Time for Governments to Raise Social Assistance Rates and End Punitive Regulations July 9, 2004

Social assistance
It’s time governments across the country raised welfare rates so people can get out and stay out of poverty, says the National Anti-Poverty Organization in response to the release of the National Council of Welfare Report entitled Welfare Incomes 2003. This recently released report showed that welfare rates continue to be well below what is required to obtain even basic necessities like food and shelter.

“This report lets politicians know just how bad things are for those who are trying to live on social assistance,” says Robert Arnold, President of NAPO. “It shows that current social assistance rates help keep people in poverty. They don’t help them overcome it.”

While the extent of poverty has not changed a great deal, the depth of poverty has grown dramatically with social assistance rates in many provinces set at less than half the poverty line.

Over the last 10 years, provinces and territories have cut social assistance rates and introduced punitive regulations that have limited people’s ability to find work and affordable housing, pay bills and purchase basic necessities. In 1996, the Ontario Conservatives under Mike Harris cut provincial rates by 21.6% and more recently (in 2002) British Columbia eliminated all earnings exemptions for people receiving assistance and placed time limits on how long a person can receive benefits.

“These restrictions and practices are not acceptable. It’s time for governments to address the facts about poverty and low benefits, and start raising rates,” says Arnold. “They have an obligation and a responsibility to take immediate action on this issue.”

Ontario recently raised assistance benefits by 3% but this only adds $15 to a cheque for a single person receiving $520. The increase still leaves families and single people well below the poverty line. It was the first increase in Ontario rates in 11 years.

The National Anti-Poverty Organization is a non-profit group representing people in poverty.

Minority Government Creates Opportunities for Action on Poverty

Help_the_homeless The election of a minority Liberal government creates some new opportunities for action on poverty issues in Canada. And NAPO will be working hard in concert with other anti-poverty groups to ensure promises made during the election campaign are turned into reality.

Affordable housing is one issue where we can expect some progress. The Liberals promised an additional $1.5 billion for affordable housing. Both the NDP and Bloc called for $2 billion to build 30,000 social housing units a year. There should be sufficient agreement among these parties for some real progress to be made. Indeed it is a hopeful sign that Prime Minister Martin has appointed Joe Fontana as Minister for Labour and Housing. This is the first time in a long time that housing related issues has been given clear ministerial responsibility and Mr. Fontana has some background on housing issues, having co-authored, with Paul Martin, a report on housing for the Liberal party.

The biggest problem with the affordable housing issue will not be money but problems with implementation. Even before the new election promises, the federal government was sitting on almost a billion dollars of money committed for affordable housing that had not been spent because they could not get provincial agreements. The federal government will have to be prepared to work with other partners such as municipal governments and cooperative and non-profit organizations if the provinces continue to stall implementation of much needed affordable housing programs.

The Liberal also promised a national child care and education program, once again. They had made similar promises in their Red Book when Jean Chretien first ran for the job of Prime Minister. They will have to do something about these promises this time or no one will believe them anymore. Child care is also an issue which the Liberals can expect support from the NDP and the Bloc. Access to affordable, quality child care will be of special help to poor families, especially single parents.

The NDP and the Bloc had also campaigned for increases to the Canada Child Tax Benefit and improvements in the Employment Insurance program. While the Liberals did not make specific promises on these issues during the election there is support for these measures among the Liberal caucus and with sufficient public pressure and opposition party initiative we can hope to make some gains.

A revitalized NAPO, working in coalition with other anti-poverty groups social partners hopes to create the public pressure that will be able to achieve some meaningful progress on eliminating poverty during the term of this minority government and set the stage for more extensive public debate about the future of our social programs leading up to the next federal election, which is expected to be only two or three years away.

NAPO Campaigns and Initiatives

The NAPO Board met in Ottawa June 25 – 27 and gave the go-ahead for the following campaigns and also supported the continued participation in the Women’s March.

Social Transfer Debate:

NAPO, in partnership with CCSD (Canadian Council on Social Development), is calling for a national discussion on the nature and future of social programs in Canada. The discussion could take the form of a commission similar to the Romanow Commission on health care or a special parliamentary committee that would hold hearings across the country. Canadians would be able to voice their ideas on social programs and help determine the priorities and role of the social safety net.

