The Existing System Works Reasonably Well

As in all developed countries, Canada's policies for tackling poverty and exclusion consist of a mix of taxes, transfers and services aimed at the population as a whole, supported by special measures aimed at those who are unemployed, or who are unable or not expected to work. Governments at all levels play an important role. Taken as a whole, and compared with many other countries, the Canadian system works well. The system has evolved gradually towards the traditional goal of a guaranteed annual income, using a targeted approach that encompasses both transfers and the tax system - along with a strong system of public health care and education. In terms of poverty, that evolution is perhaps most advanced for retired people, where Canada has one of the best - perhaps the best - systems in the world for addressing low-incomes among seniors.

Progress has, of course, been uneven. And, since poverty and exclusion are relative concepts, policy will always have to deal with the most disadvantaged groups in society. The Government of Canada, for example, currently places high priority on addressing challenges in aboriginal communities and among poor children. Additionally, as the graph below shows, persistent low-incomes are highly concentrated in certain at-risk groups. These are people with work-related disabilities, recent immigrants, single mothers, unattached older people (until they reach pension age), and Aboriginal peoples.

New Approaches are Beginning to Emerge

Until a few years ago, the philosophy informing the social policies of OECD member states generally focused on the fiscal sustainability of government programming and supports. In regards to anti-poverty policy, particular attention focused on welfare-to-work policies and establishing a culture of increased personal reliance. In recent years, however, there has been much new thinking about policies that could address to poverty and exclusion in a more effective manner.

Increasingly, the problem has been formulated not only as the lack of income at a single point in time in a person's life, but rather in terms of persistent lack of income and other resources that are needed to enable people to participate in mainstream economy and society. This perspective is often reflected in the greater use of the terminology of social exclusion, rather than of more traditional concepts of poverty that were based on income alone.

The newer perspectives have been greatly supported by the recent emergence of longitudinal data that are beginning to allow us to examine the dynamics of poverty and exclusion, its persistence over the course of life, and the role played by individual and household characteristics, and by employment.

Much has been learned about the effectiveness of policies that help people make the transition from unemployment into work. As well, there is now a much richer understanding of the work disincentives in traditional transfers. This knowledge has resulted in growing interest in 'make-work-pay' initiatives and, in some countries, in a revival of interest in the concept of a basic income for all - either on an annual basis or a lifetime basis.

There is growing understanding that exclusion is often the result of many individual, family and social factors reinforcing each other in negative ways - suggesting the need for more coordinated, comprehensive approaches to finding solutions. This understanding is reflected in more holistic interventions both at the level of the individual being assisted and in terms of broader frameworks of policy co-ordination. New strategic approaches to measuring and tackling exclusion are being developed in Europe. Quebec has recently introduced a law that that is explicitly addressed to poverty and exclusion. Increasingly, the issues are being seen in the context of basic human rights.

Policy Research Underway

While a new way of looking at a problem does not necessarily mean that existing policies need to be changed, it does seem to be an appropriate time to take stock and to assess the potential of these newer directions and insights. Towards these ends, the PRI has been working with other departments in a systematic exploration of these new directions in the context of policy making at the federal level. It is fundamentally an internal fact-finding exercise, but one that could be of considerable importance to future directions in consultation and policy-making around poverty and exclusion.

Since establishing a diagnostic and analytic framework in November 2003, the project has examined a number of issues to evaluate their relevance to the medium-planning activities of the Government of Canada. Assessments of the merits of asset-based approaches and the potential role of improved financial literacy figured prominently in this initial work. Activities in the fall of 2004 focused on deepening the PRI's understanding of the merits of these approaches and broadening the study to consider other innovative ways of addressing issues of poverty and exclusion.

PRI Activities

The project organized three PRI-SSHRC Policy Research Roundtables in the fall of 2004, engaging senior policy officials, non-governmental organizations, academics, and international participants. Details on these events can be found on the Project's Events page. A roundtable in September 2004 investigated the policy research needed to inform sound public policy development to support the social economy. In October, 2004 experts and partners came together to examine the role played by housing stress and homelessness in the onset, depth and persistence of poverty and exclusion. The proceeding month, we focused on working poverty, precarious employment and the relationship between these two phenomena. Findings from these roundtables were incorporated into a series of thematic papers that were released in spring 2005.

Other key publications were released in fall 2004. A discussion paper on normative approaches to poverty and exclusion argues for the proactive incorporation of legal dimensions into social policy development. In December 2004, the project also published an issue of Horizons (volume 7, number 2) on poverty and exclusion. Among the topics covered were trends in income inequality, vulnerability to persistent low income, experiences of elderly immigrants, and working poverty in Canada. The thematic issue of Horizons coincided with the PRI's December 2004 conference on New Approaches to Social Policy, where issues of poverty and exclusion featured prominently.

Finally, the PRI, in partnership with Social and Enterprise Development Innovations (SEDI) and the Financial Consumer Agency of Canada (FCAC), organized a symposium on financial capability on June 9-10, 2005 in Ottawa. Building on a discussion paper prepared by SEDI for the PRI, this event engaged senior policy officials, academics and relevant stakeholders in an exploration of the potential benefits of increased financial capability among Canadians, and examined options for building such capacity. A synthesis report on this conference has been published and is available in the publications section of our web site.

For more information, please contact Jean Lock Kunz, Associate Project Director, 613-992-5193.