December 23, 2013

OTTAWA – Citizens for Public Justice (CPJ) has expressed disappointment with the House of Commons finance committee Dec. 10 report on income inequality.

"While there was reason for optimism when parliamentarians from all parties voted in favour of conducting the inequality study, it's evident that improving the well-being of Canada's poor wasn't a priority," said CPJ executive director Joe Gunn in a Dec. 11 news release.

"The majority of the recommendations urged the federal government to continue on its course of narrow and relentless economic growth," he said.


"Yet, as the committee's report itself acknowledges, if Canada continues down this path, inequality will continue to grow."

CPJ was among almost 70 groups or individuals that submitted reports to the committee.

One difficulty for the committee was assessing the various methods to measure income inequality and whether social mobility, the ability to move up the economic scale out of poverty, mitigated income inequality.

The report cited studies that said income inequality is not necessarily an issue if children grow up and have an income greater than their parents.

Studies show Canadian children "displayed a relatively high degree of intergenerational income mobility" relative to those in other OECD countries, but not as high as those in Nordic countries.


The report did show the disposable income of the top one per cent grew by 77 per cent from 1986 to 2012, while that of the top 0.1 per cent grew 131 per cent during that period.

However, it was also reported the top one per cent paid 13.4 per cent of all federal and provincial income taxes in 1986 but paid 23.3 per cent in 2007.

The Canadian Medical Association reported an estimate that 20 per cent of health care spending is related to income disparity. High levels of income inequality could prove destabilizing to society, some witnesses warned.

The report made 24 recommendations. Those recommendations stress "economic growth and job creation to reduce poverty."

CPJ said it was encouraged to see the report recommends a review of the Working Income Tax Benefit to see if it "could be expanded or modified."

But CPJ's other proposals to raise the Canada Child Tax Benefit and improve income support for Canadians with severe disabilities were ignored.


"Enhancing programs that assist the poor is the best place for government to start in addressing income inequality," says CPJ research associate Katherine Scott.

CPJ released its fourth Poverty Trends Scorecard, coinciding with the committee report.

Entitled Making Ends Meet, it reveals that the economic recovery "remains modest" and Canada's poor families are having trouble meeting rising costs. They are resorting more and more to food banks and credit cards and spending a greater proportion of their income on necessities.