Economic and Social Rights:

NAPO will coordinate efforts by a number of non-governmental groups to provide information to the UN Committee on Economic, Social and Cultural Rights on its assessment of Canada’s implementation of the International Covenant on Economic, Social and Cultural Rights when it meets in 2006.

Youth Poverty Initiative:

We are developing a youth poverty initiative aimed at increasing public awareness of rising rates of poverty for youth aged 15-24, and causes and consequences of youth poverty. NAPO will involve youth, most likely through a group of volunteers and student placements, in researching the issue and developing popular education materials for use in communities across Canada. Initially, public education and action efforts will be linked to the minimum wage campaign. Currently, we have one volunteer donating time to the initiative.

Living Wage Campaign:

This campaign has two components, and is linked to the youth poverty initiative (given the high levels of youth in low-wage jobs).

  • Campaign with other national and regional partners to raise minimum wage rates to $10/hour across the country and to reintroduce the federal minimum wage rate at the same level. This would build on provincial minimum wage campaigns in Ontario and Manitoba.
  • Community-based campaigns to convince municipal governments and universities to adopt a living wage policy that would require contracts to be awarded only to those companies paying employees a minimum of $10/hour. Solicit support for Living Wage Campaign from companies that pay more than $10/hour and highlight companies who contribute to poverty by paying less than $10/hour by staging information pickets and other public events.

Important Decision From the CRTC

According to a CRTC decision made May 11, 2004, phone companies can no longer stop local service because of failure to pay all monthly local and long distance charges. Companies like Bell Canada, Telus, Aliant, MTS, NWTel and SaskTel cannot disconnect or threaten to disconnect local calling for non payment when the customer has made sufficient partial payment to cover the outstanding money owed from the local telephone charge portion of the bill. In other words, you can’t be cut off local service because of failure to pay long distance and other non-essential charges provided adequate payment on local service is made.

Sometimes a family member or friend of the subscriber runs up charges for long distance or other non-essential telephone services that threaten the ability of the family to keep its local telephone service. This decision does not wipe out that debt but simply prevents such a situation from potentially cutting off families from local telephone service.

NAPO, along with the Public Interest Advocacy Centre and a number of other groups first raised this issue with the CRTC in 2002. Our thanks to PIAC for all their hard work on this submission. If you would like more information on the ruling, contact PIAC at (613) 562-4002.

Tax cuts “for the poor” could end up going mostly to the rich warns NAPO

tax cuts

“Tax cuts being considered supposedly to help the poor could end up going mostly to middle and upper income families, ” warned Dennis Howlett, Executive Director of the National Anti-Poverty Organization in an appearance before the Parliamentary Finance Committee on November 17, 2004.

NAPO tabled a paper prepared for them by Andrew Mitchell and Richard Shillington, which shows that increasing the personal credit to $12,000 would result in only 3.5% of the share of the benefit going to low-income families. The paper also shows that when provincial taxes are also included, the poorest people are paying 35% of their income in taxes, the same rate as those with incomes over $100,000 are paying. This is largely because the poor pay more as a percentage of their income in GST and provincial sales taxes than the rich.

“Canada no longer has a progressive tax system.” Howlett claimed. “But some of the tax cut options being considered would do little to make it more progressive,” he warned. “The best way to deliver tax cuts for poor families is through changes to the GST, either restoring the real value of the GST credit for low-income families and improving on it or through reducing the GST rate,” NAPO told the Committee.

“Debt reduction and tax cuts which have been the focus of the last several budgets have succeeded in increasing the rate and depth of poverty,” said NAPO President, Robert Arnold. He said it is time that priority be given to the needs of poor Canadians. NAPO called for increased spending on social housing, raising the Child Tax Benefit to $4900 a year per child and implementation of a national childcare program.

Relieve energy cost squeeze on the poor

We need long term solutions, not just pre-election one-off response says NAPO

election_vote

The recent increase in the costs of home heating oil and natural gas as well as the price of gasoline is putting a serious squeeze on low income Canadians – both those on social assistance and those in low-wage jobs. Heating oil prices have risen by a third over last year and natural gas prices have nearly doubled. Low income households (lowest quintile) spend over 14% of their income on fuel and electricity – three times as much as all households in Canada – and these Statistics Canada figures are from 2003 when prices were not as high.

