Submission to the House of Commons Standing Committee on Finance
by the Canadian Council on Social Development
Presented on May 21, 2002 by:
Andrew Jackson, Director of Research,
Canadian Council on Social Development
After the last election, the Prime Minister placed social development and social inclusion at the heart of his government’s agenda. In his reply to the Speech from the Throne in January 2001, he noted that "there are still too many single parent families, too many visible minorities, too many recent immigrants, too many aboriginal Canadians living in poverty. Canadians with disabilities still face too many barriers to participation."
"We are determined", the Prime Minister said, "to help families break out of the poverty trap. To reverse the cycle of dependency. To help parents realize their hopes and their dreams for their children. We cannot afford the costs, moral, human and economic, of child poverty. We must find new and better ways to promote opportunity and to ensure that the basic needs of all are met."
The Prime Minister recognized that while growth and job creation are part of the answer to social exclusion, they are not the total answer. Over the complete cycle of recession and economic recovery of the 1990s, more and better jobs were created, but income gaps between Canadians have grown and the rate of poverty has increased. This is because the market incomes of the more affluent have grown much faster than those of middle and low-income families, and because income transfers needed to cushion the impacts of unemployment and precarious work have been cut.
From the Red Book of 1993 to the most recent Speech from the Throne, the Liberals have correctly recognized that economic progress alone does not guarantee social development, and that investment in social development plays an important role in economic growth. In a knowledge-based economy and in the face of looming skill shortages, it is foolish as well as immoral not to address social exclusion.
Words not enough…
Yet the real social policy agenda of the federal government has matched neither its rhetoric of inclusion, nor its generally sound analysis of the underlying issues. In the first term, the paramount goal of deficit reduction led to deep cuts to Employment Insurance and federal transfers to the provinces. The elimination of the Canada Assistance Plan and the fiscal squeeze on the provinces led to cuts in welfare incomes, the near elimination of affordable housing programs and the erosion of community-based services and supports.
With a few partial exceptions, the provinces have neglected the social investments which are needed to counter exclusion – such as affordable child care for single parents trying to enter the work force, community supports and services for persons with disabilities and youth at risk, and settlement services for new immigrants. Much of the burden of dealing with growing social problems on the ground has been downloaded to the municipalities who know what the problems are but do not have the resources to respond adequately.
After the elimination of the deficit, the pressing federal priorities became debt reduction and tax cuts (the 2000 pre-election mini Budget), and then national security concerns (the 2001 Budget.) Social development has been mentioned in recent Budgets, but very much as a second thought.
To the government’s credit, we have seen an extremely important decline in unemployment, increased tax benefits for middle and low-income working families with children and for persons with disabilities, re-indexation of social benefits to inflation, and investments in early childhood and skills development programs. Federal transfers to the provinces were boosted significantly before the last election, though the new money has been swallowed-up by mounting health care costs and provincial tax cuts.
With a new Budget on the horizon, still healthy federal finances and a government seeking a positive agenda, it is time for the new priority – the fight against social exclusion. Many of the most serious problems are to be found in our largest cities, and many of the most obvious solutions (such as reform of our inadequate and punitive social assistance system) lie within provincial jurisdiction. What, then, should the federal role be?
In this short submission, we reiterate three key CCSD policy proposals from previous briefs, and we advance a broad idea that we believe merits further reflection on the part of the government and the social policy community as a whole.
First and foremost, we again insist on the pressing need for a much more serious federal commitment to the construction of affordable rental housing, in partnership with the provinces and municipalities. The recent CCSD report on urban poverty for the United Way of Greater Toronto shows that the average rent for a two-bedroom apartment in the City is $879. This amount would swallow up almost all the income of the one out of two lone-parent families in Toronto who live in poverty. It would consume two-thirds of the income of the one in six two- parent families who live in poverty. Put simply, rents are at such a level they use up hugely disproportionate shares of the incomes of the working poor, those on social assistance and recent immigrants. We expect that data from the 2001 Census, when available, will confirm that the proportion of Canadians in core housing need soared in the second half of the 1990s, the inevitable result of a near end to construction of new rental housing outside BC and Quebec.
The chasm between big city rents and the incomes of the poor has to be closed, and construction of new affordable units is an important part of the solution. While the last Budget confirmed a very modest federal contribution to new affordable rental housing, this must be followed up by a serious, longer-term commitment.
Benefit the working poor
Second, the federal government can continue to use the tax system to raise the incomes of those in need. We need further increases to child tax benefits, a refundable disability credit, and a higher basic tax exemption for working poor families. Yes, paid work is an extremely important mechanism for social inclusion. But precarious and insecure employment is no guarantee of income security.
Support to new Canadians
Third, the federal government has the moral responsibility to take the lead in promoting effective settlement services for new immigrants. Our Toronto report and other studies show that far too many minority newcomers are trapped in low-wage jobs and living in seriously deprived big city neighborhoods. Investment in better language and skills training is needed, along with practical measures to promote immigrant skills to employers and to recognize foreign education and qualifications.
Put social development back on agenda
Finally, the CCSD wants to bring to the attention of this Committee ongoing discussions in the voluntary sector on the need to put social development back on the policy agenda. It is time to think about how to build a new partnership between the federal government and community-based social development agencies, building upon the newly forged formal partnership between the federal government and the voluntary sector.
Only a decade ago, Ottawa helped fund a huge range of not-for-profit community social services, from child care, to transition houses, to services for the mentally ill, to family and child services. This was done through the cost-shared Canada Assistance Plan, and through some direct federal support to voluntary sector organizations.
A wide range of community level social services in Canada are not delivered directly by governments, but rather by publicly funded agencies with independent, voluntary boards. These agencies were established to identify and meet the needs of particular communities as defined by location or client group (e.g.: seniors, persons with disabilities and children with special needs). At its best, the community sector is an advocate for the disadvantaged and an efficient provider of high quality services that are closely tailored to the needs of communities and client groups. Typically, the community sector works through networks and in close partnership with provincial social services departments, as well as municipalities, Social Planning Councils and United Ways.
Mounting problems, fewer resources
Today, this important sector is dealing with ever-mounting social problems with ever-shrinking resources from all levels of government. Agencies have been the first victims of social spending cuts by provincial governments who have been quick to laud the virtues of voluntarism, and slow to learn that community social services depend upon stable partnerships between governments and service providers. Volunteerism and charitable donations do make a contribution, but they are no substitute for paid staff and adequate, predictable funding. The growth of government contracting to commercial firms in some provinces (e.g.: home care in Ontario) is undermining community-based, higher quality care.
A fresh idea
The federal government must explore how it can promote social development and capacity-building on the ground, without tangling with the provinces, and without trying to impose any single blueprint on very different communities.
One way of doing this, which we propose for discussion, would be to set up an arms-length foundation to financially support the activities of community-based social agencies. Such a foundation could be run by a widely representative board, including all levels of government, business, labour and the voluntary sector.
The initial mandate of the foundation could focus on community capacity building – for example, it could promote and fund community social planning institutions such as Social Planning Councils. Funding could also be given to umbrella national organizations providing support and services to particular groups at risk of exclusion, such as immigrants and refugees. In a small way, this proposal could help move us to the comprehensive social planning frameworks that have been created in countries like the Netherlands and Ireland.
There is increased recognition that the growth and prosperity now being enjoyed by most Canadians is not being fairly shared by all. As the Prime Minister himself has said, far too many are excluded from new opportunities and do not enjoy equal life-chances.
This Budget should finally put social development and social inclusion where they belong: first on the national agenda.