FINA Committee Report

CHAPTER EIGHT — THE PRIORITY OF HELPING THE VULNERABLE

Economic growth alone cannot solve the challenge of child and family poverty in this country. Leadership and effective public policies are required from government in order to ensure that economic prosperity is more equitably shared, and that all Canadians benefit from a higher quality of life. (Campaign Against Child Poverty, 9 September 2002)

While the Committee believes in the importance of enhanced productivity and innovation — and hence economic prosperity — through changes to the tax system, the implementation of appropriate policies and practices, and investments in health care and our communities, we also note that the nation’s prosperity and the quality of life of its citizens depend on the ability of all Canadians to participate in the economy in a meaningful way. We believe that programs addressing housing, children, Aboriginal Canadians, persons with a disability, our seniors and citizens of other countries make an important contribution to Canadians’ quality of life. Other groups not addressed in this report, but which are nevertheless deserving of the federal government’s attention, include the Canadian Resource Centre for Victims of Crime, which asked the Committee to recommend that it receive sustainable funding for its advocacy work.

The terms “quality of life” and “standard of living” are often used interchangeably, although the latter is, strictly speaking, an economic term that is usually measured by a country’s GDP per capita. GDP per capita is, however, an imperfect measure of a country’s overall well-being, since it neglects everything — such as clean air, leisure time and unpaid labour (e.g., housework and child care within the home) — that does not have a price attached. It also provides no information about how a country’s economic output is distributed. While GDP per capita does contribute to quality of life, it is not the only determinant. Social programs and other more intangible factors also make a contribution.

As Better Environmentally Sound Transportation remarked to the Committee, “[t]rue economic prosperity goes well beyond measures like GDP. In conventional economics it is established that a society’s economic welfare includes not only financial transactions recorded in markets, but also transactions that do not currently have prices attached.” Dr. John Helliwell, in his brief to the Committee, also stressed the importance of social capital to the quality of life and well-being, and cited recent research suggesting that “the importance of the social fabric is even greater than previously thought, thus tilting any perceived trade-off between increasing income and sustaining the social fabric towards the latter.”

Groups and individuals appearing before the Committee pointed out many areas in which the federal government could invest in its citizens within a social policy context. In general, they focussed on measures to address homelessness and the affordable housing crisis, early childhood needs, policies and programs to improve the situation for Aboriginal Canadians, supports for disabled persons, poverty and related problems among our seniors, and the role played by Canada in the international context.

Housing Issues

Canada is experiencing a rental-housing crisis. ... Vacancy rates in the 26 largest metropolitan areas are at historically low levels, 1.1% in 2001. ... Statistics Canada’s Survey of Household Spending for 2000 reports that 1,186,877 renter households, which constitutes more than 40% of all renter households, are paying more than 30% of their monthly income on rent. (Cooperative Housing Federation of Canada, 17 September 2002)

According to witnesses who made presentations to the Committee on the issue of housing and homelessness, there is a pressing need for a serious federal commitment to the construction of affordable rental housing, in partnership with the provinces and municipalities. In their view, the current level of rental rates uses up a disproportionate share of the incomes of certain vulnerable groups of Canadians. The Tenants Rights Action Coalition told the Committee of a marked increase in the number of families and individuals at risk of homelessness due to lower incomes and the lack of affordable housing. According to data presented to the Committee, the number of social housing units developed across Canada has fallen from almost 10,000 in 1989 to about 1,500 in 1998. Figure 23 provides an indication of the declining vacancy rate for apartments in metropolitan areas over the 1996 to 2001 period.

While many groups commended the federal government’s work with the provinces and territories through the National Homelessness Initiative and the Affordable Housing Framework Agreement, they raised several concerns about both the level of funding needed and the need for other instruments. A number of groups, including the Federation of Canadian Municipalities and the Canadian Housing and Renewal Association, pointed out that, according to 1996 figures, 1.7 million Canadian households are in “core need” of funding, meaning that it is hard for them to find money for food, clothing, medicine, housing and other basic necessities.

Witnesses, including the Ottawa Child Poverty Action Group, told the Committee that addressing the shortage of affordable housing would require the creation of 20,000 affordable units and the rehabilitation of 10,000 affordable units each year for ten years. Witnesses suggested a variety of ways to accomplish the goal of an increased supply of affordable housing. In particular, recommendations included increased funding, changes to the tax system to encourage apartment building construction and subsidies or tax credits to low-income households.