The National Anti-Poverty Organization, which represents people living in poverty across the country, is calling on Federal, Provincial and Territorial governments to take immediate action to ease the severe hardship being experienced by Canadians who are poor.

Grossly inadequate rates of social assistance and minimum wages are at the root of the poor being unable to pay for huge increases in energy costs. Already forced to choose between feeding the kids or paying the rent, now they also have to choose what else to cut out if they are to heat their homes. Social assistance rates fall $10,000 to $14,000 below the poverty line for single “employable” people and $ 11,400 to $ 19,500 for a family of four depending on the province.2 Minimum wages in every province and territory are poverty wages, falling $ 5000 to $ 9000 below the before tax poverty line for a single person working full time.

The problem is compounded by the fact that heating oil companies do not generally deliver a month’s supply at a time but insist on payment for a minimum delivery of a hundred gallons that lasts three or four months. Poor families and seniors living on fixed incomes cannot afford to pay for several months supply at one time as they are already forced to go to food banks because their money runs out before the end of the month.

Homes that are poorly insulated and in bad repair also cost a lot to heat. An energy retrofit program will help low income households cut energy bills by an average of 34%, not only this winter, but every year in the future. It would also help Canada meet its Kyoto commitment to reduce greenhouse gases. Green Communities Canada has developed a proposal for a national low income energy efficiency program similar to programs already in place in the U.S. and the U.K.3 The Federal government also had a successful Residential Rehabilitation Assistance Program (RRAP), which provided assistance to low-income home-owners, social housing providers and landlords to upgrade buildings. But this program is set to expire and there has been no official announcement about whether it will be renewed. It needs to be renewed and expanded with a fully-resourced energy efficiency mandate.

While Federal government action is needed NAPO is concerned that this should not be a one-time relief payment timed as a pre-election vote-buying move. Rising energy costs are likely to be a longer-term phenomenon, not just a temporary spike because of the effects of Hurricanes Katrina and Rita. Helping poor people survive the cold winter this year, only to let them freeze next year when public and media attention has shifted to other issues is not good enough. We need long-term solutions that address the root of the problem.

With winter approaching, the prospect of poor Canadians unable to afford heat for their homes is understandably getting the most attention, but the rise in gasoline prices has also created serious hardship for many working poor who have seen their costs for commuting shoot up without any increase in their low rates of pay. The working poor also need relief which would be best delivered through an increase in the minimum wage – a move that would have no direct cost to governments.

NAPO calls on the Federal Government to:

  1. Issue a special heating subsidy to low-income Canadians to help them cope with rising home heating costs. This would be most effectively delivered by restoring the value of the GST credit lost through erosion in real value that took place between 1992 and 1999 when the credit was de-indexed and boosting the credit to help offset rising energy costs. This is the tax relief measure that would target the most benefit to low income households and there is already a system in place to deliver benefits quickly and efficiently.4
  2. Implement a national low-income energy efficiency program to enable low-income homeowners, social housing providers, and landlords renting to low-income families to increase the energy efficiency of homes and buildings, thereby reducing long-term energy costs and reducing greenhouse gas emissions. Renew and greatly expand the Residential Rehabilitation Assistance Program (RRAP) with a fully-resourced energy efficiency mandate.
  3. Re-introduce a Federal Minimum wage at $10 an hour with annual cost of living indexation.

NAPO calls on Provincial and Territorial governments to:

  1. Raise minimum wages to a level that an individual working full-time can escape poverty. In provinces with large cities this would require a rate of at least $10 an hour.
  2. Raise social assistance rates to enable those receiving assistance to meet their basic needs and live in dignity.
  3. Increase the housing or heating supplement amounts to fully cover the increased energy costs where this is a component of the social assistance package. Issue special payments for heating costs at the beginning of the winter to enable social assistance recipients to get deliveries of heating oil.
  4. Support a national low income energy efficiency program through government and utility programs.

NAPO Clarification on GST Tax Cut

Tax_Cut

The Conservative Party has cited a NAPO discussion paper in support of their GST tax cut proposal to make the case that their plan will help the poor. NAPO has received a number of enquiries about whether we endorse the Conservative GST tax cut proposal and is therefore issuing this clarification on where it stands on this issue.

