Xref: utcsri can.gov.general:261 can.politics:67220 Path: utcsri!utnut!nott!netfs.dnd.ca!srv.gc.ca!parl2.parl.gc.ca!Reflead_pc!hermae From: hermae@parl.gc.ca (Reform House Leader's Office) Newsgroups: can.gov.general,can.politics Subject: Reform Dissenting Report on HRD - Part 1 Date: Tue, 7 Feb 1995 10:03:45 UNDEFINED Organization: House of Commons Lines: 51 Distribution: world Message-ID: NNTP-Posting-Host: 167.32.178.12 Keywords: Reform X-Newsreader: Trumpet for Windows [Version 1.0 Rev B final beta #1] Reform Party Dissenting Opinion for the Standing Committee on Human Resources Development Contents: A. Introduction B. Part I: A Critique of the Report of the Standing Committee 1) A Lack of Genuine Consultation 2) A Lack of Scope 3) A Lack of Vision C. Part II: Reform's Vision-Providing Better Personal Security for Canadians in the Long Term 4) A Preliminary Response from the Grassroots 5) A Look at a World of Good Ideas 6) A Vision of Real Social Policy Reform D. Appendix: Intervenor Funding - Project Sponsors and Approved Budgets INTRODUCTION This report of the Standing Committee on Human Resources Development represents the culmination of a consultation and research process which has consumed more than a year of this government's term. Given this very large investment of time, given the fact that the government has had the intellectual resources of the entire country at its disposal throughout this period, and especially given the great importance that Canadians place on their social programs, the committee's report can only be described as a shameful disappointment. It is for this reason that the Reform Party's critics on the Human Resources Development Committee have felt it necessary to draft this dissenting opinion. It is our objective to provide a relatively brief critique of the committee's report, then to focus on what we believe are constructive solutions to the problems facing the Canadian social security system. In particular, we have tried to give emphasis to three themes: (a) the need for genuine popular consultation throughout the process of reforming the social safety net; (b) the need for a meaningful review of the security systems of the rest of the world, in order to find new ideas to use at home in Canada; (c) the need for a fresh new vision of social policy in the next century, founded on the belief that the best guarantee that governments can provide of individual personal security is to establish a framework of laws within which individuals can save for (or insure against) each of the contingencies that life may bring upon them. Brad Farquhar, Special Assistant Office of the Reform Party House Leader Tel (613) 995-7226 Room 531-C, Centre Block Fax (613) 943-0485 House of Commons hermae@parl.gc.ca Ottawa, ON K1A 0A6 I am not an official spokesperson for the Reform Party of Canada ~Xref: utcsri can.gov.general:262 can.politics:67221 Path: utcsri!utnut!nott!netfs.dnd.ca!srv.gc.ca!parl2.parl.gc.ca!Reflead_pc!hermae ~From: hermae@parl.gc.ca (Reform House Leader's Office) ~Newsgroups: can.gov.general,can.politics ~Subject: Reform Dissenting Report on HRD - Part 2 ~Date: Tue, 7 Feb 1995 10:05:07 UNDEFINED Organization: House of Commons ~Lines: 211 Distribution: world Message-ID: NNTP-Posting-Host: 167.32.178.12 Keywords: reform X-Newsreader: Trumpet for Windows [Version 1.0 Rev B final beta #1] PART I: CRITIQUE OF THE REPORT OF THE STANDING COMMITTEE Section 1: A LACK OF GENUINE CONSULTATION During the parliamentary committee's six week "travelling road show," Reform MPs were the only ones who raised public concern over the fact that 159 special interest groups were given almost $4 million by the Liberal government solely to lobby the Human Resources Development Committee. Instead of hearing from the regular Canadians we were supposed to be consulting across the country, in city after city the committee heard, instead, from representatives of these government-funded, interest groups. Ironically, virtually every one of them denounced the same Liberal government that had given them their funding as a pack of hard-hearted, elitist budget slashers, and urgently pressed the case for yet more of the same reckless spending that has brought Canada to the brink of fiscal disaster. This spectacle prompted the Reform MPs on the committee to compare these tax-funded groups to Frankenstein's mythical monster. In the novel, of course, Dr. Frankenstein tries to make a new and better form of life, but instead creates a monster that pursues him to his death. During the committee hearings almost all of the tax-funded, special-interest groups used their subsidized appearances before the committee to demand that the government spend yet more money. Many proposed raising taxes, completely ignoring the damage high taxes do to jobs and wealth creation. A LIST OF THE GROUPS IS CONTAINED IN THE APPENDIX TO THIS DISSENTING OPINION. The generous treatment extended by the committee to these groups was also extended to deliberately disruptive protesters, starting with the committee's meeting in Vancouver. Unfortunately, the Liberal members of the committee turned a blind eye to these disruptions and the protests grew progressively more disorderly until a low point was reached in Montreal, where tables were overturned, water, glasses and papers were thrown, and both witnesses and Members of Parliament were intimidated. The frustration felt by ordinary, unsubsidized Canadians as they tried to be heard over the din of the special interests is well represented by this passage from a letter sent by Cheryl Stewart of Bolton, Ontario and Sandra Evans of Mississauga, Ontario to one of the Reformers on the committee: We had applied to appear before the Standing Committee in Toronto. However, we received no confirmation one way or the other if we were accepted. After several long distance phone calls to Ottawa, we were informed that we were not selected but that there was a half-hour both in the morning and afternoon where spectators could be chosen by lottery to give a five minute presentation. This setup is outrageous. Do you really expect someone to prepare a document, travel great distances to Toronto and then hope their name is drawn for a mere 5 minute presentation? Subsequently, we have seen the list of approved presenters and it is obvious that the committee has an interest in only what unions, organizations and lobby groups have to say about social reform and is not at all concerned about what the average Canadian citizen has to say about social issues. The Committee's recommendations will no doubt be extremely distorted. Reform MPs believe a way must be found for parliamentarians to hear the opinions of real Canadians. Reformers believe that many of the problems experienced by the Standing Committee during the public hearings could be avoided. The Liberal-dominated committee gave 159 special interest groups $4 million to appear before the committee and called it "consultation." We call it, "tales from the trough." The Liberals could have opened the process giving preference to individuals unaffiliated with a special interest group. As a committee, we could have discovered what ordinary Canadians think. Instead, the committee heard what 159 special