Sifting through the aftermath of the G20 in Toronto

So much attention about the G20 in Toronto has focused on the actions of police and demonstrators that it is easy to lose sight of what the decisions made at the G20 will mean over the long haul.

Top of the list was deficit reduction. Here are the remarks of Prime Minister Stephen Harper at the closing of the Summit.

We arrived here amid growing concerns over the growth of sovereign debt. As we strive to build strong, sustainable and balanced economies, that is the issue we have had to tackle head-on, and we have arrived at firm targets for advanced economies on debt reduction and reducing debt-GDP ratios. The targets are a 50 per cent deficit reduction by 2013 and a debt-to-GDP ratio that should be at least stabilized or on a downward trend by 2016.

You may remember the last time Canada engaged in deficit reduction. Coming out of the 1990s recession, the federal and provincial governments cut back dramatically in health, education and social spending to eliminate deficits. In Ontario, the deep cuts to social assistance rates have still not been restored -- this despite persistent advocacy to raise the rates.

The call for a new round of deficit reduction coming out of the G20 summit raises real concerns about whether Canada and provinces like Ontario have the will to eradicate poverty, or whether people living in or near poverty will once again be sacrificed to deficit reduction.

Slashing program spending does not have to be the path Canada chooses for the future. Consider the advice of David Dodge, former Governor of the Bank of Canada and architect of then-Finance Minister Paul Martin's deficit cutting budgets which gutted social spending. In an opinion piece published by Bloomberg News, Dodge contends that Canada does indeed have a structural deficit -- one that won't go away through economic growth. He does not rule out spending cuts, although he acknowledges that it would entail "a significant reduction in services" and that the "quality of education, and investment in roads and public transit also would decline." Dodge concludes that restoring Canada's fiscal balance ultimately requires raising more revenue.

After deficits were eliminated in the 1990s, tax cuts became the order of the day. Bruce Campbell, from the Canadian Centre for Policy Alternatives, says that the OECD has tallied the cost of Canada's tax cuts between 1995 and 2005.

The OECD estimates that between 1995 and 2005 tax cuts reduced Canadian government revenue capacity by $50 billion per year.

Add to that another $34 billion in lost revenue annually as a result of the Harper Government's tax cuts. Compare that to the Canada's 2009-10 federal deficit of $53.8 billion and you can understand why people like David Dodge are now arguing that raising more revenue has to be how we cut the deficit.

Dodge prefers consumption taxes, for example restoring the 2% cut to the GST, with refundable credits for low and modest income households. He also favours user fees for public programs like health care and post-secondary education.

There are other options for raising public revenue. Campbell points out the need to reverse corporate tax cuts and make Canada's personal income tax system more fair.

The first step is to make Corporate Canada part of the solution, instead of being part of the problem. It starts with reversing broad based cuts to Canada’s corporate income tax system. These cuts do nothing for corporations whose profits have been obliterated by the economic crisis. They benefit profitable companies, notably banks and oil companies, which are more likely to build up cash balances, take over other companies or buy back their own shares instead of making real job-creating investments.

The second step is to bring fairness back into Canada’s personal income tax system, beginning with a new higher tax rate for those with incomes over $250,000 a year.

Fighting deficits cannot be an excuse for another round of cuts to Canada's public services. If we are going to achieve a poverty-free Ontario in a poverty-free Canada, we need to let our federal and provincial legislators know how important taxes are for providing the kind of services and supports that make our nation more vibrant and more just; that we are willing to contribute to the common good by paying taxes; and that we expect the tax system to be fair -- with those who have more, contributing proportionately more.

Call for Action on Income Security Review!

Last week I blogged about the report from the Social Assistance Review Advisory Council.

On Monday, June 21, I met with Hon. John Milloy, the Minister of Training, Colleges and Universities and MPP for Kitchner Centre to convey the realities of hunger facing people with whom MCC works. Eileen Henderson, coordinator of MCCO's Restorative Justice Program, joined me. We talked about what the cutting of the Special Diet Allowance Program will mean to people and the anxiety already caused by the announced cancellation of the program. We emphasized the need for the Government to move on the Income Sescurity Review and to also immediately increase incomes for adults on social assistance.

