Interventions in Committee
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Erica Phipps
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Erica Phipps
2015-06-18 16:01
Thank you, Mr. Chairman.
Good afternoon. Thank you for the opportunity to contribute to this important discussion.
I'd like to share a few perspectives based on our work to raise public awareness, particularly among families with young children, about the lung cancer risk posed by radon and what can be done to reduce that risk.
My name is Erica Phipps. I serve as executive director of the Canadian Partnership for Children's Health and Environment, CPCHE, a collaboration among public health, medical, legal, and child-focused organizations that have been working together for nearly 15 years to advance children's environmental health protection in Canada. The 10 core CPCHE partners include the Canadian Environmental Law Association—you've just heard from my colleague, Kathleen Cooper—and the Canadian Child Care Federation, which has been actively involved in our work to promote radon action in the child care sector.
Much of our work within CPCHE involves engaging with and learning from service providers, such as public health nurses and child care providers and others, who work with families on a day-to-day basis and empowering them to integrate children's environmental health protection into the support they provide to families.
I thought it would be fitting to start with one of their voices. These are the words of a child care provider in Winnipeg, who was one of the participants in the radon vanguard initiative that CPCHE and the Child Care Federation undertook last year, with support from Health Canada. She said:
I wouldn't want to work in a centre that had [high radon] and didn't do anything about it. I wouldn't want to do that. I wouldn't work there. And I wouldn't put my children in the centre either.
This child care professional had known very little about radon before getting involved, but she, like others in the project, was motivated to learn more because of her dedication to the children in her care and because she desired a healthy workplace. It did not take her or any of the other staff involved in the project very long to get that this is a critical issue and one that demands action.
Through the vanguard project, she and other child care providers shared information on radon with their client families and voluntarily tested their child care centres for radon. Through that process, the project participants made the transition from a group of people who had hardly even heard of radon to being nearly unanimous in rating it as a high priority for health in their centres.
When asked what they thought would need to happen to protect children and staff from this lung cancer risk, most felt that radon testing would somehow need to be made mandatory. In the words of another participant:
...what I see in child care tends to be...people don't take action unless they're forced to, unfortunately.... It's like carbon monoxide detectors, right. We never had them before and then finally we were forced to have them and so everybody got them. And you know meanwhile they're only like $40 dollars or $50, and yet people didn't do that before it was made sort of expected of [them].... I think unless [radon testing] was made mandatory or there was some kind of assistance in ensuring that it was done, I think it would be unlikely to get done...when it should be.
This viewpoint was echoed by others and supported by the results of the vanguard project. Despite good intentions and the fact that radon test devices were supplied directly to the participating day care centres, only two-thirds of them were able to complete the testing. What this suggests is that for a sector in which staff are already stretched, providing them with information—and even providing them with do-it-yourself test devices—is not likely to be enough.
CPCHE has been putting significant effort into radon outreach over the past few years, including developing a plain-language tip card for families and teaming up with Health Canada, the Canadian Lung Association, Parachute, and the Canadian Association of Fire Chiefs in a campaign that links radon testing to the more familiar home safety messages of smoke detector use and carbon monoxide detector use. I've brought copies, which you should have before you.
We have prioritized radon as a focus of our collective work because of the well-established high level of risk posed by radon and because we firmly believe that protecting children is an investment in lifelong health. The harm from radon exposure is cumulative, which means that if we can ratchet down exposures during childhood by promoting radon safety in homes and by zeroing in on those six to eight hours that many children spend per day in child care or other learning environments, we can give Canada's kids a better start towards lifelong health, such that their generation and future generations are less likely to suffer from the devastation of lung cancer.
There's also an equity question here. Radon exposure is a prime example of a housing-related health risk that is beyond the ability of low-income people, especially tenants, to address on their own. Knowing about radon is not enough if you can't afford to buy a test kit, let alone pay for a remediation. It is just this sort of issue that we are seeking to address in a new CPCHE-led initiative called “RentSafe”, which will build social service sector capacity to respond to health concerns in low-income housing.
Reducing the financial barrier to radon mitigation should be a matter of priority if we are to achieve the goal of healthier housing for all Canadians. That would potentially include the Green Budget Coalition ask that Kathy mentioned in her remarks, of having an income tax credit for radon mitigation. Federal leadership to help families get action on avoidable health risks in their housing, including radon, would be a well-targeted investment in the health and well-being of the people of Canada.
In our toxics work within the CPCHE partnership, we frequently bump up against the complexities of scientific evidence, fraught with great debates about cause and effect and proof of harm. Radon, regrettably, is refreshingly simple. Radon causes lung cancer, full stop. We know how to test for it. We know what to do if levels are high. We know that it amplifies the risk posed by the other big lung cancer culprit, tobacco smoke. Now we need the courage and investment to ensure that the homes and buildings where we spend time, and especially where our children spend time, are not a source of this preventable lung cancer risk.
Thank you.
Corinne Charette
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Corinne Charette
2015-05-28 15:55
Thank you, Mr. Chairman.
I am here today to present on Industry Canada's work in regard to broadband infrastructure.
In the context of your review of infrastructure investment in Canada, I would like to provide an overview of the federal government's historical involvement in funding broadband infrastructure and an overview of the current broadband program, Connecting Canadians.
High-speed Internet access is essential infrastructure for today's digital economy. Along with other telecommunications services, Internet access contributes to the productivity and growth of the Canadian economy. High-speed Internet enables Canadians, businesses, and institutions to access information services and opportunities that otherwise would be out of reach.
Due to rapidly changing technologies and ever-increasing demand from consumers and businesses, telecommunications infrastructure requires continuous investment and innovation. The government's policy approach to telecom, including broadband Internet, has been to encourage competition and investment, protect consumers, and ensure access for all Canadians.
In Canada, private sector competition is driving investment in upgrades to broadband infrastructure. In particular, urban areas enjoy strong coverage, increasing speeds, and high-quality networks. However, rural and remote areas present a challenge that requires targeted government investment. Often, there simply isn't a business case for the private sector to build their networks in these areas, due to low population density and geographical challenges. The need for government funding is supported by a wide variety of studies and discussions with stakeholders.
My remarks today will focus specifically on rural and remote broadband. Broadband infrastructure encompasses the cables, towers, satellites and other equipment used to provide Internet access to households, businesses and institutions across Canada. As is common in many peer countries, the Canadian government has made targeted investments in rural broadband.
In 2000, the federal government created the national broadband task force to provide recommendations to address the digital divide and connect Canadians. Out of those recommendations, several programs were launched, including the broadband for rural and northern development pilot, or BRAND, and the national satellite initiative, which Industry Canada administered.
BRAND was a $105-million cost-matching program to help address the lack of broadband access in first nations, Inuit, Métis, northern, rural, and remote communities. BRAND initially provided financial support to community-level plans for demand aggregation and network deployment.
In 2009, Industry Canada conducted a comprehensive study to identify areas in Canada where broadband Internet was unavailable or not easily available. As part of Canada's 2009 economic action plan, $225 million was allocated over three years to extend broadband service to unserved and underserved households at speeds of at least 1.5 megabits per second. By the program's close in 2012, the government had invested in 84 projects to expand service to 218,000 previously unserved or underserved households. The delivery of broadband service to these communities has encouraged economic development, spurred innovation, and improved the quality of life in hundreds of communities across Canada.
Over the past decade, select broadband projects have also been supported by Infrastructure Canada, Aboriginal Affairs and Northern Development Canada, and regional development agencies and initiatives.
The federal government has also invested in CANARIE, an ultra-high speed optical backbone network that enables the transfer of large amounts of data generated by leading-edge research and big science from across Canada and around the world.
One million researchers, scientists and students at over 2000 Canadian institutions, including universities, colleges, research institutes, hospitals and government laboratories, have access to the CANARIE network.
Budget 2015 demonstrated Canada's continued support for CANARIE with renewed funding of $105 million over the next 5 years.
Economic action plan 2014 provided $36 million over 4 years to renew the Computers for Schools program, with an additional $2 million over 2 years announced in economic action plan 2015, to expand the program and include not-for-profit organizations that support low-income Canadians, new Canadians and other disadvantaged groups.
Computers for Schools helps young Canadians develop computer literacy skills and will give them better access to computers and communications technology equipment.
Significant progress has been made through a competitive marketplace driving private sector investment and through targeted government investment.
According to the CRTC “Communications Monitoring Report”, broadband coverage in Canada at basic speeds of 1.5 megabits per second was available to over 99% of households in 2012. Coverage at 5 megabits per second was available to 94% of households, which is in line with other peer countries. This is comparable to that of the United States and ahead of many European countries.
Coverage of Canadian next-generation networks is comparable to that of the United States and ahead of most European countries. Coverage at 30 megabits per second and in advanced LTE mobile networks fares very well internationally.