Although they may have disagreed about the means through which it should increase its involvement, witnesses argued for a greater federal presence in the provision of affordable housing. They suggested increased funding of current initiatives, as well as tax and regulatory measures. For example, the Canadian Federation of Apartment Associations told the Committee that “fully rebating the GST on rental housing, deferral of capital gains tax and recaptured depreciation [upon reinvestment in rental housing], increasing the [capital cost allowance] rate and restoration of soft-cost deductibility would be the most effective measures in stimulating new rental investment.” Several groups, including the Nepean Housing Corporation, supported the Toronto Disaster Relief Committee’s recommendation that the federal government allocate $2 billion annually for a National Housing Strategy. Others recommended allocating $700 million to the federal/provincial/territorial Affordable Rental Program over the next four years.

Witnesses also told the Committee about their support for the federal government’s National Homelessness Initiative (NHI), particularly the Supporting Communities Partnership Initiative (SCPI) and the Residential Rehabilitation Assistance Program (RRAP). According to the Winnipeg Real Estate Board, “Winnipeg is second only to Montreal for having the highest per capita percentage of older housing stock in the country so the need for RRAP support will only expand.” The North End Community Health Care Centre told us that the “SCPI is beginning to address … problems on a small scale. The problem of sustainability is an issue. Supportive housing requires staffing and programs.” Moreover, the City of Vancouver shared its view that “[o]ver the past three years the Federal Homelessness Program has proven to be invaluable in addressing the homeless needs in our country.”

The Canada Mortgage and Housing Corporation (CMHC) also plays a role in the housing market, especially in the rental market. In addition to supporting portions of the federal government’s housing policy, it provides insurance for loans used to buy or build rental properties, which is usually needed when equity is less than 25% of the project value. The premium rates range from 1.75% for equity of at least 35%, to 4.5% for 15% to 19% equity. According to the Ontario Non-Profit Housing Association:

[t]he key problem for non-profit housing development is the very low level of insured financing that [the] CMHC will approve based on their standard underwriting criteria. This problem is then exacerbated by the lower, more affordable rents that non-profit providers are hoping to achieve, thus reducing further the allowable mortgage loan. A typical CMHC approved mortgage for non-profit housing might cover only 55-60% of the actual costs of the project.

In the view of witnesses, the CMHC could do more to support affordable housing. Some suggested that the federal government require the CMHC to provide favourable mortgage rates to middle- and low-income families and individuals.

When Canadians are told that the government is committing, for example, $680 million to address homelessness issues in conjunction with the provinces and territories, a number of witnesses expressed their view that they have a right to know how this money — their money — is being spent. Unfortunately, we heard that not all of the money provided by the federal government through the Affordable Housing Framework Agreement is being matched by the provinces and territories. In this area, as in others, witnesses feel that transparency and accountability are essential.

The Committee believes that a number of federal government initiatives related to housing and homelessness are working well, and are having the intended effect. We are also pleased with the September 2002 Speech from the Throne’s explicit commitment to extend investments in affordable housing for those whose needs are greatest, particularly in Canadian cities with the most acute problems, and with the commitment to extend the SCPI. We are of the opinion, however, that given the priority placed on a balanced budget, any funding increases must be the result of reallocation of spending from low-priority to high-priority areas as determined through program review and consultation with stakeholders. It is for this reason that the Committee recommends that:

RECOMMENDATION 39

The federal government review existing expenditures in the area of housing and homelessness with a view to reallocating funds in order to increase support for the National Homeless Initiative.

Moreover, the Committee feels that the CMHC has a valuable role to play in assisting Canadians to access the adequate, affordable housing needed to ensure that they are fully contributing members to the Canadian economy and to Canadian society. Consequently, the Committee recommends that:

RECOMMENDATION 40

The federal government work with the Canada Mortgage and Housing Corporation to increase the affordable housing stock in Canada.

Finally, the Committee supports transparency and accountability as an over-riding principle when public funds are spent. From this perspective, the Committee recommends that:

RECOMMENDATION 41

The federal government establish mechanisms to ensure accountability and transparency with respect to the expenditure of funds allocated to the alleviation of housing problems and homelessness in Canada.

Children’s Issues

We’ve also certainly been very pleased with progress that’s been made over the last couple of years on the National Children’s Agenda. We all know the work is not yet finished and certainly recognize the progress that’s been made on the early child development initiative. (Coalition of National Voluntary Organizations, 24 October 2002)

Witnesses repeatedly reminded the Committee that children are a country’s most valuable asset. Consequently, ensuring that Canada’s children have access to the opportunities needed for them to lead successful, productive and happy lives was a major theme in our pre-budget discussions and consultations. Governments must commit to childhood development at birth, and continue that commitment throughout a child’s life.