interest groups think. We aren't convinced that their contributions were worth $4 million of taxpayers' money. We find it hard to accept the claim of the majority report that the Standing Committee on Human Resources Development has anything approaching a firm grip on what Canadians really think. SECTION 2: A LACK OF SCOPE The entire social program review process, starting with Minister Axworthy's discussion paper or "Green Book" and ending with the report of this committee, has been far too narrow. Some of the most important programs -- notably Old Age Security (OAS), Canada Pension Plan (CPP) and health care, have been completely excluded from the review. Separate reviews have been established, but they have their own reporting schedules. In the case of the health care review, the report date is so far in the future that no reforms will be acted upon before the next election. It is difficult not to notice that the programs that have not been reviewed are precisely the ones that Canadians regard as most vital to their well-being. We agree with Sherri Torjman of the Caledon Institute when she writes of the Green Book, "[It] is severely limited by the fact that it presents no bold vision or clear plan for how Canada should address the issue of personal supports for the elderly -- the one in five Canadians who will be over age 65 by the year 2010 . We are left with the impression that the government is suffering from the illusion that the best way to protect our most important programs is to avoid discussing them." We find this head-in-the-sand attitude to be inexcusable. Canada's federally-administered social programs, including the ones left out of this review, consume two-thirds of that portion of the federal budget that is not consumed by interest payments. Our party's "Zero-in-Three" deficit elimination program shows that even if all other areas of government spending are cut back by more than a quarter, social programs will have to bear reductions in the order of $15 billion. To avoid making these cuts while Canada is still fiscally solvent merely ensures that when cuts do come, they will be much deeper. We also note that cutting spending to sustainable levels does not mean gutting social security. Even if spending on social programs were cut by 20% in order to balance the budget, the combined total of all federal, provincial and municipal spending on social programs will still be in excess of $124 billion each year. This amounts to $17,600 for every family of four. And this does not even take into account the billions that individual Canadians spend on their own for health insurance, RRSPs, and charities. SECTION 3: A LACK OF VISION Possibly the most disappointing aspect of this committee's majority report is its absolute lack of a new vision of what Canadian social policy ought to be. This shows up most obviously in the motherhood statements that fill the report, and which contrast awkwardly with an almost complete absence of fresh ideas. The problem of sustainability is irrelevant to the question of success. The Reform Party's social policy critics are reminded of the fact that by the standard employed by this committee, the SS Titanic was, generally, a success. After all, it not only carried its passengers most of the way from London to New York, but it did so in luxury and comfort. But to us, social policy cannot be considered a success either generally or at all, unless it allows each and every generation of Canadians -- including generations not yet born -- to make it all the way to port. The whole majority committee report seems to rest on three perilous assumptions: 1. Governments create jobs through ever-increasing public spending; 2. A government monopoly over the provision of all social and personal security services is the best means of meeting the needs of the old, the sick, the unemployed, and the poor; 3. Ever-increasing government deficits and debts are justifiable if they are incurred in the pursuit of job creation and social security. These assumptions are implicit in the Liberal government's Red Book and in the first budget of the Chrétien government. But the evidence that these assumptions are invalid is now more overwhelming than ever. Government spending is now at record levels in Canada, yet over a million Canadians remain unemployed and many more are underemployed. If increased government spending is the key to job creation, Canada should have one of the lowest, not one of the highest, unemployment rates among industrialized countries. It has been noted that if more government spending were all that was needed to create jobs, every Canadian would have several of them by now. Canadians have invested hundreds of billions of dollars in establishing publicly-financed, universal, government-operated, social security programs for the elderly, the ill, the unemployed, and the poor. Yet all of these programs are now in financial difficulty, with costs rising and services being curtailed, so that Canadians, who have been deprived -- thanks to our high taxes--of the means by which to provide for their own security needs independent of government assistance, can no longer count on these state-run programs to be solvent in the future. Dependence on state-run social security has become a growing source of personal insecurity. For this reason we are disappointed by the failure of the committee to recommend in the strongest possible terms that the government preserve the integrity and tax-free status of RRSPs and the private pension system, which remains the only part of the Canadian social security system that is completely solvent. It should come as no surprise -- given the committee's lack of genuine consultation, scope and vision in addressing Canada's social policy -- that the recommendations of the Standing Committee on Human Resources Development (HRD) prove thoroughly disappointing. Moreover, the Liberal members of the HRD committee base their recommendations on flawed principles, misinterpret the problems, and don't adequately think through the consequences of their policy recommendations. They assume that government can supply the personal security needs of Canadians better than individuals. This "big-brother-knows-best" approach is not only false but offensive. One need not look far to recognize that this ivory-tower, bureaucratic model for meeting individual needs has failed miserably. A new approach is needed desperately. This report takes the encroachment of government on people's lives to new heights. It encourages government to displace parental responsibility in the raising of children. Instead, government should provide the framework within which parents can meet their children's needs. Under criminal and common law, parents hold constitutional responsibility to care for their children. Government ought not to take parents responsibility, for child care away from them. The committee also assumes that improving social programs requires more money and that without further spending nothing can be accomplished. That is false. Canadians spend billions and billions of dollars on an assortment of social programs. The need is not for more money, but for proper management and targeting of existing funds to those truly