1. The proposed Conservative GST tax cut is slightly more progressive than the Liberal income tax cuts, but neither will do much to help the poor.

The Conservatives selectively quote from a Discussion Paper on Federal Tax Relief for Low Income People prepared for NAPO by Andrew Mitchell and Richard Shillington in November of 2004. This paper shows that 70% of the Federal taxes low income people pay are consumption or sales taxes. Only 12% are income taxes.

Research done for NAPO suggests that a 1% reduction in the GST would cost the Federal government about $5 billion, and result in only about $143 per year in tax savings for low income families. Approximately 8.5% of the benefit would go to low income families.

Increasing the basic personal amount exempted from income taxes from $8,148 to $10,000, as the Liberals have proposed in their mini-budget, would cost the Federal government $6 billion and result in about $113 in tax savings but only 3.5% of the benefit would accrue to low income families. The Liberals have also proposed decreases in the income tax rate starting with reducing the lowest 16 per cent rate to 15 per cent immediately and further reductions to higher brackets in 2010. This would add about $100 in tax savings for low income individuals and cost about $3 billion in lost revenue for the Federal government in the first year. But when fully phased in, the cuts will give an individual with an income of $40,000 a tax break of only $270, while someone with an income of $150,000 will get a tax cut of over $2,000. A two-earner family with an income of $60,000 would get a tax cut of only $247, while a similar family with an income of $150,000 would receive over $1,000.

The NAPO paper the Conservatives cited is a discussion paper and not a policy paper. NAPO policy, as stated in its Submission to the Standing Committee on Finance presented in October 2005, is a call for fairer taxes. This includes an increase in the GST credit, (a measure that would target 19% of the benefit to low income families), imposition of a wealth transfer tax, raising the capital gains tax and restoring higher rates for high income earners.

2. Tax cuts are not the answer to reducing poverty

Poor families would save only a couple of hundred dollars, at the most, from either of the Conservative or Liberal tax cut proposals. This hardly makes any impact on the depth of poverty which is anywhere from $5000 to $9000 below the poverty line for an individual working full time at minimum wage, depending on the province. Nor would it be noticed by the family of four on social assistance in Ontario who falls $18,937 below the poverty line.

Past income tax cuts have provided disproportionate benefits to those with middle and upper incomes. Half the benefits over the last decade have gone to those 10% of families with incomes over $100,000. The Canadian tax system is no longer progressive. If all taxes, including provincial, and local property taxes are included, we have essentially a flat tax with all people paying a similar percentage of income in tax, regardless of income.

NAPO would welcome tax measures that would make the income tax system more progressive. And tax measures, especially tax benefits such as increasing the Child Tax Benefit, the GST credit or the Guaranteed Income Supplement which target benefits to those most in need, are an important part of a poverty reduction strategy.

But we need to make sure that there is sufficient tax revenue to fund badly needed investments in social programs such as social housing, childcare and increasing the Social Transfer. The personal and corporate tax cuts proposed by the Liberals and by the Conservatives (especially if their GST rate cut is in addition to what the Liberals have already proposed) add up to a lot of money, especially down the road. This could seriously undermine the government’s capacity to fund social programs, especially if there is an economic down-turn in the next five years.

3. We need a poverty reduction strategy

Despite a healthy economy, the number of people living in poverty in Canada has remained high and for some groups, such as recent immigrants and youth, has increased significantly. Economic growth and tax cuts have not solved this challenge. If any of the political parties wish to claim that they are serious about wanting to help the poor, they will need to spell out details of exactly what they would do to reduce poverty. Which party will support the development and implementation of a poverty reduction strategy for Canada? NAPO and those living in poverty who they represent are waiting for a response.

Avoid a claw back by delivering the Choice in Child Care Allowance through the Child Tax Benefit

By Dennis Howlett, Executive Director, National Anti-Poverty Organization

There is a danger the Conservative ’s Choice in Child Care Allowance could be clawed-back by some provincial governments from some of the poorest families, namely those receiving social assistance.

