Leading the charge to end poverty in Canada

Welcome address at the Tamarack conference Cities Reducing Poverty: When Mayors Lead on April 5, 2016 in Edmonton.

It is a pleasure to welcome you on behalf of Tamarack. And a particular pleasure for me because of the presence of so many mayors and councillors. I’ve worked for a number of years to highlight the importance of the municipal level of government in Canada, and to advocate for its empowerment. It is a tremendously effective level of government, and one that is closest to Canadians.

And of course to be at this conference where we have cities focusing on poverty reduction, one of the other goals of my working life, is like a dream come true.

Senator David Croll chaired a Senate inquiry into poverty in 1971. His report opened with this landmark observation: “The poor do not choose poverty. It is at once their affliction and our national shame.” Forty-five years later those words still ring true.

For the first time in a long time I think we are in a position to do something to end our national shame. We have a new federal government focusing on some key elements of poverty reduction. Almost all of the provinces have poverty reduction strategies. And we have a rising tide of municipal governments ready to lead the charge. It is an encouraging time.

If we built it, we can tear it down

“The poor do not choose poverty.”

But societies can choose poverty. For poverty is a choice that we make as a society. It is constructed, not inevitable. It is constructed by the economic and social policies we choose, by which voices we choose to listen to, and by which rights we choose to support and which rights we choose to ignore. It is constructed by the choice we make about how well we fund the instruments we create to counter poverty, the safety net of public income supports.

I think this is an important idea, that poverty is something we have chosen to construct as a society; because if it is something we have built, we can also choose to tear it down. We can tear it down because we have decided to believe in human dignity for everyone, in healthy communities, in social justice, in moral fairness, and in shared economic prosperity.

There have been times and people in our history who have engaged in the fight against poverty. We have made progress. At times during the 1930s, 1960s and 1990s the elements of our social safety net have been put in place by governments of various stripes. As a country we learned lessons from other places, and from the devastation of economic downturns like the Great Depression.

We created supports for farmers, for unemployed workers, for children and parents, for seniors, for people living with disabilities. They provide either income supplementation or income replacement. Programs like the Canada Child Benefit and its provincial counterparts and the Working Income Tax Benefit (WITB) supplement income. Programs like the Canada and Quebec Pension Plans (CPP and QPP), Old Age Security (OAS) and the Guaranteed Income Supplement (GIS), and Employment Insurance (EI) replace income.

Most of these programs are designed and work well. They get supports to the people who need them, they tend to work through large public systems like the tax system, and they work at scale. They are generally indexed to inflation so that their value doesn’t decline over time. Governments do a good job at running these programs, and they comprise a significant percentage of the federal government budget, and a lesser but important part of provincial budgets. Program design that gets money to where it is needed, through mechanisms like a refundable tax credit, is an efficient use of public money.

We know where success has occurred. OAS and GIS led to dramatic declines in poverty among seniors, particular for single seniors whose experience of poverty was the most dire. The Canada Child Tax Benefit, now redesigned and rebranded as the Canada Child Benefit, has led to a 40% decline in child poverty, and the new Canada Child Benefit will lift another 300,000 children out of poverty. Observable declines in poverty result from the various instruments we have in place.

Good instruments need investment

However, if these instruments are so good, why aren’t the results better? Well, they are mostly underfunded. The current federal government has combined a number of family supports into the Canada Child Benefit which is fully funded; this is a giant step forward. But the WITB is currently funded at less than 25% of the target. And we know CPP payouts are inadequate for seniors, which has led to Ontario’s premier first urging the federal government to augment the plan and, when they refused, deciding that Ontario needed to take the lead. Fortunately the new federal government will join the province in a look at making public pensions more effective.

If we were to fund these programs properly, it would help tear down the poverty we’ve constructed. If we paid attention to the proper design and full funding of these instruments, poverty would begin to crumble. And while some complain that we have too many different programs and argue for a more simple approach, that diversity provides resilience to the overall safety net which may be salutary at some future date when the political pendulum swings toward a cost-cutting government.

Of course there are the voices who say we can’t afford to fund these programs fully. I think that is nonsense. We have been stuck inside a narrative of scarcity and insufficiency that is laughable in such a rich nation, one of the most blessed places in the history of humanity. We squander private and public money at will. In the public realm alone we can find savings through better military procurement, for example, or through a criminal justice system that incarcerates young people unnecessarily and expensively. The failures in our bail and remand procedures land numerous young, mostly poor, people in jail at great cost, an average of $66,000 per person per year. It would be cheaper if we sent them all to Harvard for a year where tuition room and board is only $61,000 a year, and the outcomes would be better. There are billions to be reallocated.

That narrative of scarcity means that we don’t even attend to what we have, the public pension plans being a case in point. But we neglect many of our institutions in most walks of life and let the quality of their work deteriorate. We have fallen behind in many areas where we used to be ahead, and I’ll cite two: public transit and affordable housing, including supportive housing for people living with disabilities.

Transit and housing are important economic issues for Canada. In fact I think they are the two most important issues facing the country, and this is most profoundly understood at the municipal level. They matter to people’s ability to connect to work and school, and if people can’t live close to work or it takes them too long to commute, the economy pays the price in turnover and productivity. They are also important social justice issues, because when they are provided well they support the ability for people to engage in their communities and exercise their rights, not to mention achieve their hopes and dreams. We’ve fallen behind on these key elements of shared prosperity.

