereas our farmers are being forced to compete with sporadic support tied to specific commodity cycles, with no similar policy commitment.
You have all referenced the low-income cut-off as one of the measures, and the market-based measures as well. It would not cost as much to bring the average income of those who fall beneath the LICO up to that level — through a wage supplement or a guaranteed income supplement, as we do for seniors — as we are now spending on a series of other programs. We spend $260 billion in Canada now for social security, excluding health and education, with less actual impact.
I would be interested in the comments of the witnesses. I think that will be one of the interesting policy questions before us. To be clear, we are studying rural poverty in this committee, not just agricultural revenue. The distinction you have made in that respect has been very helpful.
Mr. Bruce: Taking your second question first, about the guaranteed annual income, you have articulated a creative way of thinking about what we are really talking about, which is ensuring that people are not penalized for contributing something that we need in our society, which is food supply. Mr. Jean talked about that. I would endorse, in principle, what you are advocating. Certainly it would require some nuts and bolts thinking, but I would endorse that as an operating principle.
On your question of whether we care about rural depopulation as a national imperative, I think we should deal with it because, beyond the fact that these communities have been part of our national heritage and fabric since the founding of our country, people do not appreciate the value of having population in our rural areas. We talk about being able to access our national parks. Who are the stewards of our national parks in many cases? They are rural citizens. Who are the stewards of the landscape that we enjoy driving through and I mention the Annapolis Valley or the other scenic byways and trailways across our country. Some people have said that perhaps we should charge a toll at the entrance to the Annapolis Valley to see the apple blossoms. That is part of the value of our rural communities. You cannot quantify it in dollars and cents. We do need to care about it. We cannot demand that people not move from Berwick or wherever, but we do need to put in place conditions that give options to stay or leave depending on the economic opportunity in front of them. I do think it is important to care about it. It is a national imperative.
Mr. Partridge: Those are three very challenging questions. I will join them all together. As I was saying, the reality of 21st century rural Canada is strong linkages to urban centres and how we can enhance them to ensure rural economic vitality. I was trying to put forward ideas that are realistic and consistent with the actual movement of people. We will have a difficult time putting together a 1950s rural Canada, but we have ways of revitalizing our rural Canada.
The ideas I was proposing are more cost-efficient and would be much more palatable to large numbers of taxpayers. In terms of why rural areas are so important, I do not think we need to rely on national security. We can rely on a host of other things. First, many people like the lifestyle of rural areas. They like the small town; they do not like the congestion; they like to know all their neighbours; they like the special feel of a rural area. If we lose our rural communities, we lose that option value. A strong reason that rural Canada is so important is that we lose something not only for today but for centuries.
Also, rural communities are often our first line of environmental stewards. They are the ones at the watersheds, forests and lakes. In that sense, a healthy rural Canada helps to promote a stronger environment. Another reason is cultural; we lose much of our heritage when we lose our rural communities. I do not think we need to rely on national security in terms of revitalizing rural areas. There are a host of reasons that they are important.
In terms of agricultural policy, although your description of U.S. and EU farm policy may be accurate, in one sense it is very fluid right now. At the WTO, many of the U.S. and EU bargaining positions on farm policy are negotiating chips that they are trying to build up. Especially in the United States, there are budgetary reasons. It is unclear what kind of farm program will come out in the 2007 farm bill.
In terms of the broader economy, agricultural policy is so important to the international competitiveness of this country. Agriculture consistently runs a trade surplus and has very important impacts. Inputs and food processing takes place near urban areas. It is important for the country.
The U.S. has very generous farm programs, but studies show that the communities that received more farm support did not necessarily do better and in fact might have done somewhat worse. In terms of a general broad rural revitalization, I would say that farm programs are not the way to go. Farm programs are important for the agriculture sector but not for the broader rural economy.
Senator Mahovlich: Can rural Canada attract immigrants? When I was a young boy in Timmins, Ontario, there were Chinese people in northern Ontario. Freddy Wong and Suzy Wong were my classmates. Today, they seem to be going to Vancouver, Toronto and other major cities. Should we try to attract immigrants to rural Canada?
Mr. Bruce: That is a good question. I have been studying some counties or rural regions of the Maritimes with respect to this issue.
For individual communities, the immigration process is a huge black box. People apply at one end, communities are at the other, and somehow in the middle the people end up in Vancouver, Toronto and Montreal. From a marketing and attraction point of view, that situation presents a struggle.
However, I do think that there are a number of examples, particularly in the southern Prairies — I am thinking of Steinbach and several other places — where people of international origins are moving in.