As a recent commentary paper by Ken Battle from the Caledon Institute of Social Policy, The Choice in Child Care Allowance: What You See is Not What You Get, explains unless there are specific exemptions negotiated with the provinces, these payments would most likely be treated as income. Social assistance benefits could be reduced by the equivalent amount. The poorest families and children would then get absolutely no benefit from this program.

If the intent of this allowance is to recognize the additional costs families incur when they have young children and provide some social support to help them with these expenses then the Conservative government needs to ensure that this payment will be available to all families, especially the poorest.

Child tax benefitThe best way to deliver this allowance, in our view, would be through the existing Child Tax Benefit. The Child Tax Benefit (the base amount) is a non-taxable benefit that is already exempt from being counted as income by provincial welfare programs and therefore not subject to claw-back from social assistance recipients.

There is still a problem with many provinces clawing back the National Child Benefit Supplement, the additional benefit available for low-income families, but that is another issue.

If the government chooses to target an additional benefit to families with children under 6, rather than to all children up to age 18, or make this additional benefit universal (available to all families regardless of how high the income) they can still do so for this additional amount with minor adjustments to the Child Tax Benefit system.

The Child Tax Benefit is a proven program that has helped to reduce the extent and depth of child poverty and it would be great to improve it. Any increase in benefits would be welcome, even if it doesn’t come up to the $4900 per child that the National Anti-Poverty Organization, Campaign 2000 and the Make Poverty History campaign have called for as a key part of a plan to end child poverty in Canada.

There are significant efficiency arguments in favour of delivering the Choice in Child Care Allowance in this way as well. The Child Tax Benefit system is already set up with over 90% of families with children registered and it is already delivering monthly cheques. Setting up a whole new program and sending out two separate cheques each month to families with children would be a wasteful use of resources.

NAPO believes that the Choice in Child Care Allowance does not replace the need for continued daycare funding. We believe the early learning and childcare agreements negotiated with provincial governments should be honoured. The lack of quality day care spaces in many communities is a major barrier, especially for poor single parents, to getting work that could help them escape poverty. It should be possible to both provide additional support to families with young children and support the development of a national early learning and child care program

 

Canada fails to meet economic and social rights obligations, United Nations told

Canada is going backwards on its commitments to implement the International Covenant on Economic, Social and Cultural Rights, a network of Canadian non-governmental organizations say in presentations they will make to a UN Committee on May 1.

Social and economic rights

Though Canada is one of the wealthiest nations in the world with low unemployment and record Federal budget surpluses, too many people are being denied the human rights guaranteed by the Covenant, such as the rights to an adequate standard of living, to social security, to housing, to food, to health, and fair working conditions including fair wages. Disproportionate numbers of Aboriginal people, women, people with disabilities, people of colour, refugees and youth experience poverty and other rights violations in Canada today.

Over 25 representatives of non-governmental groups will be presenting their evidence to the Committee on Economic, Social and Cultural Rights, which meets in Geneva beginning on May 1. The damning evidence includes: welfare rates that in some provinces are only 20% to 30% of the poverty line, those in dire need being denied welfare, minimum wages that fall thousands of dollars below the poverty line, even for a single person working full time, an estimated 100,000 to 250,000 people who are homeless and over 800,000 needing to use food banks each month.

The Canadian government will appear before the Committee on May 5 and 8. The Committee is expected to issue its Concluding Observations including recommendations on what needs to be done to improve Canada’s human rights compliance on or shortly after May 19.

WARNING! TAX CUTS MAY BE DANGEROUS TO YOUR HEALTH

Too good to be true

We should be suspicious of offers that are too good to be true. The recent Conservative budget is a case in point. Thousands of dollars in “tax credits” would seem to be a good thing. But on careful examination, Canadians will discover that not only do they shrink to being just a few hundred dollars in after-tax dollars saved, they also come with all kinds of unwanted side effects. The tax cut budget package should have come with a warning.

Here is the small print you should read:

The main thrust of the Conservative government’s budget was tax cuts – even more then they promised during the election. In addition to the 1% GST reduction, the Conservatives have kept many of the Liberal income tax cuts and added other tax cuts, including generous corporate income tax cuts.

Tax cuts were also doled out to students for university textbooks, for children’s fitness and for public transit passes. In all, there were 28 tax cuts in the budget. Three out of every four dollars of the available $37.2 billion in surpluses over the next two years will go to tax cuts or paying down the debt. There was very little new program spending apart from the military, which got $5.3 billion on top of the generous increases announced by the Liberal government.

