Poverty is a complex, diverse and tough issue that requires a range of interventions by a number of actors—all three orders of government, employers, unions, educational and health institutions, NGOs and communities. Close cooperation between the federal and provincial/territorial governments is particularly important.

We believe that the federal government has the dominant role to play in tackling reduction. It can reduce poverty, it does reduce poverty and it should reduce poverty a lot more.[383]

Caledon Institute of Social Policy

In this chapter, we present testimony about the federal role in reducing poverty; suggest means to better support poverty reduction efforts across the country, including provincial and territorial poverty reduction initiatives, and promote coordination among all those involved in putting forth these efforts; and we outline potential avenues to develop a framework for a federal action plan to reduce poverty in Canada.

3.1 What Should the Federal Government’s Role be in Reducing Poverty in Canada? Canadians Answer the Question

Working in a cooperative and transparent fashion, the federal government and provinces should establish a national poverty reduction strategy that complements and reinforces provincial and territorial efforts and that's guided by a vision of a poverty-free country in which charter and human rights are fully realized. It should be a strategy that has targets and timelines. I suggest it must also be a strategy that's transparent, one that's transparent in its decision-making, its deliberations, its monitoring, and its evaluation.[384]

Sarah Blackstock, Income Security Advocacy Centre

Over the course of its study, the Committee heard from hundreds of Canadians on the role they thought the federal government should play in supporting poverty reduction efforts across Canada. The vast majority expressed clearly that that there is a role for the federal government in reducing poverty in our country, while respecting provincial and territorial jurisdictions who predominantly have responsibility over social issues such as poverty. The Committee was also told that in order to devise and implement successful poverty reduction measures, the federal government must clearly exert its role in consultation with community organizations, people living in poverty and their advocates.

So solving poverty, as people have mentioned, is a national issue. The federal government has to be involved if it’s going to work.

It’s also really important, I think, especially for the federal government, to recognize that people who are already marginalized have to be involved and that poverty has to be seen, as most European countries see it, in the context of larger social and economic objectives, not something on its own.[385]

Sheila Regehr, National Council of Welfare

Canadians and our governments have shown a remarkable capacity throughout our history to rise to the occasion and to meet the challenges of nation-building. The challenge of eliminating poverty in Canada is no greater than others we have surmounted in the past. Strong leadership from the federal government can and will make all the difference.[386]

John Campey, Community Social Planning Council of Toronto

Most witnesses recognized that the federal government is already playing an important role in reducing poverty in Canada, but also stated that further action is needed to lift Canadians out of poverty. The Committee was told that lessons can be learned from federal measures that have been particularly successful at reducing poverty. For example, the low-income rate among Canada’s senior population has been declining over the past three decades. This decline has been attributed to the maturation of the Canada Pension Plan (CPP), the enhancement of the Old Age Security (OAS) program and the Guaranteed Income Supplement (GIS), as well as to an increase in private savings. The Canada Child Tax Benefit (CCTB) and the National Child Benefit Supplement (NCBS) are another example of successful measures that contributed to a decline in child poverty.

Witnesses are asking the federal government to strengthen Employment Insurance (EI), to invest more on federal work tax credits, to increase the CCTB and the NCBS, to review the adequacy of OAS and GIS payments for seniors, and to substantially increase its investments in early learning and child care, affordable housing, disability-related income support programs, and Aboriginal programming. The Committee was told that all these measures provide a solid foundation on which the federal government can build an action plan to reduce poverty in Canada.

a. Canadians Call for the Recognition of Economic, Social and Cultural Rights

The recognition that the way poor people are forced to live often violates their human rights—or that promoting human rights could alleviate poverty—was a long time in coming. Now a human rights approach to poverty reduction is increasingly being recognized internationally and is gradually being implemented.[387]

Some witnesses told the Committee that the Government of Canada has international obligations with regard to poverty reduction making it imperative for the federal government to play a significant role in this regard. Canada is a signatory to the United Nations International Covenant on Economic, Social and Cultural Rights, which came into force in 1976. States that are a party to this covenant, according to article 11, “recognize the right of everyone to an adequate standard of living for himself and his family, including adequate food, clothing and housing, and to the continuous improvement of living conditions.”[388]

Human rights are founded on the basis of dignity. Poverty is a condition that violates these rights as laid out in the Universal Declaration of Human Rights in the international human rights conventions. Poverty impedes people's access to the basic resources necessary for well-being, including adequate and sufficient food and clothing as well as safe and appropriate housing. Poverty is also an important social determinant of health.[389]

Karri Munn-Venn, Citizens for Public Justice

Concerns about poverty in Canada have been raised during the 2009 UN Human Rights Council’s Universal Periodic Review of Canada’s human rights obligations under the covenant.[390] These concerns echo the concerns and recommendations of many witnesses that appeared before our Committee asking the federal, provincial and territorial governments to join forces and adopt a clear agenda to considerably reduce poverty in Canada.

It is not without reason that Canada, on several occasions, has been criticized by UN authorities, particularly the Committee on Economic, Social and Cultural Rights in 2006 and by the United Nations Special Rapporteur on the right to adequate housing in 2007. The United Nations Human Rights Council, again quite recently, during its universal periodic review last March, criticized Canada for its weak performance in upholding the right to a standard of adequate living and also the right to housing.

We were in a sustained period of economic growth and budgetary surpluses. Now, circumstances have changed; there is an economic crisis and we are once again facing a deficit. We must not use these two reasons, the crisis and the deficits, to fail to act to relieve poverty. I feel that these responsibilities not only still exist, they're even greater in such times.

FRAPRU's [Front d'action populaire en réaménagement urbain] first recommendation is to respect the international commitments that Canada has made in terms of human rights, and particularly social rights, rights which the government and society have agreed to uphold. It seems to me to be the very least we could do to take the various UN committees' recommendations into account.[391]

François Saillant, Front d'action populaire en réaménagement urbain

The Covenant on Economic, Social and Cultural Rights guarantees everyone the right to an adequate standard of living, including adequate food and housing. In that regard, in 2006 the committee at the UN responsible for monitoring Canada's compliance with that covenant expressed concern with the numbers of people living in poverty in Canada, and that poverty rates remain very high, particularly for low-income women and single mothers.

