Since the House of Commons returned for its fall sitting, affordability has topped the agenda.
The government introduced the Affordable Housing and Groceries Act to spur construction of new apartment buildings and increase competition among grocery retailers, and also increased the amount of low-cost financing available to developers and builders of rental units.
Canadians, particularly those with lower incomes, are hurting and politicians are finally getting the message. Although the inflation rate has moderated in recent months, prices remain at high levels and the rise in the prices of groceries and shelter continues to outpace headline inflation.
But tackling inflation alone won’t be enough to make life affordable for many Canadians. Almost seven million people — including 1.8 million children — faced food insecurity in 2022, up from about six million in 2019.
The health consequences extend beyond poor nutrition. Studies show food-insecure households spend less on other essential needs such as housing, transportation and medicine.
What should be done?
For starters, the federal government should move ahead with its long-promised reform of employment insurance. Ottawa has pledged to modernize the program to reflect changes in the labour market and to cover a greater proportion of workers but Canadians are still waiting.
Under the program’s current eligibility rules, a claimant must have worked between 420 and 700 hours in the preceding 12 months, depending on where they live, to collect benefits. A grocery store clerk in Corner Brook, Nfld. requires 490 hours to qualify while her counterpart in Toronto requires 665 hours.
Those who do qualify receive payment equivalent to 55 per cent of previous earnings. That same Toronto grocery store clerk who works full time and earns the minimum wage would receive $1,456 a month on EI — in a city where the average rent for a vacant one-bedroom apartment is $2,541.
A 2022 IRPP commentary called for a uniform 420-hour eligibility requirement across the country, as was the case during the COVID-19 pandemic, as well as increasing the earnings replacement rate to 60 per cent.
Although it has remained quiet on the EI front, the federal government has moved to expand Canada’s social safety net, including the introduction of the new Canadian dental care plan, a $10-a-day child-care program, a proposed Canada disability benefit and a one-time grocery rebate. This is a good starting point, but it’s not enough.
As well, under the terms of its supply-and-confidence agreement with the NDP, it has pledged to introduce legislation this fall to implement a national pharmacare program.
The dental care plan is the biggest expansion to public medicare in 50 years. It is being rolled out in phases starting with children under 12. The government estimates that once the plan is fully in place at the end of 2025, it will cover up to nine million low- and modest-income uninsured Canadians – a major step forward for a country that is widely seen as a laggard compared to its OECD counterparts in providing dental care.
However, a recent study notes that even Canadians with private dental insurance face barriers to care because of high deductibles, cost-sharing and coverage limits. It recommends providing Canadians with universal coverage for a limited core of essential dental services through the creation of a federally funded arm’s-length agency, while leaving private providers to cover other services.
The study also acknowledges that a “forceful mechanism” may be necessary to ensure that dental providers opt into the plan and to prevent extra billing.
The rollout of the federal government’s $10-a-day child care plan has helped boost the participation rate of women with young children in the workforce, according to an analysis by TD Economics.
However, the report estimates that commitments to create new spaces fall far short of demand across Canada. One reason is that not-for-profit service providers have difficulty accessing private capital to fund expansions, according to researcher Gordon Cleveland. A shortage of early childhood educators is also putting the program’s success at risk, he says.
What’s more, in a separate paper, Cleveland argues the $9 billion a year allotted in funding to finance the program likely isn’t enough to meet the $10-a-day target in high-cost jurisdictions such as British Columbia, Alberta and Ontario, and that a supplementary financing program will likely be needed in those provinces.
Meanwhile, legislation to implement the new Canada disability benefit received royal assent in June, but the federal government has yet to develop the regulations to implement it. About 6.2 million people with disabilities live in Canada and 23 per cent of them live in poverty, twice the rate of those without disabilities – a situation that has been exacerbated by high inflation.
Advocates called the benefit a “once-in-a-generation opportunity to break the link between disability and poverty,” but cautioned that the program must not repeat the mistakes of existing benefits and tax credits.
Researchers Jennifer Robson and Lindsay M. Tedds argue the regulations must consider the intersections of gender, and the nature and severity of the disability. They also say the process must include substantive involvement of the disability community — not simply consultation.