Some rural communities currently face labour force struggles. In western New Brunswick there are difficulties finding agricultural workers, transportation drivers and workers in the manufacturing sector. We need to look at how we can make that situation known to countries where people will — I hate to use the words ``fit in better'' — have a greater commonality between the country of origin and rural Canada. I am thinking of Eastern Europe, Russia, the Scandinavian countries and so on.
Often when I talk in a rural community about repopulation issues and immigration, the first thing I hear is, ``I do not want those Asians taking our jobs.'' The first vision they have is of the Asian or African community. They have the predisposed position that, first, those are the only countries of immigrant origin, and second, those immigrants may not fit in and they may not like them to fit in. The reality is there are many other countries of origin that we should be considering, where the skill set and the acclimatization elements might lead to a greater chance of success.
I agree with you that there is some opportunity. The challenge is to help communities understand the immigration process and where communities fit into the big picture of being a magnet for immigration.
Mr. Partridge: Our work suggests that attracting immigrants to rural Canada is very helpful because immigrants have a big multiplier impact in terms of rural population growth. Not only do the immigrants come in, there are two additional impacts. One is critical mass. If the community has enough people, it can keep the hospital and that makes it a livable place for people born in Canada. That is one multiplier. There is a big multiplier because immigrants from certain countries like to locate near other immigrants from their own country. They have a network. They have someone who has been there who has discovered ways of coping in the new country. That is why there is a big multiplier. Once you start bringing immigrants in, you get a multiplier impact where more immigrants come, and that makes the community more livable because it has more services. The problem is that many rural communities do not have the immigrants and it is difficult to attract them.
It can be a very effective strategy. That ties in to some of the work that I and some of my colleagues at the University of Saskatchewan have done. We ask how we can build enough critical mass in regions to build the networks that can attract immigrants so that they feel comfortable, resulting in more immigrants from their country, bringing immigration to its full potential for rural Canada.
Senator Mahovlich: There is a demand for labour in Fort McMurray. Are immigrants or just Canadians going up to Fort McMurray?
Mr. Partridge: I was just there a month ago. That is an interesting topic. There are two issues involved. Yes, there are immigrants going to Fort McMurray; however, I want to note the complexity of rural poverty. There is a view that immigration pushes out potentially qualified First Nations and Metis people in northern Alberta and northern Saskatchewan. Immigration policy needs to be very carefully thought out because there is the strong view that the Government of Canada and the provincial and local governments are spending more money to attract immigrants from the Philippines than it would cost to facilitate a First Nations family to work in Fort McMurray. That is an example of one of the complexities involved in immigration policy.
Senator Tkachuk: It will be Newfoundland and Labrador's Fort McMurray. Danny Williams will be out there to annex that part of Alberta.
I want to touch on an area that Senator Segal discussed. Mr. Jean also touched on the idea of rural Canada as a zoo that is kept nice and pretty; people can go see it, and money is given to people to keep it that way. I do not buy that.
The Americans have huge subsidy programs because it is easier to justify with national security than ``Thank you very much for voting for me, but also I am going to get those Europeans.'' That is a problem. If we subsidize agriculture to the extent the Americans and Europeans do, then we flood Africa, Asia and other parts world with food and they cannot become self-sufficient. It is an uneconomic, horrible way to solve the problem. The easy way is to give people money. How can we can reverse that?
I come from Saskatchewan. I am not sure about the other provinces, but social policy has acted as a big vacuum- cleaner on rural Saskatchewan. People on the committee have heard my views of this before. We centralize all the schools, so all the schools go to the cities. We centralize all the hospitals, so all the hospitals go to the cities. You cannot get an x-ray because the government policy will not allow people to pay for an x-ray in a small town. You have to drive all the way to Saskatoon to get it.
There are all of these horrible social policies. Cities get all the public buildings, the big hospitals and the government departments. In the meantime, we are taking away the post office and schools from rural places. This has been going on for 30 years. We vacuum it clean and ask: ``Why does no one want to live here? Why are people poor here?'' Everything is gone.
There is always a debate about spending on infrastructure. Should it come first? That is how we built the first railroad. Let us build a railroad, then people will come. Maybe if the infrastructure were better, people would show up. Rural Canada needs to keep its brains, its young people, its innovators, its smart people. You cannot keep smart people in rural towns without hospitals, post offices and all the amenities that are important for a civilized life.
I do not know whether there has been work done on those areas, but in my province it drives me crazy. That is my take on it.