However, rural areas continue to lag in terms of coverage, available speeds, prices and service quality. Satellite-dependent communities in the north have the added challenge that their satellite capacity is on short-term leases, which prevents long-term planning.
Following the completion of the Broadband Canada program, Industry Canada and the CRTC worked together to identify gaps in service. Based on this work, the Connecting Canadians program was developed and announced in economic action plan 2014.
In April 2014, the Minister of Industry, the Honourable James Moore, released Digital Canada 150, a plan to advance Canada's efforts to being a global leader as a digital economy, setting out clear goals for what we can achieve by the time we celebrate our 150th anniversary in 2017. Digital Canada 150 is built on 5 pillars: connecting Canadians; protecting Canadians; economic opportunities; digital government; and Canadian content.
Under the connecting Canadians pillar, I would like to highlight the new connecting Canadians program, which provides $305 million over five years to extend and enhance access to high-speed broadband networks at a target speed of at least 5 megabits per second. Connecting Canadians sets an objective to expand affordable access to high-quality broadband services to an additional 280,000 households in rural and remote areas of Canada by providing one-time, non-repayable federal contributions to Internet service providers to expand or upgrade broadband infrastructure.
The $50 million northern component of connecting Canadians, we expect, will support connectivity at a target speed of 3 to 5 megabits per second for approximately 12,000 households in Nunavut and the Nunavik region of northern Quebec. These regions are among the most difficult to serve in Canada. Expensive satellites that cover the north are the only practical option to reach them.
The target speed of 5 Mbps was chosen based on a variety of factors, including deployment costs, the needs of end-users and upgrading service to a fairly broad number of households across Canada. It provides a meaningful improvement over the previous target of 1.5 Mbps.
These speeds will allow users to have better access to applications such as cloud computing, distance learning, e-health applications and high-definition video streaming. Partnerships are a key element of the Connecting Canadians program in order to build on past and previous investments, as well as to complement investments made by the provinces and territories.
Industry Canada undertook an extensive consultation process with Canadians, Internet service providers, provinces, and territories during the design and after the launch of the program. This included a call for Canadians and Internet service providers to provide feedback over the summer of 2014 to update national broadband coverage maps, which allowed us to identify underserved communities.
After updating the national coverage maps, a call for applications to connecting Canadians was launched on October 15, 2014. Submissions were due by January 12, 2015.
Industry Canada received over 300 applications from small and large Internet service providers from coast to coast. Then projects underwent a competitive national assessment process.
Applications were first assessed for essential criteria, and then those that met the essential criteria were further assessed on a number of comparative criteria, for example, the project's cost per household, the proposed number of households, sustainability and the scalability of the technology.
The purpose of the assessment was to identify projects that offer the greatest value for Canadians in terms of extending robust, affordable broadband service to rural and remote households without access at 5 Mbps.
The program is committed to working with partners to leverage funds. For example, British Columbia committed up to $10 million to cofund projects in their province's 2015 budget.
View David McGuinty Profile
Lib. (ON)
Before Stats Canada's long-form census was eliminated by the government—something they pursued here after George W. Bush tried to do it in Washington and then had to withdraw it because of the outcry—in 2010 they did an Internet use survey and here's what it told us.
It said that 79% of Canadian households had Internet connections. It said that 97% of the top income households had them but only 54% of low-income households had them, that is $30,000 or less.
Your school program has no bearing at all on the millions of Canadians who live in households with $30,000 or less. The program was eliminated with the stroke of a pen. It was all about trying to help folks who couldn't afford computers or high-speed connections deal with, for example, CRA tax forms. In fact, hundreds of thousands of Canadians were going to those municipal centres and those libraries to get help filing their taxes, which creates revenue for the government and helps with the efficiency of CRA.
Can you help us understand why a $10 million or $12 million a year program—which is one-third of the cost of the billboards put up by the government across the country—was eliminated? Do we have any rationale for this other than the fact that you say the Internet connections are now in schools?
View Scott Simms Profile
Lib. (NL)
Thank you very much for that. This leads me to Dr. Lee.
Dr. Lee, I really liked your article. I can't dispute a lot of it.
You put a lot of IDs out there: Stats Canada, Aboriginal Affairs, 800,000 cards. I won't go through it because you did as well. There is a whole host of identification. A lot of it is tracked by the federal government, but it is provincial ID for the most part—
Dr. Ian Lee: Some.
Mr. Scott Simms: —for getting on a plane, getting on a train. I'm going to end with what you say in your article. You say, “contrary to the critics, this research reveals that low income people need significantly more ID”. I agree with that. It's very tough to get welfare.
Douglas Keller-Hobson
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Douglas Keller-Hobson
2014-10-06 15:46
Good afternoon. My name is Doug Keller-Hobson and I am the executive director of Hope Air.
I appreciate this opportunity to appear before the finance committee during the budget 2015 consultations and share with you our proposal for a very specific legislative change that would improve access to necessary health care services for low-income Canadians regardless of where they live across Canada.
Hope Air is a registered charity whose mission is to provide free flights for those who are in financial need and must travel long distances to reach specialist medical care. The only Canadian charity dedicated to providing this service from coast to coast, Hope Air helps low-income Canadians of all ages who are suffering from a wide range of illnesses.
Hope Air is not an airline. Rather, we are a lifeline for many fellow Canadians who need to access the advanced medical technology and specialists that are typically available only in larger urban centres across our country. Since its founding in 1986, Hope Air has arranged over 87,000 free flights for low-income Canadians, including over 7,000 flights last year. There are over 8,000 projected in 2014.
Hope Air's submission to this committee is focused and specific and can be enacted at little cost to the treasury. Our budget proposal seeks an exemption from the air travellers security charge for all flights being provided free of charge by a registered charity to low-income Canadians travelling to required medical appointments.
The air travellers security charge is a flat rate fee currently set at $7.12 plus HST for a one-way flight to cover security costs in place at the 89 airports across Canada. This proposed change would cost the treasury approximately $57,000 for 2014 and can be made by either revising or adding a clause to section 11 of the Air Travellers Security Charge Act.
More to the point, for today's mandate of exploring ways to support and help vulnerable Canadian families, this change would enable Hope Air to provide an additional 230 flights per year for fellow Canadians in need.
There is a precedent for enacting a change such as this. Although the act contained an exemption for air ambulance flights when it was passed in 2002, the ATSC still applied to other non-emergency medical flights. Recognizing the importance of excluding necessary medical travel from the ATSC, the government passed an amendment in 2007 making flights donated by air carriers to registered charities exempt from the ATSC.
Since that time, Hope Air's business model has adapted to changing circumstances to include more private donations and funding partnerships. This enables us to directly purchase many more flights for our clients, but also makes us still subject to the ATSC levy. The continuing impact of the current ATSC legislation is to restrict the number of clients we can serve.
Almost half of Hope Air's flights are provided for children and their parent or guardian, most of whom live in a household where the average income is close to their community's low-income line. This means that the vast majority of the families that Hope Air helps devote a larger share of their income to food, shelter, and clothing than the average Canadian family does.
Canadians who live in communities far from larger urban centres face many challenges in accessing the health care they need. They frequently face long-distance travel to get to their medical appointments at their own expense, and in winter they risk dangerous long drives. This puts low-income Canadians at risk, as they often decide to cancel or delay treatment due to the travel costs. It also takes people away from work, school, family, and community for much longer than is necessary.
Making the legislative change will benefit many Canadians by supporting families and vulnerable Canadians at a critical time when they are focused on improving their personal health.
I appreciate your consideration of this issue for inclusion in the 2015 federal budget, and look forward to your questions.
Douglas Keller-Hobson
View Douglas Keller-Hobson Profile
Douglas Keller-Hobson
2014-10-06 16:09
Increased fees always do; hence, we're asking for this specific legislative change here, which would actually reduce fees. We partner with all the airlines. There are very close relationships. Just as we're advocating today for assistance here to help vulnerable families, I'm doing exactly the same with our airline partners as to whether we can get them to waive certain fees. Again, sometimes our donors pick up additional costs if the families themselves cannot.
Today's request here, though, is very direct and will certainly add more flights.
View Gerald Keddy Profile
Welcome to our witnesses. We're having a very good discussion today, with lots of questions being raised.
My question is for Mr. Keller-Hobson from Hope Air.
You're the only registered nationwide charity that provides free flights for people who cannot afford the cost. I think you stated there have been somewhere around 85,000 free flights since 1986. Congratulations on that.
I think most of us around the table are sympathetic to your ask, but I'm not certain how we can drill down to find a way to do it. You're looking to really get around the air travellers security charge of $7.12 a flight. It's impressive that this would give you a lot of extra flights across the country; an additional 230 flights I think was the number you used.
It would be a legislative change. How can government do that and treat one charity differently from another?
You need to help us.
