Statement made on 29 April 2010 by Senator Art Eggleton
Hon. Art Eggleton:
Honourable senators, first I want to express appreciation to the members of the Subcommittee on Cities who participated in this study. It occurred over a period of two years. It took a little bit longer with the election and prorogation periods bringing us to a stop for some time, but we got it done.
I want to express appreciation to the members of the committee: the deputy chair, Senator Segal, who has long been a champion of measures to help people escape poverty in this country; honourable senators Cordy, Dyck, Keon, Martin and Munson, who also have participated directly; and a number of other senators who are members of the Standing Senate Committee on Social Affairs, Science and Technology, the parent committee, who also participated. My thanks to them, and also to the staff, particularly Havi Echenberg at the Library of Parliament, who worked extensively on the writing of what is almost a 300-page report. We were glad to obtain permission to produce something in a more condensed fashion, complete with a compact disc — a more readable form that has been circulated among a number of interested communities.
In our study of poverty, housing and homelessness, the committee held some 35 hearings, hosted 5 round tables and visited some 20 agencies in 9 cities across Canada. We had the opportunity to hear from close to 200 witnesses, some of whom were people who live in poverty or are homeless themselves. Other witnesses work for community agencies, are academics at universities or work in various volunteer organizations.
What we heard, frankly, was appalling. We found that a staggering one in ten Canadians lives in poverty. The rate has been even higher at other times. That is 3.4 million people, the equivalent of every man, woman and child in Nova Scotia, Newfoundland and Labrador, New Brunswick, Prince Edward Island and Saskatchewan combined.
For these people, for our fellow citizens, every day is a battle with insufficient income, unaffordable housing, inadequate clothing and unsatisfactory nutrition. Every day brings wrenching decisions about whether they have enough money to buy groceries or whether they use the money to pay the rent; can they buy shoes for the kids or do they make a mortgage payment; and also whether they drop out of school and take a job to help the family struggling to get by. These families cannot even dream about getting ahead.
One witness who had experienced poverty expressed it this way:
Poverty steals from your soul leaving you with little or no hope. It robs you of all that can be good in life. It leaves you isolated, lonely and hungry. Every day is a struggle.
What is particularly disturbing to me is that approximately 800,000 of those living in poverty are children, a statistic that is all the more deplorable given Parliament's commitment back in 1989 to eliminate child poverty by the year 2000. Instead, we have hardly made a dent, with double digit rates of child poverty in most of the provinces of this country.
Honourable senators, we all understand the moral arguments against poverty: the jarring juxtaposition of suffering and want in a land of plenty; and the unacceptable toll in terms of lives diminished, dreams deferred and potential denied.
What I do not think many people realize is the economic cost of poverty — how it costs each and every one of us, forcing up our tax bills, depressing the economy, increasing health care bills and breeding alienation and crime.
Today I want to examine those economic costs and outline some of the measures we have proposed to lower them because, make no mistake, with the demographic and economic challenges before Canada today, we simply cannot afford poverty any longer.
A recent Ontario study, guided by economists and policy experts such as Don Drummond, Judith Maxwell and James Milway, estimates that poverty costs this country about $7.5 billion every year in health care costs alone, and between $8 billion and $13 billion in lost productivity. All told, the study sets the bill for poverty at over $30 billion annually. That is more than half the current federal deficit.
Imagine what eliminating poverty could mean for our fiscal situation; to our ability to pay for things like education, innovation and health care and to our capacity to help the elderly?
Let me bring the Canadian Chamber of Commerce into this issue. In a recent report, they put the looming demographic challenge in stark terms — as our population ages and the growth in the working age population slows, we will face significant labour shortages. One third of the current workforce will retire in the next 20 years. Put another way, we will have about half the ratio of people working, paying taxes, contributing to pensions and health care than we have today.
In its report, the Canadian Chamber of Commerce said that to address the coming shortages in our labour supply, we need to tap into the underutilized segments of our society — for example, older people, Aboriginals, the disabled and new immigrants.
Those groups are the very groups —— along with lone parents, which are largely lone mothers — that our study found were the most vulnerable to poverty. It turns out the same groups that are languishing in poverty are the ones that we will need to fill the jobs and pay the taxes in the future.
