Proceedings of the Standing Senate Committee on
Social Affairs, Science and Technology

Issue 21 - Evidence, May 3, 2007


OTTAWA, Thursday, May 3, 2007

The Standing Senate Committee on Social Affairs, Science and Technology met this day at 10:47 a.m. to study on the impact of the multiple factors and conditions that contribute to the health of Canada's population — known collectively as the social determinants of health; and to examine and report on current social issues pertaining to Canada's largest cities.

Senator Art Eggleton (Chairman) in the Chair.

[English]

The Chairman: As we continue our study on these issues, I want to point out that this work will be completed by the entire committee and is related to two of our subcommittees.

The first subcommittee deals with population health, which looks at the key determinants of health. The second one deals with the major challenges facing our cities. Poverty, housing and homelessness are issues common to both subcommittees. In fact, through the main committee, we will feed the subcommittees with the information that we gain through these sessions.

We are also building upon some previous work that has been done at the Senate in the matter of poverty. The 1971 report headed by Senator Croll comes to mind. It was a particularly significant report. There was also the work done by another senator, Senator Cohen, who wrote a book in 1997 called Sounding the Alarm: Poverty in Canada.

We are also building on the work being done at the Standing Senate Committee on Agriculture and Forestry chaired by Senator Fairbairn. That committee is dealing with the issue of rural poverty, in particular, and that study was initiated in the Senate by Senator Segal. A lot of good work is being completed, and we build upon that work when dealing with critical issues facing the people of Canada.

Today, we will have two panels. The first panel is in front of us now. Our first witness is Greg deGroot-Maggetti, Acting Chairperson, National Council of Welfare, NCW. The council has been analyzing patterns of poverty for over a quarter of a century, especially through its two signature series, Poverty Profiles and Welfare Incomes.

In addition to Mr. deGroot-Maggetti we have Ms. Regehr, Director of the NCW. Then we have the Caledon Institute of Social Policy, a familiar organization on this matter. Mr. Battle, the President, is with us today.

Greg deGroot-Maggetti, Acting Chairperson, National Council of Welfare: Thank you, senator, and good morning. We are happy for the invitation to appear before this committee and for the work that you are undertaking.

As Senator Eggleton pointed out, the National Council of Welfare has been studying poverty for over 25 years, especially through our two signature series, Poverty Profiles and Welfare Incomes, as well as other specific studies into different facets of poverty in Canada.

Throughout this time there have been pilot projects, research, demographic and economic changes, lofty commitment, policy changes and good recommendations put forward, many ignored. Meanwhile, poverty rates have fluctuated up and down. The bottom line, sadly, is that there has been no significant and lasting improvement, except for seniors.

Working-age adults and children are as vulnerable to poverty as they were 25 years ago. There is a growing gap between the rich and poor, and people living in deepest poverty have suffered staggering losses. Some social protections have eroded, such as Employment Insurance. Some have been created, such as national child benefits. Others have failed to launch, such as the national child care program. The impacts of these policy changes have especially affected those who are most vulnerable to poverty and social exclusion.

Those who have been most marginalized will be important to Canada's future: women, children, Aboriginal people, immigrants, visible minority populations and people with disabilities whose productive capacities are constrained by lack of support. Households with two incomes have become the de facto social safety net, placing individual and lone- parent households at great risk. For too many people, getting out of poverty has been likened by Quebec's anti-poverty coalition as having to run up the down escalator.

The council's 2002 publication, The Cost of Poverty, provides many examples of how poverty matters to all of us, and not only those who live in poverty. The council is increasingly concerned that it especially matters now.

Through several years of good times we have allowed insecurity to grow and it has left the poorest even more destitute. It is hard to imagine what will happen to Canada when we face times that are not so good or when new challenges arise.

For cities, it means that increasing responsibility for large national social challenges is falling to municipal governments, local agencies, families and individuals. The fact that only a minority of the unemployed in Toronto can get EI benefits is but one example, when more people than ever are paying in. Nowhere is it more evident than in cities — especially large ones — what dangers there are in creating an underclass and the host of social ills it entails.

Poverty, regrettably, is not yet on the national agenda in Canada, although that is starting to change. Part of the impetus comes from two provinces who have made fighting poverty a priority: Quebec and Newfoundland and Labrador. I encourage the committee to look at their initiatives.

My focus today is national. What the council has concluded from entrenched poverty trends in Canada, compared to progress in other countries, is reflected in our recent publication, Solving Poverty: Four cornerstones of a workable national strategy for Canada, which has been provided to you.

It highlights that while Canada has been largely ignoring poverty, finding ways to prevent and reduce it has been at the top of the international agenda, and many countries are making good progress. Several have been way ahead of us for some time, but others such as the U.K. and Ireland have realized more recently they face a serious problem and they have designed a solution through coordinated anti-poverty strategies.

I also want to emphasize that in almost all cases poverty is approached not as an isolated problem. Rather, it is connected to overall economic, social and political objectives. It appeared to council members that Canada was out of step and had a lot to learn from others' experiences.

Therefore, in the fall of 2006 the council asked Canadians, via a web-based questionnaire, what they thought about a national anti-poverty strategy for Canada. Our respondents — over 5,000 individuals and over 400 organizations representing hundreds of thousands of members — strongly agreed that it is both necessary and doable.

The four cornerstones for completing a strategy are presented in the report, and I will summarize them here. The first is a national anti-poverty strategy with a long-term vision and measurable targets and timelines. The second is a plan of action and budget that coordinates initiatives within and across governments. The third cornerstone is a government accountability structure for getting results and for consulting Canadians in the design, implementation and evaluation of the actions that will affect them. The fourth cornerstone is a set of agreed poverty indicators that will be used to plan, monitor change and assess progress.

I want to focus on why a national strategy is truly a workable solution for Canada. In the 1960s, Canadian governments designed a set of coordinated policies to prevent and reduce poverty among seniors; Canada Pension Plan, Quebec Pension Plan, Old Age Security and the Guaranteed Income Supplement. The policies work, and we can measure their effectiveness.

They recognize the value of both market and non-market work. There are roles for federal, provincial and territorial governments, for employers and for individuals. There are different funding mechanisms. There are additional benefits added on by provincial and territorial governments, but by and large the policies all work together.

The same time period ushered in other policies that started to break down barriers to women's employment, and these policies, too, contributed enormously to the decline in poverty among seniors, both individuals and couples.

Yes, poverty is more complex with non-seniors — all the more reason for good planning and coordination. In the council's view, however, there is an equally large challenge to face, and that is the fact that in many ways Canadian governments have created poverty, often by viewing it as the result of personal failures, such as an unwillingness to work. How then do we explain a minimum-wage worker who works more than the average Canadian with none of the benefits, yet still cannot reach the poverty line? For example, a minimum-wage worker in Ontario, at $8 an hour, could put in close to 50 hours per week before reaching the poverty line. That is the equivalent of almost 13 extra 40-hour work weeks per year.

This situation should strike Canadians as blatantly unfair. It is an example of policy-created poverty and it requires a structural policy solution, not attempts to shape the work ethics of people living in poverty.

Let me present another example, comparing how two countries approach the same issue. Sweden and Canada both have similar economic resources and a significantly large and similar population of female lone parents. Yet in Sweden there is almost no female lone-parent poverty, and in Canada poverty rates for lone mothers are extremely high, surpassed only by those of the children who live with them.

Are Canadian women such failures as human beings compared to Swedish women? No, the answer is that Sweden has decided that raising children, especially alone, should not impoverish women, and has designed policies accordingly.

Canadian governments — and especially the federal government — need to realize they are responsible for designing policy solutions to poverty and are capable of doing so in a much more effective way. It means building on what works as well as being innovative. However, tinkering or changing one policy at a time is not an answer.

We have a socio-economic scenario in Canada similar to the kind of health problems created when the treatment for an ailment causes an even more serious illness. Then the second problem requires an additional treatment, and sometimes a whole series of problems arise. This situation is often the result when the original problem is misdiagnosed.

Policy can create social illness in similar fashion. When we tinker with policies or look at them in isolation we can make matters worse. A good example is provided by one of our questionnaire respondents, and I quote:

I have worked in two very different provinces and in both . . . those experiencing poverty and mental illness often land in the care of the health care system, while many of their health ailments could have been prevented had they had proper prior access to medications, services and support.

Our lack of social security too often puts people in harm's way. There are women who turn to prostitution to retain some control and dignity in their lives that social assistance takes away. For many people, whether on social assistance or working for low wages, by providing less than is needed to survive, survival brings the danger of criminalization.

Social assistance has its own unique way of creating despair by robbing people of their ability to make effective decisions. Think about employed individuals or students who decide to share housing to free up more money for food, transportation or books. We would consider this smart and laudable. If individuals on social assistance did this and told, their rent allowance would be decreased so they would not be ahead after all. If they did not tell and were found out, they would be charged with fraud and would be worse off.

Just as social policy can create social illness, it has the capacity to prevent and heal it. That is what a national anti- poverty strategy can do — and why the four cornerstones are the necessary starting point.

I will close by sharing the words of others to illustrate that the council is not alone in its views. First, here is what a UNICEF review had to say about Canada's 1999 commitment to eliminate child poverty.

. . . Canada's target year 2000 came and went without agreement on what the target means, or how progress towards it is to be measured, or what policies might be necessary to achieve it.

At a 2006 dialogue on accountability at the Organisation for Economic Co-operation and Development, OECD, a participant had this to say about the importance of consulting people early and in a meaningful way:

. . . allow citizens to act as architects who construct and design, rather than interior designers who move furniture around.

My final two quotes reflect what we heard in various ways about the role of government, from many Canadians who responded to the NCW questionnaire on poverty and insecurity. The first one says:

Government is mostly upper and middle class — they don't understand the realities of what it means to live in poverty.

The second quote says:

Clearly any solution will have to involve the governments throughout Canada on local, regional and national levels.

Thank you, and I will be pleased to answer your questions.