Douglas Keller-Hobson
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Douglas Keller-Hobson
2014-10-06 16:18
When the legislation was implemented, it was clearly established at that time that vital medical flights were to be exempted. That was always the spirit of the legislation. It caught up in 2007 with the next amendment, when it was really discovered and then advocated that Hope Air was not an air ambulance service but still was vital for medical appointments.
Now we're looking at it again, more than seven years out. I take the view that the intent and spirit of the legislation is very clear. It applies to all Canadians in that scenario, through charities. It's time for us to continue to look at our legislation and keep up with changes in society. Here Hope Air has changed its business model. It considerably grows more, and we put a considerable amount of money back into the airline industry through our purchases. A simple act like this would, I think, deliver good results.
Jason Kuzminski
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Jason Kuzminski
2014-04-08 15:52
Thank you.
Thank you for the opportunity and invitation to share what Habitat for Humanity is doing to help train youth with the skills they need to join Canada's labour market.
Many of you are familiar with Habitat for Humanity as a leading developer of affordable home ownership in Canada.
Habitat for Humanity affiliates across Canada help low-income families build safe, decent homes for them to purchase at payments they can afford.
Habitat for Humanity affiliates across Canada help hard-working low-income families build safe, decent homes for them to purchase for payments they can afford. Our traditional approach has been to enlist volunteers and donors from business and faith communities, as well as neighbours, who are touched by the need, want to help, and recognize how Habitat home ownership helps break the cycle of poverty permanently.
We will always offer this opportunity to community volunteers, and I invite community leaders like the members on this committee to come swing a hammer with us this summer and build alongside a partner family whose lives you'll help transform, but the reason I'm here today is to remark upon what has happened as Habitat affiliates diversify the approach to how we build our homes.
In recent years, several Habitat affiliates partnered with local colleges, trade schools and skills centres, and high schools to offer Habitat home builds as a living classroom for training youth in building trades and other skills that lead to apprenticeships. In 2013, over 1,500 students earned credits in carpentry, plumbing, electrical, and other construction trades taught on our home builds.
This works out to approximately 900,000 hours of training taught on Habitat home builds, most of which is counted toward apprenticeships. Not only are these students given valuable practical training, but they're also given an opportunity to meet and work with the families who will own the homes they're building.
Our success rate for retaining these students in trades programs and seeing them go on to trades is between 80% and 90%. Anecdotally, many of the students say that it's the human experience, more than anything else, that motivates them to continue pursuing a career in a trade. When asked why and what that meant, the common reply is that they come from families that are in circumstance similar to those of the families they're helping and who they met on their home build.
There are several reasons why Habitat for Humanity has moved into the direction of skills training partnerships.
Some affiliates did it out of necessity to add new volunteers so they can scale growth in homes built and families served. Others did it out of our own sense of corporate social responsibility or a duty to leave a legacy that goes beyond the homes we build and the families we serve. Still others saw it as part of a plan to attract new resources and donors interested in supporting education and youth, and not just affordable housing.
We understand that if you poll Canadians on their top 10 priorities, affordable housing sometimes comes in at around 11, but jobs and skills are always consistently at one or two. Creating skills training benefits and affordable homes out of the same dollar is something that we knew we could do. Our investment in these partnerships has begun to pay dividends.
In Canada's economic action plan 2013, Prime Minister Harper and his government acknowledged the success of Habitat for Humanity Canada in leveraging skills training from affordable housing dollars. We thank him and we thank you for that.
In Saskatchewan, Premier Wall has been a leader in Canada by doubling his investment in Habitat homes, which his housing minister, the Honourable June Draude, has said is attributable to the skills training partnerships that we've leveraged and the results we've proven out there. Minister Draude and her government are eager to explore with the federal government what other ways there are to leverage programs that achieve results for multiple priorities, and I thank her for her leadership.
Status of Women Canada's support for Women Building Futures, a skills program based in Alberta and targeted for women, also benefited Habitat Edmonton and the families they serve. Habitat affiliates in Manitoba, Prince Albert, Kingston, and the national capital region have also partnered with CORCAN to give federal offenders a second chance by learning a skilled trade and building a home that gives a low-income family their second chance.
The Canadian public is excited when we tell them what we're doing, and many are eager to support us with funds to enable us to grow these partnerships. Given the impact we have on government priorities for youth skills development and affordable housing, we look to governments at all levels to recognize these returns by investing in our ability to grow these programs.
Angelo DiCaro
View Angelo DiCaro Profile
Angelo DiCaro
2014-04-02 17:09
Good afternoon, Chair, and members of the committee. My name is Angelo DiCaro. I'm a national representative working in the research department of Unifor, Canada’s largest union in the private sector. Unifor represents 305,000 workers across Canada in nearly every sector of the economy.
We appreciate the opportunity to address this committee today on an issue which we fear if not taken seriously or dealt with meaningfully, will have lasting consequences for Canadians.
On the surface the issue is about youth unemployment. There are more than 382,000 young Canadians between 15 and 24 who fall into this category. Ostensibly, the solution to the problem is to get these 382,000 people into jobs. However, and as previous presenters have expressed to this committee, the more accurate and poignant analysis lies deeper beneath the standard reported unemployment numbers.
Youth unemployment in provinces like Ontario has actually fallen since the recession, yet youth employment-to-population rates sit at historic lows, a reflection of young people simply giving up and exiting the labour market altogether. The underemployment rate, which is captured monthly by Statistics Canada and includes not just the unemployed but discouraged workers and those who would rather work full time but can only find part-time jobs, is another metric that digs deeper into the youth labour market challenges, but it is very rarely reported. Currently one in five young Canadians are considered underemployed by this measure.
Equally as important to this committee’s analysis must be the foundational restructuring of Canada’s job market over the past generation and its impact on young Canadians. Of the 17 major economic sectors in Canada’s economy as measured by StatsCan, seven have turned out net job gains for young workers since 1976. Of those seven, which include sectors like construction, technical services, business services, and recreation, the two that have yielded the biggest job gains are retail and wholesale trade and hospitality. In fact, today half of all young workers in Canada are employed in either of these two sectors. One generation ago that number was far more modest, about one in four.
The average hourly wage for young workers in the retail and hospitality sectors is less than $12. That's the lowest in our entire economy.
As a result of this restructuring, more young workers today find themselves in low-wage jobs than they did a generation ago. This is a serious problem as the expenses many young people are expected to bear, including housing rent and tuition, continue to rise. Average student debt in Canada, for example, is $37,000.
Young workers are also far more likely to work in part-time and precarious jobs today than ever. A generation ago, 21% of young workers held a part-time job. Today, that number has jumped to 48%, and most of that jump is accounting for young workers between 20 and 34 years old. Yes, some of this has to do with young Canadians staying in school longer, but much of it has to do with the quality of jobs on offer.
There’s a prevailing myth that young workers favour part-time work. In fact, since 1997 there’s been a 33% jump among young workers who voluntarily work part-time. However, the number of young workers who are involuntarily working part-time, and who cite business conditions as the reason why they can’t find full-time work, has risen over that same time period by 231%. That is seven times faster than growth in voluntary part-time work.
Is it any wonder more than 150,000 young workers today hold more than one job. Is it any wonder that nearly 43% of all young people in Canada still live with their parents, and that's compared to 27% in 1981.
This unchecked restructuring of our economy has created a more vulnerable generation of workers with poorer labour market outcomes than generations past. To be clear, I am not saying more factory jobs will cure what ails our country’s youth unemployment crisis. I am also not saying young workers should steer clear of working in the retail and hospitality sectors.
What I am saying is that the eventual recommendations this committee makes to improve labour market outcomes for young workers have to consider these deeper structural challenges. Part of the policy prescription must tackle the worsening quality of existing jobs in tandem with any proposals designed to bring more jobs to market.
We understand the committee's objective is to explore solutions to improve youth employment outcomes in Canada. We invite the committee to consider the following policy prescriptions in light of the evidence we've provided above. There are three that I have.
One, establish a national multi-stakeholder retail and hospitality sector work standards and training council.
Less than 15% of workers in precarious forms of employment receive employer-paid training compared to almost 60% of workers in more secure forms of employment. There is currently no active multi-partner—
My five minutes are up?
Denise Spitzer
View Denise Spitzer Profile
Denise Spitzer
2014-04-02 15:31
Thank you for this invitation.
I wish to highlight three issues that speak to what I believe essentially stems from a paucity of gender analysis with regards to immigrant sponsorship policies.
Firstly, I ask that we reflect on the language used to describe this issue. In much of the discourse women are described as vulnerable, as victims, and in need of protection. However, people are not inherently vulnerable. They are instead made vulnerable by material, political, and socio-cultural conditions. Therefore, we need to ensure that women or any other potentially marginalized group are not compelled to bear undue negative impacts as a result of policies and practices. If we focus on the ways to highlight women's agency and their right to autonomy throughout the immigration process, we would be better able to build on women's capacities and capitalize on what they can offer to Canadian society.