Witnesses voiced a great deal of support for a national approach to early childhood development. For example, the Canadian School Boards Association (CSBA) told the Committee that:

[the] CSBA commends the federal government on the National Child Benefit and is pleased that a commitment has been made to continue to increase the government’s contribution. [The] CSBA also applauds the federal government and the provinces and territories for having come to an agreement on an action plan for the Early Childhood Development initiative. However, while government and political leaders have been negotiating and debating next policy steps and agreements on implementation, Canadian children remain in need.

More specifically, the Committee heard recommendations addressing such issues as child poverty and early childhood education. The Coalition of Child Care Advocates of B.C. argued that “[w]e know that adequate income and a healthy start in life have positive long term impacts and promote the healthy growth and development of our community’s children.” The Saskatchewan Early Childhood Association and the Manitoba Child Care Association supported this assertion.

While witnesses were supportive of the Canada Child Tax Benefit, many claimed that it should be expanded and increased if it is to have a significant effect on child poverty. The general consensus is that an increase to $4,000 from the current $2,400 would be appropriate, with one witness estimating the cost of such a change to be $10 billion annually. Witnesses also requested that the federal government turn the benefit into a refundable tax credit available to all families.

Support was also expressed for national programs addressing childcare needs, early childhood education and the Early Childhood Development Agreement (ECDA). In particular, witnesses recommended increased spending on early childhood education and expansion of the ECDA to children aged six to 12 years. Several groups, including the Canadian Teachers Federation, also highlighted the need for stable funding and national standards.

Quality child care is seen by many as the cornerstone of a comprehensive early childhood plan and one of several key components in a strategy to address family poverty. The Child Care Advocacy Association of Canada told the Committee that “Canada remains one of the few highly developed, industrialized countries that does not have a federally led, publicly funded childcare policy or sustainable childcare system.” Moreover, according to Parents for Child Care, “[t]here is only one licensed child care space available for every nine B.C. children who need it.” Canada’s economic prosperity is also compromised by the lack of child care, since this lack affects the ability of some parents in terms of their type and level of participation in the labour force.

Some witnesses also complained that not all provinces are matching federally provided funds. In their view, the problem is the lack of tied funds in the ECDA and of guiding principles or timelines for creating a comprehensive national early childhood education and care strategy. The result, as seen in Figure 24, is a patchwork of programs across the country. The Committee also heard about a lack of accountability in the $2.2 billion spent by the federal government through the Early Childhood Development initiative, and parental leave was identified as an important issue.

Figure 24

Source: www.socialunion.gc.ca.

Furthermore, as the OECD’s Key Elements of Successful Early Childhood Education and Care policy points out, monitoring and data collection are essential to assuring that programs are having their desired effect. Unfortunately, the Committee was informed by Campaign 2000 that data on the implementation of the Early Childhood Development Agreement are only sporadically available.

In addition to data on current programs, information is needed on the goals of particular initiatives, with the data used to assess whether the goals of initiatives are being met. The 1989 Parliamentary resolution on child poverty was one such target. Another potential target, which was suggested by the Nova Scotia School Boards Association, among others, was to reduce the depth of child poverty by 50% over five years.

As noted earlier in the report, the federal government currently offers the Canada Child Tax Benefit, the National Child Benefit and, in conjunction with the provinces and territories, the Early Childhood Development initiative to which it has contributed $2.2 billion over five years, starting in 2001-02. Moreover, in the September 2002 Speech from the Throne, the federal government indicated that it will significantly increase the National Child Benefit for poor families and work with its partners to increase access to early learning opportunities and to quality child care, especially for poor and lone-parent families. Moreover, the Speech contained a commitment to implement a long-term investment plan to allow poor families to break out of the welfare trap in order that children born into poverty do not carry the consequences of that poverty with them throughout their lives.

The Committee supports the federal government’s initiatives to support children — including the commitment of increased funding for the National Child Benefit, enhanced access to learning opportunities and child care, and a long-term investment plan — but shares some of the concerns identified by witnesses. More than a decade has passed since the 1989 Parliamentary resolution to eradicate child poverty, and too many children still live in unacceptable circumstances. We question whether the funds currently spent on children are achieving the best possible results, and are disappointed about the apparent lack of data on child initiatives, since data are required in order to assess whether programs are meeting their intended goals. For this reason, the Committee recommends that:

RECOMMENDATION 42

The federal government continue to increase incrementally the National Child Benefit. Moreover, the government should ensure the existence of mechanisms to make certain that monies are spent appropriately, with accountability and transparency.