Ken Battle, President, Caledon Institute of Social Policy: I think there is some concordance with what Mr. deGroot- Maggetti said and what I will talk about. I will also talk about architecture — although not what citizens can do as individual architects, but what governments can do.

I will try to cover a large chunk of complicated material. However, there is no way I will able to do it, so I will try to touch on the main points of the presentation that was given to you. If you are interested in our work, I encourage you to look at the prose version of this presentation, a report we released in June 2006 called, Towards a New Architecture for Canada's Adult Benefits. You can find that on the Caledon website.

I will talk in general terms about an architecture of income security and allied services for working-age Canadians. At this level of architecture, we are talking broadly about the overall structures and functions of different areas of social policy.

To use an analogy, we are sketching out — a freehand drawing, if you will — of this large area of adult benefits. The tough work, the design work — how we actually build the building with that architectural plan — is not what I am talking about today. That will frustrate you but we need to look at a broad picture to give guidance on the path we want to take. In fact, we are fleshing out certain areas of our design as we go forward with it.

The objective of this kind of work is to start people thinking in an innovative way about large chunks of Canadian social policy that are important but almost never talked about, except individually. This area is adult benefits.

Underlying the argument we want to put forward here — and it underlines all the work of our organization over years — is what we call the ``modernization imperative.'' Simply, the concept is that the social security system that was conceived in the 1930s and 1940s, built largely in the post-war era, is increasingly not relevant to the social, economic and political character of Canada.

We have managed to make some progress, as Mr. deGroot-Maggetti mentioned, on seniors' benefits. We have been able to reduce the rate of poverty substantially. We have made a lot of progress on family policy, although in the areas of child care and child benefits, there is a danger now that some of the changes being made at the federal level will unravel years of progress. However, that is not what I am talking about today.

That leaves this large area — and we needed to come up with a generic term for it: For want of a better term, we called it ``adult benefits.'' I am talking about income security programs and allied employment, and social services for non-elderly adult Canadians.

What kind of programs are in that large bundle? At its core are earnings replacement or substitution programs for those who are not working. Here we are talking about the twin pillars of Employment Insurance and welfare, for those expected to work. However, a variety of other programs come under the rubric of adult benefits, too — CPP and QPP disability benefits, paid parental leave, workers' compensation and welfare for those who are not expected to work.

Another group of programs that fall under adult benefits are measures to make work pay for the working poor. Here, we are talking about wage supplements and tax credits. A number of provinces have earning supplement programs; and in the last budget, the federal government brought in a working income tax benefit.

Then, a range of allied services and supports are contingent upon being on welfare, Employment Insurance or other income security programs. One of the most important areas here for people with disabilities are disability supports. We are also talking about supplementary health care, child care and a variety of employment programs — training, counselling, literacy and so on.

I mentioned earlier the challenge facing Canadian social policy, which is the phenomenal demographic, economic and political changes. We have a list of these changes. I will not go into them now, but we are talking about things such as the ageing population, the rise of two-earner couples, persistent poverty, non-standard jobs in the workforce, the increasing role of immigration, the problem of a low birth rate, et cetera. You will be familiar with all these changes and I will not drag you through them this morning.

However, let me talk about a couple of them. Welfare is an archaic program. It is a major program and a program that does not work. The program must be dismantled and replaced by something that does work.

My favourite quote is from a Saskatchewan public servant, Rick August, who has done a lot of work. Saskatchewan is one of the leading provinces. Mr. deGroot-Maggetti mentioned Quebec and Newfoundland and Labrador, but Saskatchewan has done a lot of interesting work in redesigning its social security system.

Some years ago, Mr. August characterized welfare asa,

. . . subtle form of micro-colonialism of poor people by the state, disempowering them and deterring them from acting to improve their lives.

This observation is from a civil servant who works on the front line in delivering programs; and he says it as well as anybody. Our presentation has a whole list of problems with welfare, most of which I am sure you are familiar with.

One concept we have used in recent years in the area of child benefits that also applies to adult benefits is the problem of the ``welfare wall.'' This problem is that people who are able to get off welfare, typically into a low-wage job, stand to lose a lot, both in terms of cash and in-kind services and benefits. This problem is real. We are looking at things such as supplementary health care, disability supports and so on. These barriers keep people on welfare and keep them from moving into the workforce. They need to be reformed as well.

Employment Insurance has shrunk dramatically. Only about 40 per cent of unemployed Canadians qualify for benefits from the program they all pay into. There are many problems with Employment Insurance and there have been efforts to improve it over the years, but the decimation of Employment Insurance is probably the biggest cut we have seen in Canadian social policy.

EI coverage varies enormously across the country. In Ontario, about 25 per cent of unemployed people are eligible, whereas in the Atlantic Provinces, over 80 per cent are eligible. EI covers less than half the unemployed in Ontario and all provinces west. Canada is somewhat bifurcated in terms of its coverage by Employment Insurance.

We see a reappearance of gender differences in Employment Insurance. The gap between men and women in terms of eligibility for Employment Insurance is widening again. Welfare, which was supposed to be a residual program of last resort, has become one of the major front-line programs in Canada. Indeed, in Quebec, Ontario and the West, welfare has displaced Employment Insurance as the bulwark of adult benefits.

In Ontario, even though coverage has been shrinking in both those programs, welfare still far outspends Employment Insurance in terms of its support for the unemployed.

As well, there are incredible differences by city in terms of coverage by EI. For example, in London, Oshawa, Hamilton, Windsor, Toronto and Ottawa, less than 25 per cent of the unemployed are eligible for Employment Insurance. At the opposite end is St. John's where about 54 per cent of the unemployed are eligible.

We have, in effect, two solitudes — welfare and Employment Insurance. People who run those programs do not talk to each other. Twenty billion dollars a year is being spent between those two programs, yet they carry on like ships in the night. They are designed completely differently, yet they both fail unemployed Canadians.

Moving from the critique to what we should do, a modern, efficient and effective system of adult benefits would provide temporary earnings replacement for all unemployed Canadians, one of the traditional functions of any social security system worth anything. Some of those benefits include long-term income support for people with severe disabilities and others who cannot reasonably be expected to earn most of their income from employment; access to a range of services — employment, supplementary health care and disability supports — for all low-income Canadians, not only those who are trapped on welfare; and policies and programs to ensure that work pays.

We have designed what we call an architecture. On page 23 of the presentation you will see a diagram to which I will speak. We are envisioning a three-tiered system of adult benefits, part to be undertaken by the federal government and part by the provincial governments. Tier 1 is about short-term income support for employable Canadians who are unemployed. We would retain the current Employment Insurance system, but we would get rid of the regional variability component that leads to so much inequity in that program.

We would also create a new program — we have used the term ``temporary income support'' for want of a better term — which would serve that large majority of unemployed Canadians who are not eligible for Employment Insurance. This program would be funded out of general revenues, not out of premiums as Employment Insurance is. Part of the idea of this new income program would be that, along with Employment Insurance, the program would keep a lot of people who are unemployed, not eligible for EI or have exhausted their eligibility from ending up on welfare. We want to deflect people from welfare to the extent possible.

The second tier is medium-term support for employable adults who are unemployed. Here we are talking about replacing the current welfare system with a system we are calling employment preparation, where the emphasis would be on making people employable, investing in human capital in the workforce.

Welfare benefits would no longer be the way they are now. We would talk about a quasi-wage type system under which a single benefit would be paid. It would not vary by number of family members and children, because the children would be helped through child benefits and other programs. This support focuses on getting long-term unemployed people into the workforce or back into the workforce.

The third tier of our system we call ``basic income.'' This tier is about replacing welfare for people with disabilities and others who cannot be expected to work. About 40 per cent of welfare caseloads are made up of people with disabilities. We are talking about removing them from welfare and providing them with a new federal income-tested program that would be similar to the current Guaranteed Income Supplement. We are developing that part of the architecture right now. We will have a report on it soon.

In all of this, you can sense that we are talking about a division of labour or a change in the division of labour between the federal, provincial and territorial governments.

There are different ways to accomplish this change politically. We do look at different jurisdictional options, but we think the most sensible division of labour is that the federal government assume even more responsibility than it has now for income programs — it is already the senior government in terms of that responsibility — and provinces and territories focus increasingly on employment and social services for people in need.

The first tier, the new temporary income program and the current Employment Insurance program, would be federal in our system; the second tier, the medium-term support — the replacement or welfare and the employment preparation — would be provincial; and third tier, basic income for people with severe disabilities, probably would be a federal program.

The quid pro quo would be that the provinces will see large savings from reduction of their welfare caseloads when 40 per cent of the load goes to a new federal program. We would expect them to reinvest those savings in disability supports for people with disabilities where the supports are crucial for them to work, live, study and function in society. The idea is the same as the National Child Benefit where we saw a reinvestment of provincial savings into other programs.

This area is obviously a large part of social policy. In fact, it is the largest chunk of social policy that Canadians must deal with. When we shop this vision to various people in Ottawa and the provinces, often people's eyes glaze over because we are talking about such a large range of programs that are so difficult and, in the case of welfare and Employment Insurance, would be so intransigent to change.

Obviously, to implement this vision, we would move in incremental steps, and we talk about strategic options for that movement. One interesting one is that the federal government could partner with some provincial governments that want to move forward with this kind of program.

Saskatchewan has already made changes, and Manitoba has announced changes as well that move in the direction we are talking about. In fact, we helped Manitoba design their new program and we have looked at the lessons learned in Manitoba.

This agenda is crucial for low-income Canadians. Without a reform of adult benefits, seniors' benefits and benefits for families with kids, low-income Canadians cannot do the job themselves. The majority of Canadians in need are left to their own devices, and this situation simply cannot continue.

I welcome any questions. We are not at the stage of concrete design and attaching price tags and so on for the whole architecture. We are working on different parts. Stay tuned for the work we are putting forward on basic income, which is an exciting and innovative change that would be welcome.

The Chairman: While my colleagues are formulating their questions, I will ask you each a couple of questions to start.