Here we have the intersection of two of the greatest challenges facing our society: the ongoing economic costs of poverty, and the demographic time bomb of aging.
The good news, and I think the tremendous opportunity, is that we can address both at the same time. If we give more people a way out of poverty, we will help fill the jobs that need filling. Give more people a way out of poverty and we will save billions of dollars that poverty is costing all of us.
It is not as if we are not doing anything about poverty. According to Statistics Canada, we spend $150 billion every year in federal and provincial transfer payments to individuals, and that money does not include education and health care costs. What are we getting for $150 billion a year? The short answer is not enough.
Those numbers of children, for example — 800,000 living in poverty — are not only sterile statistics; they are a flashing red light. We know that a child born poor has a greater chance of dying in infancy and that if the child lives, is likely to have a lower birth weight and more disabilities.
As they grow, the children are more likely to suffer from poor nutrition and poor health. They will miss more school and slowly but surely, they will fall further and further behind. Not surprisingly, they are less likely to do well and they are more likely to drop out of school.
As adults, they will have higher rates of chronic illness. With a poorer education, they will earn less, pay less in taxes, be less productive workers, have more health problems and use more social services. It will be a vicious cycle instead of a virtuous circle, and all of that means higher costs to society.
Our committee also discovered something else, something more systemic about poverty in this country. We saw that decades of social policy making by all levels of government, well meaning as it may have been, has resulted in two equally devastating results.
First, even when all the programs are working as they should, the resulting income is often only enough to maintain them in poverty. Second, at their worst, existing policies and programs actually entrap people in poverty, creating unintended but nonetheless perverse effects that make it almost impossible to escape the reliance on income security programs or homeless shelters.
As Senator David Croll put it in his landmark committee report almost 40 years ago now:
. . . we are pouring billions of dollars every year into a social welfare system that merely treats the symptoms of poverty but leaves the disease itself untouched.
Another quote of his I like to cite is one where he says:
It was obvious that the poor do not choose poverty. It is at once their affliction and our national shame. Unlike the poor of earlier days, they know how poor they are and so they face the future with little hope and mounting anger. The children of the poor, and there are many, are the most helpless victims of all and find even less hope in a society whose social welfare system from the very beginning destroys their dreams of a better life.
Along with that great work of Senator Croll, we have had other examples of solid work done in this chamber by its members on the questions of poverty. The Standing Senate Committee on Agriculture and Forestry conducted a study on rural poverty. Senator Cohen, a previous member of this body before my time, wrote a book on the subject. She was passionate about the issue. There has been some great work done in this institution.
Here is the situation, in sum: We spend over $150 billion a year; and we have almost three and a half million people living in poverty, including 800,000 children. Any corporation that spent $150 billion a year on programs without achieving its goals would conclude it needs reworking. We should too. I do not think Canadians want us to spend their tax dollars on things that do not work.
However, there are some good signs. During our work, we found examples of promising practices and programs, largely community based, that actually work. We identify and celebrate these initiatives in our report. Sadly, these examples are pockets of promise in an otherwise dysfunctional system that must be overhauled. Our committee studied the whole range of income security programs, everything from tax breaks to social assistance, Employment Insurance to Old Age Security, along with the Guaranteed Income Supplement. We made a number of specific recommendations, 74 in all, for improvement. I will touch on a few of them.
With Employment Insurance, the biggest problem is that most of the unemployed do not qualify for benefits. What sense does that make? Recommendations 7 through 15 in our report suggest a number of specific changes to make income support for the unemployed more responsive and effective. On education and training, as honourable senators well know success in today's fast-moving job market often depends on having the right skill. There is a clear connection between the level of education achieved and the level of income received, yet we found a classic Catch-22 situation: Poverty keeps many people from acquiring the kind of education and training they need; yet their lack of skills keeps them from getting the jobs that would lift them out of poverty. Breaking the cycle is critical, and breaking it begins at the earliest years of life.