While the Committee is cognizant of the request by many witnesses for a national, adequate, affordable, high-quality childcare system, and of the benefits of such a system for Canadian children and all of Canada, child care is already a component of the Early Childhood Development initiative. As well, provinces and territories are able to spend on child care if it is deemed to be a priority. Early learning is not separate from child care; a quality, national childcare system should address early learning and care, pre-school, and early childhood education and care as well as development. We need a coherent and inclusive system that does not duplicate infrastructure and resources, thereby fragmenting services.

The Committee does, however, believe that child care is a pressing need within Canada, and feels that monies must be allocated once there are accountability mechanisms in place and a commitment has been gained from governments. From this perspective, the Committee recommends that:

RECOMMENDATION 43

The federal government, along with provincial and territorial governments, recognize the urgent need for affordable, high-quality child care in Canada, and take actions to alleviate this problem.

Regarding parental care, the Committee notes that, since 31 December 2000, a maximum of 50 weeks of maternity and parental leave are available to new parents under the Employment Insurance system, a figure that represents a doubling of the previous entitlement. While this benefit allows working parents to spend more time with their newborn during the early months, certain groups of parents have troubling accessing the entitlement, including part-time workers and self-employed individuals. We urge the federal government to initiate public discussions on the possibility of extending parental leave to part-time employees and self-employed individuals.

Aboriginal Issues

Statistics and numbers continue [to] paint … a grim and disheartening picture of the First Nations in times when the majority of society around us lives in relative comfort and safety. The rates for unemployment, suicide, infant mortality, sexual abuse, alcohol and drug abuse and unemployment greatly exceed the national average. Underlying these facts and figures are people — people living day to day with no clear future in sight. (Federation of Saskatchewan Indian Nations, 8 November 2002)

As noted earlier in the report, improving Aboriginal Canadians’ quality of life to match that of other Canadians is an important, although daunting, challenge. During the pre-budget discussions and consultations, the Committee heard several suggestions from First Nations, Inuit and Métis peoples about a variety of issues, especially governance, infrastructure, poverty and health outcomes.

Several groups told the Committee about the deplorable state of repair of housing and infrastructure — including education and health services as well as water and sewer systems — on many First Nations reserves. Poor housing and infrastructure negatively affect quality of life and the ability of First Nations peoples to realize an adequate level of prosperity, productivity and employment opportunities. As noted by the Indian Taxation Advisory Board (ITAB) in its presentation to the Committee, “it should be noted that First Nations infrastructure is the most substandard in the country. Research undertaken by [the] ITAB consistently identifies a lack of quality public infrastructure as one of three serious impediments to economic growth on First Nation lands.”

The Committee also heard that other Aboriginal peoples, particularly in Northern Canada, suffer from inadequate infrastructure. For its part, the Assembly of First Nations told us that an investment of $27.5 billion over the next 20 years is needed. Aboriginal groups from Northern Canada remarked that isolated communities have their own particular infrastructure needs.

The issue of land claims continues to be a concern. Some believe that uncertainty associated with the settlement of land claims makes businesses reluctant to invest in disputed lands, which places yet another constraint on First Nations’ economic development. Several groups, including the Federation of Saskatchewan Indian Nations, informed the Committee that the lack of resolution to the treaty process is the main impediment to the realization of prosperity for First Nations. Unfortunately, the current treaty process appears to have resulted in a situation in which stakeholders are unable to agree on how to move forward. A number of groups, including the Métis National Council and the Chakastaypasin Band of the Cree Nations, commented on treaty concerns.

Uncertainty over the place of Aboriginal organizations in Canada was also articulated by the Social Planning Council of Winnipeg, which told the Committee that the Social Union Framework Agreement (SUFA), while generally successful, has been struck by “jurisdictional conflicts and a certain degree of ambiguity with regard to mobility issues and access to services, particularly for Aboriginal people in Manitoba. Aboriginal governments should and must be made a party to SUFA, as they have a vested interest in the design and delivery of programs.”

The development of policies and programs to assist Aboriginal Canadians must recognize that not all Aboriginal groups in Canada face the same circumstances or the same problems. The concerns of a First Nations individual living on a reserve are not the same as a First Nations individual living off-reserve, and the concerns of an Inuit Canadian living in the Yukon Territory differ from the concerns of an Aboriginal Canadian living in Winnipeg. As a result, federal government policy development must recognize these differences and incorporate needed flexibility. The Inuit Tapiriit Kanatami of Canada remarked to the Committee that:

[w]e see Ottawa searching for a narrow, one-size-fits-all policy for Aboriginal peoples. That approach simply won’t work, for the same reasons that a single fisheries policy will not serve Canada’s three oceans, the Great Lakes, and all of our rivers. Canada is too large, and our population, including Aboriginal peoples, is too diversified for a one-policy approach or solution.