Mr. deGroot-Maggetti, you noted in your presentation, ``the fact that, in many ways Canadian governments have created poverty, often by viewing it as a result of personal failures, such as an unwillingness to work.''

There was also a unanimous decision made by the House of Commons in 1989 about child poverty, saying that it should be eliminated by the year 2000. Of course, it has not been eliminated. The situation today is as bad, if not worse, than it was at that particular point in time, with fluctuation up and down in the statistics.

I wonder if we should go back to the child poverty objective and maybe restate it in different terms. Obviously, there were not the kind of goals, objectives and measurements it needed. Maybe it was too much to say that it would be eliminated by a certain date. Maybe it should be stated that we will try to reduce the problem by half in five or 10 years from now. Maybe these modifications would help bring us back on track.

One reason I mention this, and the question I have for both of you is, given your statements about how people look at adult benefits as opposed to child benefits, the child poverty issue resonates perhaps much more than the other, even given the fact that if we intend to solve child poverty, we will at the same time solve the poverty of their parents.

Do you think that approach should be a major thrust of what we might end up doing: in other words, trying to become involved with child poverty objectives again and trying to live up to — better late than never — the resolution that passed unanimously in 1989 through the House of Commons.

Mr. deGroot-Maggetti: That is a good starting point. Let me give you an example of how Canada might approach this question.

The example I use is the United Kingdom, where the Blair government decided they would make reducing child and family poverty a main plank of their policy.

Therefore, they set out to set goals. They said between 1999 and 2004, they would reduce child poverty by 25 per cent. That was their target. By 2010, they would reduce it by 50 per cent and they set for themselves a target to reduce it to zero by 2020. They set for themselves their goal, targets and timelines.

The other important thing is their plan to reduce child and family poverty, and it is truly a plan. All the European Union countries have created action plans to combat poverty and social exclusion. The United Kingdom's efforts to reduce child and family poverty are part of that whole movement.

Another important aspect, and this relates to what Mr. Battle talked about, is an integrated approach. We cannot accomplish this goal only with child benefits. In 1999, the United Kingdom introduced minimum wage for the first time. They did not have it before then.

They also created earned income tax credits as well as a low pay commission to study the impact of minimum wage and changes to it. They studied several facets of the impact: the impact on employment; the impact on the economy, particularly in low wage sectors; but also the impact it had on reducing poverty. Because they put that commission in place that studied the impact of raising the minimum wage, they were able to confirm that having the minimum wage and raising it was not leading to a loss of jobs, particularly in the low-wage sectors.

Initial increases to the minimum wage were cautious. They were raised at the same rate as the increase in average wages. The commission began to realize that minimum wages were not having as much of an impact on reducing poverty as they had hoped, so they recommended increasing the minimum wage at a faster rate than the increase in average wages to improve the impact on reducing poverty. They were able to document that the increases were not having a negative impact on employment.

By 2004, they were fairly close to their target of reducing child and family poverty by 25 per cent. They had not completely accomplished their goal, but they had made substantial progress. It was part of a concerted effort and an integrated plan that did not isolate children from their families but took into account the need to improve labour market income.

In the same way that child poverty will motivate Canadians to move on this, Canadians also feel strongly that if they work full-time year-round, they should not live in poverty. We have to face up to that serious problem as well. That is another area we can work on.

Mr. Battle: To echo what the chairman said, some years ago I had Sheila Regehr's job. I was the Director of the National Council of Welfare many years ago. I remember writing our brief to the Macdonald commission on unemployment. I can remember that back in the 1970s.

The first sentence went something like, Kids are poor because their parents are poor. That reality has been echoed over the years. It is an important thing to think about. Let me talk about both.

First, with respect to child poverty, you are absolutely right: It is easy for people to think about child poverty. It is difficult, however, for people to think about unemployed or low-income adults. It is not the same kind of galvanizing issue. It is difficult for the media.

It is analogous to the problem we had for many years where we could talk about people on welfare, but trying to talk about the working poor was difficult. Over the years, they have become more visible.

We have made some progress on some solutions on the child poverty side, and I can provide a dramatic number.

In terms of child benefits with respect to early learning and child care, child benefits and parental leave are the three pillars of the family policy in Canada.

In terms of the role of child benefits, as you probably know, federal child benefits have increased substantially over the years, although those increases have come to a halt. New programs have been implemented that are awful and will threaten further progress against child poverty, but I will not go into that today.

The Department of Finance a couple of years ago conducted a little known study that was interesting. The department looked at the role of the Canada Child Tax Benefit in reducing poverty.

Let us say we take the Canada Child Tax Benefit money out of the family income pool and calculate their income rate. The rate of family poverty, a family with kids, without the Canada Child Tax Benefit, would be 26 per cent higher than it is with the Canada Child Tax Benefit. That calculation was made several years ago. The benefit has been increased in recent years.

For a social program to reduce the incidence of child poverty by one quarter is phenomenally powerful. When we look at international evidence, comparing Canada with other countries, a number of countries, Canada included, have high rates of market poverty; in other words, poverty when we look only at people's earnings, wages, self-employed income and so on, and after we take out government programs.

However, other countries do better in terms of implementing strong income security programs such as the Canada Child Tax Benefit, which have a marked impact on child poverty. That is only one instrument, though. That is the other point I want to make.

Groups are committed to increasing the Canada Child Tax Benefit to a maximum of $5,000 for children in a low- income family. We are at about $3,400 now, so it is within reason.

Reaching that $5,000 income security objective will not solve poverty in Canada. It can take children out of ``poverty,'' although they still live in low-income families, but there are still adults who are in poverty, unemployed or are low-wage earners.

There is no way we can tackle the poverty conundrum by focusing only on a particular program.

The difficulty of talking about adult benefits, as I have said, is that it is a whole large range of programs. We acknowledge that.

If we do not look at that wide range of social programs, there is no way we can ever tackle poverty effectively. I have worked in this area for 25 or 30 years now. I am a pluralist. We must try a whole bunch of different methods to tackle poverty.

The Chairman: In regard to Employment Insurance, Mr. Battle, your statistics indicate a lot of inequity in terms of how EI works on a regional basis in the country. Ontario and to the west and Quebec and to the east all have different percentages. For example, 29.7 per cent in Ontario receive Unemployment Insurance compared to 93.3 per cent in Newfoundland and Labrador.

I realize you are suggesting a whole different architecture. Yes, a whole different architecture would be good, but that would take some period of time. Let us say it is a medium or long-term objective.

In the short term, how do we better operate EI? How do we fix EI to be more equitable across the country?

Mr. Battle: You have put your finger on one of the toughest nuts to crack, EI, which has been reformed forever and never successfully.

To be clear, in our architecture some people think we are talking about eliminating EI. That is not it at all. EI would play a crucial role, but it would be more of an insurance program than it is now. To us, the most inequitable feature of Employment Insurance is the regional unemployment rate, where eligibility ranges by the unemployment rate in a region and the maximum duration of benefits also varies by the unemployment rate in an area.

Think about it. An unemployed person in a low unemployment area is as unemployed as an unemployed person in a high unemployment area. There are phenomenal inequities in this dimension. We would take that part out of Employment Insurance totally. That non-insurance aspect would be covered by our new program, if we want to have that kind of regionalization because there are arguments for and against it. We are talking about two programs.

I do not think that we can reform Employment Insurance the way the Canadian Labour Congress, my friends and colleagues who I disagree with, suggest by turning the clock back and making the eligibility rules more generous. I do not think that approach will work. There are tremendous objections to that suggestion.

The nature of the changes in the labour market means that the social insurance program simply cannot meet the needs of all unemployed people in the kind of labour market we have now. That is why we think we need a new program.

I do not think we can improve EI incrementally without bringing in a new program that would serve those that a social insurance program cannot cover.

Mr. deGroot-Maggetti: I think the reforms to EI in the 1990s reflected the social policy designed with the notion in mind that we must try to shape people's work ethics. It reflected thinking that was not only in Canada; it was part of the OECD's job strategy. The thinking has changed. Even the OECD, in their latest job strategy, realized they must address the problems of low wages and low incomes as well.

Reforming Employment Insurance must be part of the broader strategy, but I do not have detailed proposals on how to do that.

Sheila Regehr, Director, National Council of Welfare: I want to make a point on the more human side to this issue. A few years ago now, the National Council of Welfare had a round table with a number of low-income people who were participants in various programs: recipients of EI, recipients of social assistance and a number of others connected to federal and provincial governments. One thing we heard from everyone clearly was this whole business about the rift between EI and social assistance.

On a human level for them, they talked about feeling like the federal government had completely abandoned them. It was not only access to income benefits, it was that being attached to the EI program made them still attached to the labour market and labour market services that were part of the EI program. Many of these services have now been devolved, but have not taken the place of those kinds of things that existed.

People talked constantly about being made to feel like second-class citizens if they do not have access to EI. It was heart-wrenching to hear some of these people and see how much they wanted to improve their lives and could not access the programs they needed.

Senator Trenholme Counsell: It is wonderful to meet you. I have not met you before. Thank you for being here.

Mr. deGroot-Maggetti, I had the feeling in your report that you overstated the well-being of seniors now. In paragraph two under Context, you state that ``there has been no significant and lasting improvement — except for seniors,'' and of course there has been improvement. Two paragraphs down, you say that ``Households with two incomes have become the de facto social safety net.''

I felt there was little sympathy and not enough understanding for the single seniors who I think are having a terrible time living on, say, a thousand dollars a month.

In New Brunswick, from where I come, it is painful and difficult for them to keep their homes. In the cities, I believe, the problem is equally severe: It is the lack of money.

On the next page, you speak about Quebec having success in fighting poverty. I wondered if you could comment on how much the child care plan has contributed to that success.

Mr. Battle, you said — and maybe not in these exact words — that what is happening now federally might undo the achievements of the past. Would you elaborate? On the three-year program you mentioned, is that akin to the three- year program Frank McKenna brought in. I have been struggling to remember the exact name of the program, but it was a three-year program to help people who were not working and largely on social assistance — I hate the word welfare — to be employable.