In 2008 when CEDAW [Canadian Feminist Alliance for International Action] reviewed Canada, they expressed similar concerns; in particular, that poverty is widespread among particular groups of women, including [A]boriginal women, minority women, and single mothers. The committee then linked women's poverty to four particular issues: one, a lack of affordable quality child care spaces; two, the absence of a national housing strategy and adequate housing; three, the cuts to and inadequacy of social assistance rates in relation to the actual cost of living; and finally, four, violence against women.

Most recently, the UN Human Rights Council, under the Universal Periodic Review where states are reviewing states, expressed concern regarding the high rates of poverty and homelessness in an affluent country like Canada. In turn, several very concrete recommendations as to how the Government of Canada might address poverty amid such affluence have emerged from the United Nations human rights system. For example, the Government of Canada has repeatedly been called on to develop a national strategy to eliminate poverty; establish a national poverty line; integrate economic and social rights into poverty reduction strategies; establish minimum standards for the provision of funding to social assistance programs applicable at the federal, provincial, and territorial levels; and establish a monitoring mechanism to ensure the accountability of these mechanisms so these mechanisms work for women.[392]

Leilani Farha, Canadian Feminist Alliance for International Action

The Committee was told that Government of Canada must respect its legal obligation to combat poverty and put measures in place to ensure that every person in Canada lives in dignity and free of poverty. For example, “Canada Without Poverty” maintains that the “security of the person” under the Canadian Charter of Rights and Freedoms should be interpreted to include social security.[393] Some witnesses asked that human rights legislation in all Canadian jurisdictions be amended to fully include economic, social and cultural rights. Others argued that “under international human rights law and Canada's treaty obligations, ultimately the federal government has the primary responsibility for combating poverty, notwithstanding the federalist structure of Canada.”[394]

The Canadian government has repeatedly been asked to act. Most recently the Canadian Human Rights Act review panel travelled across the country looking at what needs to change in the Canadian Human Rights Act. They reported that they heard more about poverty and homelessness than about any other human rights issue. One of their strongest recommendations was to include the right to freedom from discrimination because of social condition, defined, as it is in the Québec legislation, as encompassing homelessness and poverty. Unfortunately nothing has been done about that.[395]

Bruce Porter, Centre for Equality Rights in Accommodation

b. Canadians Call for a Federal Action Plan to Reduce Poverty in Canada

Witnesses also told the Committee that the federal government should show leadership in the fight against poverty in Canada specifically by creating a federal action plan with specific goals and timetables to reduce poverty, and accountability mechanisms to monitor progress. Many advocates for people living in poverty, including Campaign 2000, Citizens for Public Justice and Canada Without Poverty, have been calling for a federal poverty reduction plan that would incorporate a human rights framework. Finally, it was clear throughout our hearings that a federal action plan to reduce poverty should be developed in collaboration with the provincial and territorial governments, Aboriginal governments and organizations, the public and private sector, and people living in poverty.

Let me say first that Canada's poverty reduction strategy needs to be integrally linked to the international human rights commitments that Canada has made. These international human rights commitments, particularly with respect to economic, social, and cultural rights, should provide the framework for developing and implementing a pan-Canadian poverty reduction strategy.[396]

Greg deGroot-Maggetti, Mennonite Central Committee Canada

Unlike some jurisdictions, both provincial and abroad, the federal government does not have a formal poverty reduction strategy replete with analysis evaluation, reform initiatives, and targets. However, the federal government does have at its disposal some potentially powerful instruments to help reduce poverty, which can service key elements of the full-blown poverty reduction strategy.[397]

Ken Battle, Caledon Institute of Social Policy

What's exciting to those of us who do the work here in Ontario is that people across this province, and at the local levels, are getting involved in the work of poverty reduction. But it seems to me that Canada is not simply the sum of its parts; we are a nation. Certainly we are a nation with tremendous difference and diversity, but we're also a nation with shared values and aspirations, and Ontario is not alone in calling for the federal government to take its rightful and necessary place in our shared work to reduce poverty.[398]

Sarah Blackstock, Income Security Advocacy Centre

What can be done right now in the short term? We believe having the federal government developing a strategy and setting targets, goals, and timetables will help focus this issue. We also believe that better coordination between the federal governments and the agencies that are working on different aspects of anti-poverty activities and the coordination of these federal initiatives with provincial governments will result in major gains. The federal activities that are going on involve social transfers, unemployment insurance, funding for social housing, skills training, and economic development plans. There's a lot of activity actually going on that is currently being funded by the federal government. The problem is that it isn't all being coordinated with people coming together, talking to each other, and developing a plan. So in many ways, it's not more money but better planning, as some of my colleagues have talked about.[399]

Lynne Markell, Canadian Co-operative Association

Recommendation 3.1.1

The Committee recommends that the federal government immediately commit to a federal action plan to reduce poverty in Canada that would see, during its first phase, the implementation of the recommendations in this report.

This action plan should incorporate a human rights framework and provide for consultations with the provincial and territorial governments, Aboriginal governments and organizations, the public and private sector, and people living in poverty, as needed, to ensure an improvement in lives of impoverished people.

The action plan should be reviewed every five years and should follow a three-step process: consultation, revision, and reporting to Parliament.

3.2 Improving Coordination and Integration of Poverty Reduction Efforts Across Canada—a Federal Action Plan to Reduce Poverty in Canada

a. Supporting Provincial and Territorial Poverty Reduction Initiatives

Of course I think there should be a national strategy. We weren't prepared to wait for a national strategy, but we believe we have to do this together. Canada is a different country in that we have strong provincial governments. That doesn't mean the federal government can abdicate its responsibility when it comes to issues like this. We are looking for engaging partners at every level of government.[400]

Hon. Deb Matthews, Government of Ontario

As indicated in Chapter 2 of this report, several provinces have adopted formal strategies and other measures to reduce poverty. Many witnesses, including representatives of provincial governments that have adopted poverty reduction strategies, told the Committee that a coordinated and integrated approach is necessary to successfully deal with the issue of poverty.

Our government is committed to act in areas where we have the capacity and the jurisdiction to act relative to poverty reduction, but we believe that in order to be successful, many partners are necessary. The federal government is one of those partners we have to be committed to working with, and we believe we can work cooperatively with the federal government in terms of addressing poverty in our country. In the action plan I referenced earlier, we highlighted the need to work with the federal government, amongst many other partners, to ensure that the change that needs to happen will in fact happen.

