Improving Social Security In Canada

Attempting to solve our social and financial problems in a piecemeal fashion will not work. If we are to achieve meaningful solutions to our problems, they must be parts of a comprehensive social and financial policy. Any attempt to divide Canadians into competing groups so that the Government can play one against another in a disgraceful battle for decreased benefits, should be doomed to failure. The Governments latest gimmick, the Have Your Say workbook, or more popularly known as The Yellow Brick Road To The Land of Axworthy and Martin, was an insult to the intelligence of Canadians. We must not only be concerned with the costs of programs but we must also be concerned with the social and economic costs which will arise as a result of cutting or reducing these programs.

Many Canadians are becoming concerned about the Government's proposals to "reform" Canada's Social Safety Net. Assessment, evaluation and improved effectiveness are quite acceptable. Destruction of our social safety net is completely unacceptable. There is a very real concern that selfish interest and greed will destroy, not rebuild, our social security system.

The basic question is; What is driving the

demand for "reform"? Is it a true concern for improvement of our social programs or is it mainly an attempt to reduce the deficit. If deficit and debt reduction are the driving forces, then it is imperative that we identify the true causes of our deficit and debt. A 1991 Statistics Canada study reports that the

deficit is not due to social programs. According to Statistics Canada:

· 44% of the debt is due to tax breaks for upper income earners and corporations;

· 50% of the debt is due to high interest rates;

· 4% of the debt is due to general program spending and;

· only 2% of the debt can be attributed to social programs

If our social security plans have not been the cause of our national deficit and debt problems, we cannot solve these problems by cutting social programs. Another interesting question is what institutions hold our national debt and how much income tax do they pay to the Government of Canada?

We feel very strongly that rational discussion of our program costs can not be carried on without also discussing the revenue side. If we are truly concerned

about deficit and debt reduction, we must also be prepared to re-examine our whole taxation system.

If Government of Canada is not prepared to introduce a fair, comprehensive and progressive income tax system; if they are not prepared to eliminate special exemptions and plug the loopholes in our present income tax system, it is grossly unfair to expect the poor hungry children, the unemployed, low and middle income groups, small businesses and the elderly to be responsible for our national deficit and debt.

Conservative "laissez-faire" economic policies failed miserably in the nineteenth century.

The same policies served the then Prime Minister, Mr. R.B. Bennett and Canada, no better in the 1930's. While Mr. Bennett was "blasting his way into world markets" he was driving his own country ever deeper into the

depths of depression. The Relief Camps were no solution for the unemployed and

the bitter discontent which they spawned, culminated in the "March on Ottawa" and the tragic Regina Riot on Dominion Day in 1935

To his credit, by January 1935, even Mr.Bennett began to realize that his conservative policies wouldn't work. Mr. Bennett's "New Deal" promised reforms such as unemployment insurance, social security, a minimum wage law and a shorter work week.

Given the present state of fiscal, political and social hysteria in Ottawa, it is interesting to reflect on a few excerpts from Mr. Bennett's radio addresses from January 1935:

· "In the last five years, great changes have taken place in the world. The old order is gone. It will not return...."

· " ..... in my mind, reform means Government intervention. It means Government control and regulation....."

· ".....The dole is a condemnation, final and complete, of our economic system. If we cannot abolish the dole, we should abolish the system...."

· "Selfish men, and this country is not without them....... fearful that this Government might impinge on what they have grown to regard as their immemorial right of exploitation, will whisper against us. They will call us radicals. They will say that this is the first step on the road to socialism. We fear them not... We invite their cooperation... all the parts of the capitalist system, have only one purpose and that is to work for the welfare of the people. And when any of those instruments in any way fails, it is the plain duty of government which represents the people, to remove the cause of failure... The lives and the happiness and the welfare of too many people depend upon our success to allow the selfishness of a few individuals to endanger it ..."

If we are to prevent future problems, we might do well to learn from the lessons of history. Surely we can learn from past mistakes and prevent child poverty, and lessen costly social problems both now and in the future. The children of our society must be given the first call on the resources of our society.

Income security is a matter of fundamental concern to all members of a civilized society. Seniors in particular, have an immediate interest, in addition to their

concerns for their children and their grandchildren. The ever widening income gap, between the relatively few rich and the many poor, is a deeply disturbing trend in Canadian society. The most stable and healthy societies are those with a greater degree of income equality.

Poverty among the aged is one of the current shortcomings of our pension system.

Despite Canada's status as one of the world's richest nations, a large number of Canadians retire every year with very little money to live on - and only one out of every 100 men retirees are truly wealthy. This startling revelation, based on Statistics Canada research, shows that for every 100 men who reach age 65, 53 of them need government assistance to make ends meet. The same research shows that for women, the reality of retirement is even worse: 82 out of 100 women age 65 and over need government assistance, while only three out of 100 are financially secure. It is also important to remember that any significant change in income levels in our society, directly or indirectly impacts at all levels. Seniors are an integral part of our Canadian social structure.

In the area of pensions, there is an urgent need for earlier vesting, portability, inflation protection, survivor benefits, credit splitting and protection for part-time employees. In 1985 the MacDonald Commission recommended a Guaranteed Annual Income or "Universal Income Security Program". Perhaps we could combine many of our current Income Security Programs under the umbrella of a Guaranteed Annual Income Plan. It would be interesting to contemplate the possible administrative savings that might be achieved.

Lessons learned from Medicare and from insurance need to be applied. The important lesson to be learned is that, it is more efficient to pay these premiums out of general taxation, than to try and collect it on a month-to-month basis for each individual. This should not blind us to the fact that this is a prepayment scheme. According to Emmett Hall, prepayment is the answer to the financing of universal health care. The same principle applies to pensions. If left to the market, the majority of low income people will be left without a means to participate. These schemes must be universal.

Unemployment insurance, along with taxation policies and savings, are important economic stabilizers. Mr. Axworthy gives us the impression that the taxpayers of Canada are paying for UI benefits. Employees and employers pay the premiums while the Government only collects and administers the fund. Before we start making changes to our unemployment insurance scheme, we should consult with the people who are paying the premiums and we should be aware of the multiplier effect of those changes. On Post Secondary Education Mr. Axworthy proposes that the $2.6 billion federal annual grant to the provinces be abolished. If student fees go up by 200 to 300%, only children of the wealthy will be able to go to university and post secondary education. Everyone in Canada benefits when we have a healthy and well trained workforce. Before the government of Canada cuts grants to education, they should ask the wealthy and corporate sectors to pay their fair share of taxes.

In Conclusion, if the Government of Canada seriously wants to tackle our deficit and debt problem, they should identify the major causes of those problems. If the Government is serious about deficit reduction, they should begin with a complete overhaul of their taxation system; income tax in particular. Only after they have completed the reform of the Canadian tax system, will they be in any rational position to discuss cuts to social programs, education, unemployment insurance and health care.

The time for action has come. The Government of Canada should "screw its courage to the sticking point" and make those tough decision that are needed. The government cannot expect the poor, the hungry, the unemployed, low income workers, small business, students and the elderly to bear the brunt of deficit and debt reduction while their wealthy and corporate friends have a tax free ride.

Prepared by Wally Coates for Sask. Seniors Mechanism for presentation to the Axworthy Commission on Social Security Reform.

Cut the corporate welfare bums;

not the poor and the needy.