Coalition to unveil recommendations on social safety net

Jennifer Lewington 

May 15, 2006

Canada’s social safety net, now seen as a “sieve,” needs major changes to help low-income Canadians escape from poverty, concludes an unlikely coalition set to make wide-ranging recommendations today.

An overhaul of the federal government’s employment insurance and income tax systems, and changes in the way Ontario delivers welfare and minimum-wage programs, are among top recommendations expected from a Toronto-based task force of business, labour, national think tanks, social agencies and low-income individuals.

The current income-security system “is not working from any perspective,” said David Pecaut, chairman of the Toronto City Summit Alliance, which spawned the task force to address the traps faced by working-age adults (18 to 64 years old).

“If they are employed in low-wage jobs, they cannot earn enough money to lift their families out of poverty,” said Mr. Pecaut, citing research by the task force on modernizing income security.

“If they become unemployed, the employment insurance is not there to help them,” he added. “And if they fall into welfare and attempt to get back into the work force, the deck is stacked against them.”

While the task force research is specific to Ontario, Mr. Pecaut said the analysis “is applicable across the country” and will be shared with governments at all levels to spark a national debate on changes to income-security programs.

Toronto resident Fionna Blair, 38, one of 3.5 million Canadians in poverty, has been in and out of the labour force. Three years ago, after a string of low-paying jobs as a waitress and temporary office worker, she was diagnosed with stress-related emotional problems and no longer holds a full-time job.

She collects Ontario welfare and disability support, worth about $1,240 a month, that goes to pay for a $720-a-month bachelor apartment in central Toronto. She works occasionally but would be penalized if she earns more than $160 a month. She has no money left by month’s end to save for education to improve her prospects.

“It is an endless nightmare,” said Ms. Blair, a member of the task force. “If I was able to continue my education during this downtime, I would go back to work a lot faster than sitting and stagnating.”

The roadblocks faced by low-income adults captured the attention of the task force, said Susan Pigott, a co-chairwoman of the task force.

In addition to the Conference Board of Canada, the Caledon Institute and the C.D. Howe Institute, the members include top business leaders (Falconbridge chairman David Kerr and Nestle Purina Canada president Karen Kuwahara), labour leaders (Canadian Labour Congress president Ken Georgetti), bank economists Don Drummond (TD Bank) and Warren Jestin (Bank of Nova Scotia), social agencies, academics, foundations and a group of low-income individuals.

As executive director of St. Christopher House, Ms. Pigott said her social-service agency in downtown Toronto deals directly with those falling through the social safety net. The time for change, she argued, is long overdue.

“When you look at the income-security policies, nothing has fundamentally changed for these folks in 40 years even though the labour market has changed enormously,” she said. “Income-security programs are out of sync with the needs of people who are working in our modern economy.”

For example, the federal employment insurance program covers only 43 per cent of working adults who lose their jobs, a figure that drops to 22 per cent in Toronto because of local anomalies.

The city’s relatively vibrant economy means the threshold for benefits is higher than elsewhere in the country. Toronto also attracts a disproportionate share of immigrants, who lack the minimum hours to qualify for help.

Those new to the labour force must work 910 hours to be eligible for assistance, compared to 420 hours for those who had been working.

“When only one in five people in Toronto who become unemployed receive any benefits at all, you are not talking about a safety net any more,” Mr. Pecaut said. “It is shredded or a sieve.”

Meanwhile, those who apply for provincial welfare get caught in a “quagmire,” Ms. Pigott said, noting that welfare recipients get health and dental benefits usually missing with a part-time job.

Compared to income support for seniors, the mathematics of poverty is stark, the task force said.

Someone who earns $8 an hour in Ontario (just above the province’s minimum wage of $7.75) and works 40 hours a week would earn $14,700 annually after tax, $500 less than the poorest Ontario senior.

Credit to: Globe and Mail

Dawnmarie Harriott