Social Policy in Ontario

Governments can’t ignore income security forever

Posted on June 11, 2012 in Social Security Policy Context

Source: Toronto Star — Authors: Hugh Segal

NationalPost.com – FullComment
Jun 10, 2012.    Hugh Segal, National Post

There is an invisible elephant in the room in the debate around employment insurance reform. Coincidentally, it is the same large elephant hiding among the pots and pans of the Quebec student protest and can even be found on the edges of NDP leader Thomas Mulcair’s angst about the West’s resource-based economic success damaging Ontario’s industrial heartland. And that elephant goes by the name of income security.

It is reasonable to have an employment insurance system, funded by contributions from Canadian workers, that provides a financial bridge to those who have lost their jobs and cannot immediately find a replacement. When mildly tightening the eligibility to those who really cannot find work is controversial, however, this shows that EI stands for Extra Income, not Employment Insurance. That the income may be vital to communities, regions and lifestyles tied to seasonal jobs is not in question. But such a system is no longer insurance. It is a basic income floor unrelated to whether or when work was available.

Moving to find work within your country used to be normal (and still is for thousands of Canadians who have found good jobs in Alberta and Saskatchewan). But we must recognize that government programs have unintentionally created powerful disincentives to labour mobility. When equalization tries to even out per capita government revenue by sending federal dollars to sustain poorer provinces’ spending capacity, we are not addressing the income security gaps between the wealthiest and poorest Canadians — nothing guarantees that the transferred funds be spent addressing income security. And as equalization does help less wealthy governments maintain reasonable quality for roads, hospitals, schools, community infrastructure and the rest, the incentive to move from family and friends to take a job in another part of Canada is not there. This makes the problem worse.

When students worry about tuition and student debt, they do so at a time when younger Canadians who enter the work force get much lower salaries relative to the equivalent of prior generations and face a much tougher time finding reasonable employment. Unemployment and poverty is worse for younger Canadians. Income security may not be on the posters and placards of Quebec students and their fellow pot and pan percussionists. But it is at the root of the mobilized angst.

Many of the manufacturing employees concerned about their jobs in Ontario worry understandably about income security through the working-age years when they try to raise a family and put aside something for retirement. Canada’s performance for decades in terms of facing working-age poverty has not been good. There are many OECD countries who do far better and always have. In contrast, Canada’s performance in alleviating poverty amongst older Canadians is at the very top of the OECD measure, proving that it can be done, and done well, by federal and provincial governments.

The elephant in the room ain’t going anywhere. The premiers’ Council of the Federation might well consider launching their own initiative on income security. They should invite federal Minister of Finance Jim Flaherty, who has shown an open mind to the issue of Canada’s working poor. Except for Newfoundland and Labrador, all provinces pay welfare rates well beneath the poverty line, helping to feed the costly pathologies of poverty that fill our hospitals, our homeless shelters, our prisons and the tragedies of family violence and substance abuse.

A frank discussion about income security, poverty and the kind of income floor that could obviate other programs that are unbalanced, expensive to operate, wasteful and disconnected from reality, is long overdue. The elephant is getting angrier, hungrier and more unfriendly every day. And is becoming far less invisible.

National Post

Senator Hugh Segal is a Conservative senator from Ontario and a long-time proponent of the efficiency, fairness, stability and productivity benefits of a guaranteed annual income.

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Tags: budget, economy, featured, ideology, participation, poverty, rights, standard of living

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