Here is something you can do to help move this forward. The 25 in 5 Network for Poverty Reduction is calling on folks to contact Premier McGuinty urging the Government launch the Income Security Review this fall.

Send a message to Premier McGuinty to start the Income Security Review by September 1!

Email dmcguinty.mpp.co@liberal.ola.org

Tell him:
"I want you to keep the promise you made in the Poverty Reduction Strategy. You now have advice from experts in the field. I want to see the Income Security Review up and running by September 1.

As a member of 25 in 5, I support the recommendations of the Social Assistance Review Advisory Council to immediately increase the incomes of adults on Ontario Works or ODSP, by bringing in a $100 monthly Healthy Food Supplement, a Housing Benefit for all low income tenants, or increased tax credits.
I look forward to your response."

your name, address, and email]

Feel free to modify/personalise your e-mail. But please do take a moment to contact the Premier. It is important that the Government know Ontarians want the Income Security Review to get underway promptly.

Here is part of the 25 in 5 Network’s Response to SARAC report (with a quote from yours truly):

Toronto, June 17, 2010 - The 25 in 5 Network for Poverty Reduction is calling on the Ontario government to move forward on an income security review by September 1, 2010.

Swift action would show the government is serious about implementing the recommendations of its own Social Assistance Review Advisory Council, meeting the commitments it made to poverty reduction in December 2008 - and, especially, improving the lives of low-income Ontarians across the province.

"The government now has the advice it sought from experts in the field - it is time for the Premier and Cabinet to act, without delay," said 25 in 5 Network co-chair Greg de Groot-Maggetti." We urge government to appoint two income security commissioners and an advisory council, and lay out a broad public consultation schedule, by September 1."

"We especially welcome the Council's recommendation to immediately increase the incomes of adults without children who are on Ontario Works," said Mike Creek, co-chair of 25 in 5. "They bear the largest burden of poverty and make up a significant number of the people on assistance. No one anywhere in Ontario can live on the current single adult benefit of $580 per month."

"And we would extend the recommendation to the incomes of everyone on Ontario Works and ODSP. There are many ways to do this, such as the $100 Healthy Food Supplement, a Housing Benefit for all low-income tenants, or increased tax credits."

Art Agent for Inuit Carver?

MCC Ontario's anti-poverty advocacy comes from the work we do with people living in poverty. One part of that work is MCCO's Lazarus Rising Project, a partnership with Sanctuary, a downtown Toronto community and church that works at building community among the marginalised and the mainstream.

Lazarus Rising street pastor, Doug Johnson Hatlem, walks the streets of downtown Toronto being present to and building friendship with people living on the margins of our society. The life experience for these folks is hard and complicated. Yet there are also turning points as Doug describes in the message below.

Hello All,


I'm writing to you with a bit of an unusual request. I've cast my net widely since I'm totally unfamiliar with this sort of thing. An Inuit man with whom I've been working closely for the last three to four years has recently turned the corner in an unbelievable way. To get right down to it, I think he needs an art agent - a good one who can help him navigate selling his carvings for a reasonable price while also cataloguing where they end up toward the possibility of future displays, art installations, etc. My friend has been sober for about six months now and his first major carving since becoming sober is really quite stunning. It's a piece about 40cm tall of two women throat singing, dancing and carrying babies on their backs whilst they wait for the men to come home from hunting. From our limited knowledge of what these things sell for, we think it to be worth several thousand dollars.


Any advice you have in finding a reputable art agent would be greatly, greatly appreciated. It's a terrific feel good story, as you might imagine.


With much appreciation,

Doug Johnson Hatlem
Lazarus Rising Street Pastor
Mennonite Central Committee Ontario
Sanctuary Ministries of Toronto

If you can offer advice on finding an art agent, please e-mail Doug at djjohnso@yahoo.com

Federal Poverty Elimination Act Tabled in Parliament

This blog is focuses on achieving a poverty free Ontario. But it will take federal action alongside the province to get there. Yesterday (June 16, 2010) a significant step was taken at the federal level.

NDP MP, Tony Martin tabled the Poverty Elimination Act, a private member's bill seconded by Mike Savage, MP of the Liberals and Yves Lessard, MP of the Bloc Quebecois.

