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Growing Gap

The road to good intentions

Update
Projects & Initiatives: Growing Gap

Today, something remarkable happened.

And, as remarkable as it is, it shows us how far behind Canada has fallen from its ideal self as a beacon of fairness, social justice and equality.

Today, 20 years after a unanimous federal government motion to eliminate child poverty by the year 2000, which it failed to make good on, Parliament has unanimously agreed to try again.

HUMA, the House of Commons Standing Committee on Human Resources, Skills, and Social Development and the Status of Persons With Disabilities, acknowledged the previous failed motion and committed "to develop an immediate plan to eliminate poverty in Canada for all".

The motion is a moral victory for many who have worked tirelessly toward a federal government commitment to tackle poverty, not the least of whom is Campaign 2000, which reports today that child and family poverty remains a blight on a nation as affluent as ours.

On a day such as this, it would be easy to berate Canada's parliamentarians for failing to make good on its original promise.

It would be easy to castigate short-sighted politicians for giving away billions of dollars in tax cuts to really well-off Canadians while ignoring the poor during some of the best economic years in our nation's history.

But I'd prefer to concentrate on the task at hand.

Canada is knee-deep into recession and if any of its last two recessions are a predictor of the future, a full economic recovery is many years away.

After the 1990s recession, Canada's GDP bounced back fairly quickly but it took seven years before Canadians had access to the same level of full-time jobs that were available pre-recession.

Canada's federal and provincial governments made terrible mistakes following that last recession. They cut public services at a time when the economy was relying on public sector growth to pull the nation back into recovery. They ushered in punitive social assistance rules that deepened the experience of poverty for Canadians and made it harder for someone who falls on hard times to crawl out of the gutter.

When the economy finally started firing on all cylinders, Canada's senior levels of government, and much of the electorate, were lured by vote-getting tax cut promises and failed to use the nation's prosperity to significantly reduce poverty.

Today, Campaign 2000 released a report that shows Canada's after-tax child poverty rate was 9.5 per cent even before recession took root a year ago. In 1989, the year Parliament first committed to eliminate poverty, Canada's after-tax child poverty rate was 11.9 per cent.

In a nation as prosperous as Canada's - it is the ninth largest economy on the planet - there is no good excuse for such high rates of poverty.

One in 10 children still live in poverty in Canada. It's worse for children living in First Nation's communities: one in four grow up in poverty.

There are more working poor in Canada today: 40 per cent of low-income children live in families where at least one parent works full-time year round, up dramatically from 33 per cent in the 1990s.

Meanwhile, the gap between rich and poor has widened: On average, for every dollar families in the poorest 10 per cent had, families in the richest 10 per cent had almost 12 times as much ($11.84) in 2007.

What's heartening is that six provinces in Canada have signaled their intention to reduce poverty in their jurisdiction. It's time for the federal government to stand with them.

What we learned from the 1989 motion is that good intentions alone do not resolve the problem. Political will, backed by solid public sector investments in social programs proven to reduce poverty, is what's needed.

There is no time to waste.

 -- Trish Hennessy

Parliament will try (again) to eradicate child poverty

Update
Projects & Initiatives: Growing Gap

"Twenty years after a unanimous federal government motion to eliminate child poverty by the year 2000, which it failed to make good on, Parliament has unanimously agreed to try again," writes Trish Hennessy, director of the Growing Gap project, in a recent rabble.ca blog.

Despite the federal government's failure to eliminate child poverty in Canada, the ninth wealthiest nation on the planet, Hennessy sees hope in the leadership some provinces in Canada are taking to reduce poverty. But she says it's time for the federal government to contribute to this effort too.  To read her blog, click here.

Canada's growing gap explained

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Projects & Initiatives: Growing Gap

The income gap between the rich and the rest keeps growing, in good times and in bad. Learn more about it in this video.

Can we have an adult conversation about taxes?

At the risk of insulting a generation of 4-year-olds, it's time we had an adult conversation in Canada about taxes and public services.

Most 4-year-olds have figured out that when you go to the store to get something you want, you have to be prepared to pay for it. Yet Canada's political leaders and business interest lobbyists would rather spit nickels than admit this basic fact. It's a problem with all political leaders and parties – not just those I disagree with.