I'd like to take a minute to highlight some areas where we need to work cooperatively, where we believe the province and the federal government can work together. Our experience, like that of other jurisdictions that have managed to significantly reduce poverty, shows that a coordinated and integrated approach is necessary. We need to work together on this.

If you are serious about tackling poverty in Canada, the federal government needs to join the provinces. They need to develop a comprehensive strategy in conjunction with the provinces and the territories to combat the problem of poverty.[401]

Hon. Shawn Skinner, Government of Newfoundland and Labrador

Although the Government of Canada has not adopted a poverty reduction strategy itself, the majority of provinces have now adopted such strategies, including Newfoundland and Labrador, New Brunswick, Nova Scotia, Québec, Ontario, and, most recently, a couple of weeks ago, Manitoba. It's no accident that Canada's two largest provinces have been the first to pass poverty reduction legislation. As provinces grow in fiscal size compared to the federal government, the two largest provinces have the greatest fiscal capacity to address that poverty, at least in part, on their own.

Smaller provinces with lower fiscal capacity and western provinces more influenced by commodity price cycles have yet to adopt such strategies. If this situation persists, it may be the case that poverty reduction will look very different in some Canadian jurisdictions than others. The federal government should not allow this to happen. The federal government should exert its leadership role and set a national poverty reduction strategy at the earliest possible opportunity.[402]

John Stapleton, Atkinson Charitable Foundation

The federal government spends a considerable amount of money on a variety of programs and transfers to assist low-income individuals across the country. The Committee was reminded that in some instances we do not know whether this money has been spent as intended or what the impact of this spending has been. One example of this lack of accountability pertains to the Canada Social Transfer (CST), a sizeable block fund transfer to the provinces and territories intended to support social assistance and social services, post-secondary education, early childhood development, and early learning and child care.

b. Canada Social Transfer

With respect to the Canada Social Transfer, we believe it is important to continue to enhance it. The many cuts made to provincial transfers since the 1990s have negatively affected the funding of many social programs in the provinces and resulted in chronic underfunding, something which has greatly affected service quality.[403]

Élisabeth Gibeau, Union des consommateurs

In 1996-1997, the federal government replaced the Established Program Financing and the Canada Assistance Plan—federal cost-shared programs for health, post-secondary education and social assistance and services—with a new block-funded transfer called the Canada Health and Social Transfer (CHST). Associated with this new federal-provincial/territorial transfer was a 30% (roughly $6 billion) reduction in cash transfers to the provinces and territories by the second year of the CHST.[404] Effective 1 April 2004, the CHST was divided into two transfers—the Canada Health Transfer and the Canada Social Transfer (CST)—with the latter equal to some 38% of the CHST (based on provincial and territorial spending patterns on CHST-supported activities).

The CST is the primary federal transfer program that provides support to provinces and territories for post-secondary education, social assistance and social services, early childhood development and early learning and child care. Due to a lack of accountability associated with the CST, Budget 2007 announced that the federal government would identify amounts within the CST for each priority area. This notional allocation was based on provincial and territorial spending patterns for post-secondary education and social programs, including support for children, at the time. The former was set at 25% and the latter at 75%.[405]

According to Budget 2009, the government intends to keep its commitment to long-term and growing transfer support to the provinces and territories. In regard to the CST, this transfer is expected to reach $10.9 billion in 2009-2010 and continue to grow at 3% per year until 2013-2014.

Despite the lack of accountability, several witnesses identified the CST as the preferred funding vehicle for helping provincial and territorial governments deliver poverty reduction initiatives.

The CST needs to be increased. We need to have transfers from the federal government that will provide immediate relief.…I don't have an exact number, but I do know that the CST needs serious and significant adjustment. It's one little sliver of the income we need to make changes for people living in poverty. [406]

Rene Ross, Stepping Stone Association and Community Coalition to End Poverty in Nova Scotia

[W]e must increase the Canada social transfer to give the provinces and territories the means to increase social assistance benefits across Canada and make it possible to return to the levels we had at the time of the elimination of the Canada Assistance Plan.[407]

François Saillant, Front d'action populaire en réaménagement urbain

The federal government has reduced its transfers for public services to the provinces, be it in health, education or social services. Its withdrawal from the Canada Assistance Plan has allowed the federal government to cut its transfers in half. It is clear that those who are most affected by this are those living in poverty. We know what the consequences of poverty are on health, education and so on. The federal government has a responsibility in this regard. We ask the federal government to fully reinstate this 50% in order to pay the real costs of public services.[408]

Nicole Jetté, Front commun des personnes assistées sociales du Québec

In addition to public support for an increase in the CST, several witnesses expressed the view that more accountability needs to be attached to federal transfers to the provinces and territories. Although provincial poverty reduction initiatives typically involve some sort of accountability framework, some witnesses maintained that provincial and territorial governments need to be more transparent and should be able to demonstrate that federal funds have been spent as intended.

It's a concern [lack of accountability] we've had for years, since the Canada Assistance Plan was changed. Originally, it was transformed into the Canada health and social transfer. We wrote a paper, back in the mid-nineties, called “The Dangers of Block Funding”, which identified precisely the kinds of issues you're raising.

We saw some positive developments in the country around, for example, the [N]ational [C]hild [B]enefit. What is of interest, and what I think is helpful in this regard, as a model, is that it's a negotiated federal-provincial-territorial agreement. So the federal investment comes with an associated set of criteria or principles that have to be addressed with respect to receipt of the money. So it sets up, in a sense, an accountability mechanism.

I know there are opting-out provisions, and these always have been addressed. But when you do have these kinds of principles in place, everybody looks to those principles and those barometers as a means of measuring performance. I think it is one of the ways we can respond to this open funding. We tie it in more to a negotiated agreement.

Similarly, with respect to the child care agreements and the early childhood development framework we had in the year 2000 and then in 2003, we had an associated set of principles for that investment. It's, again, at least one way of looking at tying the money, to the extent we can, in a federation.[409]

Sherri Torjman, Caledon Institute of Social Policy

I personally believe there should be some level of responsibility associated with the transfers. If they are meant to do something, there should be conditions to make sure that those things are happening. If there's money transferred for child care, for instance, I would like to see conditions, to make sure that we have the same level of standards across the country.[410]

Johanne Perron, New Brunswick Coalition for Pay Equity

As I said in my report, if you were giving money to the provinces for things like housing and other poverty reduction strategies, you have to ask the provinces to be accountable for that money and to have targets and timelines. I really think that's one thing the federal government should do and can do.[411]

Dr. Andrew Lynk, Canadian Paediatric Society

Members of the Committee also note that some witnesses recognized that poverty reduction is primarily within the domain of the provinces and territories and that the federal government must respect this reality. We fully agree with this and maintain that the federal government must not proceed with any measure that directly supports provincial and territorial poverty reduction initiatives in the absence of a bilateral agreement with the provinces and territories.

