More than a decade ago, the federal and provincial governments started work on a new poverty line - the Market Basket Measure (MBM). After decades of distracting and divisive debates about poverty lines, Human Resources and Skills Development Canada crafted a methodology for the MBM that passed the test of common sense.
These days, the federal government appears more intent on throwing all that work into the garbage heap.
Two years ago, the bean-counters in Ottawa changed the methodology. In particular, they started calculating housing costs in a way that produced figures that were patently absurd. Suddenly, the much-lauded MBM no longer passed the test of common sense.
In Vancouver, for example, the shelter portion of the MBM for a family of four dropped from $12,329 a year for two-bedroom or three-bedroom apartments to $7,455 a year, a drop of almost 40 per cent. The new measure works out to $621 a month, including utilities, in one of the most expensive housing markets in Canada.
Anyone know of a nice two-bedroom or three-bedroom apartment in Greater Vancouver that rents for $621 a month?
While the biggest cuts in the shelter portion of the basket for a family of four occurred in BC, there were also major cuts elsewhere when the revisions went into effect:
The MBM is worth getting right. Unlike other poverty measures, it is intuitive and easily understood because it's based on the actual cost of basic goods and services. The MBM is also grounded in real local expenses in cities and towns across Canada rather than using a single figure for all major cities regardless of actual variations in local costs. And it was designed to be reasonable. People could look at the list of local costs and agree that the line made sense; that it reasonably came to a figure that most would agree was an appropriate poverty line. In short, the MBMs were a simple and uncomplicated way to describe poverty, and they were so much simpler to understand than the Statistics Canada low income cut-offs (or LICOs) traditionally used by most poverty analysts.
The three of us (all long-time researchers of social policy and poverty issues) were early supporters of the MBM. While recent revisions to the costs for food, clothing, transportation, and other items in urban and rural regions of each province met the test of common sense, the same could not be said for the revisions to the shelter costs.
The three of us raised our concerns with colleagues in the federal government in September 2010, shortly after the changes were made public.
We saw no corrections when the most recent poverty data was published in June 2011. Human Resources and Skills Development Canada and Statistics Canada ignored our suggestions either to suspend the MBMs last year or include a warning about the housing changes.
Most recently, we’ve been told this coming year’s poverty data will again contain this ridiculous and unsupportable change, although we’ve been assured that the folks in Ottawa are mulling over our concerns. Surely the better part of two years is long enough to fix the problems we have identified.
The party line in government seems to be that the last revisions in the MBMs were done with great care and great transparency. We don’t believe either of those descriptions is true.
Regrettably, we are forced to recommend - once again - that the MBMs not be used until they are fixed.
Meanwhile, anyone have an address for that $621 apartment in Vancouver that could house a family of four and includes all utilities?
Michael Goldberg is a former director of research at the Social Planning and Research Council of BC, Steve Kerstetter is a former director of the National Council on Welfare in Ottawa, and Seth Klein is director of the BC office of the Canadian Centre for Policy Alternatives.
CBC Radio's The House did a segment last Saturday (Feb. 11) on the Harper government's bilateral free trade strategy and specifically its approach to China. CCPA's Scott Sinclair was on a panel with Bay St. trade lawyer Lawrence Herman.
For those who are interested, the podcast can be found here. The segment begins with a clip from NDP trade critic Brian Masse at the 23 minute mark.
It may be that the sheer bravado and aggressiveness of the Harper government's bilateral negotiating strategy (including talks with China) could reopen much-needed public debates on the merits of free trade and Canada's trade and investment treaties. Host Evan Solomon closed this way -"Back to the future -- the free trade debate is back on the agenda."
A halting and fragile "recovery" from the biggest global economic meltdown since the Great Depression has seen the growth of the ugliest side of capitalism. In the Wake of the Crisis: Bully Capitalism, by CCPA's Armine Yalnizyan, is a must-read piece documenting the new snatch-and-grab business ethos, one that may ruin the game for everyone but the corporate giants, as we lurch headlong down the road of lower taxes and lower wages.
You can read In the Wake of the Crisis: Bully Capitalism over on our blog, Behind the Numbers.
As part of the consultations undertaken in preparation of our forthcoming Alternative Federal Budget, the Canadian Centre for Policy Alternatives hosted an economist roundtable, The Global Economic Crisis: Can Canada Escape a Lost Decade? on January 26, 2012. The event brought together several leading Canadian economists to address the appropriate fiscal policy response to Canada’s anemic economic recovery, as well as three internationally recognized authorities who shared their perspectives on the nature of the global economic crisis, how it’s likely to unfold, and obstacles to reform.