Mr. deGroot-Maggetti: Thank you for your questions. The first point is a good point. We do not mean to suggest that there is no issue of poverty amongst seniors in Canada. It was similar to Mr. Battle's example of the Canada Child Tax Benefit. There has been more progress made in reducing both the rate and depth of poverty among seniors over the past 25 years than among other groups. We are not suggesting that our work is done and we do not have to deal with it, but rather we are indicating that when a concerted effort is made, and coordinated efforts are made, we can make significant progress.

The council discovered, several years ago, even though we have Old Age Security and the Guaranteed Income Supplement, that a number of seniors who were eligible for those programs were not aware they were eligible and did not receive them. We brought that to the attention of the minister and said the department needed to find ways to let those seniors know they were eligible.

In my own community of Kitchener, Ontario, a strategy was worked out with community groups where agencies and organizations had served seniors to get the word out. Over the course of a year and a half or two years, they had reached about 2,000 or so seniors to let them know they were eligible for these benefits.

Again, we do not suggest that the work is done, but when coordinated efforts are taken we can make progress.

With regard to your second question around progress in Quebec, in my opening remarks I tried to indicate that Quebec, like Newfoundland and Labrador, realized that they needed to take a strategic, coordinated approach to reducing poverty. In the case of Quebec, the impetus came from the community and people organizing for a law to eradicate poverty and to put in place an action plan to reduce that poverty.

That being said, Quebec has invested a lot in child and family services, including the child care program in Quebec. While the council does not have specific data to indicate how much that investment has contributed to the decline in child poverty rates in Quebec, the province is one of the few — perhaps the only one — where the child poverty rate has come down consistently since 1997.

However, when we conducted a study into the new Market Basket Measure and compared different household types in four provinces, we found that for a single-parent household where the mother was working full time at a minimum- wage job, Quebec was the only province where a mother in that situation with a young child, because of the access to $5- or $7-a-day child care, a minimum wage job, together with child benefits, a host of programs and services available, would be enough to have an income above the Market Basket Measure. I think Montreal was the example.

At least in that exercise, it appeared that having the services, along with income supports, would make a difference in helping families with children that experienced the highest rates of poverty — single-mother families — to rise above poverty.

Mr. Battle: To take up your point about seniors' poverty, it is a good one to remember. When we look at the decline in the low-income rate for seniors — which is good internationally as well — Canada now has one of the lowest rates. However, we are looking at all seniors and we do not break it down between families and singles.

I do not have the numbers here, but the decline in poverty amongst single seniors has levelled off. Indeed, the decline in poverty will level off because of OAS and GIS, which is the major reason for that decline. The GIS increased a couple of years ago for the first time in real terms in almost a generation, but there are limits to what they can do.

On child benefits, two changes have been made in the last two budgets. The first one was the creation of the Universal Child Care Benefit. You are probably familiar with that term, UCCB. Then this budget brought back a non- refundable Child Tax Credit. There are real problems with both those programs. I will talk about it quickly with you, because it has a lot to do with poverty.

The Universal Child Care Benefit is a payment of $100 a month to all families with children five years or younger. It is the restoration of a universal benefit, although it is taxable on the income of the lower-income spouse.

There are two problems with that. One is families with one earner receive a larger after-tax benefit than two-earner families and single-parent families at the same income level. It has reintroduced horizontal inequities: people at the same income level but different family types receive different amounts of benefit.

It flows a lot of money to high-income families now. Money is always tight, and I think low- and middle-income families need more money than that. This budget brought back a non-refundable Child Tax Credit, which is a flat-rate payment that goes to all families except poor families: they receive zero. Every other family, including people earning $1 million, will receive $310 a year from this new benefit.

The amount of that benefit for a high-income family is infinitesimally important. The amount of child benefits for low- and modest-income families are incredibly important. Looking at minimum-wage single parents, federal, provincial and territorial child benefits now make up, in some provinces, 15 per cent to 20 per cent of their income. In terms of the movement of child benefits, we are critical of these two new programs because it takes us backwards, not forwards.

About Mr. McKenna's policies, I do not know that particular one. He was an innovative premier when he was in power in terms of social policy, and put a lot of emphasis on investment in human capital and helping people off social assistance, which is important.

As Mr. deGroot-Maggetti and Ms. Regehr have said, over the years a number of provinces have tried to help people off welfare and into the workforce. It is not a new thing. There is a lot we can learn from.

Senator Munson: On the welfare business, it must be dismantled. That would take a long answer and longer question, I think. I want to see some of your ideas. You used the word ``quasi-wage'' type system. I do not know what that means, to be honest. It seems, at the end of the day, that horrible word ``welfare'' will still be used. I want to see more specifics, but you say you are still working on that plan.

I want to focus briefly on disabilities. When you both use the word ``disabilities'' do you mean intellectual disabilities as well as physical disabilities?

Mr. deGroot-Maggetti: Yes.

Senator Munson: Can you paint a picture for me? I think you talked about a low-wage wall in cities, in one of your reports. People with disabilities in urban areas: How many are there, what are they facing and what can we do in a report to help people with both intellectual disabilities and physical disabilities? How serious is the problem?

Mr. Battle: Yes, we mean people with visible and invisible disabilities. We must think of that. I will elaborate on the welfare wall analogy that I mentioned. As you know, the degree of disability varies a lot. About four different levels have been calculated using the disability survey taken: 2001 was the most recent survey.

People with severe disabilities, particularly if they have either no attachment to the workforce or an episodic attachment to the workforce, often end up on social assistance. With help, some of those people could work, perhaps only part-time. However, they become trapped in welfare because welfare gives them not only an income benefit and — as the National Council of Welfare's annual welfare income reports show — disability welfare benefits are higher than the other areas. They are not high, but they are higher than other family types.

People become trapped there not only because they have an income benefit, which is at least more secure than what might happen if they go into the workforce if they are able to get a job, but they receive what are called disability supports. Here we are talking about not only prostheses, wheelchairs and changes to ramps in places of employment, workplaces and homes, but also people who help those with disability negotiate the system. There is a whole range of quasi-medical and social services.

People can receive that help when they are on welfare. It is not great, but they usually have some access. If they leave welfare, they lose their disability supports. They are lost. They cannot make it.

Ms. Regehr spoke about how Employment Insurance gives access to employment programs as well as to income. We want to separate those supports. Income programs should be separate from services. In the case of disability supports and services, we need a system outside income programs such as welfare that serves the needs of Canadians with disabilities. Provinces are starting to develop these systems, but they do not have the financial wherewithal to develop a system of their own, which is why we need to make changes at the federal level to flow more money to the provinces.

When talking to people with disabilities and their representative groups, this issue comes up again and again. The adult income system is a complicated mess, but the disability system is much worse. Services are absolutely crucial to people with disabilities, and we must deal with that need as well.

Mr. deGroot-Maggetti: People serving people with disabilities and their families need to be architects who construct and design, rather than interior designers, to refer back to that quote. It will be important to include Canadians with disabilities and groups serving them in identifying the barriers and designing how to overcome those barriers to income security and the services they need. That element is important to an overall strategy.

The Chairman: This is important testimony.

If we do not have time to ask all the questions today, we could ask the witnesses to submit answers in writing to certain questions.

The Chairman: Senator Callbeck, Senator Keon and Senator Cordy, if you could ask your questions, I will have the witnesses answer them all together.

Senator Callbeck: Mr. Battle, you spoke about Saskatchewan trying some reforms that I understood were positive. Maybe you can give us examples. I know what you mean by the welfare wall. It is difficult for a family to leave all the supports behind and go to a low-paying job.

On the framework that you have worked out in this paper, you talk about short-term support. What do you mean by that and why do you suggest the federal government would deliver that support rather than the provincial governments, as they do now?

Mr. deGroot-Maggetti, you talk about Newfoundland and Quebec having anti-poverty programs. Are those two programs much the same? You talked about four cornerstones needed in a national program. Do those provincial programs include those four cornerstones?

Senator Keon: One area I intended to ask about is close to Senator Callbeck's question.

In my previous life, I had the experience of dealing with people who had a disability that could be eliminated with medical therapy. These people had a terrible problem because their qualifications in the work force were not high enough that they could get a job that would make them better off than they were before they were relieved of their disability. I always felt that the solution to this problem was some incentive between those two ends. Surely, it is not rocket science that a person can work for the department of highways and be better off than by staying on disability insurance.

I did not gather from any of you any suggestion about how to deal with that issue. Perhaps you can speak to that collectively.

Mr. Battle, I find your material interesting. However, there is a tremendous apprehension by taxpayers about increasing social services, because they believe that increase will increase their taxation. I believe that the Province of Quebec taxes the average citizen at a rate similar to that of Sweden, and the rest of Canada taxes the average individual at a much lower rate. From my own interface with social services and health care, I believe that Quebec is well ahead of the rest of the country, and has been for some time.

If you could develop an architecture that accentuates the positive, with a price tag, because it must have a price tag to sell it, this strategy might be the beginning of the end of social inequities in our country.

Senator Cordy: I am also interested in the welfare wall. The analogy of running up the down escalator gives an excellent picture of what is happening. People cannot get out of the cycle.

Is there any province in Canada that allows people to work while receiving some benefits? If they are on welfare, they are entitled to some medical benefits. Physiotherapy, psychology and pharmaceuticals are prime examples. I have heard of someone in a low-paying job who had a chronically ill child and had to leave their job because they could not afford the medical expenses for their child. That situation is a sad one for the family because a number of things happen as a result. Is there any province in which support does not have to be all or nothing?

My second question relates also to Quebec and Newfoundland and Labrador. You said that in Quebec, the government is making fighting poverty a priority as a result of community response. Most governments, regardless of which political party, talk the talk about fighting poverty, but it tends to be the same old, same old.