Mr. Bruce: I am not sure if there is a question there, but it is certainly an observation. I will just touch on the point you made about the need to keep the brains. I am borrowing a phrase from a colleague of mine, Godfrey Baldacchino at UPEI, who uses the term ``brain rotation.'' That phrase means it is okay to let our young people get off the island or get out of the farm, but we must create the conditions where, four our five years after getting that global experience or whatever it is that nurtures the brain, that they can come back and make a difference for themselves, for the community and for their next generation. That goes to your point that we must have the right mix of services and amenities for that brain to continue to be nurtured in that community.
It then comes down to an issue of finding from a broader public society investment point of view, what is the minimum critical mass of services and public infrastructure we need so that that brain can rotate back to rural Saskatchewan or rural P.E.I.
Senator Tkachuk: People in Saskatoon have mail delivered to their house.
Senator Segal: I want to engage briefly on the infrastructure issue.
[Translation]
Senator Segal: Professor Jean has spoken about the positive effects that the presence of a university may have on the people in a particular area.
[English]
We have had, sporadically in Canadian public policy, provincial and federal governments who have decided to move major government back-office operations into centres — Dr. Partridge, that would be like the ones on your map — that are at the centre of rural urban areas. I think of a GST centre in Summerside, Prince Edward Island; the immigration centre in Vegreville, Alberta; Veterans Affairs in Charlottetown; and OHIP in Kingston, which brought a cluster of employees from Toronto, plus a lot of good local jobs, adding to the pool of off-farm income options. Because the norms were higher, as in the case of a university, so were the levels of pay, benefits and medical insurance.
There is some cost to doing those moves, but we do not calculate what happens when you are paying less per square foot in rural Saskatchewan than you might be paying in downtown Ottawa for government space. Ministers from Ottawa get very antsy about this kind of discussion, but I am untroubled about that because it strikes me that the need for back-office operations in the big cities is yet to be proven.
This is particularly true for back-office operations that do a lot of manipulation of data — a lot of processing of things like tax returns, and so on. I am always troubled when I get a note from the tax department in Shawinigan, but not because it is Shawinigan. I feel better now that the government has changed. I do not have to worry about mail from Shawinigan as much as I would have in the past, but I give credit to that prime minister, as a local member of Parliament, for making sure that is part of the ongoing employee base.
In your particular analysis, Mr. Partridge, of clusters, both in the United States and in Canada, what is the role of public sector presence? To what extent does that strike you as an important lever with respect to facilitating those clusters and the employment reach that reaches out to rural areas and is genuinely helpful to the broad economic base?
Mr. Partridge: Government plays an important role. I recognize that government has limited resources. There are so many things on the government's plate — with health, education and other needs — that it only has so much in terms of rural revitalization.
However, in terms of the government's role, one is the underlying support. Is there the needed infrastructure? Are there the needed social services? Whether it is in every town or more likely, given the cost considerations, at least in larger centres, are there ways to ensure that the rural public has access to that? In terms of the third role, you are bringing up a case of the kinds of innovative little niches where government can play a role. I completely agree with your analysis, as long as we are not trying to move certain kinds of government services and locate their centres in small rural communities where you cannot attract employees; those small centres will not attract certain kinds with high educational demands.
However, the kinds of services you are describing could be done right now offshore in India. Why can they not be sent to smaller rural communities and spread the wealth out? In that sense, there are many government services that could be centred in rural communities. They could build critical mass, build regions and create opportunities, so you get spillovers and multiplier effects in the entire region.
Mr. Bruce: That also spills over into the private sector. Where I live in Sackville, New Brunswick, we have a so- called back office of the company that deals with the retailers that have the swipe machines. They deliberately got out of having all their operations in downtown Toronto for the purpose of having some diversity. When there was the blackout in southern Ontario, the only thing that saved that company was the fact that they had an operation in Sackville, which could continue to serve their customers. The spreading of risk is important, as well.
Why Sackville? It is close enough to an airport and it is a university town. It is part of a clustering of services and amenities that are necessary to attract that kind of activity. You just cannot plunk it down anywhere.
Senator Mahovlich: The one thing that attracts me to France and Italy in travelling around those countries is the restaurants and the gastronomy there.
Are we doing enough in our universities in that regard? Often, Mr. Jean, I go to Quebec and find fine restaurants. However, for rural Canada, if we attracted chefs and had fine restaurants, we would have more tourism. People would find it more attractive to go to these places. I do not think we are doing enough to attract good food in this country. Do you find that or are there good places that I do not know about?