Click on the sessions below to watch online (via CPAC):
Keynote I: Perspectives on the global crisis and what to do
Speakers:
Panel I: Canadian dimension of crisis and assessment of the policy response
Panelists: Patti Croft, Alice Nakamura, Mario Seccareccia, and Jim Stanford
Moderator: Althia Raj
Keynote II: Perspective on the U.S. and the global crisis, and the way forward
Speaker:
Panelists: Roy Culpepper, Andrew Jackson, Brenda Spotton Visano, and Eric Pineault
Moderator: Norma Greenaway
Old Age Security (OAS) is the basic building block of Canada’s retirement income system. Canadians build on that foundation, saving for their retirement with benefits from the Canada or Quebec Pension Plan, a workplace pension if they’re lucky enough to have one, and private savings.
But now Prime Minster Harper says OAS is unsustainable and will not be able to accommodate the retirement of the baby boom generation over the next 20 years. Subsequently, the government is now considering controversial reforms to pension programs—including raising the age of eligibility for OAS from 65 to 67.
Pension experts don’t agree. Old Age Security: Can We Afford It?, a new CCPA technical paper by Monica Townson, sheds some light on the negative impact of cuts to Canada's pension programs and also addresses its sustainability, given government claims that OAS costs will be soon be “unaffordable.”
Click here to read the full report.
Electro-Motive/Caterpillar's decision to lock out its London, Ontario workers on January 1st, demanding workers accept a 50% pay cut or lose the plant altogether, brings into focus a theme that is unfolding in 2012: The crackdown on middle class work in Canada.
The CCPA's Trish Hennessy has written two blog posts about the developments in London and what it means for Canada's labour movement:
Caterpillar: The moth flying too close to the flame shows the futility of Canada's tax cut agenda and the failure of senior governments to act to save jobs.
Attack of the killer unionbot deconstructs the dehumanizing narrative that is pitting Canadians against unions.
Last week Prime Minister Harper signaled possible cuts to Canada's pension programs, namely Old Age Security benefits for middle- and lower-income seniors. The Canadian Centre for Policy Alternatives has produced several resources on pension reform, including analysis of the possible plan to raise the age for OAS eligibility:
CCPA research associate Erin Weir brings some clarity to claims that the cost of Old Age Security is unsustainable.
Andrew Jackson suggests that an increase in the eligibility age for OAS/GIS will negatively impact an increasing proportion of older Canadians who are staying in the workforce well past 65.
On CCPA’s blog, Andrew Jackson writes that despite the government's claims to the contrary, OAS costs are indeed sustainable in the context of an ageing society.
Hennessy's Index is a monthly listing of numbers about Canada and its place in the world. February's edition introduces us to some distressing numbers and facts on pensions and Old Age Security.
Andrew Jackson suggests that raising the age of eligibility for Old Age Security/Guaranteed Income Supplement (OAS/GIS) will have the biggest impact on future seniors who are in lower income brackets.
In this blog post, Andrew Jackson writes that raising the age of eligibility for OAS/GIS will cut a basic building block of retirement security, and instead we should be expanding the Canada Pension Plan now to raise incomes for seniors in the future.
Karen Foster examines the impact of pension reforms on the job prospects and economic well-being of younger workers.
This report reviews OAS and its associated programs of the Guaranteed Income Supplement (GIS) and the Allowance and discusses measures that could be taken to strengthen this part of Canada’s pension system.
This study provides an analysis of the government's proposed Pooled Registered Pension Plan (PRPP) program, and asserts that it will do nothing to solve Canada’s pension crisis.
The common story of why we need to integrate information and communication technology into education has changed. A dozen years ago it was about changing and preparing students. Now it's about changing the schools to fit the kids. This shift generates enthusiasm about changes among many—but not everyone. The speed and breadth of technological change and how it plays out in education is creating many battles.
The Winter 2012 issue of Our Schools/Our Selves -- Every Tool Shapes the Task identifies some of these areas of conflict and how they play out in schools and for students and teachers. The articles in this issue frame some of the many areas of conflict over education — conflicts that grow out of social, cultural, political and technological changes and differences.
Click here for a preview of the book, or to order.
Caterpillar's February 3rd announcement that it will close the Electro-Motive Diesel facility in London has renewed calls to overhaul the Investment Canada Act. The CAW, CEP, USW and CLC among others have pressed for expanding the criteria for approving foreign takeovers to include the impact of the investment on employment, wages and conditions, and the livelihood of workers, retirees and communities affected. Unions have also pointed to the lack of transparency and public participation in the review process, calling on the government to make public all commitments made by companies under the Act.
Some in the media have also questioned why companies like Electro-Motive (Caterpillar), which benefited from tax breaks and incentives announced in 2008, are not required to return the money if they close plants and lay off workers. In a similar vein, the CLC recently urged the federal government to require companies benefitting from corporate income tax cuts, but stockpiling cash, raising executive compensation, and boosting shareholder dividends instead of increasing real investment and employment, to pay back the money to taxpayers.
The CCPA Monitor is the only place I know that one can go to for accurate and honest reporting on the state of the world. I would hate like hell to ever be without The CCPA Monitor; it would be like losing my sight and my hearing. I heartily recommend it to anybody who gives a damn about the condition of the world.
— Farley Mowat