in need. In any case, more money for any program is not an option. As Minister Axworthy has finally been forced to acknowledge, this government has no choice but to begin dealing with the nation's deficit and debt. What was intended as a system based on the virtue of generosity has become a system of entitlements and confiscation. The Liberal recommendations simply reinforce the entitlement mentality. What's more, they create expectations for entitlements that cannot be met. All such deception does is to create resentment between Canadians -- those concerned with the cost and abuse of social programs and those who feel entitled to more. Noble notions of equity and equality are at the heart of a significant number of the committee's recommendations. However, research indicates that the very schemes intended to promote the welfare of people are shown time and again not to serve the interests of those they are supposed to help: women, visible, ethnic minorities, Aboriginal people, and the disabled. When people are hired or promoted for characteristics other than merit, their self-esteem is damaged, bringing stress, self-doubt and a loss of confidence in their own ability. Promotion according to special status creates friction among coworkers and, in principle, works against the very equality it espouses. The Liberal members of the committee rely not only on inconsistent principles, but also misinterpret the problems they claim to address. The most flagrant example is in the area of child poverty. They claim that "close to one-fifth of our nation's children are living below the Low-Income Cut-Off (LICO)." Not everyone is aware, however, that LICO is "a relative measure." It is geared to relative living standards. As living standards rise overall, the so-called poverty line rises as well. According to this standard, the only way out of relative poverty is to improve one's position with respect to everyone else. Under such a measure, it is impossible to eliminate poverty because there will always be one-fifth of income-earners at the bottom of the scale. Even if all incomes were to double, the percentage of Canadians below the cut-off point would remain the same. Poverty is redefined in relative terms, not in real terms. Understood in real terms, poverty has to do with lacking food, clothing, or shelter. For many families below the LICO measure, if their children are without food or clothing, it may be for reasons other than a low family income. The social consequences of expanded child care as promised in the Liberal Red Book are also reason for concern. Again, recent research has raised concern about the socio-emotional development, behavioural adjustment and cognitive development of children subjected to extended, non-parental, child care. The social consequences of such developmental problems are increased likelihood of clinical depression, propensity to commit crime, and personal stress. Those are the immediate consequences. Long term, such conditions would lead to an increased demand for government-provided social services and law enforcement. These concerns should be addressed before governments invest enormous resources in non-parental, child care. The committee expresses concern about the problems of family structure, single-parent families, common-law unions, two-income families and the needs of young families, but fails to recognize the causes of such disturbing trends. Instead, they focus on symptoms rather than causes. The report fails to recognize that these problems are in part a direct result of harmful government policies in the first place. During the committee hearings it was suggested that overtime ought to be more tightly regulated. The presumption is that people who want to work hard are taking jobs out of the economy. That is wrong-headed. People working hard doesn't result in a net job loss. Inappropriate government intervention results in a net job loss. Finally, the committee fails to consider the long-term consequences of some policy recommendations. One of the more controversial recommendations is for the extension of the Child Tax Benefit to mothers upon certification of pregnancy by a qualified physician. Such a proposal would seem ripe for abuse by those who suffer a miscarriage or terminate a pregnancy through abortion. Canada doesn't need more money for social programs. What Canada needs is an infusion of new ideas and options as to how we might best reconstruct social programs. Canada needs a new vision. Sherri Torjman, "Is CAP in Need of Assistance?" in Keith Banting and Kenneth Battle (eds.), A New Social Vision for Canada? Kingston, Ontario: Queen's University School of Policy Studies and the Caledon Institute, 1994, p. 111. Brad Farquhar, Special Assistant Office of the Reform Party House Leader Tel (613) 995-7226 Room 531-C, Centre Block Fax (613) 943-0485 House of Commons hermae@parl.gc.ca Ottawa, ON K1A 0A6 I am not an official spokesperson for the Reform Party of Canada ~Xref: utcsri can.gov.general:263 can.politics:67222 Path: utcsri!utnut!nott!netfs.dnd.ca!srv.gc.ca!parl2.parl.gc.ca!Reflead_pc!hermae ~From: hermae@parl.gc.ca (Reform House Leader's Office) ~Newsgroups: can.gov.general,can.politics ~Subject: Reform Dissenting Report on HRD - Part 3 ~Date: Tue, 7 Feb 1995 10:06:53 UNDEFINED Organization: House of Commons ~Lines: 201 Distribution: world Message-ID: NNTP-Posting-Host: 167.32.178.12 Keywords: reform X-Newsreader: Trumpet for Windows [Version 1.0 Rev B final beta #1] PART II: REFORM'S VISION -- PROVIDING BETTER PERSONAL SECURITY FOR CANADIANS IN THE LONG TERM Section 4: A PRELIMINARY RESPONSE FROM THE GRASSROOTS Because of our disagreement with Minister of Human Resources Development's decision to limit the scope of this committee's supposedly wide-ranging review to only a some of its social programs, Reform MPs made the decision to initiate our own consultative process directed at ordinary Canadians. Reformers designed and distributed our own tabloid-size information "broadsheet" describing the minister's limited range of proposals and also alternatives proposed by Canadian social policy experts and organizations, as well as social policy alternatives that have been successfully employed in other countries worldwide. This broadsheet dealt with all of Canada's major social programs, including health care and pensions. Respondents were asked to select their preferred alternative from among those laid out in the broadsheet, or provide us with their own ideas. Over 300,000 broadsheets were distributed throughout the country. Additionally, Reform MPs conducted a significant number of "town hall meetings," workshops, cable TV shows and radio phone-in shows to solicit the views of their constituents on the reform of social programs. The Reform Party of Canada conducted an internal survey of 100,000 members to solicit their views on social programs reform. As this report is being written, Reform MPs are still actively involved in this consultation process with Canadians. So far, thousands of Canadians have expressed their perspectives and opinions on the reform of social programs. 