[W]e believe that the problem of poverty and eradicating poverty is so large, and it has such a significant impact on national prosperity, that it is going to require the participation of all three orders of government. Having said that, we are always very careful and always very clear in saying that federal support for, in this case, poverty reduction in cities and communities must always respect provincial jurisdiction over cities and communities.

…The message I would leave is that we do believe these kinds of problems are large enough, and the impacts are national in scope, that each order of government has a very important part to play. How those parts are played out—transfers versus federal–provincial programs—we'll leave that up to federal and provincial governments.[412]

Michael Buda, Federation of Canadian Municipalities

While some members of the Committee believe that accountable direct federal support for provincial/territorial poverty reduction initiatives is hypothetically achievable within a reformed CST, it is highly unlikely given the limited success the federal government had following Budget 2006 regarding discussions with the provinces and territories on the “overall objectives for post-secondary education and training, appropriate roles, and on developing a framework for ensuring measurable results and accountability in respect of funding.”[413] In this context, an alternative approach—such as a negotiated federal-provincial-territorial transfer dedicated to supporting provincial/territorial poverty reduction initiatives—probably presents a more realistic alternative to a reformed CST.

c. Beyond the Canada Social Transfer—A Federal Poverty Reduction Fund

Some of the things the federal government can do include...creating a poverty reduction fund to support provincial initiatives.[414]

Dennis Howlett, Make Poverty History

At the moment, there is no consolidation of federal spending on programs and transfers (including the tax system) to help low-income individuals across the country. Members of the Committee believe that it is necessary to provide taxpayers with a full accounting of federal spending measures to alleviate poverty among Canadians. A poverty reduction fund could serve this purpose and could be part of a federal action plan to reduce poverty.

In terms of directly contributing to provincial and territorial poverty reduction initiatives, some members of the Committee believe that the federal government should establish a new federal-provincial-territorial transfer dedicated to helping provinces and territories reduce poverty. This transfer would be in addition to the CST and would require provinces and territories to share information with the federal government on how funds delivered through this new transfer are used and what results have been achieved. Provinces and territories would be responsible for evaluating the effectiveness of this spending.

Members of the Committee do not think that the proposed transfer should entail specific directives or targets from the federal government to the provinces or territories; however, the federal government could contemplate the possibility of augmenting this transfer in cases where provincial and territorial governments are willing to cost-share in areas of mutual agreement, such as bolstering support for community non-profit organizations that serve and support those living in poverty. The Committee believes that this approach would provide a minimum level of accountability that Canadians expect, but more importantly provide provinces and territories with sufficient flexibility to achieve their poverty reduction objectives.

The value of this new transfer would, of course, depend on the fiscal position of the federal government and the objectives and targets associated with a federal poverty reduction action plan.

Recommendation 3.2.1

The Committee recommends that at their next meeting, First Ministers start negotiations regarding the creation of a new federal transfer (e.g., a federal poverty reduction fund) to support provincial and territorial poverty reduction initiatives.

3.3 Developing a Framework for a Federal Action Plan to Reduce Poverty and Measuring Results

a. Legislative Framework

Adopt and implement a federal act to eliminate poverty, promote social inclusion and strengthen social security: This act will ensure an ongoing federal role and responsibility for social development, while demonstrating a lasting federal commitment for action and for accountability to citizens for results.[415]

Citizens for Public Justice

Many witnesses suggested that the Government of Canada should establish a federal action plan to combat poverty and social exclusion that would include clear poverty reduction targets and timelines, accountability mechanisms, as well as an institutional framework and a funding mechanism; and some organizations recommended that this action plan should be incorporated in legislation. The Committee was told that enshrining the parameters of a federal poverty reduction plan in legislation would ensure that all who will serve in future parliaments will be focused on this issue and take the necessary steps to meet the poverty reduction goals and timelines established by the said law. Poverty reduction legislation is not without precedent in Canada: the provinces of Québec, Ontario and New Brunswick have passed legislation to this effect.

Among other components, a federal legislation to reduce poverty in Canada would likely include a preamble that would define poverty, outline the Government of Canada’s values and principles with regard to the right to dignity and a life free of poverty for all Canadians, and situate the legislation within a broader human rights framework. Witnesses recommended that a federal poverty reduction act should include a clause requiring that the Government of Canada develop and regularly update a federal action plan to reduce poverty (e.g., every five years) and that this plan should include specifics goals and timelines to reduce poverty in Canada (e.g., reduce poverty by half by 2020). The legislation could also require Statistics Canada, in collaboration with the lead department(s) and other stakeholders, to conduct research on poverty measures and advise the federal government as to which measures and indicators of poverty should be used to monitor the progress of a federal poverty reduction plan. To further promote accountability and transparency, the legislation proposed by witnesses would require the federal government to provide annual progress reports on the implementation of the action plan, its challenges and successes as well as any improvements to be implemented in the forthcoming year. Finally, some witnesses suggested that it would be important to include a requirement that existing and new federal government policies be examined for their impact on poverty.

However, no consensus emerged on the need for legislation among witnesses and among members of the Committee. Some witnesses suggested that there are alternatives outside a legislative framework to ensure the successful implementation of a federal action plan to reduce poverty in Canada, such as bilateral agreements with provincial and territorial governments that would include approved upon definition, goals and measures of poverty reduction.

Thirdly, we need to think about alternatives to legislation. I would argue that in fact just coming together and agreeing upon standard definitions and goals and then measuring and delivering on those goals would be fundamental to the success of poverty reduction in Canada. I know there has been some interest in renewing the discussion around the SUFA agreement [Social Union Framework Agreement], although I struggle with that because I'm not convinced that it was that successful as a piece of legislation.[416]

Glen Roberts, Canadian Policy Research Networks

b. Institutional Framework

Many witnesses indicated that the federal government would need to establish an institutional framework to ensure the success of a federal poverty reduction action plan. As a first step, a lead department or departments, including a specific poverty reduction office or secretariat, could be established to oversee the creation and implementation of the proposed federal action plan to reduce poverty in Canada. Given that Human Resources and Skills Development Canada’s (HRSDC) mission is to “build a stronger and more competitive Canada, to support Canadians in making choices that help them live productive and rewarding lives, and to improve Canadians’ quality of life”,[417] HRSDC should be given the responsibility to implement, monitor and report on the federal action plan to reduce poverty in Canada. The responsibility of heading the federal action plan could also be shared with Health Canada as poverty is an important social determinant of health.