Secondly, I ask us to consider how the structure of spousal sponsorships ultimately creates and/or reinforces dependent and unequal relationships that belies Canada's commitment to gender equality, as the policy endows one person, usually the male in heterosexual couples, with power over his partner. Amongst immigrant couples, men are most often the designated principal applicants, even if both partners have similar professional backgrounds. Women are relegated therefore to the status of sponsored spouses. As the principal applicant's training and work experience anchors the family's case for immigration, it often follows that any investment required to obtain Canadian credentials, be it in terms of finances or time, is channelled towards men's careers. In essence, the program reinforces an outdated model of single—again, generally male—breadwinners and dependent spouses.
Under these circumstances, women are often launched on a spiral of downward mobility characterized by deskilling and a loss of social status. Once again, we lose out as a society when these individuals are unable to realize their full potential. I acknowledge that some of these gender disparities may be pre-existing. However, I still maintain that the framework of spousal sponsorship helps to naturalize and reinforce inequities.
Thirdly, I'd like us to consider the case of women as sponsors of family members and how in fact these regulations can operate to make them vulnerable in this capacity. We note that foreign-born women, particularly from non-European source countries, experience the most precipitous decline in professional and economic status as compared to other groups of newcomers. The threshold income required for family sponsorship has risen, thereby disproportionately excluding women from being joined by family members.
I'll share with you some of the research I've conducted with immigrant women who came to Canada under the auspices of the live-in caregiver program, the LCP, to illustrate this point. After completing their obligations under the program, former LCP workers generally find themselves in low-paying jobs regardless of prior training or education. For example, in our study over 40% of former live-in caregivers earned between $10,000 and $19,000 annually, and this was at a time when individual Canadians earned approximately $41,000 or more.
What does this relative impoverishment mean then for female immigrants, such as a single woman who wishes to bring her parents to join her in Canada? Is she able to meet the income threshold required for sponsorship? What does it mean if she cannot?
Social support including the informal, emotional, material, and instrumental support provided by family and friends is a well-documented determinant of health. Thus a presence of family and enhancement of social networks are vital to the well-being of newcomers to Canada and this sense of well-being is truly critical to the integration process. The loss of social support and social networks is even more evident when women are unable to be reunited with adult children. For example, former live-in caregivers who have children are often most anxious to be reunited with them, particularly as most if not all were separated from them for many years prior to moving to Canada.
The age at which a child is considered an independent adult and therefore ineligible for sponsorship is critical here and many have found themselves racing against the clock to earn sufficient funds to bring their children to Canada or to keep funding their post-secondary education to maintain their eligibility for sponsorship. Yet as we know, application processing can take years and funds can be tight as women try to keep their young adult children in school while coping with myriad other expenses. In a number of cases, a woman who has been apart from her children for more than a decade has then been compelled to tell her eldest child that he or she cannot join the family, after waiting patiently and eagerly for that day for many years.
The ensuing stress that these women face has long-term health effects and potential consequences for immigrant integration. Indeed, how does one feel part of a society that has made one choose between their children? I recall interviewing a women who had been granted political asylum in Canada following the 1973 coup in Chile.
Twenty-five years later she was still distraught that she and her husband had to leave their 19-year-old daughter behind in Argentina until they were able to successfully petition to have her join them. They were certainly grateful for the refuge, but her relationship with her daughter never healed. When I spoke to her daughter who was by then in her forties, she still wept from the pain of separation that she experienced as abandonment.
The idea that children over 18 are meant to be independent of their families is a western construct predicated on notions of individualism. However, in many cultures family members are interdependent, and adult children play a vital role in sustaining a household, both materially and in terms of other forms of support. The presence of family members may provide the kind of loving support that would in the long term be beneficial to the health, well-being, and long-term stability of an immigrant, her family, and the community at large—
Denise Amyot
View Denise Amyot Profile
Denise Amyot
2014-04-01 15:32
Thank you, Mr. Chair.
Good afternoon, everyone.
Given that the youth unemployment rate is twice as high as the national average and that there has been little improvement since the economic recovery, the Government of Canada must play a leadership role in maximizing youth employment opportunities.
The Association of Canadian Community Colleges, which I represent, is the national and international voice of 133 publicly funded colleges, institutes, and polytechnics serving over 3,000 urban, rural, and remote communities from coast to coast to coast.
Targeted measures for disadvantaged youth, I would like to begin by recommending targeted measures to increase the employment opportunities of disadvantaged youths: those neither employed nor in education, aboriginal youth, and those with disabilities. We need to increase participation in post-secondary education and the labour market by enhancing existing federal programs including increased support for the post-secondary support program administered by Aboriginal Affairs and Northern Development Canada to ensure all eligible first nations and Inuit students have access to funding.
Second, we need to increase grants through the Canada student loans program targeted for youth from low-income families, youth with disabilities, and for non-status and non-Métis youth.
Third, we need to strengthen the capacity of aboriginal organizations supported by the aboriginal skills and employment training strategy to improve career counselling services, pre-employment, and essential skills training. We also need initiatives to support upgrading as well as science and mathematics bridging programs for youth who have not completed high school or who lack the skills and prerequisites for post-secondary programs. As the committee knows, most of the new jobs created mean that you need to have science and mathematics in order to be eligible for that education. Science and math are the foundations of many occupations in key sectors such as construction, IT, health, engineering, and the environment. Canada must do more to encourage a science culture in youth. We need to increase the outreach capacity of colleges and institutes to engage disadvantaged youth and facilitate access and pathways into upgrading and post-secondary programs, including apprenticeships.
As to supporting underemployed youth, targeted measures are required to improve opportunities for the nearly 450,000 youth who are poorly integrated into the labour market. Thirty-three national industry organizations and ACCC have come together to form an industry-college coalition to address employment and innovation challenges. Industry organizations emphasize the need for better labour market information and the importance of dispelling the myths about the value of college-institute certificate, diploma, degree, and post-graduate programs. Too often college and institute credentials are seen as second best, which we all know is not the case.
All college institute programs are developed with input from employers to ensure graduates have the skills employers seek. Underemployed youth would benefit from knowing about the 660 post-graduate certificate and diploma programs offered by 56 colleges, institutes, and polytechnics that are all our members. These are highly specialized employment-oriented one-year programs. These programs require a post-secondary diploma or bachelor degree. What is very interesting is that our student population now includes 22% of students who have previously attended university.
To address the needs of underemployed youth, ACCC recommends that the federal government take the lead in improving national labour market information on both the supply and demand side so that youth have the information on the full range of post-secondary education options available to them as well as on the careers, the salaries, and how quickly they can expect to find a job.
Next is enhancing employability through essential skills. Essential skills are key to improving access and employability. ACCC essential skills projects funded by ESDC completed in 2013 demonstrated the value and impact of essential skills training. Seventeen college pilot projects assessed learners and workers across Canada—
View Lise St-Denis Profile
Lib. (QC)
Do you have any statistics on the number of people from low-income areas who are in immersion programs?
Graham Fraser
View Graham Fraser Profile
Graham Fraser
2013-12-02 16:04
I do not have any numbers on that. The best source of statistics on immersion is the annual report of Canadian Parents for French. This organization does very patient work in collecting data on various aspects of immersion.
Here is an anecdote. In west Toronto, one of the parents told me that the school board district to which his children's school belonged was organized along a north-south axis. He said that children living in the low-cost housing in the Jane-Finch neighbourhood took long trips by bus every day to go to an immersion school because their parents know that bilingualism is a factor in advancement. As to whether this happens elsewhere, I cannot tell you.
You touched on an important point. The immersion system is often criticized as being only for the elite even though it is funded by taxpayers. This is a frustrating criticism. If students in an immersion program have learning disabilities that have nothing to do with the language of instruction, the school's first reaction will be to pressure the parents of these children to take them out of the program. After a few years, in grade 7, grade 8 or grade 9, all children with learning disabilities are placed in regular classrooms. Because of decisions made by the schools, only those students who excel will be in an immersion program, because those who did not will have been excluded from the system. The system is then criticized and said to be for the elite only. I find this criticism deeply unfair.
View Tyrone Benskin Profile
As part of the potential new programs you spoke of in your speech, do you think the federal government could help in creating programs that make this type of access outside of your walls, for lack of a better way of putting it, more accessible?
Valérie Leclair
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Valérie Leclair
2013-12-02 17:29
I believe it is an area in which the federal government could provide some support and that absolutely would benefit all students in Canada. I'm thinking especially of students who come from lower socio-economic homes, where they're not able to afford outings such as this.
I'm thinking of the SEVEC program and how we have sent some of our classes on the SEVEC programs and how they've come back. Some of those students would never have had the opportunity to do that on their own with their parents or to go on an exchange trip or just a trip to Quebec.