Access to health and education of the same type and quality as that enjoyed by other Canadians is also required. The Canadian Dental Association told the Committee that 72% of First Nations and Inuit children aged two to five suffer from early childhood tooth decay, and the decayed, missing, filled teeth rate for 12-year old First Nations children is two to three times higher than for non-Aboriginal children. Moreover, the Pauktuutit Inuit Women’s Association informed us that Inuit Canadians lack access to basic diagnostic and prevention services taken for granted in Southern Canada. Health concerns were also mentioned by the Native Women’s Association of Canada. Women, in particular, are not diagnosed with many cancers specific to women before it is too late to save their lives, since they are unable to access information that would enable early diagnosis. We also received a recommendation that the First Nations and Inuit Health Program be re-established with a proper funding base and adequate growth factor.

It should be noted that the September 2002 Speech from the Throne listed a number of Aboriginal-related health improvement measures, including a First Nations Health Promotion and Disease Prevention strategy with a targeted immunization program, and a commitment to work with partners to improve health care delivery on-reserve.

A high-quality education is essential for individuals to participate in society, both as citizens and as economically productive people. The Committee heard that Registered Indians are more likely than the general population to have less than a grade nine level of education: three times more likely in the case of on-reserve Registered Indians (32.5% versus 12.4%), and one-and-one-half times more likely for those living off-reserve (18.4% versus 12.4%). Given the strong link between educational attainment and economic prosperity, it is not surprising that Registered Indians face lower participation rates and significantly lower average income levels than Canadians as a whole. The Saskatchewan School Trustees Association advocated financial support for partnerships with First Nations school boards and the provinces and territories that address the academic, social, emotional, physical and spiritual development of First Nations children and youth. The Northern Teacher Education Program stressed the importance of Indian and Métis teachers to the development of education for Aboriginal students.

The Committee also heard that the First Nations population that will be entering the labour force is expected to triple over the next 15 years, making it even more essential that education and employment needs be addressed. The Assembly of First Nations informed the Committee that there is a backlog of 10,000 First Nations students, requiring $147 million in funding.

Regarding Aboriginal education, the September 2002 Speech from the Throne committed to:

Moreover, while the September 2002 Speech from the Throne stated the federal government’s intention to reintroduce legislation designed to strengthen First Nations governance institutions that would support democratic principles, transparency and public accountability, as well as provide tools to improve the quality of public administration in First Nations communities, the Committee heard representations both opposing and supporting the government’s governance initiative. This lack of cohesiveness among First Nations peoples suggests not only a split within the First Nations community, but also perhaps between the federal government and First Nations peoples. As well, the Speech committed the federal government to work with First Nations communities in an effort to build their capacity for economic and social development, and to expand community-based justice approaches, especially for youth on reserves and Aboriginal Canadians residing in Northern Canada.

The Committee is aware of the challenges associated with improving the quality of life of Aboriginal Canadians, and believes that a multi-faceted approach is needed in order that they can enjoy the same standard of living, and access to opportunities, as their non-Aboriginal counterparts. This approach must recognize the differing needs of Aboriginal Canadians, and the different challenges faced by First Nations individuals living on- and off-reserve. The Houston Friendship Center Society, for example, advocated increased funding for youth programming targeted at Aboriginal youth living in urban areas. Action must also be taken with respect to health, education, water and sewer systems as well as other infrastructure requirements. These needs should be funded primarily through the reallocation of expenditures on existing initiatives that, on the basis of consultation and program review within Indian and Northern Affairs Canada and other relevant departments, are no longer needed, are not a priority for Aboriginal Canadians or are not meeting their intended goals.

As well, while the Committee does not support the development of a First Nations/Aboriginal Canadian infrastructure program, as suggested by the Indian Taxation Advisory Board and the Assembly of First Nations, we believe that any future infrastructure programs introduced by the federal government should contain funds earmarked specifically for Aboriginal communities. Since small and remote communities which may be sparsely populated are disadvantaged when funds are allocated based on population alone, a different method for determining the amount of any allocation must be used. Traditional population-based funding mechanisms are ineffective in improving Aboriginal living conditions. Moreover, we believe that governance issues must be resolved. It is from this perspective that the Committee recommends that:

RECOMMENDATION 44

The federal government implement programs that adequately address the governance, health, education and other infrastructure needs of Aboriginal Canadians. These programs should contain sufficient flexibility to meet the divergent needs of Aboriginal Canadians. As well, any future infrastructure initiatives announced by the government should contain an allocation targeted to Aboriginal communities, but not based strictly on population.

