Income Security Advocacy Centre

ISAC works to address issues of income security and poverty in Ontario

The 2017 Federal Budget and Income Security

The federal Budget announced on March 22 does very little to address the poverty and income inequality that Canadians are experiencing right now.

The Budget did announce important investments over time in key areas like housing and childcare as well as modest changes to Employment Insurance and federal labour law. There are also targeted investments being made to improve conditions for Indigenous peoples. The Budget has also introduced a gender-based analysis to track the impact of investments for women. And small changes were announced to help workers in federally-regulated sectors.

However, there are virtually no new investments in federally-administered income benefit programs that help low-income people. Key changes that would improve Old Age Security, CPP-Disability, Employment Insurance, and the Canada Child Benefit have not been made. And no movement has been made on increasing tax fairness to provide necessary revenues for government programs and services.

The federal government is currently consulting on a National Poverty Reduction Strategy, which may lead to more immediate investments in income security in next year’s budget.

What’s In the Budget on Income Security

Employment Insurance

Parental leave has been extended from 12 months to 18 months, which will allow parents to take more time off after the birth or adoption of a child. However, parents will get the same total amount of benefits whether they are off for 12 months or for 18. The benefit rate for 12 months will continue to be 55% of the person’s average weekly earnings, while the benefit rate for 18 months will be 33%. This change will not support single parents or low-income families to take the extra six months away from work, as the 33% benefit rate will not be enough to support themselves and their families. The needs of low-income parents would have been better met by creating a low-income supplement to ensure that no benefits fall below $300 / week, as recommended in the Alternative Federal Budget published by the Canadian Centre for Policy Alternatives (https://www.policyalternatives.ca/afb2017).

A Caregiving Benefit of up to 15 weeks will be created this year that will allow people to take time away from work to care for an adult family member. This new benefit will allow for more situations than those covered under the Compassionate Care Benefit for people to take leave from work. As well, Maternity Benefits have also been extended, which would allow women to take four additional weeks off before their due date if they choose.

The federal Budget also announced changes to the EI program to allow unemployed workers to receive EI benefits while they take part in “self-funded training”. This positive move will help workers retrain for a new job while not losing their ability to pay the bills, but it will not help those low-income workers who cannot afford to pay for re-training out of their own pockets.

Federally-Regulated Workers

The Budget commits $13 million over five years, with continuing funding thereafter, to strengthen compliance with and enforcement of federal labour laws, which cover workers in sectors like banking, airports, and telecommunications. It also commits to ending unpaid, non-education-related internships in federally-regulated sectors, and to making it easier for workers in these sectors to request flexible work arrangements.

These commitments are a good first step for workers under federal labour laws, as they will ensure better protections and less exploitation for these workers.

What’s Not in the Budget on Income Security

Improvements to Income Security Benefit Programs

The Budget makes no improvements to the Old Age Security and Guaranteed Income Supplement system for low-income seniors, even though poverty among seniors is increasing, especially for women and single seniors. While last year’s Budget made important investments in the GIS top-up, there is no additional top-up to the Guaranteed Income Supplement as recommended in the CCPA’s Alternative Federal Budget (https://www.policyalternatives.ca/afb2017).

As well, no improvements have been made to income adequacy or access to the CPP-Disability program. Changes to the eligibility calculation could ensure that people actually get a monthly amount of benefits that they can live on. Loosening contribution requirements could increase access to the program for people with disabilities. These omissions mean that people with disabilities in Canada will continue to live with a higher rate of poverty, and will not be as well served by the CPP-D program as they should be.

Despite advocacy from many groups on necessary improvements to the Canada Child Benefit, the Budget does not index the benefit to inflation before 2020, improve take-up among Indigenous peoples on reserve, address gaps in eligibility for parents without regularized immigration status, or ensure that the provinces and territories are prohibited from clawing back the CCB from social assistance benefits. Lack of action on these gaps undermines the ability of the Canada Child Benefit to end child poverty in Canada, and sends a message that some children matter more than others.

In addition, the Budget does not improve access to regular EI benefits for the many workers in Canada who don’t qualify, or increase benefit levels for those who do qualify. Given the continued erosion of the quality of work in Canada, action must be taken to ensure workers in precarious jobs can access these benefits. The Budget also does not provide migrant workers with access to EI benefits, despite the fact that they pay into the EI system through premiums on their paycheques. Lack of action on these issues is disappointing, given that the necessary reforms are affordable and the need for improvements is great.

As well, there is no indication that the federal government intends to make additional investments in the Canada Social Transfer to improve the adequacy of provincial and territorial social assistance benefits. Given that the 5% of people in Canada who receive social assistance make up 40% of those living in poverty, increasing investment for social assistance through the Canada Social Transfer, and requiring the provinces and territories to use those funds for this purpose, would be an important contribution to ending poverty in Canada.