[Translation]
Mr. Jean: You are right. There is a lot of work yet to assist the tourism industry in rural Canada. I don't know a lot about this particular sector, but I do know that there are a number of regional tourism associations in Quebec that are doing a fine job and working to offer high-quality tourist products.
Since I have the floor, I would like to come back to the issue of the presence of the rural inhabitants of our Northern territories, of our huge empty spaces. I am convinced that rural workers fulfill a variety of functions. While occupying the territory, they produce goods and services, they develop their environment. Occupying territory represents an essential geopolitical function for ensuring national sovereignty and security.
One could also say that rural people do it voluntarily. In certain isolated areas, however, I think that the government has a responsibility to help them sustain their presence on this piece of Canadian territory. This is a means of addressing the larger problem and, in one way or another, we must recognize the geopolitical role played by rural populations.
[English]
Senator Peterson: The presenters have done an admirable job of defining poverty and where it exists. The challenge now is, what will we do about it?
We have talked about a lot of possibilities that may or may not work and will take considerable time to implement. In the interim, could we not consider using the nation's wealth, which does not just belong to Central Canada and the large urban centres, to develop a guaranteed income program while we are trying to establish these programs and get them up and running? I would like to hear your thoughts on that.
Mr. Partridge: I recently co-authored a book entitled The Geography of American Poverty. I spoke about one of the biggest problems facing rural Canada, namely, the institutional problems. We need to rely on our institutions with the headwinds, which are blowing toward urban centres. We do not want a complete abandonment of rural Canada. How can we ensure that rural Canada can sustain itself, given these trends?
In near-term solutions, I would not go in the direction of a guaranteed income program. It would be much more successful with other kinds of supports. One support would be to support people to work through things such as child care. We talked about the challenges single women have with children; we should support more training opportunities. Another key problem, especially in rural areas if you have a family that is under a lot of financial stress, is transportation; finding innovative ways of getting low income workers to the job is another critical element. I would put more stress on work supports. One other work support I would mention is a refundable tax credit. If you are working at a low income, you get a refundable tax credit; in other words, you are subsidized to work.
The U.S. has had a mixed record in terms of poverty and has a higher poverty rate than Canada, but one of the successes it has had is the low-income tax credit where working low-income families get a significant tax credit. Those kinds of work-support programs should be put in place before some sort of annual guaranteed income.
Senator Peterson: I understand, other than the fact that when you set up the structure the people have to apply have difficulty in doing so. The programs often are so convoluted for them that by the time they receive a ``yes,'' it is too late. These other matters may involve tax credits. That way would give them a hand up instead of a handout. That makes some sense. This is a difficult thing for people themselves to have to deal with.
Senator Callbeck: I have a supplementary on that refundable tax credit. You say if they are working, they get a refund whether they pay income tax or not? How does that work?
Mr. Partridge: If a low-income household has earned income, the family receives a cheque just like a tax refund.
Senator Callbeck: They must file?
Mr. Partridge: Yes.
The Chairman: There is one issue I wanted to raise with you. This committee has been well-known for some of the reports that it has put out over the years. We have been pretty activist when something goes wrong in our agricultural community.
This past year we heard about the crisis with our grains and oilseeds industry in Canada. Prior to that were the years of the BSE, the mad cow near disaster and our relationship with the United States.
At that time, we heard from a great number of witnesses from our rural areas across the whole country. There was a great deal of discussion about why we should have our own packing plants — some of them, not huge ones like the ones that govern our country in that product. As things settled down a bit, there was still a great deal of interest, particularly in western Canada and particularly in my own province, of having smaller companies that would do niche marketing, but would be there in case this happened again and the border was closed.
That has not happened. It is partly, I guess, because the governments involved have not really supported the notion that this was probably a good thing to do — not in great droves of companies across the country but nonetheless places where Canadian farmers and Canadian truckers and Canadian processors would have an opportunity to make a better living and also include more jobs.
I am not sure why it has not all happened; I know there is one in Senator Callbeck's province but it was on its way long before the crisis happened. There is one, finally, that will take place in Manitoba and there is another in British Columbia. In our province of Alberta, in my own city, there were people who wanted to do it and were prepared to raise money themselves but were not getting government support. Also, there are the two big companies, Cargill and Lakeside that are firmly entrenched in that area.
When we talk about ``rural Canada'' we are talking about getting more productive operations going that hopefully will keep our young people there and will be able to fill in when weather is bad, or whatever. How vigorously should we be promoting this?
I listened to all of you and there seemed to be a notion that we had to get other business out into this vast rural area. Here was an opportunity, I thought, to do this, but it has not happened. Does anyone have a comment on that?