Situations where the federal government could provide some support in that area definitely would help.
View Raymond Côté Profile
As for the general preferential tariff, I would like to discuss another topic—the regressive aspect, economically speaking, of those tariff increases.
Let's take the example I have already used in committee and in the House. When I was a boy, my geometry kit was made in Canada. That's a good example. Today, I think it's impossible to find such a kit made in Canada.
Mostly low-income households will be hit hard by those tariff increases. Clearly, this is a matter of proportion.
Do you want to comment on the regressive aspect of those tariff increases?
Mike Moffatt
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Mike Moffatt
2013-05-21 11:23
Consider a coffee maker. A low-income household is probably going to buy an entry-level coffee maker that is built in China. Somebody who makes six or seven figures a year is probably going to buy an expensive espresso machine built in Switzerland that is not affected by these changes. So these changes are really focused at low-end, sort of plastic goods, which are more likely to be purchased by low-income households.
So absolutely, there is a regressive element to this.
Stephen Richardson
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Stephen Richardson
2013-04-30 8:47
Thank you, Mr. Chairman.
I'd also like to thank the committee for the opportunity to appear here this morning.
In my opening remarks, I will briefly provide some context for the issue of income inequality and comment on some measurements.
The first point of context is that income inequality is a natural result of free markets that price goods, services, and capital according to supply and demand accounting for risk. Redistribution of income through taxes, transfers, and subsidies is the way in which governments act to reduce income inequality. Note, however, that redistribution mechanisms can have negative effects on the economy—for example, where high levels of taxation on business or skilled labour are used. Redistribution funded by government borrowing can also cause issues in terms of inequities between generations.
The second point of context is that income inequality is inherently a relative concept, and measures of it in a given population show only relative relationships. For example, a rich country producing a large, absolute amount of income could have a higher level of income inequality than a poor country producing a small amount of income, yet a sizable proportion of the persons living in the poor country would improve their economic welfare by living instead in the rich country.
The third point of context is that the determination of a correct or appropriate level of income distribution as a goal in itself is based on normative judgment derived from an ethical or a political framework. For example, at the political extremes, certain forms of socialism have a goal of absolute economic equality, while certain forms of libertarianism will consider very high levels of inequality as appropriate. Typically developed economies with free markets accept a position in between these extremes.
Though statistical or economic analysis cannot determine a correct level of income distribution, it can assist in measuring income inequality. These measurements of income inequality in a population can be used to benchmark inequality and redistribution against both historical and international comparisons.
Gini coefficients are a commonly used measure of income inequality in a population. A Gini is a measure of statistical dispersion, that is, the unevenness of a variable over a population, with a Gini coefficient of one representing complete unevenness—that is, inequality—and a Gini coefficient of zero representing complete evenness—that is, complete equality. Gini coefficients in between obviously represent intermediate amounts.
Now I'd like to refer to two figures that I think can be found in the materials that were handed out to members ahead of time.
This is a chart that shows the Gini coefficients for income distribution in Canada for all families from 1976 to 2010. The data is from Statistics Canada. The blue line shows the inequality measured by Gini coefficients pre-tax and transfer, that is, before any redistribution. The red line shows the reduced inequality after taxes and transfers are taken into account, which in effect shows the amount of distribution.
My figure 2, which I'm not going to put up at the moment, because I would use the rest of my time trying to get these two computers to do it—I'll put it up immediately after—just shows the difference between those two lines over time.
Figure 1 indicates that post-tax and -transfer, income inequality in Canada that takes account of redistribution increased during the time period from 1976 to 2010 by about 8.5% in total, but with virtually no increase in the last 10 years measured.
Figure 2 will indicate that the scale of redistribution of income by government increased during the same period by about 27%. Although it did drop from its peak in 1994, the scale redistribution has been relatively stable for the last 10 years measured. Moreover, as measured by the OECD—and this is not on the slides—the Canadian post-tax and -transfer income inequality for the late 2000s of 0.324 is very close to the OECD average of 0.314, compared to, for example, that for the U.S., which is much higher at 0.378.
What are my public policy conclusions? In my view, these historical and OECD benchmark comparisons suggest that the Canadian system of income redistribution is working well, and there's no reason for public policy in Canada to target income inequality as a general issue. However, in order to maintain and improve equality of opportunity and living standards for Canadians, continuing attention should be paid to more precise targeting of existing and new policy initiatives using existing resources that can specifically assist lower-income Canadians. For example, consideration could be given to reducing the phase-out threshold for OAS, which is currently available unreduced up to $69,562, and not eliminating it completely until the person has an income of about $112,000 a year. Using these cost savings could increase the benefits to lower-income Canadians who require this more.
There are other examples, but I think I've probably used my time, so I'll stop.
Thank you for your attention, and I'll be prepared to take questions.
Armine Yalnizyan
View Armine Yalnizyan Profile
Armine Yalnizyan
2013-04-30 9:08
I thank you very much, Senator...not yet “Senator” Brison, right?—
Voices: Oh, oh!
Ms. Armine Yalnizyan: —for bringing forward this opportunity. I thank very much the whole process that permits us to talk about what is perhaps one of the defining issues, not only for Canada but around the world, on the future of democratic capitalism and globalization.
Don't ask me, ask the World Bank what they think about rising inequality. Provocative words coming out of the World Bank are that perhaps rising inequality is increasingly threatening and undermining democratic capitalism.
The International Monetary Fund, again, no left-wing pinko organization, says that the more inequality you have, the shorter the spells of growth you have, the more volatility you have in markets, and the less overall growth you have over a sustained period.
Internationally referenced Canadian academic Miles Corak, from whom you've heard, has noted that there is a tight correlation between the degree of inequality in society and the degree of mobility, both social and economic, for the next generation, which is clearly something that violates the very principles of meritocratic societies. If you think these trends are only happening elsewhere to other people, think again. The same things are happening in Canada.
The Conference Board of Canada has warned that growing income inequality left unchecked in this country will lead to lost potential, increased costs, squandered opportunity, and potential social unrest. Those are words from the Conference Board of Canada.
Data from the Organization for Economic Co-operation and Development show that whereas Canada, from the mid-1980s and mid-1990s, bucked the international trend towards rising income inequality, since then Canada has slipped most rapidly down the international rankings, from 14th place to 22nd place, from above-average to below-average equality, while at the same time, 15 of 34 OECD nations reduced inequality.
The University of Toronto's Centre for Urban and Community Studies has launched path-breaking research showing how income inequality leads to people living in more rich neighbourhoods, more poor neighbourhoods, and fewer middle-class neighbourhoods. If you think you can predict poverty by postal code, you know you're creating problems, and it creates problems for the way we raise our kids and the opportunities that are hard-wired into their environment.
Between 1981 and 2010, the economy more than doubled, in inflation-adjusted terms, but poverty has been on the rise.
I ask you to look at the first table I've distributed for you, the “Percent of People with Incomes below the Low Income Measure”, in after-tax terms, by age group. You will notice that seniors' poverty rates are increasing, working-aged adults' poverty rates are increasing, and children's poverty rates are higher today than they were in 1989, when all parliamentarians stood together and said that child poverty in a nation as rich as Canada was a travesty and it needed to be eliminated by the year 2000. It has been pretty much eliminated in Denmark, Sweden, Norway, and Finland. We know this can be done, should we wish to do it.
I ask you to look at the second chart I've distributed, which shows the percentage of Canadians in low-, middle- and high-income classes. The group of people earning a middle-class income, between $30,000 and $60,000, has been shrinking over time. The group earning less than $30,000 is higher today than it was in the mid-1970s—and this is all in inflation-adjusted terms—and the group earning above $60,000 is rising. This leads to, of course, who at the top is earning the most. Professor Veall indicated that those in the top income group have seen the biggest share of income growth.
I point you to my third and last chart in the presentation, which shows that the top 1% took 32% of all income gains in the decade before the crisis. That, ladies and gentlemen, is four times the amount of a similar period of growth in the 1960s and twice the amount of the Roaring Twenties.
What can the federal government do? You can introduce direct income measures. We've mentioned some of these today: the working income tax benefit, refundable tax credits, enhancing the child tax benefit, the OAS or the GIS, or more sweeping reforms such as the guaranteed income supplement. Also, improving access to EI is important for our macroeconomic strength, so that we can more recession-proof in future.
If you don't choose to do direct measures, you could indirectly support the provinces and territories, eight of which have committed themselves to poverty reduction strategies. The federal government should support these initiatives. You seem to like experimentation at a provincial level, and the alternative federal budget has outlined how such a plan could take place.
In terms of tax measures, we've talked a lot about what could be done to raise taxes, but enforcing the rules that exist requires enhancing, rather than cutting, the staff at the Canada Revenue Agency and following through on prosecution of tax evasion.