What happened in Newfoundland and Labrador and Quebec? Was it the individuals who were involved in? What happened to make fighting poverty a priority in those provinces? Is it something that we can do to make it a priority nationally and in other provinces?

Mr. deGroot-Maggetti: Canada has committed to putting into place a national strategy, and policies to eradicate poverty as quickly as possible. In 1995, at the World Summit for Social Development, the goal was to have that strategy in place by 1996, and we are not there yet.

There are some important similarities and differences between Quebec and Newfoundland and Labrador. That commitment was one impetus for people in Quebec to push for a law to eradicate poverty. This is the difference between Quebec and Newfoundland and Labrador. In Quebec, it came from people saying that if we can put in place laws against governments running budget deficits, we can put in place a law that says we need to try to eradicate poverty.

They also learned in Quebec that the task to keep government on task is an ongoing one. They continue to monitor Quebec government policies and provide critique when it needs to be critiqued and praised when policies work well.

In Newfoundland and Labrador, Danny Williams made a commitment during the election of 1995 to put in place a strategy to reduce poverty.

Similar in both cases is vision, targets and timelines. In Quebec, their vision is to be amongst the jurisdictions with the lowest poverty rates among wealthy industrialized countries. In Newfoundland and Labrador, the goal is to have the lowest poverty rate in Canada. I have often said it is nice to have one instance where provinces are racing to the bottom. That is one place where that kind of competition is nice to have.

Newfoundland and Labrador included a lot of consultation in developing their strategy. In Quebec, the consultation was carried out in the first instance by citizens' groups, trying to outline what needed to go into the law. Both provinces have accountability mechanisms. In Newfoundland and Labrador, there is a multi- ministerial committee to integrate the policy.

In Quebec, they have created two advisory committees. There are elements of the four cornerstones. We found elements of those four cornerstones in both Quebec and Newfoundland and Labrador, as we did in other jurisdictions.

I will first pick up the question, which was not directed to me, about the costs of a comprehensive strategy to which Mr. Battle of the Caledon Institute responded.

Mr. Battle: I am happy for you to answer that.

Mr. deGroot-Maggetti: I will draw your attention to another study, The Cost of Poverty conducted by McMaster University. The attempt was made in social services with single mothers on social assistance that, rather than letting the women themselves figure out what services were available to them, they were proactive and let the mothers know the supports and service available to them and their children.

They were able to document that the rate increased twofold at which these women were able to exit welfare and enter paid work. It reduced depression among mothers and reduced behaviour problems for children. In fact, being proactive in letting them know what services they could access saved millions of dollars.

It is important to get that message across. Poverty does not only cost people who live in it. It also costs us as a society. Somehow we need to bring the costs of poverty together with investments in human development. That is important. We need to somehow build that in from the start, so we can analyze that.

There is the question of extended health and dental benefits. When the National Council of Welfare was in Manitoba, it was interesting to learn that they were making changes there in terms of extending access to health and dental benefits.

In Ontario, the change has been to extend benefits by six months if somebody leaves social assistance so that they can receive benefits for a temporary period of time. I am not sure how it works Quebec. Extending access to health and dental benefits seems to be one of the crucial steps to making substantial progress.

Ms. Regehr: One really interesting point about the Newfoundland and Labrador plan occurred when they sat down and looked at priorities: what they could do first and what was needed most. They focused on prescription drug and dental issues and that was where one of their major first investments was made.

Mr. Battle: The Saskatchewan thing came up a few times. I am not trying to push Saskatchewan all the time but in this area they have made some advances.

Simply, Saskatchewan took child benefits out of its welfare system early on into a stand-alone child benefit system, which is in line with the philosophy of the national child benefit reform. That is important because the child benefit serves all low income families with kids, whether they are on welfare, working poor, EI or in between.

For several years, they have had a wage supplementation program as assistance to the working poor. The federal government has now launched a federal version of that program. We are hoping that the federal people will talk to the provincial people in terms of those provinces that have wage supplements to see if they can integrate their benefits.

Alberta and Saskatchewan have a form of wage supplementation. Quebec has had various kinds of wage supplementation for 20 to 25 years and New Brunswick has a small one. Saskatchewan has a program to provide supplementary health and dental care. It is taking those services out of welfare and delivering them more broadly.

Senator Munson, this gets to your point whereby a flat-rate benefit is paid every two weeks. It is less than minimum wage but it is a simple thing. One problem with welfare is the enormous complexity of the rate structures. This benefit is starkly simple.

Saskatchewan also has an interesting use of an automated delivery system over the phone in a direct manner. That system is important for someone with a wage supplement or if somebody's wages go up or down, which happens a lot for people with low incomes. If you can contact a call centre right away and have an adjustment made, it is important. One of the problems with the federal program is that it cannot do that.

Senator Keon's question is absolutely fundamental to this kind of work, where we need to talk about not only the cost of our proposals, but the flows.

I cannot give you a sense of that at all but we see our architecture as having a lot of movement between the different tiers. One thing that would happen is Employment Insurance would be less expensive because we would take away regional extended benefits. The temporary income program would be a new program so it would be an added expense. To the extent that those two programs could keep unemployed people from falling onto welfare, Mr. deGroot- Maggetti's point, that would be an enormous advantage because research has shown, and common sense would indicate, that for people who are on welfare a long time, their skills rust, and their self-confidence diminishes. They decay and are further and further away from the work force. It is important that we keep unemployed people from falling onto welfare.

Our architecture is labour-market oriented. For almost everyone except for people with severe disabilities, the expectation is that they would move either into or back into the work force. One would see declining expenditures that way as well.

The individual things that we are developing, we are costing. The disability income program would be federal, and we are looking at the cost.

Mr. deGroot-Maggetti: I want to make one quick point and it relates to the wage supplementation and the low wage wall, to underscore the point that an integrated strategy to reduce poverty in Canada must be part of the economic, social and political strategy. For example, wage supplements cannot be a substitute for work that pays a living wage.

Canada has a low-wage problem. About a quarter of the jobs in our economy pay low wages. That situation contributes to low productivity. It explains part of the reason there is little training and skills upgrading for low wage workers. Other countries do a better job of making sure that low-wage work is not a trap, and there is training. The importance of skills and training is reflected in the architecture Mr. Battle talks about. It is important, when talking about wage supplements, that they be part of addressing specific problems that people face, but they also need to be part of an economic strategy to ensure jobs pay a living wage, and that people can work productively, contribute and be paid accordingly.

The Chairman: Programs have been mentioned for Newfoundland and Labrador, Quebec and Saskatchewan, and we want to invite analysts who can talk to those programs and give us more information.

Senator Fairbairn: Mr. Battle, we have been around a table like this one before, over the years, and, unhappily, nothing appears to be changed in the issue that I spend time on. In your information, you make the statement under Modernization Challenges for Adult Benefits that ``education and skills are the great divide in the knowledge economy.'' That takes us to literacy, and I will not go on. It is tough. It is still there. It is improving a bit, but not as fast as the market demands. I wonder whether you have any thoughts on that subject, Mr. Battle.

Senator Cochrane: You are right that our government in Newfoundland and Labrador has formally adopted an anti-poverty strategy. Many have called for the Government of Canada to do the same. Recently, we made changes to the provincial drug system. Now coverage is provided to low-income Newfoundlanders under our drug plan, which is great.

I am looking at your architectural plan, Mr. Battle, at page 23, and you talk about, in the first tier, the short-term support, the income support programs for the ``temporarily unemployed actively seeking work.'' Have you put forth a ceiling for that section of your plan? Is there a certain amount they would receive? Do they have a certain time frame to get a job? What if it is a two-income family and one person is now out of work? Does the income from the other person affect what the person looking for the job will receive? These things come to mind.

Senator Nancy Ruth: Mr. Battle, would the cost of your proposals be above or below the $20 billion that you estimate is now spent on EI and welfare, and by what magnitude?

To the National Council of Welfare, you have a fifth cornerstone on page 15 of your main report, and I quote: ``Specific attention to populations most at risk of poverty, to matters of social inclusion as well as income, and to gender equality, which is a universal, central objective.'' My question is two-pronged: Are working-aged women and children more susceptible to poverty than they were 25 years ago, and if so, why? Have you seen any specific proposals for reform that pay specific attention to populations most at risk for poverty, including the two provincial ones and the one proposed by the Caledon Institute?

Mr. Battle: Senator Fairbairn, literacy gets short shrift in this architecture, and all I can say is, that is one of the areas we need to develop. The problem is enormous. We flagged that. How that will fit into the architecture is something we have not figured out yet, but we must.

We have not costed our proposals. We will do that for the various parts of the architecture. Senator Keon raised the same issue. I hope we can produce figures that show that the cost of our reform would not be appreciably more than we already spend. One problem is costing over time. It will take a number of years for the effects of these changes to be seen. When we do a cost-benefit analysis, we must look over time. I take your point. We cannot talk only about architecture with no dollar signs or design, because people will not listen, and the point is for people to listen.

What is short-term and long-term, the duration of benefits and whether they would be family income-tested or individually income-tested, all those major design issues are things we are working on. They must be figured out. The short-term, medium -term and long-term is something that must be realized in the program design. We cannot pay somebody employment insurance forever. Currently, it is just under a year. If their Employment Insurance is exhausted, they might go to the new temporary income program. If that does not work, they would go to the replacement for welfare, where more services come into play. People with disability who are on welfare now would go back to a new federal program. We see this issue of flow. Where people end up will be important in terms of designing the system.

Ms. Regehr: I will start with the gender question, especially in terms of one of the key populations most at risk. We have many statistics, some we gave you and some that we could, showing that in many instances, women are running to stay in place or things look like they are falling back. Mr. Battle alluded to the moves with the Universal Child Care Benefit. Mr. Maggetti mentioned the failure to launch a national child care program, which the Royal Commission on the Status of Women called for in 1971. That refrain has been consistent and one of the best researched and costed-out initiatives that we have ever looked at, and still we cannot implement it.