But tax cuts are not the best way to address problems of the high cots of post secondary education, increased incidence of obesity among children or the threat of climate change. Nor do they do anything to reduce poverty. Program spending to reduce tuition costs, funding for health education and recreation facilities and programs, and investment in public transit and energy retrofits of houses are much more cost effective and targeted ways to deal with these problems. Poor people get much more out of government programs such as childcare, income support and social services then they do from tax cuts.

Tax cuts are bad news for the poor

  • Tax cuts are unfair

The rich always get more from tax cuts then the poor. Even by the government’s own admission the tax cuts in their budget provide less then $100 a year for families with incomes of less then $15,000 and over $1200 for families getting over $100,000 a year. (average tax savings for 2007) The richest families will get twelve times as much as the poorest families.

  • Tax cuts are ineffective

Tax incentive based mechanisms have proven to be a very ineffective way to deliver social programs. The best examples are day care and affordable housing tax incentives used by the Harris government in Ontario, which produced hardly any day care spaces or new affordable housing units. Tax credits for public transit passes are a very expensive way to reduce greenhouse gas emissions. The same amount of money invested in public transit infrastructure or invested in energy conservation retrofits for houses of low-income families (something that was cut by the Conservatives in this budget) will deliver a much greater bang for your buck.

  • Tax credits don’t help if you don’t pay taxes

The poorest Canadians, including many students, who don’t have enough income to have to pay taxes will get no benefit at all from the tax credits for textbooks, public transit passes or children’s fitness programs. This is because they are non-refundable, meaning they can be deducted from what you have to pay in taxes but if you don’t pay taxes you don’t get anything.

  • Tax cuts reduce options

The most serious problem with tax cuts is that they reduce amount of money governments can raise and therefore the funds they have available to spend on government programs. Because of past budget surpluses, the impact of Conservative tax cuts will not be felt immediately. But a few years down the road, or even sooner if interest rates go up, the government will be facing serious shortfalls in revenues and this will provide the pretext for major and painful cuts in spending on programs such as funding for welfare and post secondary education.

The goal of this government is to reduce the role of the federal government and let the provinces and the private businesses take up the slack. Most Canadians don’t want more privatization of health care, education and other social services. Nor do they want the federal government to abdicate its leadership role in tackling social problems such as homelessness, child and family poverty or environmental issues such as climate change. Women in particular will be hard hit by the withdrawal of the federal state in the financing and provision of social programs and services, especially women-led single parent families. These programs are essential to the achievement of women’s equality. However, tax cuts are much more popular. So they are being used as the Trojan horse to achieve policy objectives that would be opposed by most Canadians.

But Canadians should not be fooled by a few more hundred dollars in their pockets if this comes at the price of more homelessness, environmental degradation, lack of daycare spaces and poorer health and social programs.

Specific Impacts for Low Income Canadians

“One-time” investment in affordable housing

The budget did include $ 1.4 billion for affordable housing from the NDP budget deal passed by the last parliament but not allocated. While NAPO is relieved this hard won money was not lost, even if it has shrunk from $1.6 billion, building much needed social housing is a long-term task. It takes several years to plan and build social housing projects and there is a huge back-log of 1.5 million Canadian households in core housing need as a result of many years of government inaction. Finance Minister Flaherty’s description of this money as a “ one-time investment to increase the supply of affordable housing in our cities” does not bode well for what he will do for housing in future budgets.

There was no word either about the extension of the federal homelessness and housing rehabilitation programs (which are due to expire this year).

No money for childcare program

One of the biggest disappointments in this budget was the notice served to provinces that funds for childcare will be cut after this year. The establishment of the beginnings of a national early learning and child care program was an important step forward, particularly for poor and sole parent families where the lack of quality, affordable child care is a major barrier to employment, and now it looks as though this may be lost.