1) What Canadians told us about the philosophy of social policy reform The preliminary results of our consultations have helped us to develop the guiding principles for social program reform that are outlined in Section Six of this report. Almost all the Reform Party members who have returned their survey forms to date agree with the following two statements: (1) "As a general principle, social program reform should focus on giving people the tools to provide for their own needs through such initiatives as personal RRSPs, registered unemployment savings plans, and tax-sheltered savings accounts for education and training", and (2) "As a general principle, where governments must be involved in delivering social services, those programs should be directed by the levels of government closest to the people (i.e. municipal and provincial, rather than federal)." In addition to their views on the reform of social programs, Canadians also told us a few things about the upcoming budget. There is widespread support for Reform's position that the budget should be balanced over a three year period and that this should be accomplished by cutting government spending, not by raising taxes. 2) What Canadians Recommend: Specific Program Changes GIS: Strong support has been expressed for the following measures: (1) Continuation of means-testing; (2) Increasing the age of eligibility. OAS: Support for the following options: (1) Elimination of OAS for seniors with above-average incomes; (2) "Clawback" from seniors with above average incomes; (3) Converting all Old Age Pensions into the Guaranteed Income Supplement which is already "means-tested", and (4) Increasing the age of eligibility. CPP: Strong support was expressed for: (1) Replacing CPP with mandatory RRSPs for younger Canadians; and (2) Eliminating mandatory retirement to allow people to continue working past age 65, combined with raising the age of eligibility. CTB: Support seems to exist for: (1) Limiting the Child Tax Benefit to families with incomes below the national average; (2) Giving more to children in poor families and less to everyone else; and (3) better enforcement of child support payments. UIC: Strong support for the following changes: (1) Return UI to its original function as a true insurance program, and (2) The "radical disentanglement" option proposed by the CD Howe Institute, which would eliminate all regional and non-insurance components of UIC, thereby saving $5.5 billion each year. EPF (Educational Component): Strong support was expressed for: (1) A federal role in ensuring adequate funding for post-secondary education; (2) A voucher system for distributing post-secondary funding directly to students rather than to provincial governments; (3) The creation of registered education savings plans. There was also support for a system of Income Contingent Loan Repayment for post-secondary students. EPF (Health Component): There was strong support for allowing the provinces much greater flexibility in the provision of health services, while keeping national standards that maintain core services. There was near-universal support for the principle that no Canadian should be denied adequate health care by reason of inability to pay. CAP: "Welfare" is already a constitutional, provincial, administrative responsibility. There was support for completely phasing out the Canada Assistance Plan by turning over the necessary taxation powers to the provinces, while eliminating cash transfers from Ottawa. There was strong support for the concept that welfare recipients should be required to contribute to the economy in some way. Equalization: Respondents expressed strong support for the elimination of equalization payments to the provinces -- even though we noted that this principle is enshrined in the Constitution. There was also solid support for the Australian equalization payment model, in which total levels of equalization are set in advance and this amount is then divided among have-not jurisdictions according to a negotiated formula. Reform's bottom line is people. Surely most people want the best form of personal security: a well-paying, productive job. That and the security of a sound health care plan, adequate resources for retirement, and something to fall back on in the event of job loss, injury, or extended illness. Canada's social safety net stretches to the limit to do things that it was not designed to do. Instead of serving as the last line of defence supplementing existing community and family support, it is a socio-economic catch-all and a social engineering machine. A top-heavy bureaucracy and interest on federal debt siphon off tax dollars from Canadians. The Reform party believes that the current economic situation offers Canadians a unique opportunity to reinvent its social policies. It is time to restore balance: to our social safety net; to our national ledger; and between government intervention and individual responsibility. Section 5: A LOOK AT A WORLD OF GOOD IDEAS The problems faced by Canadians as we attempt to restructure our social programs for the 1990's and into the twenty-first century are by no means unique. Countries around the world face problems of aging populations, high unemployment, rising health care costs, poor targeting on the part of social programs, regional disparities of wealth, high taxes, and out-of-control deficits and debts. Some countries have dealt with these problems in highly original and effective ways. Yet the Standing Committee has displayed an almost willful refusal to consider applying solutions to the Canadian situation. Among the options that Reform MPs have found most interesting, and which we consider to be most deserving of further study for possible application to the Canadian situation, are the following: Unemployment Insurance * To replace UI with personalized, tax-sheltered capital accumulation accounts on the model of RRSPs, as suggested by the Canadian Institute of Actuaries and as implemented in Singapore. Canada Pension Plan * In Chile, the local version of CPP has been phased out and replaced by mandatory RRSPs, financed by a payroll deduction of 10%. Benefits to the current generation of retirees were guaranteed from this deduction, and all surplus funds are directly deposited into each worker's RRSP-style private account. * Britain has paid down the greater of its CPP-style contingent liability by permitting employers to opt out of the state-administered plan in favour of private-run group pension plans which offer better rates of return. A special surtax on opting out provides funds to pay the pensions of the current generation of retirees. Equalization * In Australia, the federal government establishes a fixed amount of money to be distributed among state governments. This total is then divided on the basis of a formula to which the state governments have given their approval. * In Germany, transfers are made directly from the budgets of the wealthier provinces into the budgets of the less well-off provinces. As well, a percentage of that country's federally-administered value-added tax is transferred to the have-not provinces. Health Care * In Switzerland, health care is the responsibility of the cantons (their equivalent of provinces). Health care is delivered by about 270 private and public insurance funds which must conform to minimum