In terms of other ways in which women are becoming more vulnerable, we talked about EI in general, but if it becomes harder to qualify for Employment Insurance, then it also becomes harder to qualify for maternity and parental benefits. This point brings back the need for an integrated strategy and system. We made maternity and parental benefits much better for the people who qualify but, as family policy, it does no good if those who need it most cannot access it.

Most European countries and many developing countries that are starting to bring in family supports such as maternity and parental policies are run through the general social security programs and not tied to the labour force. They are looked at as family policy.

Related to welfare and social-assistance-type things and some of the education and training questions that people were talking about, when I was a young, lone parent, it was possible almost anywhere in Canada, except in Alberta, for someone to collect family benefits and receive student loans that would allow them to pursue higher education, which is one thing women need to make a go of it economically in the labour force. Now, it is illegal to do that everywhere. That is another example of how the federal government does one thing and the provincial governments take it away. We need a coordinated strategy.

Mr. deGroot-Maggetti: In response to your question about whether the Quebec and Newfoundland strategies include specific planks related to particular populations, I cannot recall offhand, but we can check on that and get back to you.

Ms. Regehr: They almost all do.

Mr. deGroot-Maggetti: I cannot remember the specifics on Newfoundland and Labrador and Quebec.

The Chairman: We have come to the end of this particular panel. I know honourable senators have other questions they want to ask. I can only suggest that we put them in writing, give them to the clerk and the clerk can ask them to respond further.

In this second panel we have the National Anti-Poverty Organization, NAPO. I am pleased to welcome Robert Rainer, Executive Director, and Nancy Shular, First Vice-President.

NAPO was born at the Poor People's Conference held in 1971 in Toronto, and since that time has worked to ensure the concerns of low-income people are reflected in federal policy decision-making.

We also have, from the Canadian Association of Food Banks, Shawn Pegg, Acting Director of Public Policy and Research, and Dianne Swinemar, Member of the Board of Directors and also Executive Director, Feed Nova Scotia.

Founded in 1985, the Canadian Association of Food Banks is an umbrella organization representing regional and community food banks.

Feed Nova Scotia is a central collection and distribution centre for food banks and meal programs in that province.

Nancy Shular, First Vice-President, Board of Directors, National Anti-Poverty Organization: Thank you for having us here. The mandate of NAPO is to work to eradicate poverty in Canada by first, ensuring that the concerns of low- income people are reflected in federal policy and decision-making; second, defending the human rights and economic rights of low income people; and third, assisting local and regional organizations to bring the voices of low-income people in Canada to the decision-making and policy-making processes in their communities.

NAPO is unique among national NGOs working on poverty issues. All our board members are individuals currently living in, or who have once lived in, poverty. We know from personal experience what it is like to survive on levels of income that are insufficient to meet basic needs. NAPO was founded in 1971 to help bring the voice of people like our board members to proceedings such as this today.

NAPO is focused on issues of income security as they affect those caught up in or falling through the social safety net. This income security includes focus on the idea of guaranteed adequate income for all, something Mr. Rainer will talk about shortly.

I have a personal situation that I would like to address. My brother lives right here in Ottawa, and in February was diagnosed with brain cancer. He was self-employed. He is trying to survive on income provided by Ontario Works, which is Ontario's social assistance or welfare program. He needs to find a place to move to since he lives in a place that in winter is too cold. He cannot afford to pay his rent. He should be a candidate for placement in housing that is geared to income. He receives so little money that he must access the food bank. He must go between 6 p.m. and 8 p.m. and must be there early. If he stands in line and does not get in before 8 p.m., then he must go back the next day.

This person is receiving radiation treatment and is sick, but the depth of poverty one is forced to live in on Ontario Works forces this person to put his health at further risk.

There is no priority for housing to someone who may well be dying. My brother faces the real possibility of becoming a street person. This is right here in Ottawa, the capital of one of the wealthiest countries in the world.

About 70 per cent of all people in Canada live in the 25 largest cities in the country. Poverty rates in Canada are highest among visible minorities, immigrants, the disabled, and Aboriginal people living in urban areas.

We have concerns about the rapid increase in low-paying service-sector jobs, the greater difficulty in being able to make ends meet and the erosion of the working class jobs that pay decent, living wages.

We see skyrocketing incomes at the top and the widening gap between the rich and the poor. Our real economy doubled in growth between 1981 and 2005, with much of that growth taking place between 1995 and 2005.

In 2004, the average earnings of the richest 10 per cent of Canada's families raising children were 82 times that earned by the poorest 10 per cent of Canada's families, nearly triple the ratio of 1976. On average, the highest paid chief executive officers in Canada earn in about 13 hours what the Canadian minimum wage worker earns in an entire year.

This gap is leading to growing intolerance for the widening disparities. There is a tremendous loss in spending power for those with lower incomes. On top of this loss, many low wage earners have no extended medical benefits such as drug plans or dental care.

People with lower income and social status have less control and fewer choices in their lives. At low levels of income, Canadians are more vulnerable to poor health and a shorter lifespan.

There is proof that babies born to the poor are less healthy. The Canadian Institute of Child Health has written that ``a low level of family income is associated with a higher rate of low birth weight and, potentially, with higher rates of adverse health effects stemming from the low birth weight, such as chronic illnesses, developmental delays and disabilities.''

Babies born in poor neighbourhoods have double the risk of dying than those born in more affluent neighbourhoods. Children at the lower end of the economic scale have poorer health and developmental outcomes than children in the middle. Children at the top of the income spectrum have even better health and development outcomes.

Ontario teens, in lower income families, less than $30,000, are 1.8 times more likely to smoke than teens from higher income families, over $50,000; 1.8 times more likely to have an alcohol problem; and 1.4 times more likely to use drugs and other forms of anti-social behaviour.

The rise in gun-related crimes in Toronto is linked, in our view, to the poverty and social exclusion that is deepening in Canada's largest cities.

There are more family breakdowns; people are becoming more depressed; there are more suicides and homicides; and the poor have to beg for handouts. Increases in the use of food banks are at a point in many communities where the need cannot be met.

Almost one fifth of Canadians are seriously underemployed, have no work at all or are at risk of becoming unemployed. Our dominant economic system has systematic barriers to social mobility. Improving the social structure to attempt to fix some of the infrastructure and systematic problems requires planning, partnership and persistence.

Social planning organizations are an important asset to any urban community because they work on a diversity of community issues. These organizations are able to initiate, create and nurture realistic coordinated responses to real challenges. The government needs to address poverty with a national strategy or things will become much worse.

I will turn it over to Mr. Rainer now.

Rob Rainer, Executive Director, National Anti-Poverty Organization: I was also planning to read from a prepared text but in the interests of time, I will be briefer and speak a bit more off the cuff. I will focus particularly on a couple of elements we wanted to key in on.

The idea of a national strategy is critical, but I think even more important for us is for government to set the ideal of eradicating poverty in Canada. We are dedicated to that goal as our mission. Even if society does not eradicate poverty, we need to strive for that goal and not be satisfied only with poverty reduction.

We wholeheartedly agree with Senator Dallaire, who has said that all humans are human and not one is more important than the other. We would go further in saying that the goal is not only poverty eradication but improving social cohesion in society.

The previous panel gave some testimony to some of the European experience in dealing with poverty. All the European Union, EU, countries are obliged to create not only poverty reduction strategies, but also social cohesion strategies. You can download those plans, as well as their progress reports where those two themes are closely linked.

We think social cohesion needs to be part of what this committee and the government focuses on. Canada is drifting toward what we might call the ``gated community syndrome'' in which some citizens may believe themselves to be insulated from the poverty and the problems associated with poverty that are found around them. While we do not have many literal gated communities, the gating syndrome is becoming implanted in some people's minds. We need to attack this syndrome.

We fully support the National Council of Welfare's work and their call for a national strategy. You have heard that Newfoundland and Labrador and Quebec are two provinces that have taken a comprehensive and determined approach, and we commend them for that. We feel a national strategy is absolutely essential for the country. The vision, the determination, the will, the resources and the accountability structure must be built in.

On accountability, we suggest that the government establish the position of an independent poverty commissioner in the Auditor General's office — someone who would annually report on Canada's progress on this important file. The lack of a single individual to help report on poverty in Canada is part of the reason the famous 1989 declaration was never achieved. No one's feet were held to the fire. We need someone who has that responsibility to say, this is where we are making progress and this is where we are falling short. There has been too much turnover of people in various positions to give that continuity.

Much of our written submission focuses on the concept of a guaranteed income. NAPO advocates what we call the ``guaranteed adequate income.'' We put that word ``adequate'' in there to focus on the fact that if there are to be guaranteed income programs in Canada, they need to be adequate to address basic needs.

The conversation, obviously, is what are the basic needs? There needs to be a dialogue on that. Guaranteed income is income that is secure year by year for those who receive it. Income is guaranteed by government at a level below which no individual or family is meant to fall.

We have begun some contact with a fellow named Dr. Guy Standing, whom I strongly encourage you to invite to address the committee. He is a labour market specialist. I believe he is from Australia but he works heavily in Europe and is active in what is called a basic income network there.

He has spoken in Vancouver recently on the concept of basic income. He is eloquent. He has a depth of response to typical biases, perceptions or concerns that have been expressed about basic income. We will invite him to come to Ottawa in September to give a public presentation and perhaps meet some parliamentarians. Maybe that is something we could explore with you.

I am sure you know the 1971 Special Senate Committee on Poverty made a guaranteed income program their top policy prescription at the time. In 2006, the National Council of Welfare conducted a survey of Canadians. They had 5,500 on-line responses to their survey about poverty in Canada — what should be done about it — and the top-ranked priority was a guaranteed annual income program for Canada.

It would be interesting to go into more depth on people's perceptions about guaranteed income and why that suggestion came up so strongly relative to other things that were recommended, but that was notable.