Should we, as a national government have been saying that we would be part of the partnership, or certainly the provinces? Is that the way you have to get the business done?
Mr. Bruce: It is a tricky question. You are really talking about the willingness of an individual or a private enterprise to take a risk to start a business. Without knowing the details of the examples that you gave, I would assume that in some of those cases, people looked at the risk assessment attached to that business venture and decided that either they could not commit to it or they have committed to it but could not secure the financing through the banks, or whatever.
That raises the question of the appropriate role of the Community Futures Development Corporations and other publicly funded arms of our society that are set up to invest in relatively higher risk business ventures, particularly when financing is not available from the private sector banks. There could be two avenues that address your question: One, an assessment of the decision making processes and risk assessments that are made by applications to the Community Future Development Corporations and others. Is it too stringent? Are they not taking enough risks in investing in these businesses? Second, is there a sufficient pool of loan capital available to those Community Future Development Corporations to meet the demands of entrepreneurs coming forward with new ideas? I do know that in some areas in Canada, in New Brunswick in particular, funds were increased through the Atlantic Canada Opportunities Agency to the 10 CBDCs in the province to increase the size of their loan pool so that they could respond to increasing demands. I cannot comment if that has been the case at large across the country, but there have been those kinds of examples out there to look at that. It may be a question of being too conservative in our risk assessments.
Senator Callbeck: I have a couple of brief questions.
It seems that there is a lot more research or attention given to urban poverty than rural poverty by think tanks, researchers, and media, what have you. Why?
Second, how would you describe the difference between urban poverty and rural poverty? Is there a difference?
Mr. Partridge: In terms of the media, it is in the cities. Governments are headquartered in the cities, and the media pays attention to the things that are close to them, for example, the ministries. The Globe and Mail does not focus on rural poverty across the country. La Presse does not focus on it. That is the key reason. They focus on things they understand, which tend to be the urban centres.
In terms of poverty, the one big difference between urban and rural poverty is that urban poverty tends to be more concentrated in neighbourhoods. Poor people live in close proximity to one another. That is not the case in rural areas. The good news in terms of policy is that when you have concentrations of poverty, you get what urban economists call ``peer effects.'' If your neighbours do not have jobs and are not regularly working, you do not build this culture where everyone goes to work. You get adverse peer effects. In terms of rural areas, those kinds of peer effects are probably less strong because you do not have the geographic concentration of it. Though rural areas are facing many problems, they do not face that major problem that we would see, for example, in the core of Toronto.
[Translation]
Mr. Jean: There is a huge difference between urban poverty and rural poverty, and this difference is linked a number of factors. Rural poverty is often hidden. I have had occasion to visit the beautiful region of Charlevoix, Quebec. It is a tourist area, attractive, not far from Quebec City. There is a lot of poverty in that region, but it is hidden. Rural poverty is often less visible because of the informal economy. There are mutual help systems, social networks, which keep it from being as visible as it is in the city.
One should never encourage poverty, but there are poor people in the rural areas who manage to achieve a certain quality of life because of these networks. Of course, none of this can be quantified. It does not appear in the official statistics or on the ground, but it is there nonetheless. It is what I see.
[English]
Mr. Bruce: You are right. Most of the major studies and analyses on poverty have an urban focus. The Canadian Council on Social Development had a major landmark study that it released in 2000, and it was almost exclusively profiling the major urban centres and the specific features of poverty among different demographic subpopulations.
What we see in rural poverty from an analytical point of view tends to be less global and comparative and more in terms of ``this is what is going on in this specific community''; or ``this is what is going on with Aboriginals living on First Nation reserves,'' and so on. We tend not to get the full snapshot.
I would agree with my colleagues on what is different about rural poverty. In general, the types of people who find themselves in poverty are more or less the same: single mothers, seniors, and so on. The depth might be a bit different, but the coping mechanisms and the visibility are very different. In rural places, people who find themselves in poverty do tend to have assets, but they may have absolutely no income at all.
Senator Mahovlich: There is more crime.
Mr. Bruce: More crime in urban areas is a response.
Senator Mahovlich: Why is that?
Mr. Bruce: It is a coping mechanism, in some cases.
The Chairman: Thank you very much. This has been a very worthwhile and interesting session.
Senator Segal: Yes, it has been excellent.
The Chairman: It is quite different from previous sessions. The three of you have brought, each in your own special way, a different perspective to the task that is evolving. Thank you for coming, and who knows, maybe next year we may want to have another chat with you as we move along on what is a difficult but much needed road.
Thank you very much, colleagues. We will meet again next week.
The committee adjourned.