standards. Membership in an insurance plan is compulsory for low-income people, but in 21 of 26 cantons it is voluntary for everyone else. About 99% of Swiss citizens belong to a plan. Section 6: A VISION OF REAL SOCIAL POLICY REFORM A System of State-sponsored Insecurity Personal security is vitally important to Canadians. Aside from providing welfare or pensions to that minority of Canadians who are unable to provide for themselves, the major function of social policy is to ensure that when the first line of personal security (a good job at a good income) fails, resources exist that can care for people through unemployment, sickness, old age, disability and other special circumstances. For too long politicians have maintained that personal security can be provided effectively only if it is monopolized by government. The end result is that social programs have become costly, bureaucratic, centralized and financially unsustainable. Canadians have been promised that government would provide the lion's share of their most important security needs. In practice, government programs have crowded out the traditional role of families, communities and local organizations in the delivery of personal security. Governments have also lulled seniors into a false sense of security, by encouraging them to depend on government-run pension programs that have proven to be financially unsustainable. After thirty years of rapidly-increasing government spending on social programs, we have somehow been left with less security rather than more. Because of what amounts to medical rationing, one percent of all Canadians (approximately 270,000 people) are waiting for surgery. Canada Pension Plan is effectively bankrupt, leaving today's young people uncertain that they will ever receive pensions. The payroll taxes used to pay for Unemployment Insurance -- most of which are hidden in the form of unseen employer contributions -- have reached such a high level that many employers have had to reduce their numbers of employees. Moreover, generous UIC benefits offer a strong incentive to delay rejoining the workforce. These benefits, combined with the burden imposed by the high premiums needed to support them, mean that government-run unemployment insurance has become a leading cause of unemployment, as is shown by Figure #1. [CHART OF UIC BENEFITS] Our Guiding Principles At the heart of the Reform Vision of a Better Social Security System is a desire to empower individuals, communities and local organizations to both fund and deliver forms of support. With that in mind, our vision includes the following five principles: 1) Build on the Canadian tradition of self-reliance, recognizing the family as the primary caregiver in society; 2) Empower communities and charitable organizations to play an increasing rather than a diminishing role in social security; 3) Provide temporary assistance to people who experience short-term misfortune, while ensuring that long-term assistance is reserved for those who are genuinely incapable of providing for themselves (focusing social spending on those most in need); 4) Where government must be involved in social service delivery, entrust the resources and responsibility to that level of government which closest to the people; and 5) Ensure that we can pay for security measures without borrowing more money. These principles are based on the assumption that when people are equipped with the tools to take care of their (and their family's and community's) security, they will do it better than government. Brad Farquhar, Special Assistant Office of the Reform Party House Leader Tel (613) 995-7226 Room 531-C, Centre Block Fax (613) 943-0485 House of Commons hermae@parl.gc.ca Ottawa, ON K1A 0A6 I am not an official spokesperson for the Reform Party of Canada ~Xref: utcsri can.gov.general:264 can.politics:67223 Path: utcsri!utnut!nott!netfs.dnd.ca!srv.gc.ca!parl2.parl.gc.ca!Reflead_pc!hermae ~From: hermae@parl.gc.ca (Reform House Leader's Office) ~Newsgroups: can.gov.general,can.politics ~Subject: Reform Dissenting Report on HRD - Part 4 ~Date: Tue, 7 Feb 1995 10:08:22 UNDEFINED Organization: House of Commons ~Lines: 206 Distribution: world Message-ID: NNTP-Posting-Host: 167.32.178.12 Keywords: reform X-Newsreader: Trumpet for Windows [Version 1.0 Rev B final beta #1] The Welfare State versus the Secure Society Reformers want to replace the Welfare State with a Secure Society. In the welfare state, government assumes that people are poor, defenseless and helpless. Their security needs are interpreted as a need for an ever-expanding net of direct transfers, in which most of society's wealth is taxed away from those who earned it and placed in the hands of those whom the politicians and the bureaucrats deem to be in need. Aside from the obvious potential for arbitrariness and injustice, the welfare state eventually becomes unsustainable. After all, everybody has so many genuine personal security needs: child care, education, health care, pensions, and so on. The bureaucratic welfare state, with all of its inherent inefficiencies, wastes so much and misdirects so much of the money that it tries to transfer or to transform into government-provided services that people are left with their security needs unmet, or met only in the most slipshod manner. Government in the welfare state fails to recognize the obvious: not all security needs are the same, and transfers of wealth, whether in the form of cash or of government-subsidized services, are often the worst way of providing for these needs. Most Canadians are not poor enough to be the appropriate beneficiaries of direct transfers from government. What they need from social policy is a safety net. They need policies that will protect them from personal ruin if they become ill, if they lose their jobs, etc. It is impossible to eliminate all such risks under any system, but it is possible and highly desirable for government to provide a framework of laws within which such risks can be reduced. This is what the secure society promises. Personal security needs can be divided into three classes based on the likelihood that any individual will need to use the security and on whether that need is immediate or will arise in the future. The first class of security needs is for protection against personal catastrophes such as a medical emergency or the death of a family's chief income-earner. Most people, most of the time, are not experiencing a crisis of this nature and catastrophes are by their nature unpredictable. This means our need for security against personal catastrophes can be dealt with by means of private insurance. In a secure society, government would establish national standards for various forms of catastrophe insurance and might give financially strapped people some help paying the necessary premiums. In a welfare state like Canada, the problem has been dealt with by means of such transfer programs such as Survivors' Allowance. The second class of security need consists of needs that will arise reasonably far in the future, but which are predictable. Most people will have such needs at some point in the future, so one can't insure against them. But one can prepare for them. Typical needs in this