Senator Segal has spoken eloquently in favour of a guaranteed income. In replying to concerns about the potential cost of such a program in an article in the Toronto Star, he has observed that:

. . . the municipal, provincial and federal governments are currently footing the rather hefty price tag of poverty as it translates into health-care costs, an overburdened judicial system, a myriad of social services that often duplicate each other and the basic loss of human productivity.

We want to stress that in our view, Canada's patchwork approach to poverty reduction is not working. The witness to that failure is the breadth and depth of poverty we see today, the growth in the number of food banks — which our colleagues to the right can speak about in much greater detail — and the exploding homeless population on Canada's streets.

We support guaranteed income to replace insufficient, inefficient and stigma-riddled welfare but any guaranteed income program needs to be truly adequate to meet basic needs. It should be universal so that everyone is treated equally, without judgment on behaviour, even if those with higher incomes who do not need a guaranteed income supplement ultimately repay the benefit through taxes on earned income.

I wanted to focus a bit on urban poverty. We are not experts on the issue of housing and homelessness. Other groups are more targeted to that. Some of your committee members will be well familiar with those groups, and individuals such as Cathy Crowe in Toronto, who will speak next week on the release of her book on the homelessness crisis in Canada.

We clearly have a crisis: 1.5 million Canadian households are in need of decent, affordable housing. The crisis is acute within Aboriginal communities, where one in two children lives in poverty. However, even a few paces from Parliament Hill, we encounter the human face of this crisis directly.

As the government of Sweden has observed, homelessness is an extreme manifestation of social exclusion. We need a Marshall Plan on housing and homelessness. It is long overdue.

It is also an opportunity to address some of the urban challenges. The chair of the committee, Senator Eggleton, is obviously deeply familiar with these kinds of issues. From a sustainable development point of view, where we are trying to achieve goals of social equity and environmental improvement, there is a big role for progressive urban design that seeks to attain mixed use, and mixed-income neighbourhoods. If people have a chance to mix together to a greater degree, that will promote social inclusion. People who can walk to work do not need to rely as extensively on public transit or private vehicles. That situation obviously will help low-income citizens.

There is a design function there, but municipalities cannot do that alone. There is a role for the federal government to support urban design that takes mixed use and mixed-income objectives into account.

To close off, Martin Luther King said, ``True compassion is more than flinging a coin to a beggar; it comes to see that an edifice that produces beggars needs restructuring.''

We must look at the root causes, the fundamentals of poverty and shy away from the more superficial or incremental approaches. There is obviously a huge role for leadership at the federal level, the provincial level and even the municipal level.

There is no greater role and responsibility, in our view, for the federal government than to tackle this issue. There is no greater opportunity for leadership and legacy. Looking ahead to Canada's one hundred and fiftieth birthday in 2017, would it not be wonderful to say that Canada has made serious progress on poverty after so many decades of relative lack of progress?

The Chairman: Thank you for the excellent presentations. From the Canadian Association of Food Banks, we will hear from Dianne Swinemar and Shawn Pegg.

Dianne Swinemar, Executive Director, Feed Nova Scotia, Member of the Board of Directors, Canadian Association of Food Banks: Mr. Chairman, I will begin by saying that when I represent the world of food banks, I feel like we should not be at the table in some ways because we do not want to be in existence. When it comes to making recommendations, we are often so involved and entrenched in the day-to-day workings of our organization to feed hungry people, it is often difficult to focus on what the solutions might be.

However, I am here to represent the Canadian Association of Food Banks, CAFB, which, as you mentioned, has been in existence, reluctantly, since 1985. We have had several attempts at going out of business but they have all failed.

I will quote statistics from a report we produced. In 2005, our organization distributed 10 million pounds of food to front-line food banks across Canada. Taking into account what the local food banks added to that, a total of 160 million pounds of donated food was distributed through the world of food banks. The committee heard from a previous witness today that we are not providing an adequate service. We never proclaim that our service is adequate but that is what we do. In March of every year, we try to prepare a research piece to measure what is happening at our food banks — the numbers of people coming to us and what they tell us.

In March 2005, our hunger count research revealed a number of interesting points. It told us that food bank use has increased by 13 per cent since 1997; that volunteers and staff put in 4.2 million hours to run their operations, not including any financial support they might receive; and that one in six children live in poverty.

I could tell you province-by-province what they are saying but the overall message is that people come to food banks because of inadequate incomes, whether they are on social assistance or disability, or are employed. The highest growth in the use of the food bank world comes from those who are employed.

The number one issue cited when they come to us, other than inadequate income, is that the basic cost of living, the cost of housing in particular, is too high: They cannot afford to live. Where do they go? They turn to a food bank. I went through our document province-by-province and saw ``housing'' and ``inadequate income'' cited time after time as the reasons that people need food banks.

We looked at this issue as a collective organization and put forward some policy recommendations. I will give them to the committee so that senators might ask questions. Mr. Pegg will assist in answering those questions.

One of the first policy recommendations in our report is that the social transfer include splitting the block fund into separate post-secondary and social transfer envelopes to ensure greater transparency and a new funding formula for social assistance and social services, and enforceable standards that would ensure adequate access and assistance. CAFB also recommends a re-examination of the place of welfare in Canada's current income security system.

The second thing we noted was that those who have jobs make up the second largest group of food bank clients at 13.4 per cent. The increase in casual, part-time, contract and temporary jobs have led to the working poor. We recommend that the federal government create a new national refundable tax credit. I understand that in March 2007, the creation of the Working Income Tax Benefit for families is a step in the right direction. However, it is not available to enough people and the amount needs to be raised for it to impact on the people that we see at the front lines of our food banks.

Employment Insurance is a primary income support program for unemployed workers. The current EI program provides insufficient or no support to many unemployed workers. Only about 40 per cent of the unemployed qualify for benefits today compared to 80 per cent in 1990. The numbers are even lower in major urban centres like the Greater Toronto Area and the Lower Mainland area of British Columbia. Our recommendation is that coverage of the EI program be strengthened to make it more accessible and that the benefit rates and the maximum benefit period be significantly raised.

The National Child Benefit Supplement program goes to the lowest income families and is taken back from families who receive social assistance. Some provinces stopped the clawback. We recommend that the clawback cease completely across the country.

Affordable housing is the single most stated reason for people using food banks. We recommend that a national housing strategy be implemented that meets the needs of Canadians and ensures the right to affordable housing. Government must continue investments in housing and rent supplement programs, whereby rent is geared to income or is capped at affordable rates. Provinces and territories should have more flexibility to choose how they spend the funds allocated to affordable housing, and the federal-provincial wrangling over housing must end.

I have a housing story to share with senators. In Halifax, where I live, the downtown area is being redeveloped and is beautiful with wonderful new condos. However, they were built after several apartment buildings were torn down where a number of families lived on the financial edge, although they were not necessarily using the food bank. When those buildings were torn down, there was no immediate place for them to go. They needed to move further away from the services and resources available to them to find affordable accommodation. One lady who came to us said she moved into a rooming house where the landlord provided no bathroom facilities. To access a bathroom, she needed to go across the street to an ESSO service station. The landlord was allowed to get away with that. Nothing is in place to protect vulnerable individuals in such a situation. Certainly, that situation needs to be looked at.

The current government has promised to give more money to the provinces for child care spaces and we support that.

Each of these policy suggestions would be great to see in place but, to make an impact on the families who live below the poverty line and visit the food banks, we cannot consider only one of these recommendations and think that it will make the difference. There needs to be a holistic approach to the problem to provide solutions that work.

Several food banks in major cities across the country, in frustration, have taken on the role of providing employment training; and we are one of those places. We run a culinary and life-skills training program. When people come to us, we recognize quickly the individuals who want to be employed. They want to learn the skills and move into the employment workplace, but we cannot simply teach them culinary skills and how to do a job interview, then send them out into the world.

Their problems are so complex and so involved. Child care, budgeting, transportation, housing, safe housing and no telephone — so many things need to be taken care of before we even attempt to move them into the world of employment that it is somewhat daunting for us and we are the optimistic folks, never mind what it must be for the individual trying to cope with all these problems. There must be a national, holistic response to make an impact on the people we see everyday.

The Chairman: Thank you very much. Do you wish to add something, Mr. Pegg?

Shawn Pegg, Acting Director of Public Policy and Research, Canadian Association of Food Banks: Back in the 80s, I was a founder of Food Share in Toronto, and remember we established it to be an umbrella organization for the various food banks in Toronto. The first thing was that we wanted to be out of business as quickly as possible. The sad reality is that food banks are still there today and still needed everywhere in this country. I am also reminded of a poster you can see in Toronto, on the subway system, having to do with Covenant House that helps street youth. The sign shows a birthday cake and it says: ``Sadly it is our 25th anniversary.'' I think a lot of organizations would say that about the kind of services they provide. They want to provide them but they wish there was a better way of doing it, a better system.

The Chairman: A lot of what you said is valuable and they are the kinds of things we hope will happen but they might take a long time. We can see evidence from the past, that progress is slow in this area, unfortunately.

Let me try to focus on short- and long-term objectives. Are there some things that we can achieve quick results from in the short run? This committee will probably, in its interim report, look at some possibilities in that way. Then, we will look at the whole architecture, as a phrase used previously by Mr. Battle, for the long term. Do you have any thoughts about things that can be done right now, to help alleviate much of the problem? In the long run, yes, we should look, as Mr. Rainer said, at eradication, not only reduction. We should aim for the highest, or the lowest level, depending on which way you want to phrase it. We also need quick hits to help alleviate the problem.

Ms. Shular: My idea and it is only a quick idea, would be to retrofit old buildings that are empty for housing. It would not cost as much money. The buildings sit empty and would create affordable housing.

Mr. Rainer: One major expenditure for any household, but particularly for low income households, is to meet energy costs and so forth. In New Brunswick, the population faces a 10 per cent rate hike. The increase has been applied for by the power authority, which is unprecedented. The maximum the power authority could apply for was 3 per cent. For some reason, they are now allowed to apply for a 10-per-cent rate hike. One of our board members is on social assistance in Moncton and she told us how hard it was to meet her current electricity bills. To be faced with that situation is daunting.