Cities need to focus on maximizing impact

When cities and provinces develop poverty reduction strategies I think they should focus on the big things that work at scale and that impact a large number of people. I’ve talked about some of the big instruments: the Canada Child Benefit and the Working Income Tax Benefit for example. Because we are such an urban country, most of the clients of these programs live in our cities. When they struggle because these programs are funded below the targets, our cities struggle. A city’s poverty reduction strategy should include using its political clout to get these programs fully funded.

And of course provinces have the capacity to make sure their components of such programs are properly funded.

Cities also have enormous leverage to exercise around paying people adequately for work. Cities can begin by being good examples, by adopting fair minimum or living wage rates that they pay to their own employees. Most cities in fact do this well, in good part because their employees are part of collective bargaining units. But cities can go beyond their own practice and require fair pay practices of their suppliers, and the agencies and corporations related to the city. As you know this is a growing practice in major cities, including London in the UK. And we have Canadian cities like Cambridge, Ontario, adopting a living wage, which was the subject of a recent Tamarack webinar. We know these measures work.

Our experience with getting employers to change their practices has been encouraging. Maytree initiated the Toronto Region Immigrant Employment Council to help skilled immigrants find the jobs for which they have experience and training. Part of it is helping the immigrant, and part is helping the employer change their HR practices to get good at hiring immigrants. Once employers understood that they could get a competitive advantage by changing, they got on board. Evidence has shown that being the employer who pays better and values workers more yields rewards in loyalty and effort.

I’ve already mentioned transit and affordable housing as big issues. I know that cities lack the fiscal capacity to undertake these major issues on their own, being restricted largely to the property tax for revenue, whereas the federal and provincial governments have access to the larger taxes on income and sales. But mayors and leading councillors employ some of the biggest bully-pulpits in the country, and have regular touch with many more Canadians than politicians at other levels of government. They can build a groundswell of support, voices demanding fair fiscal treatment for cities.

This may well require our cities to pick up some of the tools handed to them. For example, if a provincial government were to permit municipalities to levy a sales tax, or an income tax, would mayors and councillors be willing to implement them? In recent decades there has been enormous resistance. The preferred approach is for the federal or provincial governments to levy the tax and then transfer the proceeds to the municipality. The political liability would then sit with the province or feds and the asset with the city. No wonder the feds and provinces resist, and will likely do so until cities accept some of the political heat.

Of course there are good arguments about the highest fiscal capacity residing at the federal government and in the large provinces, but those levels of government would be encouraged if the cities were more willing to do more of the heavy lifting on the revenue side.

Addressing poverty through rights

At Maytree we are very interested in human rights. Canada is of course governed by our Bill of Rights and our Charter of Rights and Freedoms. We are also signatory to a number of international rights agreements including the UN Universal Declaration of Human Rights, which incidentally was drafted by Canadian John Humphrey, and the International Covenant on Economic Social and Cultural Rights.

Our Charter protects political and justice rights, things like free speech, voting and fair trials. Our protections are quite robust in these areas. Our signing on to international covenants extends our rights protection into economic, social and cultural rights, things like access to work and fair pay, and to health, nutrition and good housing. There is an argument that some make in Canada that economic social and cultural rights are not “justiciable,” that they cannot be tested in court. But that is not the view of the United Nations which makes it clear that signing the covenants requires that people have access to these rights, and can pursue that access through the justice system.

It is important to understand that rights inhere in people. We hold these rights because we are human. They are not granted by governments or some other entity. When governments recognize these rights, they accept the obligation to protect them. So when Canada signed on to the International Covenant on Economic Social and Cultural Rights, it said it would protect those rights for people living in Canada.

And it does not obligate just the federal government, but all subnational governments, including municipal governments. Before signing the UN agreements, the federal government had to seek the written approval of the provinces, which it did. The UN required this agreement by the subnational governments to ensure that Canada could carry out its commitment, given the political structure of our federation. Because municipalities are creatures of the provinces as set out in the Constitution Act, it also implicates municipal governments who therefore have an obligation to protect these rights.

And there is an attendant obligation to protect these rights to the extent of “all available resources.” This means that simply choosing not to afford something is in violation of those obligations. Of course there is a test of reasonableness, but if studies of tax revenue hills indicate that there is much more room to increase revenues without incurring significant tax avoidance behaviour then that revenue must be pursued if it is to be used to protect rights.

So, for example, if there is deteriorating public housing stock that is unhealthy or unsafe, it must be fixed. If children are going to school hungry, they must be fed. Doing so is not a choice, but an obligation of municipal officials under our rights regime.

Using the rights lens puts a different frame on political office. It means that there is an actual job to do, to house the under-housed, to feed the hungry, to make sure the sick have access to good health care, all of this alongside the usual municipal mandates set out in provincial laws. Of course our better mayors and councillors have known this for years, and indeed it is what draws them to public service. They work hard to improve their communities, even if they don’t explicitly employ a rights lens in the way they frame their job. I suspect that those of you in this room are in this group, which is why you have chosen to be here today.

But there are other people for whom the winning and holding of public office is the end, and all the rest seems to be a set of free choices they get to make based on an ideology or an idea that comes to them. Our human rights obligations put the challenge to them, and it might be a challenge some day in a court of law.

I think the next few days will be rich in content, ideas and spirit. We have a chance here to form the relationships and alliances that can set us on the path to Senator Croll’s mission for us to end our national shame.