Disability Issues

We are not seeing incremental progress, we’re actually seeing erosion of services for people with disabilities in this country. We are living in greater poverty, we’re having parents go to the extreme of taking the lives of their children. It is at the point now where people have to select which province they might reside in to gain the service they may need. (Council of Canadians with Disabilities, 21 May 2002)

Earlier, the report noted that a disability presents challenges not only for the person with the disability, but also for family members who help to care for the disabled individual, often placing the family under severe economic and emotional strain. The National Council of Women told the Committee that “[s]uch caregivers sacrifice career opportunities and frequently subsist on inadequate income, both during the caregiving years and in later life.” At present, the federal government plays a role in helping disabled individuals and those who care for them enjoy the best possible quality of life through funding for health and home care, and through targeted tax and program spending.

Nevertheless, many witnesses commenting on disability issues criticized elements of the federal government’s support. In particular, they did not support the government’s recently implemented guidelines, which effectively narrow the eligibility for the Disability Tax Credit (DTC). The Committee heard that a sizeable number of disabled Canadians are no longer eligible for the credit. As such, the Multiple Sclerosis Society of Canada suggested to the Committee that:

[w]e cannot believe it was the intention of Members of Parliament who approved the language in the Income Tax Act to exclude from receiving the DTC a person with MS who might be able to struggle to walk 50 metres on level ground [one of the tests for the DTC] on one of her ‘good’ days, but ordinarily cannot climb stairs unsupported or walk a block in less than 30 minutes.

Concerns are heightened by the DTC’s role as one of the main tools to help defray out-of-pocket expenses associated with disability. In its March 2002 report Getting It Right for Canadians: The Disability Tax Credit, the House of Commons Sub-Committee on the Status of Persons with Disabilities stated its view that “the guidelines pertaining to the application’s questions are very restrictive and serve to deny support for too many applicants with a severe disability.”

Many of the recommendations made to the Committee concerned enhancements and refinements to existing programs. Suggestions included making the DTC refundable, and providing paid leave as well as refundable and enhanced tax credits for those providing significant levels of unpaid care to disabled individuals. T-Base Communications reminded the Committee of the importance of ensuring that all Canadians can access and use government documents and information.

While income security is ultimately achieved through the full labour market participation of persons with disabilities, the Committee heard that only 48% of adults with disabilities are employed, compared with 73% of adult Canadians without disabilities. For a labour market strategy to benefit disabled Canadians, the federal government must invest in supports for them, and for their family and community. Several groups suggested that the federal government increase its involvement in this area in addition to the existing federal/provincial Employability Assistance for Persons With Disabilities Initiative, under which the federal government contributes 50% of the cost, up to a maximum, of eligible provincial/territorial programs and services.

The Committee also heard suggestions for a national disability strategy to assist provinces and territories in investing in better programs and services. As recommended by witnesses, such a program would be a federal/provincial/territorial agreement (developed in conjunction with interested groups) to equalize supports across all provinces and territories, and ensure the mobility rights of persons with disabilities.

As with other vulnerable groups in Canadian society, the Committee believes that the federal government has a responsibility to provide assistance that enables disabled Canadians to be full participants in our economy and in society. This requires that attention be paid to such issues as enhanced support and tax assistance for disabled Canadians and their caregivers, reasonable qualifying conditions for the Disability Tax Credit, and appropriate labour market assistance. In developing policies and programs, both physical and mental disabilities must be considered, with a view to ensuring the equitable treatment of various types of disabilities.

In the Committee’s view, appropriate actions are being taken by the federal government in some areas as it assists disabled Canadians and their families in meeting their challenges. There is, however, room for improvement. In particular, we believe that a number of suggestions presented by the witnesses have merit or warrant further examination. Consequently, the Committee recommends that:

RECOMMENDATION 45

The federal government study the feasibility of a refundable disability tax credit, enhanced tax assistance to disabled Canadians and their caregivers, and options for providing enhanced labour market supports to disabled Canadians. Moreover, the government should consult with organizations representing those with a disability regarding a federal/provincial/territorial National Disability Strategy and a Labour Market Agreement.