I would recommend also that you avoid expanding the tax free savings account, and do not introduce income splitting for families with young children, both measures the parliamentary library has shown increase disparities, rather than reduce them. You can improve the supports and services, as you have done in measures such as Pathways to Education funding, and you can target additional revenues raised or not forgone by alleviating the pressure on the middle- and low-income households through child care, transit, housing, and post-secondary education.
Can I just close by saying that the most immediate concern is the temporary foreign worker program?
View Mike Sullivan Profile
Mr. Stoney, you talked about inappropriate transit choices, or inefficient transit decisions I think were the words you used. We've seen some of that when our city of Toronto went back and forth over whether or not to build the subway, some of it driven by provincial politicians, some by municipal politicians, but we've also had federal politicians put their oars in the water.
My counterpart on the other side talked about the Canada Line. As I remember the story, the Canada Line has just recently been found guilty of not paying their workers enough when they had Costa Rican and Ecuadorian workers in Canada being paid $3.57 an hour to build the Canada Line. On this side of the House, we don't want a P3 that is finally paying its workers the right amount of money 11 years later, and only those they could find. They were temporary foreign workers and they're back in their countries. It's only through the actions of one of the unions out there that they managed to get a multimillion-dollar settlement for these individuals.
We're concerned that P3 is a euphemism for cheap labour, and we're not in favour of reducing the Canadian standard of living by using cheap labour. Is that what P3s really mean?
That question is for either of you.
Paul Moist
View Paul Moist Profile
Paul Moist
2013-04-25 16:48
They can mean that, and I hope they don't.
Dr. Loxley quotes Larry Blain, the former head of Partnerships BC. They only get funding for Partnerships BC—and they helped to consider the Canada Line—if they get P3s. That's how they get their funding, so it's not an arm's-length, sober second look. Larry Blain said that public sector comparators won’t do you much good anyway because by playing with discount rates and so-called risk transfers he can make the public sector as bad as he wants to, to make the private sector look good.
Through the chair, as the bottom line, I would recommend that any member of this committee go to the FCM convention where there are 2,000 local councillors and mayors, folks from across Canada. We're there every year, and we're not big players there. We have a booth. We have people coming up to talk to us. These politicians are under immense pressure to fix up their towns and cities, and they're quite open to a collaborative way to do that. They don't want to be told how to do it but that's the way many are feeling, way beyond the city of Regina.
Daniel Muzyka
View Daniel Muzyka Profile
Daniel Muzyka
2013-04-25 9:09
Thank you, Mr. Chairman and committee, for inviting me.
We submit that this is an issue that is important to review and monitor and to create a public policy framework around. My comments and the data behind them can be found on our website, in a section called “How Canada Performs”.
How is inequality measured? There are three ways.
One, the Gini coefficient, which I'm sure you've heard about, ranges from zero to one, where zero is perfectly equal distribution of income. Canada ranks 12th out of 17 peer countries on the Gini index, with number 1 being Denmark, and the worst performer, number 17, being the U.S. As we did, 12 of 17 peer countries experienced an increase in the Gini coefficient from the mid-1990s. The countries with the lowest Gini coefficients during that period, Sweden and now Denmark, have either implemented or are looking at measures to increase their Gini coefficient.
The second way to measure it is to divide the population of income into groups such as fifths, or quintiles. The facts are that the largest gain has been seen in the top quintile—something that's been noted before—and the lowest increase has been in the third or middle quintile. The middle class is truly being squeezed.
The third way to calculate it is to calculate the gap in average income between, let's say, the richest 20% and the poorest 20%. As is also the case for most of our peers, the gap in Canada is growing. This is due largely to technology and globalization, but also to tax policy.
Because of the use of different measures, income inequality can be open to different interpretations. But it is clear under all measures that inequality increased in Canada during the 1990s, something that has happened with a majority of our peer countries. We are higher than we used to be, but we are somewhere in the middle of our peer group, and we are not getting worse. Nor do we have the extent of the issues being raised in the fairness debate by our neighbour.
There are two other factors, often raised in any discussion of income inequality, that complicate discussion of the issue. First is income mobility. The ability to move between income ranks is often raised in a discussion of inequality. The second, absolute versus relative incomes, is usually a discussion about how a rising tide raises all boats.
Is income inequality really an issue in general? Experience and objective research tell us that it can be if it rises too high, but there has to be some inequality for markets to function and to create incentives for effort and investment.
The negative impacts of high levels of inequality include a break in social cohesion and a rise in political instability, a consequential decrease in foreign and domestic investment, a decrease in economic growth potential—and this is from a recent IMF study—and a waste of human potential. If lower-income individuals have more limited access to education, skills training, and employment, we will not be fully utilizing the skills and capabilities of all of our citizens. Another issue is a more limited ability by individuals in lower-income ranks to apply their skills to pursue entrepreneurial opportunities. Finally, there is a limiting of the government's ability to deal with economic shocks by raising taxes or cutting spending.
There are also arguments that higher levels of inequality support economic efficiency, innovation, and entrepreneurship. Does this mean we don't have to worry about inequality? No. We want to maintain good mobility and we want to worry about structural inequality, because not everyone has the means or access to move between income groups. But mobility does not remove all of the other negative impacts of higher inequality, including those on growth potential, use of skills, etc.
Are we where we want to be? Should we actively address this issue? The answer is that we probably should. On balance, we can do a little better. But like most economists, I have a second opinion. Do it in a forward-looking way rather than through an immediate structural shift. Acting precipitously has more downside than upside. The IMF rightly warns that poorly designed efforts to reduce inequality could distort incentives and undermine growth. One needs a win-win policy implemented over time.
How could we go about it? Are there some levers? You've heard a number of them today. Invest in education: early education, primary education, secondary education, and post-secondary. You have to address all of them. Invest in early childhood development. Recent research strongly suggest there's a huge payback. Implement active labour market measures to boost employment. Improve access to capital for those in lower-income ranges—microfinance, for instance. Remove the welfare wall built into the tax system, and eliminate distortions and improve efficiency in the tax system.
What are the conclusions? Under all measures, inequality increased in Canada in the 1990s. We are higher than we used to be. Again, we're somewhere in the middle of the pack, and we're not getting worse. This is an issue that deserves close attention. Inequality can undermine Canada's economic performance and prevent individuals from reaching their full potential. Numerous policy levers exist and can be refined to actively address the issue.
Thank you very much.
Craig Alexander
View Craig Alexander Profile
Craig Alexander
2013-04-16 9:02
Thank you very much.
Thank you for the opportunity to speak to you today on this important issue.
I think one of the core issues is that across the entire industrialized countries, we've been seeing rising income inequality. This is a product of the capitalist economic system, which has been demonstrated to be the most efficient system for generating a rising standard of income. The challenge is that the economic model does not create equal opportunities for all. That's where there is a role for public policy to play. This is why we have a progressive tax system in Canada. This is why we have the social security system.
Now, in terms of economic literature, economics has traditionally focused on income inequality in terms of playing down its role as a problem. It tends to focus on it in terms of an incentive to work and invest, or the product of uncertainty around income and volatility of income. However, like most things in life, excess brings consequences and negative, very powerful forces. Moderate income inequality actually can be healthy. Excessive income inequality can actually create enormous social, health, and economic strains.
A growing body of economic literature emphasizes this. A number of books that have been written, including The Spirit Level and a variety of other works, emphasize the negative forces that are created by income inequality. One of the core challenges with a lot of these studies is that correlation isn't always causation. Nevertheless, even when you look at work done by the IMF, it does argue convincingly that elevated income inequality can be economically damaging.
In the wake of the financial crisis, it isn't surprising that we're seeing increased attention focused on this as a pressing issue. If you look at the unemployment rates in Europe, if you look at the poor labour market outcomes in the United States, you can understand why this is a growing and pressing issue.
In Canada the story about income inequality is one that's a little more nuanced than what we're seeing in some of the other nations. If we look at it in relative terms, income inequality in Canada is the second lowest in the G-7. Canada has relatively good social mobility. It's the highest in the G-7. But it is true that income inequality in Canada has in fact been rising.
When we look at the Gini coefficient, which is basically the best overall benchmark of what's happening to the economy as a whole, you can see that income inequality was rising in the seventies and eighties in a very gradual rising trend. Then we had a big jump in inequality in the mid-nineties, which seems to correlate with when governments were tackling their deficits. In the mid-nineties we saw a big cut in transfers to individuals, and that seems to have created a very sharp increase in income inequality.
After the nineties, we see that the Gini coefficient is broadly flat. It might have a slight upward slope, but it's extremely small. It's almost negligible. This is surprising, given the public attention on income inequality.
As Diana Carney emphasized, the Gini coefficient isn't very good at telling you what's happening at the tails of the distribution. There's no question that top income earners are receiving a greater share of income. The top 1% has gone from about 7% of national income in the eighties up to 11% of national income in 2010.
