THE BLOG

For Canada's Poor, Working Can Be a Disincentive

04/30/2013 12:14 EDT | Updated 06/29/2013 05:12 EDT
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Effectively addressing issues of poverty and unemployment is a critical component of building both a fairer, more compassionate society, and a productive economy. It is time to rethink government's role in reducing poverty and unemployment, and strengthening our social economy where we all have access to equal opportunities. We all share in the hard work to make that vision a reality.

It would be great if slashing poverty rates and improving outcomes in health and education were as easy as introducing something like a new streamlined government cash payment, as proposed by proponents of a guaranteed annual income or negative income tax. Unfortunately, it is not that simple.

Overcoming poverty requires a multi-pronged approach that addresses all the sources of poverty in addition to low income -- a lack of affordable housing and childcare, the need for accommodations for disabilities, and accessible training, practical education and apprenticeships. It requires both public and private action that reflects a strong collective commitment to build an economy and society that protects the dignity of the weakest among us so that we protect the dignity of us all -- a commitment to ask as much of ourselves as we do of our governments. We are only as strong as our weakest link, and we cannot stand by while a growing number of under- and un-employed are pushed to the margins and left to struggle alone.

Our 21st century world combines both unprecedented transparency and instant communications, with unprecedented cynicism about politics and governance. We require a significant modernization of our federal structure to guarantee sustained coordinated, collaborative and accountable action across all levels of government -- federal, provincial, municipal and aboriginal -- and the establishment of new mechanisms to empower Canadians directly in the process of determining effective private and public measures.

Indeed, nothing is more important than government's role in bringing all the players together -- businesses, industry, labour unions, the educational institutions, the front-line community and social services organizations -- to redefine the role of government itself. No government program, no matter how well designed, can substitute for Canadians working together from community to community in such forums as Workplace Development Boards to strengthen a skilled engaged workforce, produce higher-value goods and services, and boost innovation, prosperity, and greater opportunities for us all.

Only when we are able to restore public trust in our political leadership and our collective capacity to act effectively, will we be able to undertake crucial reforms that will allow us to respond successfully to the challenges of poverty and unemployment. These include such steps as an overhaul of Employment Insurance so that the majority of workers who are in non-standard work or just starting out, and not even eligible for EI in its current form, can get the transitional support and training they need to find work; national health care standards to assure comparable quality and level of services across the country; and a significant improvement in and strengthening of our existing mechanisms that establish minimum income levels -- a floor below which no Canadian should fall -- such as the Guaranteed Income Supplement (GIS) for elderly Canadians, the National Child Benefit (NCB), and the Working Income Tax Benefit (WITB).

Take, for example, the WITB, which is supposed to help Canadians in low-paying jobs keep more of their employment income. A single person working at a fast-food outlet for minimum wage and making $343 a week, or less than $18,000 a year, earns too much to be eligible for the WITB. But if she reduces her hours by half, she not only gets the WITB but also retains provincial benefits for the working poor such as prescription drug coverage. Essentially, the program is a disincentive for her to work.

The national government should systematically remove disincentives from the tax system, and work with the provinces to get rid of counterproductive rules in the welfare system that discourage recipients from making the transition to employment. And any federal efforts to establish and maintain realistic and effective income floors, must be coordinated on an ongoing basis with the whole range of related provincial efforts, including the consolidation of the hodge-podge of tax credits -- sales, property, energy -- into a more effective monthly payment. Ontario's Trillium Benefit and Québec's Solidarity Tax Credit provide the model that other provinces should be encouraged to follow.

All of this is possible with firm political will and a clear, constructive policy platform during the next national election that will gain the support of Canadians who care about where we are going as a nation, and desperately want principles and policy to guide our collective efforts to build a better future.

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