Study after study confirms that children who arrive at school ready to learn become adults prepared to succeed. Among our recommendations, therefore, is a nationwide federal-provincial initiative on early childhood learning, with the emphasis on learning. Referring to early childhood development programs, the recent report of Canada's Chief Public Health Officer, Dr. David Butler-Jones, notes that a dollar invested in the early years saves between $3 and $9 in the future spending on the health and criminal justice systems, as well as on social assistance.
We also witnessed first-hand the importance of middle school support for vulnerable children and for high school completion, as well as literacy upgrading and skills building at every age. That is why we propose offering additional tax support for post-secondary education for students in groups like Aboriginals who are under-represented in those institutions, as well as for initiatives that keep disadvantaged young people in school.
According to one study, if Aboriginal Canadians were able to increase their education attainment to the level of other Canadians, our cumulative economic output would grow by an additional $179 billion by 2026 and government tax revenues would be $3.5 billion higher. Obviously, that is good for Aboriginal people and good for all Canadians.
One of my favourite community-based programs to help keep kids in school is the Pathways to Education Program. At Toronto's Regent Park, they were instrumental in lowering the high school dropout rate from 56 per cent to 10 per cent and increasing the number of high school graduates going on to post-secondary education from 20 per cent to 80 per cent. Those numbers are phenomenal.
We need more programs like that. I was pleased that the Minister of Finance in his recent budget provided $20 million so that Pathways to Education could tell other people about their programs. That can be a benefit right across the country.
We also looked at health because there is a strong connection between being poor and having poor health. The poorest quarter of Canadians use twice the health care services that those in the wealthiest quarter use. According to Statistics Canada, poverty reduces life expectancy more than cancer does. Also in our study, we saw examples of things that worked, such as tax credits, including the National Child Benefit Supplement, which puts money into the hands of low-income individuals and households. As a critical step to eradicating child poverty, we propose increasing the NCBS to $5,000 by 2012 from the current $3,400. The Working Income Tax Benefit supplements low income earnings and holds great promise by making work pay. We recommend increasing the benefit so that no recipient would fall below the poverty line.
I will say a quick word on those who struggle with disabilities. They are highly marginalized, face exclusion from quality education, have lower employment rates and are more likely to be poor. We believe that what is needed is to provide a basic income guarantee for people with severe disabilities. Just as the Guaranteed Income Supplement lifted tens of thousands of seniors out of poverty, a guaranteed income for those with severe disabilities would immediately take about half a million people off the social assistance roles.
On housing and homelessness, I think all honourable senators understand intuitively the importance of having decent shelter. A home anchors a person and a family, provides the foundation for higher educational attainment and leads to greater stability in the workplace. Health experts also tell us that adequate housing is a key determinant of health and long-term health outcomes. Today in Canada, at least 3 million people are struggling to find affordable housing. We need to do a better job. We need leadership from the federal level. Our report provides a number of relevant recommendations.
Addressing the issue of homelessness is not only about doing the right thing morally but also about dollars and cents. It is more expensive for us to leave someone on the street than to provide them with decent housing and support services. Recently, Premier Ed Stelmach of Alberta said that an average homeless person costs society roughly $100,000 per year, including health costs. He said that the annual cost per person drops to $35,000 annually if that person is given a long-term home.
We need to do a better job on both housing and homelessness. It is time for the federal and provincial governments to come to grips with the issue and develop a national housing and homelessness strategy.
Underlying our report is a simple common-sense premise: Social programs should lift people out of poverty, not keep them there. It is time to give people the tools they need to lift themselves into a better life. Poverty is not benign. It affects us all. It costs us all. We spend a lot of money and do not get the results we should get. We do not need to spend more money. I emphasize that. We do not need to spend more money, but we need to spend smarter, and more efficiently and effectively.
In today's global economy, with the looming demographic challenge of an aging population leading to a shrinking workforce, the importance of creating those opportunities of unleashing the creative contribution of those trapped in poverty is more important than ever. In a very real sense, honourable senators, the future level of our prosperity depends on addressing the current level of our poverty. Simply put, we cannot afford poverty anymore.
Please click here to read the Committee report In from the Margins: A Call to Action on Poverty, Housing and Homelessness
Please click here to read the full text of this debate