Secondly, to promote consultation and collaboration among the different federal departments and agencies, an interdepartmental working group or cabinet committee for poverty reduction could be set up headed by the minister(s) in charge of the lead department(s). The working group or cabinet committee could be given the responsibility to review all current and proposed federal legislation, programs and policies to ensure that they do not hinder the measures taken under the action plan to reduce poverty in Canada, and make recommendations to solve any potential negative interaction between the two. The interdepartmental working group or cabinet committee could also undertake to evaluate the costs and benefits of federal programs and measures aimed at reducing poverty to make sure that taxpayers’ dollars are well spent. Finally, it could be given the responsibility to coordinate all communications and collaborations with other levels of government and agencies involved in implementing the federal action plan to reduce poverty in Canada.

Recommendation 3.3.1

The Committee recommends that the federal government establish a lead department (e.g., Human Resources and Skills Development Canada) or departments, including a specific poverty reduction office or secretariat, to oversee the creation and implementation of a federal action plan to reduce poverty in Canada.

Furthermore, to promote consultation and collaboration among the different federal departments and agencies, the Committee recommends the creation of an interdepartmental working group or cabinet committee for poverty reduction to be headed by the minister in charge of the lead department.

Members of the Committee were also told about the institutional framework in Canadian jurisdictions and other countries that have action plans to combat poverty. For example, some have established agencies that operate at arm’s length from the government to give policy advice on social and economic matters related to poverty, undertake research into the factors aggravating poverty and the extent of poverty, and to promote a greater understanding of poverty through public education. Most members of the Committee believe that to enhance accountability and answerability, it is appropriate to assign certain research, advisory and monitoring powers to an agency that would operate at arm’s length from the government of the day.

In Canada, a similar approach could see the mandate of the National Council of Welfare expanded to:

• monitor the progress of the proposed federal action plan to reduce poverty;
• oversee the development of indicators and measures in consultation with the federal interdepartmental working group or cabinet committee for poverty reduction, and Statistics Canada;
• advise and report back to the lead department(s), office or secretariat, on the implementation of the federal action plan to reduce poverty in Canada, its progress and make recommendations to promote its success; and
• work with the non-profit and voluntary sector to build community partnerships and promote community economic development, social innovation and other means of tackling poverty at the community level.

As an alternative, or in addition to an expanded role being played by the National Council of Welfare, a poverty commissioner could be appointed by the Governor in Council with the approval of the House of Commons and the Senate. The commissioner could be subject to the same terms and conditions, and exercise similar powers and duties given to the Auditor General of Canada in the Auditor General Act, in addition to the powers that could be given to his/her office by legislation to oversee the development, implementation and progress of a federal action plan to reduce poverty in Canada. Obviously, the creation of a whole new entity such as a commissioner would be much more complex, would require more time and would likely cost more than simply expanding the mandate of the National Council of Welfare. The Council is already an arm's length advisory body to the Minister of Human Resources and Skills Development on matters of concern to low-income Canadians and on programs and policies which affect their welfare. It already undertakes research on issues related to poverty, its contributing factors and potential solutions, and publishes reports on a regular basis that raise awareness about poverty and other social issues. It is well positioned to monitor progress under the federal action plan to reduce poverty in Canada.

Recommendation 3.3.2

The Committee recommends that the Minister of Human Resources and Skills Development Canada should see that the mandate and capacity of the National Council of Welfare be expanded to allow it to:

• create an advisory committee on poverty reduction comprised of people living in poverty and other relevant experts to work closely with the Council to oversee the progress of the federal action plan to reduce poverty in Canada and to advise the lead minister(s) accordingly;
• assist in the development of measures and indicators and undertake research with respect to the implementation of the federal action plan to reduce poverty and other issues related to poverty;
• submit a written report to the lead minister(s) annually on its findings with regard to the progress made toward the goals established under the federal action plan to reduce poverty in Canada, that shall then be tabled before both Houses of Parliament by the minister(s);
• work with the various levels of government and the non-profit and voluntary sectors to build partnerships and raise knowledge of local, provincial-territorial and federal initiatives contributing to the reduction of poverty in Canada; and
• promote a greater understanding of poverty through public awareness campaigns.

c. Poverty Measures

As indicated in Chapter 1, defining poverty, poverty lines, poverty levels, sufficient incomes or minimum standards of living is a matter of ongoing global debate among policy-makers inside and outside governments. In general, poverty is defined either in absolute terms—inability to obtain the necessities of life—or in relative terms—“being worse off than average.” By and large, poverty indicators in Canada fall somewhere along the continuum of these two definitions of poverty. The Government of Canada has not endorsed an official poverty measure. Measures used to determine the incidence of poverty in Canada include Statistics Canada’s Low Income Cut-offs (LICOs) and to a lesser extent the Low Income Measure (LIM), the Market Basket Measure (MBM), which is approved by a number of provinces, and the Basic Needs Poverty Line (BNL).

A majority of witnesses told the Committee that in order to better understand poverty in Canada and to tackle this phenomenon effectively and efficiently, the federal government needs to adopt a set of valid and reliable measures. These measures should capture the multi-dimensional nature of poverty, and allow the government to assess the effectiveness of federal programs and initiatives aimed at reducing poverty and promoting social inclusion. The Canadian Association of Social Workers also told members of the Committee that, in devising poverty measures, the realities of women’s lives must be considered and suggested that a composite index based on gender-sensitive indicators of well-being would produce a better picture of what it really means to be a woman living in poverty.[418] Other witnesses suggested that measures of social exclusion should also be developed to shed light on the daily life struggles of people living in poverty in Canada. However, witnesses also agreed that the pursuit of such measures and indicators should not prevent the federal government from taking immediate action to reduce poverty in Canada.