The Affordability Gap

Spending differences between Canada's rich and poor

Reports & Studies
Projects & Initiatives: Growing Gap
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Boom and Bust

The Growing Income Gap in Saskatchewan

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Projects & Initiatives: Growing Gap
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Recession watch: May's job losses

Update
Projects & Initiatives: Growing Gap

In the past few weeks there has been lots of talk that the worst of of Canada's recession is over; that some "green shoot" indicators hint recovery may be on the way.

It's hard to tell what the future will bring but it is easy to compare Canada's experiences with those of the past.

So far, the worst recessions since the Great Depression happened in 1981-82 and 1990-91.

In 1981-82, Canada's GDP dropped by 0.7% in the first quarter of the recession and 0.5% in the second quarter. The recession went on for four quarters, and the economy shrank by 4.9% from peak to trough.

In 1990-91, Canada's GDP dropped by 0.4% and 0.6% in the opening two quarters of a recession that went on for eight quarters, with GDP contracting by 3.4% from peak to trough.

This time around, Canada's GDP dropped by 0.8% in the first quarter of downturn and the rate of decline accelerated to a stunning 1.4% in the second quarter of this recession.

The number of job losses so far has been the most dramatic of any recession, though as a proportion of the overall job market it is unfolding on roughly the same scale as the 1981-82 recession.

Without doubt there is much more job loss to come, given the dramatic decline in the economic last quarter and the ongoing retrenchment of demand.

In every recession, the highest toll is on full-time jobs. (There are always some part-time jobs created, offsetting the decline in total employment.)

So far in this recession, there are 406,000 fewer full-time jobs to be had, a 2.9% shrinkage in the full-time job market.

Over the opening seven months of the last two recessions, there was a loss of 271,000 full-time jobs in the 1980s recession (2.8%), and 214,000 fewer full-time jobs in the 1990s recession (2.0%).

This time round, there have been proportionately fewer part-time jobs created to offset these declines (about 43,600 new part-time jobs in the past seven months, compared to 46,700 in the 1980s).

The job losses in the opening seven months of the recession accounted for 38% (1980s recession) and 35% (1990s recession) of the total loss of paid work, peak to trough. Despite the stimulus packages that were announced, there will likely be many tens of thousands more jobs lost in the coming months.

This month's Labour Force Statistics also brought news of a further 9.4% decline in the number of manufacturing jobs since October. This dramatically deepens the decline that started in the summer of 2002.

Since then Canada has lost over three quarters of a million manufacturing jobs, or 30% of all manufacturing jobs. Now at 1,788,400 jobs, manufacturing employment in Canada is lower than at any time since the data started being collected in 1976.

The struggling American economy is pushing up the relative value of the Canadian loonie, adding to the difficulties faced by Canadian manufacturers and exporters and squeezing household budgets further.

Together, these trends raise the question: will the kind of jobs that remain when we get through this mess sustain a middle class?

-- Armine Yalnizyan

Exposed: Revealing Truths About Canada’s Recession

Reports & Studies
Projects & Initiatives: Growing Gap
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Canada's Quiet Bargain

The Benefits of Public Spending

Reports & Studies
Projects & Initiatives: Growing Gap
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Excess CEO pay hits home

Update
Projects & Initiatives: Growing Gap

A story in the Financial Post reports the CEO of Canada's TD Bank is donating his $3 million dollar bonus to charity this year, leaving him with $8 million in compensation this year.

It's a trend that's growing popular in the U.S. but TD Bank CEO Ed Clark became the first to announce such a move in Canada.

No word yet on whether he'll dedicate some of his bonus to the Canadian Centre for Policy Alternatives, to acknowledge our ongoing work on tracking CEO pay in Canada.

Our latest study, released on January 2, shows the pay for Canada's highest paid 50 CEOs leapt from about 85 times the wage for the average Canadian worker in the mid-1990s to 398 times the average wage.

The study found the 100 highest paid CEOs of public companies received an average of $10-million in annual compensation, a 22% increase compared with a 3.2% raise for average Canadians in 2007.

-- Trish Hennessy

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