class are post-secondary education, non-catastrophic health care, retirement income, and periodic unemployment. In a secure society, such needs would be taken care of by means of a system of personalized tax-sheltered capital accumulation accounts. Canada already is a world leader in the use of such accounts for the purpose of accumulating retirement income -- through our system of RRSPs. The way that such accounts would work was explained by the Canadian Institute of Actuaries in a report submitted in 1994 to the Standing Committee on Human Resources, which recommended examining such a plan as a replacement for UI. The report describes these accounts this way: A well designed Unemployment Insurance program would be one to encourage and reward attachment to the workforce. A capital accumulation program would fulfil this role, as this type of plan could be set up to deposit employer and worker contributions into a registered unemployment savings trust (RUST) account. This account would be tax-sheltered and invested at the sole discretion of the worker, similar to a group RRSP arrangement. This program would be compulsory for all workers and would replace the existing UI program. This program could be coordinated with CPP/QPP to enhance retirement security . The empowerment and independence that such accounts could bring to individuals and families is strikingly shown by Figure #2, which shows the potential earnings of such an account at a typical rate of investment return. Based on this evidence, we think that the use of such accounts for all predictable social needs merits serious consideration. [TABLE] The final class of security need is for immediate help for those who have not been able to provide for themselves. This is the proper function of charity or, in its absence, of government transfers. Empowering charitable organizations, community groups and individuals would go a long way to ensuring that those unable to care for themselves are provided for. There would probably still be a need to provide public assistance for those truly unable to help themselves. Such a system could be designed to deliver a sufficient level of income to ensure that nobody lives in absolute poverty. To ensure that those able to provide for themselves do not become dependent on a program designed to help those incapable of doing so, public assistance must be limited to those who, by reason of physical disability or advanced age are incapable of providing for themselves. Such system must also ensure that no one wealthy enough to pay taxes would receive assistance, and those who received assistance would pay no tax. To ensure that the marginal tax rates paid by the working poor would not be confiscatory, some of this assistance would have to take the form of a supplement to work employment. Self Reliance and Family The first source of personal security should be the individual's personal resources. The second should be his or her family. It is a tragedy that many Canadians have come to blindly accept that government can and will provide them with personal security from cradle to grave. Formal social programs have largely displaced personal responsibility and family reliance. Individuals rely on government pension plans and therefore fail to save adequately for their own retirements. When children grow up, they no longer feel the obligation to care for their parents, since they expect the state-run health care and retirement systems to provide assistance to the sick and elderly. If RRSP-style savings accounts were to be used to replace direct government transfers as the primary means by which typical families could save for their own security needs, families would be tremendously strengthened. For example, families would be strengthened by RRSP-style tax-sheltered savings plans for post-secondary education, which would help parents to save for the education of their children. Young adults leaving home would still be reliant upon the aid of others to help fund their education, but those others would be their parents, not the government. Another potential element in empowering families might also be to increase the deductibility of child care expenses, regardless of the method of care chosen by the parents. This would not interfere with the manner in which Canadians choose to raise their children, because it would not pay subsidies based on the type of care. Empowering Communities and Charitable Organizations Distant, impersonal and expensive government programs cannot be tailored to personal needs in times of crisis, and are open to abuse. The best way to ensure targeted and personalized delivery of assistance to individuals is to empower local communities and charitable organizations to provide the third line of defence in providing for the personal security needs of Canadians -- after personal responsibility (employment) and family. The key to reinvigorating private charities would probably be to offer an enhanced tax credit to individuals contributing to charitable organizations or to community groups engaged in the delivery of social services. A revived charitable sector would mean that governments would not be the only source of the myriad of specialized programs for assisting Canadians in need. Instead, local communities could tailor their aid packages to their own needs. Local community services in Newfoundland could design their programs to the distinct needs of fishermen, community services in Oshawa could be fitted to the distinct needs of auto workers, and so on. Decentralization Where government must be involved in social service delivery, Reform believes the resources and responsibility must be devolved to those levels of government closest to the people. In principle, this would mean a major shift in responsibility from the federal to provincial and municipal governments with respect to social assistance, health care, child care, education/training and cultural development. This would also mean a greater respect for the existing constitutional division of powers between the federal and provincial governments. This does not mean that there would be no role for the federal government in these areas, but the federal role would be focused on working with the provinces to establish and maintain national standards, using equalization as the principal mechanism of bringing those standards within the financial reach of every province. The operation of the principle of decentralization can be illustrated by looking at the example of health care. The federal government claims to be the guardian of national standards in health care, which it enforces by means of withholding health care transfers to provincial governments when they do not comply with Ottawa's interpretation of the provisions of the Canada Health Act. Under existing arrangements, federal funding for health care has been declining for years and will eventually disappear early in the twenty-first century. This will effectively eliminate Ottawa's ability to enforce any sort of national standard. It is unacceptable that the federal government should simply wash its hands of responsibility for the nation's health needs as its transfers to the provinces declines. One way to maintain and improve such