Seniors’ Issues

The protection of the pension security net is important to aging with dignity and security. (Congress of Union Retirees of Canada, 9 September 2002)

From housing to health care, Canada’s senior citizens have a stake in all major economic and social policy debates. Their dependence on a fixed income and heightened needs in areas such as health care, however, make them vulnerable to economic disruption and changes in social policy. Seniors’ potentially precarious economic position is highlighted by the National Council of Welfare’s report which indicates that while poverty rates fell in 1999, poverty rates for single senior women actually rose in 1999, reflecting “significant gender-based differences in labour force attachment, in life expectancy, in marital status and in health or disability status.”⁷⁰

While the implementation of many of the recommendations in other sections of the report would help to address the needs of seniors in the areas of health, housing, RRSPs, sustainable communities and general tax policy, other concerns would not be addressed. For example, a number of the Committee’s witnesses expressed concern with various aspects of the retirement income system. Witnesses suggested improvements to the Canada Pension Plan — including allowing individuals to contribute to the Plan regardless of their employment status — and having the federal government finance the “employer” portion of the premium for those taking care of the young, sick, elderly, disabled or dying. Other suggestions included enhancing accessibility to and the generosity of Guaranteed Income Supplement benefits, eliminating the social benefit reduction tax (or clawback) on Old Age Security payments and, as recommended by the Multi-Employer Benefit Plan Council of Canada, introducing a retirement tax credit for extra contributions to a Registered Pension Plan.

Over the past several years, the federal government has implemented ad hoc reforms of Canada’s retirement income system, for example through changes to the RRSP program and to the CPP. While each of these changes individually has been undertaken for valid public policy reasons, decisions have not perhaps been made with due consideration given to other parts of the system. A holistic review of Canada’s retirement income system should occur in order to ensure that Canada’s seniors have an adequate level of retirement income and the quality of life they deserve. Such a review is particularly needed in view of the aging of the Canadian population.

The Committee believes that Canadian citizens have respect for and value their senior citizens. We have made recommendations regarding tax changes, health care and sustainable communities that could indirectly benefit our seniors. More targeted assistance, however, is needed and a comprehensive review of the retirement income system is in order. From this perspective the Committee recommends that:

RECOMMENDATION 46

The federal government initiate a public consultation process on the changes that are needed to the three pillars of Canada’s retirement income system: Old Age Security/Guaranteed Income Supplement/ Allowance/Allowance for the Survivor; the Canada Pension Plan; and Registered Retirement Savings Plans/Registered Pension Plans. In the short term, and pending the completion of the review, the government should consider increasing the amount of the Guaranteed Income Supplement to assist those seniors most in need.

Canada’s Participation in the World at Large

[I]nternational aid is a way to maintain influence. It’s the right thing to do. It reflects and is a way to project Canadian values: care, compassion, multiculturalism. This is important at a time when other international values are being projected all too clearly. Fifty million dollars over five years saves between 350,000 and 700,000 lives but $50 million wouldn’t buy one military aircraft. (David Cross, 4 November 2002)

As noted earlier in the report, Canada’s foreign aid budget is currently equal to about 0.26% of GDP, far less than the United Nations goal of 0.7% of GDP. According to Action Canada for Population and Development, Canada’s Official Development Assistance (ODA) has been reduced disproportionately compared to other program areas between 1991 and 2001. While the federal government’s commitment in the September 2002 Speech from the Throne to increase the aid budget by 8% annually — with a view to doubling Canada’s ODA by 2010 — has been welcomed by some, the Committee was informed that this funding commitment will not enable Canada to reach the 0.7% target. Results Canada, KAIROS and Eric Cordeiro spoke about Canada’s ODA, and several groups also recommended that the federal government continue to pursue the cancellation of the unsustainable debt of the world’s poorest countries.

The Committee is proud of Canada’s participation in the international environment. We support the recent commitment to increase our Official Development Assistance, and believe that we must always help to support vulnerable citizens in other countries. From this perspective, the Committee recommends that:

RECOMMENDATION 47

The federal government incrementally increase the foreign aid budget until it reaches 0.7% of Canada’s Gross Domestic Product. A timetable for achievement of this goal should be developed.

In addition to Canada’s participation in the international environment through development assistance, aid to citizens in other countries is also provided by Canada’s Armed Forces. In a 25 October 2002 speech, Minister of Defence John McCallum described the role of the military as the defence of Canadian citizens and the preservation of Canada’s sovereignty:

So what does sovereignty mean in this context? It means that our government must be able to deploy forces overseas to reflect Canadian priorities and values, to help Canada achieve its foreign policy objectives and to do our fair share in the struggle for democracy and freedom around the world. [It] means that we must be able to defend Canada and participate meaningfully in the defence of North America. As well, [it] means the defence of our territorial claims … Finally, [it] means strengthening our capacity to fight terrorism. What can be more threatening to our sovereignty than a bunch of terrorists determined to kill innocent Canadian citizens and destroy Canadian property? Sovereignty means all of these things … .