Along with housing, food prices have topped cost-of-living concerns in recent months. In the 2023 budget, Ottawa announced a one-time grocery rebate that provided $2.5 billion in targeted inflation relief to 11 million low- and modest-income Canadians. The rebate was delivered July 5 with the quarterly GST/HST credit payment.
However, the one-time grocery rebate was not enough. An analysis shows that the GST credit was too small to lift many above the poverty line.
Federal efforts to lower costs and increase income will provide much-needed relief for low-income Canadians and other vulnerable populations. Still, more action is needed and wrestling inflation down won’t be enough.
The federal government needs to make sustained improvements to new and existing social supports, and expand targeted benefits for those most vulnerable. Moving forward with EI reform and closing gaps in income supports for the lowest-income Canadians are two areas for increased federal action in the next budget.
As the federal government prepares to unveil its 2023 budget, and especially its response to the hundreds of billions of dollars the U.S. government has committed to addressing climate change, it should remember that Canada’s best chance of economic and emission-reduction success rests with the private sector.
The government has without doubt an important enabling role to play in driving low-carbon investment, but that role is to address market failures. It is not to supplant the role of businesses in choosing which sectors and technologies to invest in.
“Industrial strategy” is once again a term heard in corridors of power, although it is now preceded with the adjective “green.” Governments do need to think strategically about ensuring that Canada maintains economic growth and competitiveness through the global energy transition. In doing so, governments may be tempted to develop detailed plans for economic activity where they see opportunities, such as the production of green hydrogen or sustainable aviation fuels or batteries for electric vehicles.
But businesses, when risking their own money and jobs, are much better placed to make these risky bets.
At the same time, we need to recognize that markets do not always produce optimal outcomes from a societal perspective, and government policy needs to address those market failures. Doing so will reduce obstacles for the massive investments we need to achieve a prosperous low-carbon future. We see three main sources of market failure for the energy transition: insufficient pricing of the societal costs associated with energy production and use; global and domestic policy and market uncertainty; and risks associated with the development of beneficial new technologies.
Left to their own devices, markets do not account for the climate or environmental damages that result from economic activities. Government policy, through carbon pricing and regulations, can correct this. The U.S. is relying on tax credits and expensive subsidies to drive low-emissions investment. In contrast, Canada has adopted carbon pricing across the country, and the federal benchmark carbon price is scheduled to rise significantly over the next decade. This will increase economic incentives to reduce emissions and develop low-emissions technologies. Canada should focus on improving its pricing and regulatory foundation, and only turn to subsidies and tax credits to address those areas where carbon pricing is ineffective.
The second type of market failure comes from the enormous amount of policy and market uncertainty facing companies and investors. Policy reversals can be very costly for business, and few governments are able to provide credible long-term trajectories for their policies.
Of course, markets can also be fickle: shifts in technologies and consumer demand or the entrance of new competitors can wipe out returns. These uncertainties act as a barrier to investment. Governments can reduce this uncertainty through policies such as “contracts for difference” that compensate companies if policies or carbon price trajectories change. If the federal government’s proposed $15 billion Canada Growth Fund focuses on addressing these kinds of investment risks, it will be a worthy policy experiment.
The third kind of market failure stems from the technology risk associated with the commercial-scale deployment of many early-stage emissions-reducing technologies, which require huge up-front capital investments and then many years to realize an investment return. However, many of these projects will generate societal benefits by reducing technology risk for similar future projects. Governments can play a role in overcoming barriers to investment in early-stage projects by sharing some of the risk with investors, and potentially some of the financial benefits too. The U.S. has taken the approach of generous production tax credits for emerging products such as green hydrogen and sustainable aviation fuels, which could pull investment away from Canadian projects. Maintaining a competitive edge without breaking the bank will be one of the defining challenges of Canada’s upcoming budget.
In implementing these policies, governments should see their role as an enabler of private-sector success. If they take an overly top-down or government-knows-best approach, public spending could crowd out private investment and Canada could be left with costly white elephants or an endless demand for subsidies to prop up unsuccessful ventures. There has been insufficient research on enabling policy tools to date, and governments could benefit from a more rigorous external analysis of various approaches.