Improvements for Migrant Workers

The Budget did not include improvements to working conditions and protections for the rights of migrant workers in Canada. While changes have been promised to the Temporary Foreign Worker program, the Budget did not address the critical need to provide open work permits rather than the current system of permits tied to one employer, which increases exploitation and precarity for migrant workers. And while government has committed to find pathways to permanent residency for migrant workers, no details on this commitment were announced. Without these important changes, migrant workers are forced to remain in unsafe working conditions or risk firing and deportation if they try to enforce their rights.

Other Important Budget Announcements

Housing

The Budget announced an $11.2 billion investment over the next eleven years in housing, to support the government’s upcoming National Housing Strategy. This includes funds for improvements to existing social housing, construction of new units, rent subsidies, funding for homelessness prevention, the provision of federal lands and buildings, off-reserve housing for Indigenous peoples, housing in the North, as well as better data collection and research.

All of these investments are critically important and necessary, and have been welcomed by housing advocates across the country. However, advocates have also noted that the size of the investment does not come close to meeting the identified need, particularly given thirty years of disinvestment by the federal government in affordable housing. As well, most of the funding is not scheduled to be made available until after the government’s current mandate.

Child Care

The Budget announced $7 billion over 10 years for child care and early learning, starting in 2018-19 and building on $500 million in 2017-18 that was announced last year. Some of the funds will be earmarked for Indigenous children both on- and off-reserve.

It is not year clear if the money will go toward creating the fully-funded not-for-profit child care system that child care advocates have long been pushing for, or will be directed into subsidies to the for-profit system. The National Framework on Early Learning and Childcare is expected to be announced soon, but will only outline broad principles for how the money should be spent.

It is clear, however, that the funds will not be enough to meet the need, especially in the early years of the ten-year commitment. More investment is needed early on to build an affordable, accessible, high-quality, inclusive and flexible system that will support mothers’ participation in the workforce and provide children with quality care.

Unique solutions for Indigenous parents and children are needed that respect sovereignty and address the extreme poverty and disadvantage that affects many communities. The federal government has committed to separate negotiations for an Indigenous Framework on Early Learning and Child Care but they have not yet started. It is not yet known how much of the funds will go to Indigenous children.

Indigenous Peoples

The federal Budget commits $3.4 billion over five years for investments in infrastructure, health, education, language and culture for Indigenous peoples in Canada. These important investments have the potential to improve life for Indigenous peoples in Canada, but they must be made quickly and in collaboration with Indigenous communities.

This government has made big promises to achieve reconciliation with Indigenous peoples and to address the gap in living standards. The measure of these investments will be whether they make concrete improvements in the lives of Indigenous peoples both in the short and long-term, including an end to poverty and Indigenous control over Indigenous lives. These goals will not be achieved without Canada’s compliance with the Canadian Human Rights Tribunal order that it immediately cease discriminating against Indigenous children by properly funding Indigenous child and family services, which this Budget does not do.

Gender-Based Analysis

The Budget includes an analysis that highlights investments that benefit women. This is the first time a gender-based analysis has been used in a federal Budget in Canada and is an important step toward addressing the problems that women disproportionately face, including poverty and low-income.

The Budget invests $100.9 million over five years, with continued funding thereafter, to establish a National Strategy to Address Gender-Based Violence. Given that violence against women and poverty are deeply intertwined, a national strategy may be good news for low-income women in Canada. Details about this strategy are expected in the coming months.

Investments in child care will need to be prioritized to make a real difference for women and their children. Improvements to the Canada Child Benefit must be made. The gender wage gap must be closed. More needs to be done to address the poverty and inequality that women face, particularly women from racialized communities, Indigenous women, newcomers, and seniors, who experience additional vulnerabilities and systemic disadvantage.

We hope that further development of the gender-based analysis can lead to better programs, services, and policies as well as more investments to improve the lives of women in Canada. We also call on government to more explicitly include the rights and experiences of transgendered persons and to add a race-based lens to the analysis to ensure government laws and policies are always working towards racial as well as gender equality.

Other Missed Opportunities

Tax Fairness

Advocates had hoped that the Budget would close tax loopholes that disproportionately benefit higher income Canadians, as the government pledged during the 2016 election campaign. Unfortunately, the Budget took no meaningful action to close tax loopholes or on other moves to increase tax fairness. It did, however, announce an investment of $529.9 million to crack down on tax evasion and avoidance. Even so, government will continue to give billions of dollars away to higher income earners in tax breaks instead of using that money to pay for the important programs and services that Canadians need.

What’s Next

The federal government has just started a consultation on creating a National Poverty Reduction Strategy and are asking for public comment on a discussion paper, which is available here: https://www.canada.ca/en/employment-social-development/programs/poverty-reduction/consultation.html.

The discussion paper asks several questions, primarily about important technical issues like the definition of poverty, how to measure progress on reducing poverty, and which groups and dimensions of poverty should be prioritized. However, it also asks for suggestions for improvements to federal programs and policies to help reduce poverty.

ISAC will be making a submission to this consultation, focusing on the improvements that can be made. We will circulate our submission in advance of the close of the consultations in June so that others can endorse it or use it as the basis for their own.

As well, Dignity for All has created resources to support engagement in the consultations, which are available here: https://dignityforall.ca/poverty-reduction-strategy-consultations/.