standards in the absence of such transfers would be to amend the Canada Health Act. Meaningful national standards could be preserved and improved by redefining them to cover "core" or essential health services. A revised Canada Health Act could also recognize that under our constitution, the provinces have jurisdiction over health care and end federal interference in the administration of all non-core, non-essential services. This would allow provinces (and patients) more flexibility to fund these services as they see fit. We agree with this opinion, expressed by health care experts Jane Fulton and Ralph Sutherland in their book, Spending Smarter and Spending Less: Policies and Partnerships for Health Care in Canada: The public may, in time, agree that although access to a broad range of basic health care should be guaranteed to everyone, the original Medicare model, in which everyone received everything health care professionals wished to deliver, is not only intolerably expensive, it is undesirable for other reasons . . . . Consumers should be allowed to stay outside of the publicly funded system completely if that is their wish, or to supplement publicly funded care with additional privately funded care if that is their wish . This would mean that a narrower set of basic health services would be covered by federal transfers. For the remaining services, provinces would be flexible as to the funding arrangements, as demanded by their electorate and as determined by fiscal necessity. This basically entails filling out the attached "Medical Reform Matrix," which is shown below as Figure #3. Filling out this matrix will illustrate where funding for "core", "non-core" and other health needs come from. The matrix has been shaded to show how we see funding for health care evolving in the coming years. INSERT HEALTH CARE MATRIX HERE This matrix would preserve universal coverage for basic core services. It would ensure that no Canadian would be denied adequate health services because of inability to pay. Basic and essential health care services would be kept within the financial reach of every citizen, no matter who they are or what their income or where they live. Our vision for decentralization would emphasize a better link between the provision of social services and the funding of these services. This would allow social services to better reflect the needs of diverse communities and regions across Canada, while working with Canadians to meet their security needs and living within our means. Financial Sustainability Most of the measures outlined above would be fully funded by individuals, or dependent on fully funded local agencies or community organizations which would ensure that the programs do not become financially unsustainable. Any remaining government programs (health care, public assistance, etc.) must be designed to ensure long term financial sustainability. This means that the level of funding must be determined not only on the basis of current needs, but also based on what can be sustained in the long term. It must be based both on demographics and a realistic assessment of the possible number of future beneficiaries of the programs when they are designed. A personal security net that does not meet the criteria of financial sustainability will provide no security at all. It will only guarantee that whatever replaces our current bankrupt system will soon need to be radically redesigned again. Summary The Reform Party believes that Canadians should move away from the existing framework of programs and look for new, better ways to meet our social security needs. We also believe that this new way of doing things should be guided by the five principles outlined above. The greatest single danger to the personal security of Canadians comes from the financial unsustainability of social programs currently monopolized by government. Instead of providing peace of mind, these programs have left Canadians feeling anxious about their, and their families', futures. Only if we abandon the ideology of the welfare state, where all personal security provisions are considered to be the rightful monopoly of government, and adopt in its place a model of localized delivery and personal responsibility, can we ensure that Canadians will be able to enjoy a rising level of personal security in the future. Canadian Institute of Actuaries, Submission from the Canadian Institute of Actuaries to the Standing Committee on Human Resource Development on Unemployment Insurance. Ottawa: Mimeograph, 1994, p.35. Fulton, Jane and Ralph Sutherland Spending Smarter and Spending Less: Policies and Partnerships for Health Care in Canada. Ottawa: The Health Group, 1994, p. 210 Brad Farquhar, Special Assistant Office of the Reform Party House Leader Tel (613) 995-7226 Room 531-C, Centre Block Fax (613) 943-0485 House of Commons hermae@parl.gc.ca Ottawa, ON K1A 0A6 I am not an official spokesperson for the Reform Party of Canada ~Xref: utcsri can.gov.general:265 can.politics:67224 Path: utcsri!utnut!nott!netfs.dnd.ca!srv.gc.ca!parl2.parl.gc.ca!Reflead_pc!hermae ~From: hermae@parl.gc.ca (Reform House Leader's Office) ~Newsgroups: can.gov.general,can.politics ~Subject: Reform Dissenting Report on HRD - Part 5 ~Date: Tue, 7 Feb 1995 10:10:26 UNDEFINED Organization: House of Commons ~Lines: 230 Distribution: world Message-ID: NNTP-Posting-Host: 167.32.178.12 Keywords: reform X-Newsreader: Trumpet for Windows [Version 1.0 Rev B final beta #1] INTERVENOR FUNDING PROJECT SPONSORS AND APPROVED BUDGETS NATIONAL (49) Assembly of First Nations - $50,000 Canadian AIDS Society - $30,000 Canadian Association for Adult Education - $29,500 Canadian Association for Community Living - $25,000 Canadian Association of Independent Living Centres - $50,000 Canadian Association of Toy Libraries and Parent Resource Centres - $42,340 Canadian Association of Volunteer Bureaux and Centres - $24,500 Canadian Child Care Federation - $44,000 Canadian Coalition for the Rights of Children - $12,950 Canadian Coalition of Community Based Training - $38,000 Canadian Congress for Learning Opportunities for Women - $49,800 Canadian Council for Reform Judaism - $42,000 Canadian Ethnocultural Council - $50,000 Canadian Home and School and Parent-Teacher Federation - $45,000 Canadian Mental Health Association and National Network for mental Health - $44,650 Canadian Paraplegic Association - $48,325 Canadian School Boards Association - $44,025 Canadian Unitarian Council - $6,300 Centre for Community Enterprise - $39,400 Child Poverty Action Group - $43,900 Child Welfare League of Canada and Canadian Foster Family Association - $38,700 Citizens for Public Justice and CJL Foundation - $45,000 Coalition of National Voluntary Organizations - $40,000 Congress of Aboriginal Peoples - $50,000 Council of Canadians with Disabilities - $50,000 Ecumenical Coalition for Social and Economic Justice - $40,000 Fédération Canadienne pour l'alphabétisation en français - $34,316 Generation 2000 & The Student Commission - $46,852 Institut canadien d'Éducation des Adultes - $15,000 Inuit Tapirisat of Canada - $50,000 L'Association canadienne pour la promotion des services de garde l'enfance - $43,990 Le Réseau national d'action éducation