During our pre-budget discussions and consultations, some witnesses told the Committee that Canada was not providing its Armed Forces with the resources needed to fulfill its mandate. We also note the comments of the Standing Senate Committee on National Security and Defence in its November 2002 report, For an Extra $130 Bucks … Update On Canada’s Military Financial Crisis, A View from the Bottom Up:

The question whether the Government of Canada is investing sufficiently in the nation’s insurance policy is essential to what has to be the main question: whether Canadians are being provided with what reasonable risk analysts would deem to be an adequate amount of collective security for their lives, their assets, and their way of life. It is the position of this Committee that they are not.

The Senate Committee recommended an “immediate increase of $4 billion to bring the Department of National Defence’s baseline from $11.8 billion to $15.8 billion, with increases in future years that are realistic, purpose-driven and adjusted for inflation.” The Conference of Defence Associations advocated a smaller amount, recommending an immediate $1.5 billion increase in the operating budget of the Department of National Defence.

Defence, however, involves more than the Canadian Forces. For example, the Union of Canadian Transportation Employees informed the Committee that, at present, there is no Coast Guard presence in our coastal waters to deal with criminal activity or the smuggling of illegal immigrants. We also heard from the Canadian Association of Fire Chiefs and the International Association of Fire Fighters (AFL-CIO) about the need to involve groups such as firefighters, often the first respondents to emergency situations, in protecting Canadians’ critical infrastructure. On the subject of preparing for emergencies, the Canadian Association of Mutual Insurance Companies argued that there is a need to address the frequency and severity of man-made and natural disasters.

The Committee believes that our Canadian Armed Forces play a vital role in the worldwide struggle for democracy and freedom. Fulfilling this role, however, requires resources, and we believe that some increase in funding is in order. We also feel that there is a more fundamental need for a defence and foreign policy review. Moreover, from the perspective of national security, we support the position of the Union of Canadian Transportation Employees. For these reasons, the Committee recommends that:

RECOMMENDATION 48

The federal government provide an increase in funding to the Department of National Defence to meet the most urgent needs. The government should also immediately initiate a defence and foreign policy review, with a re-examination of funding requirements occurring at the conclusion of the review and mindful of the priority to avoid a budget deficit. Funding should also be allocated to ensure a Coast Guard presence in Canadian waters.

Finally, Canada also participates in the international environment as an importer and an exporter. As a small, relatively open economy, trade is very important for our well-being: exports account for about 44% of our GDP. Furthermore, Canada is fortunate to be located next to the largest market in the world, the United States, into which we sell the vast majority of our exports and from which we buy over two-thirds of our imports. Because of our reliance on the United States as an economic partner, it is essential that goods and services flow across our shared border as freely as possible.

As noted earlier, the focus of the Committee’s report last year was securing our future, particularly with regard to the Canada-U.S. border. At that time, the goal was to respond to U.S. security concerns while improving the efficiency of border operations. While governments in both countries have developed and implemented plans and programs to address trade-related border concerns, we must not become complacent in addressing border issues. The Canadian Trucking Alliance told us that  they “continue to need, and the federal government continues to pursue, bilateral solutions at the border with the Americans.” Moreover, the Shipping Federation of Canada informed us that requests for increased security have led to new initiatives for marine border patrols, and that more money is needed to ensure that increased security needs do not interfere with commercial flows. The management of our trade relationship with the United States and an ongoing examination of measures that can be taken to improve the cross-border flow of goods and people, must remain a government priority.

The Committee also notes that trade disputes with the U.S., particularly over such commodities as softwood lumber and wheat, are having detrimental effects on communities across Canada. The imposition of softwood lumber duties, combined with new agricultural subsidies for U.S. farmers and tariff protection for the U.S. steel industry, indicate a rise of protectionism in the U.S., which poses a growing threat to the Canadian economy. Trade barriers are also a more general problem. According to the Grain Growers of Canada, “foreign trade barriers and production and trade distorting subsidies are costing our farmers at least $1.3 billion each year. This estimate was completed before the recent United States Farm Bill increased the level of support for U.S. producers.” Addressing these protectionist moves by our largest trading partner is challenging but necessary.

The Committee believes that oversight of our trade relationship with the United States must be ongoing, and there must be vigorous defence of our international trade rights. From this perspective, the Committee recommends that:

RECOMMENDATION 49

The federal government allocate sufficient resources to the management of Canada’s relationship with the United States. Priorities should include adequate personnel and funding directed toward the resolution of trade disputes, and the creation and staffing of additional consular and trade offices.