Social Policy in Ontario

A realistic plan to narrow the income gap

Posted on March 2, 2016 in Equality Policy Context

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TheStar.com – Opinion/Commentary – A think-tank has released a sensible blueprint to reverse income polarization
Mar 02 2016.   By: Carol Goar, Star Columnist

It took 35 years to turn Canada into one of the most inequitable countries in the industrial world. It will take almost as long — plus money and discipline — to reverse the trend.

That is the message of an exhaustively researched book entitled Income Inequality: The Canadian Story. The 547-page compendium, released this week by the Institute for Research on Public Policy (IRPP), is bad news for wishful thinkers and poll-conscious politicians. But it’s good news for Canadians who have been waiting a long time for a non-partisan analysis of how a once-egalitarian nation became a sharply polarized country and what it will take to turn things around.

Those advocating a guaranteed annual income (or basic income or guaranteed minimum income) < http://www.thestar.com/opinion/commentary/2016/02/11/the-stage-is-now-set-for-a-basic-income-for-all.html > will be disappointed. The authors examine and dismiss that option. Those calling on policy-makers to turn back the clock to an era of strong social safety nets won’t be much happier. The changes proposed by the authors are much more extensive than that.

Economist France St-Hilaire, who headed the two-year project, gives Justin Trudeau credit for breaking the official silence on income inequality and beginning to shift income from the richest 1 per cent of Canadians to the other 99 per cent. “But a much more comprehensive approach is needed,” she says.

The Prime Minister has taken two initial steps. He cut taxes for the middle class and raised them for those with incomes above $200,000. And he combined the hodgepodge of tax breaks and payments for parents into a single Canada Child Tax Benefit targeted at middle- and lower-income families.

To build on this modest start, St-Hilaire says Trudeau would have to work with the provinces, municipalities, employers, educators, organized labour and social agencies. On top of that, he would have to convince Canadians of all ages, income levels, backgrounds, regions and political stripes that the task is worth doing and tangible progress is possible. It is as daunting a challenge as any prime minister has faced.

The Montreal-based policy think-tank and its Vancouver partner, the Canadian Labour Market and Skills Researcher Network, assembled 27 of the best thinkers in the country to bring their knowledge and ideas to the table. What emerged was a package of measures, ranging from act-now steps to ambitious multi-year proposals. At first glance, it looks intimidating. But on closer examination, it is a sensible and coherent blueprint.

It has seven basic elements:

– Expand the Working Income Tax Benefit < http://www.cra-arc.gc.ca/bnfts/wtb/menu-eng.html >.  This refundable tax credit, brought in by former finance minister Jim Flaherty, makes work, even in a low-wage, precarious job, better than welfare. It could be broadened in next month’s federal budget

– Revamp Canada’s outdated, threadbare, employment insurance system. Trudeau is promising to fix two easily correctable problems: cut the waiting time for benefits and channel more money into skills training. But much more is required. The two biggest imperatives are broadening coverage to all workers (as opposed to 40 per cent) and eliminating regional disparities in benefits.

– Raise social assistance rates < http://incomesecurity.org/publications/social-assistance-rates/OW_and_ODSP_rates_and_OCB_as_of_Oct-2015.doc > which fall below the poverty line in all 10 provinces. Regrettably Trudeau can’t raise the bar. Social assistance is a provincial responsibility and none of the premiers sees any urgency. Last week’s Ontario budget made it clear that Premier Kathleen Wynne is in no hurry to lift welfare recipients out of poverty.

– Get moving on early-childhood education. It has been promised since 1984. Trudeau’s position is unclear, although the Liberal party is in favour of universal early education and child care. To give all kids a strong start, Ottawa would have to provide the provinces with funds to create thousands of preschool learning centres.

– Improve high school teaching of science and math. Canada needs a generation of workers as numerate as it is literate to compete globally. Again, this is a provincial responsibility. Ontario has a litany of plans and goals. Qualified, enthusiastic teachers are harder to find.

– Move gradually toward higher minimum wages. “Gradually” is clearly the premiers’ watchword. Not one province has a minimum wage that allows workers to cross Statistics Canada’s low-income cut-off. Ontario raised its minimum wage to $11.25 last October — an increase of 25 cents an hour.

– “Executive compensation needs to be reviewed and addressed,” the authors submit, leaving readers to figure out who will do it and how.

If these proposals sound familiar, maybe that’s the point. There’s no mystery about what it takes to make a society fairer. It is a matter of political will.

< http://www.thestar.com/opinion/commentary/2016/03/02/a-realistic-plan-to-narrow-the-income-gap-goar.html >

Tags: budget, child care, economy, featured, ideology, jurisdiction, participation, standard of living, tax

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