Work done by people like Michael Wolfson has emphasized that if you actually look at it, half of the increase in income at the high end of the income scale is actually not just the 1% or the 0.1%; it's actually the 0.01%. So what you're really talking about is a very small number of individuals getting a larger share of income.
There is also a broader structural story taking place, and that broader structural story is around the fact that the economy is shifting towards more high-skilled, higher-waged jobs. This is a healthy outcome for the Canadian economy, but it does mean that it can lead to higher income inequality.
I would stress that I think the focus really should be on removing barriers to opportunity for people at the low end of the income scale. If you look at the bottom 20% of income earners, they earned a market income of only $3,100 in 2010. Our social security system and tax system, transfer system, will bring their income up to $15,200, so it is working to try to reduce income inequality and provide support, but understand: try living on $15,200.
What we have is a problem at the low end of the income scale that there are barriers to growth. We have 9% of Canadians living in poverty. That's three million Canadians. It is costing the economy a lot of money. In Ontario the estimate is that it takes $32 billion to $38 billion a year to basically combat poverty and forgone tax revenues.
The numbers of seniors and children in poverty has actually diminished because of actions taken by government, but at the same time the percentage of poor—they are classified as working poor because they have someone working in the household—is now 40%.
There are areas of weakness or vulnerable populations—aboriginals, recent immigrants, people with disabilities—but I would caution about looking just at silos. We have real, fundamental problems with high marginal tax rates on people coming off income support programs: an inability to accumulate assets; poor literacy skills and essential skills, which are the foundation for growth, and many workers lack the skills that businesses need.
I'll stop there because I've gone over my time. Thank you very much.
Yanick Labrie
View Yanick Labrie Profile
Yanick Labrie
2013-04-16 9:57
Thank you.
I'll do my presentation in French, if I may.
First, I would like to thank the Standing Committee on Finance for giving me an opportunity to testify before you on behalf of the Montreal Economic Institute about inequality, a very important area.
Last year I wrote a research paper for the Montreal Economic Institute in which I explained why the income inequality phenomenon is probably less of a concern than many groups frequently imply.
My remarks today are mainly based on that research which I published in May of 2012.
At the time, I reported on five factors that put inequality in perspective. Today I will focus on three of those factors.
First, an increase in inequality can quite often happen at the same time as a decrease in poverty rates.
This is exactly what occurred in Canada over the past few decades. In fact, from 1976 to 1995, a period during which income inequality remained rather stable, the average Canadian household income after tax amongst the poorest 20%, in other words the poorest fifth of the population, barely increased by 4%, taking into account inflation.
Conversely, from 1995 to 2010, a period, according to many, marked by an increase in income inequality and a decrease in government redistribution measures, average income after tax for the poorest Canadian households increased by 25%. That is not insignificant. Remarkably, the number of individuals falling below the poverty line, as measured by Statistics Canada, decreased by more than 60% over the course of that period.
Second, economic mobility is very pronounced in Canada, and even more so for low-income individuals.
Statistics Canada often publishes studies on this issue. One of their last studies was about how incomes for the same households evolved over a period of five years. The analysis of this data shows that the greatest upward economic mobility occurred amongst the poorest 20%. In fact, 43% of those individuals who were in the lowest income quintile in 2005 were in a higher income quintile before the end of that five-year period.
The situation is also very encouraging for economic mobility between generations. In fact, a recent study showed that less than 16% of sons whose father was amongst the poorest 10% remained in that category once they reached adulthood.
Third, disparities in living standards are much lower than the data on income gaps would suggest.
Several economists have in fact shown and underscored the fact that income is not necessarily the best indicator for comparing living standards between different population groups. To the extent that the main concern of people is to be able to obtain goods and services that allow them to maintain an adequate living standard, using consumption measures is more accurate than income measures.
For example, people who are retired have perhaps lower incomes but they also have assets and little debt. The have acquired assets that allow them to maintain a significant standard of living. In that example, their living standards are much better than income data would suggest.
According to Statistics Canada figures, not only has consumption inequality over the past 30 years been less than income inequality, but furthermore it has changed very little over that period.
In conclusion, I would like to recall to the committee that in a survey of the Canadian population in 2009, more than two-thirds stated that they felt it was more important to have a fair opportunity to improve one's economic condition rather than to reduce inequalities.
Inequality can be a concern when a large number of citizens feel that society is unfair and that social mobility is so weak that there is no point in trying to improve one's lot. However that is not the case in Canada. My analysis shows that on the contrary the phenomenon of inequality is a much lesser concern, and economic and social mobility is much greater than several groups are suggesting.
Thank you for your attention.
Jason Clemens
View Jason Clemens Profile
Jason Clemens
2013-04-16 10:02
Thank you, Mr. Chairman. And thank you for the invitation to present before the committee today on an important issue.
I just want to touch on four aspects of the paper for which I was called before the committee. My paper dealt with nine issues, but due to the time limitations I'll deal with those four.
The first is that income inequality is indeed an important issue that we should be concerned with. Unfortunately, more often than not, I believe, it's grossly oversimplified, and by grossly oversimplifying it we risk solutions that are detached in varying degrees from the real underlying problems.
Secondly, we really need to understand some of the measurement problems and challenges we have with respect to measuring income over time. Related to that is an issue that's overlooked all too often, which is a definitional issue. Depending on how we define the income we want to measure—if it's pre-tax or post-tax, whether we adjust for household size over time, or, as my colleague from MEI has mentioned, whether we look at consumption versus income—we can get very different results with respect to measuring inequality. They're all correct, and this is the important point: all of those measures are correct, but they define “income” or “inequality” quite differently. So we have to understand the role of those differences.
I would certainly point the committee to an important paper by Burkhauser, in the United States, on this very issue. In Canada, for example, depending on how you measure, you can go from a decile measure of inequality from 6.5 all the way up to almost 14, which is a range of more than 100% in the difference between decile inequality. So as I say, I think we have to be aware of these definitional roles when we talk about inequality.
Thirdly, there's mobility. I fundamentally don't believe we can talk about or understand inequality without talking about mobility. Again, my colleague from MEI and my colleague from Fraser will speak about this.
Then finally, Mr. Chairman and members of the committee, I think unfortunately too often we conflate the discussion of low income with inequality. I think some of the solutions raised with respect to inequality fundamentally miss the issues with respect to low income, and more particularly those Canadians who get stuck in low income. From a series of Statistics Canada reports we know that there are essentially three groups that look like they get stuck in low income over time. Those are single parents, individuals who fail to complete high school, and Canadians who, unfortunately, have drug and alcohol abuse problems. It strikes me that some of the solutions we talk about in a very narrow sense when we think about inequality really miss the nuances of these three groups and how we could, from a social policy perspective and an economic perspective, more directly deal with the underlying problems of these three groups that get stuck in low income, which to me is a much more important issue than the general issue of income inequality.
With that, Mr. Chairman, I'll cede the chair, so to speak, but those are the four issues I wanted to deal with in terms of my study.
Thank you.
Charles Lammam
View Charles Lammam Profile
Charles Lammam
2013-04-16 10:06
Thank you, Mr. Chairman, and my thanks to the committee for the invitation to appear today and speak on this issue.
I want to focus my remarks on a recent study that I co-authored, published by the Fraser Institute last year. It's called “Measuring Income Mobility in Canada”. To sum up my perspective, we can't have a meaningful discussion about income inequality if we don't understand the extent of income mobility in Canada.
One of the critical underlying assumptions in the inequality debate has been, and continues to be, that Canadians are stuck in the same income group year after year. If we pause and think about that for a second, it means that for the most part Canadians are born into a certain income group, where they live and die. Now that to me doesn't match up with common sense, nor does it match up with evidence. What we do in our report is we look at the evidence. What we generally find, when we think back to our own experiences, is that most of us follow an income trajectory such that we start off with a low income, mainly because we're young and we don't have education, skills, or work experience. Gradually, over time, as we gain these attributes, incomes increase. Incomes peak around middle age, around 55; as they approach the age of retirement, incomes start to fall. Of course, a lot of stuff happens in between. Some people may transition between jobs, they may lose jobs, or they may exit the labour force. But generally there's an upward transition in income until you're about in middle age, after which it begins to fall.
In our study, we looked at income mobility using historical data from Statistics Canada. We used both survey data and tax filing data. We looked at income mobility over various time periods—two five-year periods, a 10-year period, and a 19-year period. In the short term, over the two 5-year periods, we found that 50% of Canadians who were initially in the lowest 20% of income earners had transitioned outward from those groups. Sorry, I should state that in our study we broke up income earners into five groups of 20% income earners in each. Over the longer term, from 1990 to 2000, what we found was quite remarkable: 83% of Canadians who were initially in the lowest income group had transitioned to a higher income group. We found that 19 years later those same people, almost 9 in 10 of those in the lowest income group, had moved to a higher income group. It's not that they were just moving out of the lowest income group into the second or third quintile. We found that one in five who were initially in the bottom had actually made it up to the top 20% of earners; over two in every five had made it up into the top 40% of earners.