The coming energy transition will be complicated and full of uncertainty. Governments should resist the siren song for direct involvement in the direction of specific sectors or technologies, and focus instead on addressing the market failures that are obstacles for low-emissions investment. Once those broad direction-setting policies are in place, the private sector will have all the market signals it needs to get us to the cleaner future we all want.
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Christopher Ragan is an economist and Director of the Max Bell School of Public Policy at McGill University. Rachel Samson is Vice President of Research at the Institute for Research on Public Policy
This op-ed was first published by The Hill Times on March 22, 2023
Now that the summer is wrapping up, many Canadian adults are in “back-to-school” mode regarding their children. But what about the parents themselves? Today’s economic and social reality means many of them would also benefit from increased learning opportunities, whether it’s how to negotiate a contract, improve their reading to help their children with homework, or upgrade their skills to get a better job.
In Canada, adult education provides life-changing opportunities for millions. Yet it remains a forgotten corner of education, lacking co-ordination and sharing of best practices; its learners and teachers often stigmatized; and its programs underfunded, and disconnected from social policy and education at large.
In a paper published by the Institute for Research on Public Policy on UNESCO’s International Literacy Day, I offer insights from Aotearoa New Zealand, a country that set up an overarching national educational strategy that helped move adult education from the margins to the mainstream. (Aotearoa, the Māori word for New Zealand, is increasingly used interchangeably there.) I also review lessons from Canada from the early 1970s to the mid-2000s, reflecting on how we might better support the learning of adults in our geographically vast, diverse and federated nation.
I identify five key areas for action across federal, provincial and territorial governments.
1. Make adult education mainstream
New Zealand’s most important step was to group everything involving the education of adults under one banner, from adult literacy to vocational training to higher education, and then to connect it to various ministries and agencies responsible for social and economic policies. Canada has had many champions, organizations and initiatives to be proud of, which helped place adult education on the radar of our governments and citizens over the 1970s, 80s and 90s. While many of these initiatives and institutions folded from 2000 to 2010, Canada can learn both from its past experience and from New Zealand to help bring adult education more into the mainstream, particularly at the provincial and territorial levels.
2. Beware of reliance on single measures of progress
While the proliferation of various literacy assessments, such as the OECD’s International Adult Literacy Survey, helped motivate investments in adult education, their findings should not be used too literally and in isolation. For example, making funding for adult education conditional on outcomes in Canada led to focusing on bringing learners with intermediate literacy skills (level 2) to a so-called “minimum job standard” (level 3), while overlooking individuals at rudimentary levels 0 or 1 in real need of improvement. Consideration should also be given to assessing “soft” outcomes such as changes in personal and social well-being and interest in further learning.
3. Professionalize and recognize adult educators
Increased pay, professional education and certification, and more public recognition of adult educators’ contribution to society were the main positive outcomes of New Zealand’s efforts to make adult education mainstream, which also provided greater legitimacy to the entire field. As one adult educator put it, “we’re no longer seen as grannies in cardies” referring to the reputation that adult education has had of being a non-serious, voluntary endeavour largely undertaken by retired women. There should always be a space for volunteers and for educators who do not necessarily possess the same credentials.
However, creating new avenues for teacher qualifications and ongoing professional development, as well as paying adult educators well, will help Canada become more of a place that values the education of people of all ages. Similarly, ensuring meaningful inclusion of experienced adult educators in the development of any evaluation tool, accountability requirements, or adult education policy development will also help make sure learners and educators get the support they need.
4. Empower Indigenous leadership in adult education
Aotearoa’s increasingly close work with the Māori over the past decades — including the development of a Māori qualifications framework and consideration of non-traditional outcomes, as well as required knowledge of aspects of Māori culture, history and language for teacher credentials — was an important step forward, and should be of particular interest in Canada at all levels of the government. Partnering with, providing increased financial support to, and empowering the leadership of First Nations, Métis and Inuit organizations will be crucial.