The Committee was told that the LICOs and LIMs are useful measures of low income that should continue to be calculated and released by Statistics Canada on an annual basis. These measures have an advantage over more recent market basket methodology as the survey data on incomes have been available for a longer period and can provide policy-makers with an important historical perspective on long-term low-income trends in Canada. Some witnesses also talked about the importance of using a market basket methodology (e.g., BNL and MBM) as it provides data that allow for regional, provincial and sub-provincial comparisons and sheds a different light on the living standards of Canadians.

Each of the measures has its limitation. For me, the biggest drawback to the LICO, which we've used since the 1960s, is the fact that it lumps the large cities together, because of the survey it used to calculate its threshold. It doesn't have a sample size to be able to provide us more geographical breakdown. But we know shelter costs are quite different between Montreal, Toronto, and Vancouver. For me, that's the biggest drawback. However, it has a history since 1976, so at least you can monitor trends and see how they evolved. So the MBM, in that context, provides us more geographical breakdown, which I think is a better thing.

One of the drawbacks for the MBM is the fact that it goes back only to the year 2000. So it's a limitation if you're looking at previous time cycles. You can go back to the year 2000 only, which is why we produced the two measures, so it gives you an idea of where they're giving the same message and where they're different.

[...]

The LIM, with the international standards, doesn't move as much with the economic cycle, so some people have a problem with that. When you have higher unemployment, a measure linked to inflation will reflect some of these economic hardships. The LIM, because it's based on the median, doesn't tend to move as much.

What we see more and more in a number of countries is that they actually look at a suite of measures....I think you eventually want to look at maybe not just one but a few measures, to understand the strengths of each of them and how they complement each other.[419]

Sylvie Michaud, Statistics Canada

I think we do need relative income measures like the LICO, and we can debate the pros and cons of the particular methodology, but that's important. It tracks low income and income inequality. But I would argue that we need to continue to develop a series of deprivation measures, whether it's the MBM or a list of.... For instance, New Zealand has developed a very interesting living standard index over the last decade as part of their social report, which would be very interesting. It would provide more of a direct assessment of people's access to basic goods and services, in some ways similar to some of the measures we have around housing.

[...]

I would recommend a suite of measures. Canada needs to look at creating a deprivation or a living standard index, which I think would be tremendously useful to do.[420]

Katherine Scott, Canadian Council on Social Development

The members of the Committee agree that the LICOs and LIMs should continue to be part of Canada’s suite of low-income measures and think that the MBM is an important supplemental measure that should also be included in a Canadian toolkit to measure poverty and social exclusion. However, members of the Committee also believe that a new federal action plan to reduce poverty in Canada should include a study of current low-income measures and issues related to data quality, and an assessment of the need for other indicators of material and social deprivation (e.g., Canadian Index of Wellbeing (CIW) and others). Indicators should also be reassessed on a regular basis to ensure that they are providing needed data to effectively inform policy.

Recommendation 3.3.3

The Committee recommends that the lead department(s) (e.g., Human Resources and Skills Development Canada), and/or the office or secretariat responsible for the implementation of the proposed federal action plan to reduce poverty in Canada, in consultation with the National Council of Welfare and Statistics Canada:

• examine the advantages and disadvantages of existing measures of low income;
• assess the need for other indicators of material and social deprivation;
• decide on a suite of measures and indicators that would provide effective information to monitor progress on the implementation of the proposed federal action plan to reduce poverty in Canada; and
• advise the Government of Canada to adopt this suite of poverty measures in a regulatory or otherwise flexible format which may evolve to accommodate changing best-practices in the measurement of poverty in Canada.

Recommendation 3.3.4

The Committee recommends that the federal government adequately fund the collection of data based on the suite of measures of poverty that it will have adopted to ensure that data are available as needed to inform the monitoring and reporting processes as set in the proposed federal action plan to reduce poverty in Canada.

3.4 Building Community Partnerships

We strongly believe that only by investing in programs like Pathways to Education, programs that are community-based and that recognize the community risk factors associated with poverty, will we truly see a kind of reversal in fortunes and create a healthier, safer, and more prosperous nation.[421]

David Hughes, Pathways to Education Canada

Building partnerships with the non-profit and voluntary sector will be key to reducing poverty in Canada. It is estimated that Canada’s voluntary sector consists of some 180,000 non-profit organizations, of which almost 45% are registered charities. This sector employs roughly 1.3 million individuals across the country and is aided by some 6.5 million volunteers.[422] In 2005, the latest year for which data was available at the time of writing this report, Canada’s non-profit sector accounted for some 6.8% of gross domestic product (i.e., GDP totalling more than $86.9 billion).[423] When hospitals, universities and colleges are excluded, Canada’s “core” non-profit sector accounted for 2.4% of GDP ($31 billion), roughly one-third of the total non-profit sector GDP. Chart 3.4.1 provides a breakdown of the distribution of the core non-profit sector’s GDP by area of activity. It is interesting to note that the value of this sector’s output exceeds that of several industries including motor vehicle manufacturing, agriculture, and accommodation and food services.[424]

The activities of non-profit organizations that the Committee is primarily focussed on are social services (e.g., services to children and youth, family services, services for persons with disabilities, services for seniors, refugee assistance, temporary shelters, material assistance and income support), development and housing (e.g., entrepreneurial assistance, social development, housing associations, housing assistance, job training, and vocational rehabilitation and sheltered workshops) and other health services (e.g., mental health treatment, crisis intervention and public health and wellness education).

Without question, Canada’s non-profit organizations impart a significant positive impact on the social and economic well-being of many individuals and their communities. Witnesses informed members of the Committee about the critical role that this sector plays in assisting low-income individuals across the country. And, on a few occasions, we had an opportunity to observe directly the positive impact that these organizations have on the people and communities in which they operate.

During our study, members of the Committee visited several non-profit organizations that are involved in providing community-based assistance to help low-income people cope with their everyday struggles and improve the quality of their lives. For example, in Halifax, Nova Scotia, the Committee visited the Metro Turning Point Centre, a facility of Saint Leonard’s Society that provides a range of support services to homeless men. The Committee also visited the Vestiaire St. Joseph Food Bank in Shediac, New Brunswick, the largest food bank and clothing depot in the area (serving more than 4,300 families in 2008). In Montreal, we toured Moisson Montréal, Canada’s largest food bank, where some 212,000 kilograms of food pass through this immense warehouse each week. The Committee also visited the Regent Park Community Health Centre which is located in one of Toronto’s most diverse communities and the location of Canada’s largest social housing project. During this visit, we gained a greater appreciation of the impressive work conducted by an organization called Pathways to Education; this organization has been instrumental in decreasing secondary school dropout rates in Regent Park from a pre-Pathways’ rate of 56% to less than 10% today. Moreover, 80% of Pathways’ graduates continue on to post-secondary education, a rate that is four times higher than the pre-Pathways’ rate of 20%. Finally, during our trip to northern Canada, the Committee visited the SideDoor Youth Center in Yellowknife, Northwest Territories. This organization serves more than 15,000 youth each year through a wide range of programs and recreational activities and operates Yellowknife’s only emergency shelter for homeless youth.