femmes - $40,896 Metis National Council - $50,000 Movement for Canadian Literacy - $50,000 National Aboriginal Network on Disability - $35,000 National Anti-Poverty Organization - $50,000 National Association of Friendship Centres - $50,000 National Association of Women and the Law and The National Organization of Immigrant and Visible Minority Women - $40,070 National Council of Women of Canada - $25,000 National Metis Women of Canada - $25,000 National Pensioners and Senior Citizens Federation and Congress of Union Retirees - $19,300 National Union of Public and General Employees - $42,500 National Youth in Care Network - $45,000 Native Women's Association of Canada - $50,000 Neil Squire Foundation - $40,000 One Voice - The Canadian Seniors Network - $37,500 Rural Dignity of Canada - $43,000 SpeciaLink - $22,600 United Way/Centraids Canada - $40,000 BRITISH COLUMBIA (6) Aboriginal Women's Council of British Columbia - $30,000 Affiliation of Multicultural Societies and Service Agencies of British Columbia - $30,000 Social Planning & Research Council of British Columbia - $30,000 UNN Local 136/B.C. Native Housing Corporation - $5,000 Vancouver and District Labour Council - $13,450 Victoria Status of Women Action Group - $15,000 ALBERTA (9) Alberta Committee of Citizens with Disabilities - $30,000 Alberta Native Friendship Centre Association - $25,000 Children and Families Initiative - $13,820 Edmonton City Centre Church Corporation - $14,855 Family Centre of Northern Alberta - $10,000 Income Security Action Coalition - $10,000 Metis Nation of Alberta - $20,000 Native Council of Canada (Alberta) - $15,000 Training and Education Network for Women in Alberta TENWA and Alberta Status of Women - $29,650 NORTHWEST TERRITORIES (2) Northwest Territories Federation of Labour - $35,470 Yellowknife Women's Society - $30,000 YUKON (2) Social Development Community Coalition - $15,000 Victoria Faulkner Women's Centre - $24,052 SASKATCHEWAN (9) Disabled Women's Network of Saskatchewan - $28,000 Downtown Chaplaincy - $12,000 People Empowering People and NAPO-SASK - $17,400 Saskatchewan Action Committee, Status of Women - $30,000 Saskatchewan Child Hunger Coalition - $30,000 Saskatchewan Coalition Against Racism - $15,000 Saskatchewan Voice of the Handicapped - $22,300 Social Fairness Action Coalition - $15,000 MANITOBA (5) Aboriginal Council of Winnipeg - $14,640 Canadian Association of the Non-Employed - $24,000 Manitoba Action Committee on the Status of Women - $30,000 Manitoba League of the Physically Handicapped - $20,000 Metis Women of Manitoba - $25,000 ONTARIO (26) Advocates for Community Based Training and Education for Women - $14,750 Conseil de planification des services communautaires de Prescott-Russell - $10,000 East End Literacy - $13,500 Family Service Association of Metropolitan Toronto - $15,000 Lakehead Social Planning Council - $10,000 LIFE*SPIN - $11,400 Niagara Mental Health - $9,500 Northumberland Coalition Against Poverty - $10,000 Ontario Coalition Against Poverty - $12,750 Ontario Coalition for Better Child Care - $26,100 Ontario Coalition of Senior Citizen's Organizations - $26,500 Ontario Metis and Aboriginal Association - $50,000 Ontario Network of Employment Skills Training Projects - $30,000 Ontario Network of Independent Living Centres - $25,000 Ontario Social Safety Net/Work - $30,000 Persons United for Self-Help, Northwest - $15,000 Peterborough Social Planning Council - $13,229 Social Planning Council of Metropolitan Toronto - $20,000 Social Planning Council of Niagara Falls - $14,137 Social Planning Council of Ottawa - Carleton - $15, 000 Social Planning Council of Peel - $12,450 Tenants & Homeless Information & Action Committee - $9,400 Toronto Aboriginal Social Services Association - $15,000 Toronto Association of Neighbourhood Services - $15,000 Waterloo Region Community Coalition - $12,495 Windsor Women's Incentive Centre - $15,000 QUEBEC Association Multi-Ethnique Pour l'Intégration des Personnes Handicappées - $15,000 Association pour la santé publique du Québec - $18,000 Comité d'adaption de la main d'oeuvre pour personnes handicappées CAMO - $25,000 Comité des Organismes Sociaux de Laval - $9,950 Conseil Québécois de Développement Social - $29,904 COPHAN et Table des ROP - $30,000 Corporation de développement communautaire de Brome-Missisquoi - $14, 600 Corporation de développement communautaire des Bois-Francs - $9,800 Corporation de développement communautaire Rond Point - $10,200 Entraide Communautaire La Presqu'Ile - $13,772 Front Commun des Personnes Assistées Sociales du Québec - $29,625 L.A.S.T.U.C.E. Du Saguenay - $14,066 La Ligue des Droits et Libertés - $24,600 Le Centre d'organisation et de formation des travailleuses et travailleurs en entreprise - $9,800 Mouvement Action-Chômage Montréal - $15,000 Mouvement Action-Chômage Trois-Rivières - $13,850 Québec Native Women - $30,000 Regroupement des Corporations de développement économiques communautaires - $13,250 Relais Femmes - $50,000 Solidarité Populaire Québec - $29,000 Table des Groupes Populaires - $20,394 Table régionale d'organismes volontaires d'éducation populaire de la Montérégie - $15,000 NEW BRUNSWICK (6) Ad Hoc Anglophone Committee - $10,000 Coalition Chaleur pour la Sauvegarde des Programmes Sociaux - $10,000 Comité ad hoc sur la réforme de la sécurité sociale - $10,000 Grater Moncton Coalition for Economic and Social Justice - $14,600 New Brunswick Association for Community Living - $5,000 New Brunswick Coalition of Disability Organizations - $25,500 P.E.I. (9) Aboriginal Women's Association of P.E.I. Inc. - $5,000 Lennox Island Band Council - $5,000 Native Council of Prince Edward Island - $5,000 PEI Coalition on Social Security Reform - $30,000 PEI Women's Reference Group - $25,000 Prince Edward Island Federation of Labour - $20,000 Prince Edward Island Literacy Alliance - $15,000 Société Saint-Thomas d'Aquin - $25,000 West Prince Alert Group - $12,000 NEWFOUNDLAND (7) Atlantic Child Care Coalition - $30,000 Community Services Council of Newfoundland and Labrador - $30,000 Equity in Reform Coalition - $30,000 Federation of Newfoundland Indians - $30,000 Gander Status of Women Council and Newfoundland and Labrador Women's Economic Network - $30,000 Iris Kirby House and Women in Trades and Technology - $12,282 Newfoundland and Labrador Federation of Labour - $30,000 NOVA SCOTIA (9) Cape Breton District Labour Council - $13,080 Halifax coalition on Social Security Reform - $14,500 Native Council of Nova Scotia - $30,000 New Dawn Enterprises Ltd. - $14,000 Nova Scotia Disability Coalition - $30,000 Nova Scotia Federation of Labour - $23,900 Nova Scotia Provincial Literacy Coalition - $15,000 Second Story Women's Centre - $3,700 Students' Union, University College of Cape Breton - $14,600 For further information regarding this report, call Russ Kuykendall at (613) 995-6289. This document will also be available on the WWW. Point your browser to: http://chat.carleton.ca/~bfarquha/reform/hrd.html Brad Farquhar, Special Assistant Office of the Reform Party House Leader Tel (613) 995-7226 Room 531-C, Centre Block Fax (613) 943-0485 House of Commons hermae@parl.gc.ca Ottawa, ON K1A 0A6 I am not an official spokesperson for the Reform Party of Canada