The Universal Child Care Benefit (the new name for what was being called the Choice in Child care Allowance) that will provide a taxable benefit of up to $100 a month per child (in many cases a lot less) is no substitute for a national child care program. While the Finance Minister commended provinces that said they will not claw-back this benefit from families receiving social assistance. But there is no guarantee that this benefit will not be clawed-back from some of the poorest families in those provinces that have not made this promise. Bowing to pressure from NAPO and others, the government did say income from the Universal Child Care Benefit will not affect federal income-tested benefits such as the Child Tax Benefit and Child Benefit Supplement. But making it a taxable benefit for the parent with the lower income means couples with one income will get to keep more of the benefit than a working single parent who has greater need for child care. It would have been much better to deliver this new benefit as part of the Child Tax Benefit as NAPO recommended.

Funds for Aboriginal Health and Poverty Reduction Disappear

Another shocking development was the absence of any funds to implement the Kelowna Accord negotiated between First Nations and federal and provincial governments to address the health, housing, water and social and economic infrastructure needs of Aboriginal peoples. Of the $5 billion dollar commitment made at that time less then 10% appeared in this budget to address these needs. The government should not be surprised if there are more blockades and unrest in Aboriginal communities this summer.

We will pay for tax cuts later

Apart from the money for social housing, this federal budget was a disaster for low income Canadians. But even more ominous is that the tax cuts introduced will likely mean even worse budgets for the poor in the future.

Work and Wages Fact Sheet

 

Work, Wages and Youth Fact Sheet

If you are earning minimum wage, you are likely living in poverty or you are at risk of living in poverty. That is not good at all! He are some statistic for the unemployement rate in Canada. At NAPO. We are working lowering the Unemployement rate significantly

  • In 2000, 18.4% of youth under 18 were poor (low income) – that’s 1,245,650 young people.
  • The unemployment rate for youth is high and rising. It is consistently above 14%, which is much higher than rates for other age groups. Unemployment for Canada as a whole varies but is approximately 7%.

Minimum wage is not a living wage

  • Young workers who are employed tend to be in low wage sectors and jobs e.g. the commercial and services sectors. Many workers earning less than $20,000/year are young people.
  • One person living alone in a major urban centre needs to earn at least $10 an hour at full time, full year work to avoid being poor. Forty percent of youth aged 25 or under working full time made less than $10 an hour. 60% of those working part time made less than $10/hr.
  • Two-thirds of minimum wage workers were under age 25 in 2003. This rate is eight times that of people over 25.
  • Minimum wage jobs make it difficult for youth to accumulate the number of hours they need to qualify for EI. If they become unemployed, they cannot access EI benefits even though they have paid into the fund.
  • A person in an Ontario city with a population greater than 500,000 who was earning $7.50 an hour (Ontario’s minimum age) working 35 hours per week for 50 weeks of the year would make $13,125. This is $5,716 below the poverty line ($18, 841).

Among wealthy industrialized countries Canada has the second highest number of low- wage workers. Only the US has more people in low-wage jobs.

Canada’s economy and income distribution

  • Canada is now a low-wage economy with 25.3% of Canadians working low paid jobs. In Scandinavia only 5% of workers are in low-wage employment.
  • The economy is producing fewer well paid jobs and more low-wage precarious work (e.g. part time, contract). For example, all of the job growth in March 2005 was in part time employment.
  • Wage increases in Canada have gone mostly to the top 10% income earners not those in the lower income groups. In fact, for 50% of income earners their wages have stagnated or decreased. This includes youth.

A job is no longer a guarantee against poverty.

What can you do to about youth poverty?

  • Join the NAPO Our Future Now! youth poverty campaign. Sign the action card (on website) and return it to the NAPO office so we can bring it to meetings with ministers and senior policy advisors at all level of government.
  • Contact your federal member of parliament and ask what he or she is doing to ensure a national job strategy is put in place for youth, and the federal minimum wage is reintroduced at $10 an hour and indexed to inflation.
  • Contact your provincial member of the legislature and ask if she or he supports raising the minimum wage to a living wage i.e. at least $10 an hour. Ask if she or he will support reduction of tuition fees for post secondary programs.
  • Write your federal and provincial representatives and ask if they support reintroducing grant programs for low-income post secondary students and how they will ensure a program is put in place.
  • Get involved in groups dealing with these issues or start your own group to push for change.
  • Hold public information sessions in your community to make people aware of the issues.
  • Get a meeting with your provincial and federal government representatives to educate them on the problems and solutions.