All members of the Committee agree that the important role played by the non-profit sector to help meet the needs of low-income Canadians cannot be overstated. Community-based organizations that support individuals living in poverty need to be recognized more fully for their vital contributions to improving the welfare of Canadians across the country. The federal government, along with provincial and municipal governments, have come to rely heavily on these organizations and their volunteers. Given the unmet needs of this sector and the essential contribution it makes, the Committee believes that the federal government must strengthen and enhance its support for the myriad of community-oriented, non-profit organizations operating across the country whose raison d’être is to improve the social and economic welfare of those who need it most.

Three years ago, I co-wrote the report for the New Brunswick task force on the non-profit sector, which was a provincial undertaking in which we examined the state of the non-profit sector. What we discovered, among other things, was that the non-profit sector, properly supported and strengthened, could be the best vehicle for dealing with poverty and addressing issues of poverty in the community. That's a critical thing. Let's have no more direct service delivery from the top, from the middle. Let's put it on the ground.[425]

Sue Rickards, as an individual

We need community-based program delivery. As you recall from the presentation by the Right Honourable Iain Duncan Smith, the U.K. experience has been that the local community, faith, and NGO organizations are best able to deliver services that are tailored specifically to the needs of poverty-stricken individuals and families within their community. I believe this is the key to further improvements for low-income Canadians. Further efforts should take place around this issue.[426]

Dave Quist, Institute of Marriage and Family Canada

In June 2000, the federal government launched the Voluntary Sector Initiative (VSI). This five-year initiative was intended to strengthen the relationship between the non-profit sector and the federal government and to enhance the former’s capacity. In addition to establishing an Accord, the VSI entailed the creation of two Codes of “good practice”—the Code of Good Practice on Policy Dialogue and the Code of Good Practice on Funding. Combined, these documents contained commitments from the federal government to work toward sustainable multi-year funding, streamlined application processes and improved consultation. The extent to which this has been realized is limited at best.

This accord, signed by the Government of Canada and this sector in good faith, perhaps has failed both of us. There has absolutely been no follow-up on it, no commitments to what was stated in the accord, no application of the two codes. We believe there was a chance to collaborate and build a relationship of trust between government and the sector, and perhaps that is not necessarily true, and that is something we have to focus on.[427]

Martin Itzkow, Manitoba Federation of Non-Profit Organizations

According to From Red Tape to Clear Results, a report prepared by the Independent Blue Ribbon Panel on Grants and Contributions, “[o]ver the past ten years, the sector [community non-profit sector] has participated in a number of studies and consultative initiatives with the federal government and has received many assurances of change, to little avail. For all the consultations and promises, the sector today suffers from more uncertainty and instability than ever before. A simplified application, reporting and auditing process, predictable funding, and speedy decisions would address many of the sector’s concerns”.[428] Similar suggestions were made during our hearings.

a. Administrative Burden

The Committee was told that community non-profit organizations spend far too much time applying for funding, writing proposals and reporting results. Witnesses felt that the resources devoted to these activities would be better spent providing support to clients. The application process is burdensome, both in terms of the frequency with which applications must be made and the quantity of information that must be supplied to support proposals. Moreover, we were told that organizations are competing with one another for limited funding, which in our opinion is an inefficient use of limited resources in organizations which are already overburdened.

You have to provide detailed descriptions, identify all the people who will be involved, and so on. This makes for a lot of extra work for us during the year, because we have to fill out forms, etc. It takes a great deal of time. In terms of administration, in our organization, it is the same people performing multiple tasks.[429]

Janine L'Archevêque, Jardin de la Famille de Fabreville

I haven't stopped writing grants long enough to think about that.…As I said, these are very small pots of money that we're after, and we are completely and totally accountable for everything, because we spend just as much time writing grants and proposals as we do on the interim report and the final report and the meeting and everything like that.

[…]

Again, I'm just seeing more and more over the past couple of years that people are spending a lot more time looking for those pots of money because there have been so many decreases from our core funding.[430]

Rene Ross, Stepping Stone Association and Community Coalition to End Poverty in Nova Scotia

All Committee members believe that accountability to taxpayers is an important and necessary feature of administering federal grant and contribution programs. However, it is our view that this important requirement can be achieved without overburdening the organizations that deliver essential programs and services to those in need. In this respect, federal departments need to become more flexible in their administration of grant and contribution programs, especially in terms of their application to community non-profit organizations, many of which are small, under-resourced and well known in the communities they serve. Furthermore, members of the Committee think that these organizations should be encouraged to and rewarded for developing initiatives that pool resources across organizations. This approach would reduce the administrative burden associated with the necessary application, reporting and auditing processes. Moreover, we think that partnering would encourage the development of more comprehensive initiatives.

Recommendation 3.4.1

The Committee recommends that the federal government examine the Treasury Board’s policy on grant and contribution programs with a view to encouraging program administrators to simplify the application process and adopt a more risk-based approach to auditing agreements. Moreover, applications made by community non-profit organizations that have demonstrated an ability to provide effective, high-quality programming and/or that involve partnering by pooling of resources to provide more comprehensive programming should be assessed and administered favourably, while still ensuring a fair review process of all applications.

b. Inadequate Funding

Non-profit organizations find it difficult to raise sufficient revenues in the best of times, let alone during an economic recession. According to the most recent data available, total revenues in the core non-profit sector were $68.8 billion in 2005. Federal transfers to the core non-profit sector in that year totalled $3.8 billion, or roughly 5.5% of total core non-profit sector revenues that year.[431] Despite the cost-effectiveness of and the major contribution made by this sector, especially the community non-profit sector which relies heavily on public funding, the federal government’s support for this sector is relatively small.