This is the purspose of the Poverty Elimination Act:

PURPOSE OF ACT
2. The purpose of this Act is to impose on
the federal government the obligation to eliminate
poverty and promote social inclusion by
establishing and implementing a strategy for
poverty elimination in consultation with the
provincial, territorial, municipal and Aboriginal
governments and with civil society organizations.

Here is part of the media conference to mark the tabling of the Poverty Elimination Act.



Tony Martin has been working tirelessly on poverty issues for years. I had the fortune to connect with Tony on many occasions when I worked at Citizens for Public Justice. He always goes about his work with respect for all people -- including members of other political parties. He is one of the people who represents the best of parliament and politicians.

Other people at the press conference were Chandra Pasma from CPJ and Rob Rainer from Canada Without Poverty (CWP). Those two organizations partnered to lead the Dignity for All Campaign, whose aim is to get federal commitment to eliminating poverty in Canada. If you have not already endorsed the Dignity for All Campaign, take a moment to do so now.

A Call to Transform Income Security in Ontario

Yesterday (June 14, 2010), the Social Assistance Review Advisory Council made public its report to the Ontario Government. The eleven-person panel was appointed in December 2009 and given a two-fold task:
- Lay out the terms of reference for a provincial social assistance review, and
- Recommend short-term reforms to improve social assistance “without adding substantial costs.”

The panel gave the Government its list of short-term recommendations last February. The Government only moved on four of those recommendations.

The Council’s Recommendations for an Ontario Income Security Review, by its very name, goes beyond the scope of their first task. Rather than simply recommending a review of the social assistance system, they call for a transformation of income security for Ontarians. That includes federal and provincial programs and everything from tax credits, employment insurance, training programs, housing, drug and dental benefits, as well as Ontario Works and the Ontario Disability Support Program.

The key contention of the Council is that there “is deep and continuing dissatisfaction with the existing social assistance system from all quarters.” The Council wants to see more income security and services delivered outside of social assistance. They recommend a review guided by six key strategies:

a. Building on the approach of the Ontario Child Benefit, develop an expanded range of income and services to be available to all low-income Ontarians.
b. Strengthen initiatives such as minimum wage increases, enhanced employment standards, fair employment initiatives and the federal Working Income Tax Benefit to ensure the labour market offers effective pathways out of poverty.
c. Replace short term coverage in Ontario Works with more appropriate financial support outside of the social assistance system for those who are temporarily unemployed.
d. Re-engineer long-term coverage in Ontario Works as an opportunity planning program to support achieving full labour market potential through skills building, education, training, employment and related support.
e. Develop standards for a liveable income and a process to use those standards to assess the adequacy of Ontarians’ incomes.
f. Improve income and social supports for those whose reasonable prospects of earning liveable incomes from employment are limited by disability or other circumstances, including a possible new vision for the Ontario Disability Support Program and exploring options for alternative models of financial assistance.

The Council recommends a review led by two Commissioners with an Advisory Council including representatives with lived experience of poverty and supported by a Secretariat. They recommend a review process of 12 to 18 months – which, if the review begins next fall, would run through the October 2011 provincial election. The Council also calls for “separate and substantive discussion with First Nations to ensure reforms reflect their needs and priorities.”

Urgent need to raise incomes for people on social assistance
One thing that might be overlooked in the report is the Council’s call for immediate Government action to improve the incomes of people on social assistance, particularly individuals and couples without children – whose incomes fall far below any of the recognized measures of low income in Canada.

“For this reason the Social Assistance Review Advisory Council recommends that government address with urgency the need to improve the incomes of unattached individuals and couples without children on Ontario Works. The government has a number of options for immediately increasing the incomes of unattached individuals and couples without children, through new tax credits, Ontario Works rates or a new housing benefit.”

Now that the Social Assistance Review Advisory Council has weighed in, it is up to the Government to follow through on the recommendations, both for the review and for immediate increases to the incomes of people on social assistance. Given that a review would extend past the life of the current Government, we need to hear what commitment the Conservatives and New Democratic Party will make to transforming Ontario’s income security system based on the recommended review.

The positive effect of minimum wage increases

Do increases in the minimum wage really lead to unemployment? That is an important question for Ontario. The Provincial Government has raised the minimum wage each of the past seven years. It now stands at $10.25 an hour. Prior to that, it had been stuck at $6.85 an hour for ten years.