So our study reaffirms what we know from our own experiences. Where we were 5, 10, 20 years ago in income is not necessarily where we're going to be today or in the future. If we don't understand that people's incomes are changing over time, I think we can get misled by looking at snapshots of the income distribution, which is what most people do when they examine income inequality.
Those are my remarks. Thank you.
View Scott Brison Profile
Lib. (NS)
Thank you, Mr. Chair.
This speaks as well to the issue of fairness and the issue of growing income inequality and the importance that we as legislators consider the challenges and the plight faced by low-income Canadians, the people we ought to be most concerned about.
Theoretically, pension income splitting is something that sounds pretty innocuous, except when we consider there is a significant tax expenditure through pension income splitting and when we really consider who benefits from pension income splitting. We have been informed by witnesses, numerous studies, and experts in the area of retirement income and pension policy that the disproportionate benefit for income splitting in general goes to people with higher income.
I think it's important. We all represent people from all walks of life, and in the House of Commons we bring our own experiences as well as those of a lot of the people we meet with on Saturdays in our constituency offices across Canada and during break weeks. The people coming to see us on issues are people who are struggling, people who face real challenges.
We're struggling with budget deficits. The minister recently announced that he was going to miss another target and that the budget wouldn't be balanced until 2016-17, but now the Prime Minister has subsequently announced that the minister was wrong and we would be balanced before the next election. In any case, my point is that we do live in a period....
I have heard Mr. Van Kesteren sometimes say there are no free lunches, usually after members of Parliament have just had one here, but the reality is that tax revenues and the fiscal situation today are such that any decision that involves a tax expenditure has to be taken very seriously.
While I understand on the surface why pension income splitting would be supported overwhelmingly by tax planners, you have to ask yourself why. Who do tax planners work for? Typically the people hiring tax planners are people who make a fair bit of money, so it's not surprising that tax planners ought to support pension income splitting. What we should be looking out for at this committee are the people who can't afford to hire tax planners, the people who can't necessarily afford to hire professional accountants, the people who shuffle down to H and R Block and do their best to get their tax returns in but don't really have the resources to hire the sophisticated financial and tax advisory services that are hired by the well-paid people who tell us that pension income splitting is good. Pension income splitting is good for their clients.
The problem with this, Mr. Chair, is that it does involve reallocation of money from other areas. We heard from Ms. Glover, Ms. McLeod, Mr. Adler, and witnesses who called for tax reform. We have not had significant study of our personal tax system in Canada since the Carter commission changes of 1971.
Some people advocating tax reform were advocating it for building a fairer tax system and addressing some of the inequities and closing some of the loopholes and addressing those issues. Some others approached it from the perspective of competitiveness, but the reality is, Mr. Chair, at a time when we face significant budget deficits and significant challenges in balancing the books and also at time of rising poverty and rising income inequality, I question the judgment of the government and the decision of the government to go forward with pension income splitting. I just think there are better ways we can help low-income seniors.
Ironically, this government wants to take people on old age security and—
I'm sorry, I was just getting started, Mr. Chair.
View Scott Brison Profile
Lib. (NS)
Mr. Chair, I want to thank Ms. Glover for her advice. I appreciate very much her advice when she said that the Liberals have not supported the PRPP initiative. We actually have, but we've also expressed concerns that the PRPP initiative does not do what the government says it would do in terms of transforming Canada's retirement savings framework. The fact is that people who can't afford to participate in an RRSP are unlikely to benefit from a PRPP, which is why we have proposed an additional vehicle, a voluntary supplemental CPP.
There is a bigger concern that I have. This is a time when we know that income inequality is an issue that 75% of Canadians believe is an important one. We need to be designing our retirement vehicles and our public policy around retirement, particularly with the demographic shift that we are undergoing in such a way that it benefits low-income Canadians. What frustrates many of us is that every measure the Conservatives propose will benefit people who are actually doing fairly well. Income splitting is one of those areas.
In a perfect world, when books were balanced and you weren't dealing with ongoing deficits and challenges and having to cut social investment in areas of equality of opportunity, you could be frivolous in this, but at a time when these challenges are before us, I think we should be very careful in how we provide tax expenditures.
The PRPPs, like RRSPs, we support them, but we don't believe they go far enough in terms of addressing the significant gaps in the retirement savings framework for Canadians.
The other issue, Mr. Chair, is that if you look, going forward, at the measures the Conservatives take when it comes to retirement provisions, when it deals with low-income Canadians or lower income Canadians, they perversely go in the opposite direction. The change to old age security moving the qualification age from 65 to 67 is going to have a disproportionately negative effect on the lowest income Canadians. Forty per cent of the people who qualify for old age security make less than $20,000 a year. Fifty-three per cent make less than $25,000 per year. Yet, we are saying to those people when it comes to old age security that they have to wait another couple of years. For someone collecting GIS—and to qualify for GIS you have to qualify for old age security—it will cost that person around $30,000. Can you imagine taking $30,000 out of the pockets of low-income seniors at a time when you are proposing income splitting and PRPPs? Nobody at this table can benefit. The disproportionate benefit will go to people who already have some retirement choices.
Contrary to what Ms. Glover said, we do support the PRPP as an additional retirement vehicle, but we do not think it actually addresses the bigger challenge, and that is retirement security for low-income and lower middle-income Canadians, which in a civilized Parliament we ought to be most concerned about, the country's most vulnerable. The Conservatives may have figured out that's not where their votes are so it doesn't matter, but I think it does matter. You don't just create public policy around the people who are voting for you.
In terms of Ms. Glover's other advice to us—
Kim Pate
View Kim Pate Profile
Kim Pate
2012-11-01 15:30
It would be my pleasure. Thank you.
Thank you very much for inviting the Canadian Association of Elizabeth Fry Societies to present to you. I'm happy to be here with a long-time colleague and friend, Sharon. We've known each other since Alberta days.
I also want to say that I come, as you know, representing an organization that works with marginalized, victimized, criminalized, and institutionalized women and girls.
I will cut right to the chase on this. We have two concerns with Bill C-37.
One is that we know women form the fastest-growing prison population. The majority of them are in prison for poverty-related offences: they have tried to negotiate poverty. Our significant concern is that Bill C-37 will only exacerbate that issue, particularly when you're talking about women who are single moms. The majority of the women in prison are single moms, and most were the sole supports for their children before they went to prison, women trying to support themselves and their children living in poverty.
The reality of having a mandatory surcharge also flies in the face of the Wu decision of the Supreme Court of Canada in 2003, which clearly said that it is certainly appropriate, in a situation in which a default of payment of a fine—and by extension a victim surcharge—occurs because someone chooses not to pay, to be looking then at the potential for a far more serious penalty, but that a genuine inability to pay a fine should not be a proper basis for imprisonment. By extension, the same argument would apply similarly to a victim surcharge.
So we would encourage you to reconsider this and to allow there to be judicial discretion to examine the ability to pay, rather than see us end up defaulting to a situation we have been in, and to which arguably we're heading with many women in the prison system, such that we end up with prison essentially being debtors' prison, where people are put because they cannot afford to pay the penalty, and not because of an unwillingness to pay the penalty or to pay a victim surcharge.
When we know that the majority of the women—91% of the indigenous women in prison, 82% of women overall—have histories of physical and/or sexual abuse, talking about a victim surcharge to assist victims, when these women end up in custody largely because of the lack of resources in such other parts of the community as social services and health care, particularly mental health care, seems highly.... I would suggest there will be some section 15 and some human rights challenges.
But also, it seems morally problematic to be talking about more individuals being in prison, largely because they can't pay, at a huge cost to the Canadian government. The Parliamentary Budget Officer has estimated that it costs $343,000 per year to keep one woman in federal custody, and provinces range, depending on the range of services and what is costed in, from a minimum of $30,000 of cost up to in excess of $200,000. When we're talking about those kinds of costs, to jail someone for non-payment of either a fine or a victim surcharge seems counterproductive at best.
We would respectfully urge you to look at either not passing the legislation or, in the alternative, amending it to ensure that the provision of failure to pay....
We would also urge that you seek an accounting from the provinces and territories as to how they're spending their victim surcharge moneys now. My understanding is, and the background legislative summary for this prepared by the Library of Parliament indicates, that it seems unclear which provinces and territories actually are requesting the money. It's certain that some are requesting increases in victim surcharges, but what is very unclear is how that money is currently being spent. It strikes me that it behooves all members to know where that money is going and how it's being spent before we start imposing more fines that will likely cost taxpayers even more money and arguably will not assist victims, if in fact these resources are not going to the sorts of supports that will prevent people from being victimized in the first place and not necessarily to providing direct services in the second place.
Thank you very much.
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