The Committee was told that many community non-profit organizations do not have sufficient revenues to achieve their goals and, in some cases, face a great deal of uncertainty regarding the continuation of programs and services. We were told that the federal government should increase its spending on non-profit organizations whose focus is to alleviate and address poverty in rural and urban communities across the country. In this context, many witnesses called for a shift away from project-based funding agreements that require yearly applications. Some called for a return to “core” funding[432] or at least a multi-year funding commitment.

We would like there to be more stable funding. As regards project funding, when the year is up, the project is over, and that has an impact on the organization because things are constantly changing. It is exhausting for us. We hire people and then have to let them go because, when the year is up, we no longer have the necessary funds to continue the project. Very often, it would be worthwhile to continue those projects, but it just is simply not possible. We are aware that needs are great in this area. Unfortunately, as needs continue to grow, we do not have the necessary resources to respond.[433]

Janine L'Archevêque, Jardin de la Famille de Fabreville

Finally, we recommend that the federal strategy include a program that commits funds to strengthen effective community-led poverty reduction initiatives. As I mentioned earlier, Canadians across the country have long been taking action that enables others in their community to overcome barriers and develop capacity and opportunities to participate fully in community life. Many of these initiatives lack the required resources to work with the active leaders in their communities to tackle the complex issue of poverty...[434]

Brendan Reimer, Manitoba Community Economic Development Network

In terms of specific federal programs, more emphasis should be afforded to funding innovative and effective programs that achieve concrete results. One avenue that the federal government uses to improve the social and economic conditions of low-income individuals is the Social Development Partnerships Program (SDPP), an initiative delivered through Human Resources and Skills Development Canada’s (HRSDC) Community Development and Partnerships Directorate. The SDPP is delivered in partnership with social non-profit organizations to improve the lives of people with disabilities, children and families and other vulnerable populations. In our view, the client groups served under this program could be broadened and program spending could shift away from support for conferences and analysis to initiatives that directly assist low-income people.[435] In 2010-2011, HRSDC plans to spend $20.6 million on the SDPP, down $500,000 from the previous fiscal year but $5 million less than in 2008-2009.[436]

I find it interesting and a touch sad that recently, on May 8, a call for proposal was put out by HRSDC for the [S]ocial [D]evelopment and [P]artnership [P]rogram, and one of the priority areas was strengthening the voluntary sector. Again, this was project funding for non-profit to get funding on how we can strengthen the sector. What I need to strengthen my sector is funding, so that I can deliver the service. It is not project funding that will end in three years when women who are homeless and hungry are knocking on my door; they need critical service now.[437]

Tanis Crosby, YWCA Halifax

Recommendation 3.4.2

The Committee recommends that the federal government review the spending priorities under the Social Development Partnerships Program and expand the client groups served under this program. Spending under this program should be increased and targeted at innovative and effective programs delivered by non-profit organizations whose primary purpose is to strengthen the communities in which they operate and provide services and support to those who need it most. Furthermore, funding for these organizations should be made available on a multi-year basis.

In addition to increased program spending, some witnesses suggested that the federal government should examine ways to enhance the revenue-raising capacity of non-profit organizations. One suggestion was to raise the charitable tax credit. According to the results of the most recent Canada Survey of Giving, Volunteering and Participating (2007), 54% of donors said that they would give more in return for a better tax credit.[438]

[T]he final thing I would say to challenge our policy-makers is that we are in an economic downturn and requiring stimulus. I think the economic downturn has produced a bit of a revolution in understanding that life is not about defining “more” and how to get it; instead, people are starting to be challenged to define “enough” and how to give more away. I would urge our policy-makers to support that philanthropic revolution and to up the tax credit for donors who are donating to our organizations.[439]

Michael Poworoznyk, Saint Leonard's Society of Nova Scotia

Federal tax policies should be modified to encourage local businesses and individuals to contribute to local solutions, thus empowering the community.[440]

Susan Crouse, Salvus Clinic

Recommendation 3.4.3

The Committee recommends that the federal government provide a more generous charitable tax credit targeted at community non-profit organizations that are dedicated to poverty reduction, and consider other tax policies that would serve the same purpose.

Finally, we were reminded that the activities, especially revenue-raising activities, of core non-profit sector organizations have changed over the years, but that the regulatory framework governing these activities has not. According to recent research, federal legislation and regulations governing non-profit organizations is very dated: “[w]hile the third sector has boldly moved into the 21^st century, it is being governed by 19^th and 20^th century structures.”[441]

Unlike the past, today many core non-profit organizations rely on multiple sources of revenue. In 2005, it is estimated that 50.4% of core non-profit organization revenues came from earned income (including investment income), 20.3% from government transfers, 15.4% from membership fees and 13.8% from donations by private individuals and businesses.[442] However, it is important to note that the distribution of revenue sources varies significantly by area of activity. For example, it is thought that sports and recreation organizations receive more than half of their revenues from fees and memberships, while social services receives more than two-thirds of its revenue from government and more than one-fifth from earned income.[443]

According to the results of a recent survey of legislative and regulatory challenges facing the non-profit sector, respondents ranked the following issues as being the most important to address: lack of access to capital (75% of respondents); lack of access to foundations for funding (66%); all of charity’s activities must be charitable (63%); earned income must be a secondary activity for charities (prohibits social enterprise) (60%); charities are prohibited from owning more than 10% of a business (54%); and the Canada Revenue Agency’s requirement that 80% of charitable revenue received be disbursed within the subsequent year on charitable activities (54%).[444] It seems clear from the results of this survey that rules pertaining to earned income represent significant revenue-raising challenges for non-profit organizations, especially those with charitable status. A 2009 report recommended extending capital gains exemptions to donations of real estate and private company shares, in order to extend the base for charitable donations.[445]

The non-profit sector currently has very limited access to the financial tools available to the private sector. Many non-profits do not seek alternative forms of capital because they lack business expertise, they are wary of associated risks of borrowing, or they do not have a business model to support debt financing. Regulatory barriers also prevent charities and non-profits from structuring and financing social enterprises.…Lack of tax incentives or other government-sponsored approaches to mitigating risk also discourage institutional investors from participating in this market.[446]

Don Palmer, Causeway Work Centre

Recommendation 3.4.4

The Committee recommends that the federal government review and implement quickly the required legislative and regulatory reforms to allow core non-profit organizations, especially those that rely on charitable donations and earned income, to better meet their growing revenue needs.