“Some of the new evidence points toward a positive effect of the minimum wage on employment; most shows no effect at all.” That is the conclusion drawn by economists David Card and Alan B. Kreuger in their book Myth and Measurement: The New Economics of the Minimum Wage (published by Princeton University Press). They studied increases to minimum wage rates in the United States during the 1990s. They also reexamined existing research.

The Waterloo Region Record published an opinion piece recently (June 8) under the title "Minimum wage increases merely add to unemployment." The author, Ben Eisen, from the Frontier Centre for Public Policy, argued that minimum wages are ineffective because they cause unemployment. Eisen claimed this is “an iron-clad law of economics” and that a “strong majority of research on the question shows that high minimum wages kill jobs.” Unfortunately, Eisen’s article did not provide links to any of the research supporting the view the minimum wage destroys jobs.

Card and Kreuger acknowledge that the assumption that minimum wages lead to unemployment is one of the very few areas of broad agreement among economists. “Such a high degree of consensus,” they write, “is remarkable in a profession renowned for its bitter disagreements. But there is one problem: the evidence is not singularly agreed that increases to the minimum wage reduce employment.”

The two economists explain what led them to reexamine minimum wage research. “Our initial work on the 1988 increase in California’s minimum wage and on the 1990 and 1991 increases in the federal minimum wage, showed the anticipated positive effect of the minimum wage on the pay rates of teenagers and other low-wage workers. But in each case, the anticipated negative effect of a minimum-wage hike on employment failed to materialize.”

Card and Kreuger’s findings are reinforced by the UK’s experience with its minimum wage. When the British Government first introduced a national minimum wage in 1999, it created a Low Pay Commission to assess the impact of the minimum wage and recommend adjustments to it. The Commission has produced ten annual reports.

The Commission reported that in the first year after the minimum wage was introduced, there was “no measurable impact on overall employment,” while “employment continued to grow in low-paying sectors in the quarter following the introduction of the minimum wage.” The 2008 report observed: “One of the notable achievements of the National Minimum Wage has been that, for the best part of the last decade, it has ensured, probably for the first time, that the wages of the lowest paid in the UK have shown a modest but meaningful uplift when compared to increases in the average wage and with no consequent loss of jobs.”

Public policy must be guided by solid evidence. The evidence from the UK’s Low Pay Commission and research by Card and Kreuger demonstrates that minimum wage increases over that past decade have raised the incomes of low wage workers without creating unemployment.

Hungry

MCC Ontario runs the Circle of Friends Project in Kitchener-Waterloo. This is a joint project with Mary's Place, a shelter for women and families run by the YWCA Kitchener-Waterloo.

The aim of Circles of Friends is to help women break the cycle of homelessness in their lives. Circles matches women volunteers with a woman at Mary's Place, forming a bond of friendship and support as she moves from the shelter into her own home. It is a very successful program.

In recent months, Circle of Friends Project Manager Jenn White has noticed a disturbing trend. She writes,

I am noticing that many of our friends are finding it more and more difficult to eat each month.

I know that budgets have always been tight, but I have noticed that more and more are struggling more significantly since Christmas. This trend goes beyond Circles- the House of Friendship Emergency Food Hamper Programme has noticed an increase too. Here is an excerpt from Matt Cooper’s blog (he coordinates the House of Friendship Food Hamper Programme):

"So what was 2009 like? First, last year was the busiest on record for us. We gave out a total of 33,154 hampers between January and December to 9959 households representing over 22,000 people. The 33,154 was a 15.5% increase in the number of hampers distributed over 2008 when we gave out 28,691 hampers. To put that in context, you need to understand that we have been extremely busy the last few years. 2009 is part of a longer multi-year trend where demand has been high and relatively flat"

This rise in hunger comes at a time when the Provincial Government is planning to cut back the Special Diet Allowance Program -- on which many of the women in Circle of Friends rely. Social Assistance rates are not keeping up with increases in the cost of living.

MCC Ontario has endorsed the Five Principles for a New Nutritional Supplement Program and is meeting with MPPs and the Government to tell them about the difficult realities faced by the people with whom we work.