There is a role for government, both federal and provincial, to play in that area of helping households of all descriptions, but particularly low income households to find ways to save energy, to reduce their energy consumption. There are and have been programs set up across the country. A lot more could be done in this area. I have some personal background and experience with the issue because the opportunities for savings are readily available but an infrastructure needs to be put in place, expertise to be shared literally from household to household. There are models for programs like this. They are successful. They can help address the crisis of rate hikes but also penetrate deeper and make some longer term benefits for low income citizens, be they in urban or rural areas. Everyone needs energy and heat through the winter. That is a practical thing. There is a big role for the federal government to play. There have been programs in place federally. I do not know how robust they have been. I see investing in energy efficiency as providing a lot of bang for the buck, particularly for older dwellings.

The Chairman: Are there any other suggestions? They do not have to be only on housing.

Mr. Pegg: One major focus of the CAFB right now is the working poor. The percentage of people who are working and need to use food banks across Canada has jumped from 6 per cent in 1989 to over 13 per cent in 2006.

About 50 cities in Canada have a population greater than 100,000. About 13 per cent of people who use food banks are employed. If we take away 11 or 12 of those cities, we have a subset of those cites where the average percentage of people who are employed using food banks jumps to 18 per cent. In a smaller subset of about 17 cities, about a quarter of the people who use food banks are working. That tells us that when we look at other research being done on the changes in employment over the last 10 years, we see more part time and temporary work. People are working below the minimum wage, or at the minimum wage. One thing that needs to be done quickly in the provinces, and I know this is a provincial jurisdiction, but something that the federal government can take the lead on, is to improve employment standards. Employment law has not kept up with the way that employment is moving. People are being taken advantage of and there is no recourse if they are not paid, if they do not even make the minimum wage or if they are fired without notice.

It is a big problem that is fairly widely known and I am not sure why it has not been addressed.

Mr. Rainer: With respect to the minimum wages, because our group is heavily involved with minimum-wage and living-wage campaigns across the country with partner organizations, we feel this change is one of the most fundamental ones that needs to happen, and it would make a major difference for the working poor.

We subscribe to and support the principle that was articulated in the recent Canadian Federal Labour Standards Review Report. The author, Harry Arthurs, did not come out with a specific figure but he more or less enshrined the principle that someone working full time for years should be able to meet basic needs. We should have that fundamental element of fairness in our society. The minimum wage should be at a level to allow an individual meet basic needs however we end up defining that. Currently, minimum wages across the country are well below that level, but we do see some encouraging movement. In Ontario, the provincial government recently announced a minimum wage of $10.25 by 2010, which our group and other groups feel could be attained sooner but at least it raises the bar higher. Newfoundland and Labrador, last week indicated they would move their minimum wage from $7 to $8. We see some interesting and encouraging leadership campaigns in B.C. and Alberta around minimum wage.

That measure is relatively short term that, at least for the so-called working poor, would make a considerable difference in their income security.

The Chairman: Colleagues, I will do what I did last time and that is to have Senator Keon's question and then Senator Callbeck's question and then I will put it to the panel.

Senator Keon: I will put this question to the entire panel because it is relative to what all of you said, particularly Ms. Shuler and Ms. Swinemar.

Let me come back to you, Ms. Swinemar. You mentioned that when somebody uses the food bank, to get out of their conundrum they need access to nine social services, as I listed them, but I think they probably need access to about a dozen to get themselves up and going and, hopefully, back into the work force and rehabilitated or whatever.

In listening to testimony of this nature over the last number of years, the services appear to be mostly health-related, but the big defect in the system is the lack of community social service, combined with primary care health services — a place to go in the community where somebody can find their way through this horrendous minefield of social services. I think extremely well-to-do people with all the resources in the world could not find their way through this minefield, not to mention some poor person who is down and out. I believe that we in the Senate from every dimension need to push until collective governments recognize that things must be organized at the community level and they must come up with the resources to provide the community centres. I want to have your comments.

Senator Callbeck: I want to bring up the issue of housing, because it has been talked about so much today. I believe, Ms. Swinemar, you indicated that it was the number one reason why people go to the food bank. You also said that provinces should have more flexibility in how they spend their money. Can you give examples?

Ms. Shuler, you talked about your brother and the serious situation he is in. He is on social assistance. He is taking radiation treatments. He is living in an apartment that is cold. You say he should be a candidate for placement in housing that is geared to income. Are you saying that he is not eligible for such housing?

Ms. Shular: He is eligible, but there is a waiting list for housing. When they apply for housing, they go to the bottom of the waiting list.

The Chairman: How long is the waiting list in Ottawa? In Toronto one could wait for five to 10 years, but how long is the wait in Ottawa?

Ms. Shular: I do not know how long the waiting list is. He has not been given any indication as to how long, other than that he probably will not be around long enough to get in.

Senator Fairbairn: In going through your material, I notice the province of Alberta is mentioned. I am from Lethbridge. I am startled to see the increase in your activities in Calgary, a city in a province that is clearly one of the wealthiest in the country. Is this activity again because of the tremendous push on housing, or is it because people are coming in from everywhere trying to find jobs that are not necessarily open for them when they arrive there, for many reasons, including literacy?

Mr. Pegg: I can address the question on service fragmentation. It has long been a problem. It is a problem made worse in the mid-1990s when many provinces downloaded responsibility for services and for paying for services to municipalities. Municipalities, as I am sure you know, do not have the capacity to provide the amount of services that are needed.

There are good examples across the country of non-profit, non-governmental organizations that have taken the lead. I have seen this initiative in the disability support centre. In Toronto, Community Living Toronto has arms across the city. They have connections to health care, social service and government agencies. They have taken responsibility to bring services together and to refer anyone who comes to them to the correct area.

A similar thing is happening in the B.C. Lower Mainland with the British Columbia Association for Community Living, where associations have been given a budget and have taken over provision of services for people with disabilities. That is one possible solution. I do not know if anyone else has solutions to service fragmentation. Giving money to municipalities is one, and finding and funding a central body whose job is to know what is happening in a particular municipality is another.

At the moment, organizations are dealing with funding from project to project. It is difficult for non-profits to see the big picture because they do not have the staff to do that.

Senator Callbeck, can you repeat your question? I was not sure what you were talking about.

Senator Callbeck: What was said, I believe, was that there should be more flexibility for provinces as to how they spend the money that comes from the federal government. Can you give any specific examples?

Mr. Pegg: We are saying the opposite. We recommend that there be more oversight on the money that is transferred from federal to provincial levels. If the money is transferred for post-secondary education, social services and early childhood education, then the money needs to be used for those things.

Senator Callbeck: I know that was your first point about the formula. I thought there was something said about housing, but maybe I misunderstood.

The Chairman: Right now we have the Canada Health Transfer and the Canada Social Transfer, but you think the social transfer needs to be divided, back to where we were one time, separately between social services and education, so we can keep track of how both are spent and how they are doing the job.

Mr. Pegg: That is right.

Mr. Rainer: On the question of how to resource and fund a stronger and more effective social safety net, not to pick on Alberta, but on the drive in this morning I caught the tail end of a story about Alberta's heritage fund, through which the profits or revenue earned from the province's oil-and-gas sector are put into a fund that is there for the long- term benefit of Albertans, to be used in such-and-such a way. The Senator from Alberta can speak to that.

The comparison was made that Alberta's oil-and-gas sector in terms of its level of activity and revenue generation is roughly comparable to that of Norway. Norway has a similar fund but it is at $250 billion, about 20 times the size of Alberta's. I have not studied how Norway goes about its income distribution but we do know that the Nordic countries, in general, are more equitable in terms of their income distribution, with much lower levels of poverty. The ability to draw from those funds to make that happen is, at least for Norway, part of why they are able to achieve greater social equity. They have those funding mechanisms in place.

Whether Canada can create such a national fund and where those funds would come from remains to be discussed. That possible mechanism should be explored through the natural resource sector or other profitable sectors — banking, perhaps — to create a substantial fund from which benefits can flow more universally and effectively to address this particular issue of poverty.

Ms. Shular: On the issue of fragmentation, an organization should be helping my brother. In other centres, he would be helped. The organization has not entered into the picture at all. My brother takes the bus to and from the hospital. In other centres, this organization would take him to and from the hospital. They would provide supportive services, moral support and so forth. There has been no entrance of that organization into his life.

Mr. Pegg: Senator Fairbairn had a question about Alberta and Calgary, specifically. What is happening there we also see in Fort McMurray, and I have heard it is also an issue in Whitehorse. People move to Whitehorse because there might be a pipeline because mining might take off again. I have heard that people arrive, with the hope or expectation that they will find work. They do not find work. They run out of money and they cannot leave Whitehorse. At the same time, condos are going up in the city. Ms. Swinemar talked about the condos in Halifax: where do the condos go? They go where land can be bought, which means low income apartments and housing, which displaces many people who cannot afford the new housing.

In general, when we see growth in a city, the city's infrastructure will have trouble dealing with an influx of people. Given the present situation where municipalities do not have funds to cover existing need, they will have that much more trouble covering new need.

Senator Fairbairn: We have had your colleague, Wayne Hellquist, before our other committee. We heard from him, and I have seen it myself, that food banks are forming in rural communities and towns, because of the pressure. These communities have never needed to do this before. Alberta is one province that should not be in this situation.

Mr. Pegg: I grew up in Southwestern Ontario, and there is a food bank in almost every small town.

Ms. Swinemar: With respect to the Alberta situation, I know that a number of Nova Scotians have gone to Alberta looking for work. Some have secured work, but not all. What has also happened is that family members are left behind and left vulnerable. Their support system is gone. They end up at food banks and soup kitchens because the resources are not coming back. Any money earned is taken up in housing because of the high cost of housing in Alberta, so the impact on the family has not been positive impact.

The Chairman: I need to bring this meeting to a conclusion.

Thank you for your participation.

The committee adjourned.