5. Build toward national co-ordination
Most likely, there will always be 13 separate education systems — for both adults and children — in Canada, so having better communication and co-ordination among them will greatly benefit both learners and teachers. There may be ways to make better use of existing organizations such as the Council of Ministers of Education, Canada that could facilitate the exchange of knowledge and practices across the country; help tackle interprovincial barriers to credential recognition; and generally contribute to streamlining the decentralized field of adult education in Canada. We should also consider reinvesting in pan-Canadian clearing houses to share best practices, along the lines of the former National Adult Literacy Database; supporting work that both captures and shares effective adult education; and exploring possibilities for new ways of supporting and sharing provincial research on Canadian adult learning. Any cross-country initiatives, however, must have provinces and territories as the key players that benefit from these initiatives rather than entities that merely report and contribute.
Canada now appears to be making a renewed effort to build a more robust adult education and skills system. Encouraging signs over the past few years include overall increased budgetary commitments, the Future Skills Centre and the recent establishment of the federal Office of Skills for Success. While these developments give cause for renewed optimism, the adult education field continues to lie outside the mainstream and little seems to have been done to challenge the long-standing association of adult education with basic learning for a small and marginalized subset of the population.
By drawing on lessons from our past and from other countries’ experiences, we can bring all government and non-government actors together to devise a nationally coherent system of adult education that will create a better future for us all.
Labour markets are in constant flux. As some sectors retract and shed jobs, others grow and search for workers. We’ve seen this play out over the past two years of the pandemic, as workers in the tourism and hospitality sector have been particularly hard hit by business closures while the healthcare sector has struggled to find workers.
The trend is expected to continue as Canada transitions to a low-carbon economy. TD Economics estimates that three-quarters of workers employed in Canada’s oil and gas sector are at risk of losing their jobs over the next 30 years. Yet many new jobs are expected to be created in clean-energy industries.
Helping workers find new employment options will be vital, and so will the availability of career guidance to help them make the transition. But there are few career-guidance options available for working-age adults in Canada. Research by the Labour Market Information Council shows that few Canadian adults access career services, far fewer than their counterparts in peer countries; many Canadians surveyed didn’t know these services even existed.
In a study published by the Institute for Research on Public Policy, we propose a new approach to career planning. Rather than relying on an individual’s degree or diploma or previous job title to look for employment alternatives, the method we employ identifies occupations — perhaps even in a different industry — that overlap with their current or recent job in terms of work activities and competences. This approach broadens the range of new employment options available for jobseekers and should result in a better job match. Our approach only considers alternative jobs in growing industries that offer wages at least as high as what workers earned in their previous occupation.
But identifying alternative careers isn’t enough. We can also pinpoint any skills gaps that would need to be addressed to make these transitions successful. This allows individuals and career counsellors to develop a roadmap to identify appropriate training programs that help jobseekers qualify for new jobs. Ideally, our proposed methodology would be used in conjunction with real-time data available on job-posting sites like ZipRecruiter or Indeed, as well as information on training options from tools that don’t yet exist but need to be developed.
We hear a lot about skills that workers will need to remain resilient in the face of labour market disruptions. In our view, a one-size-fits-all approach must give way to personalized career and training guidance tools that make the most of an individual’s skills, interests and abilities. Such tools will improve job matches, better target retraining efforts, and increase participation in and completion of training programs.
This type of comprehensive skills-based approach to career guidance would offer tailor-made employment and training solutions for unemployed workers, workers who seek to improve their employment options and those who are in danger of losing their jobs. These tools could be especially helpful for vulnerable populations, such as women and racialized Canadians whose jobs were most affected by the pandemic shutdowns.
When globalization and automation led to a widespread loss of jobs in North America’s manufacturing sector in the 1990s, many of the displaced workers took ill-suited jobs, resulting in lower pay and a loss of skills. Let’s avoid repeating mistakes of the past. Adopting a comprehensive skills-based approach to career guidance, like the one we propose, would be a step in the right direction. Our methodology remains in early stages of development and bringing it into widespread use will require substantial government investment. Given the scale of the problem, we can’t afford to put it off.
Matthias Oschinski is the founder and CEO of Belongnomics, and a member of the teaching faculty at the University of Toronto’s Munk School of Global Affairs and Public Policy.
Thanh Nguyen is an undergraduate student in computer science and engineering at MIT.
This op-ed was originally published by The Hill Times.
Amid the many uncertainties that this new year brings, we can make one prediction with confidence: In 2021 – and beyond – many Canadians will need some kind of training to ensure they have the skills needed to succeed in their current job or to find a new one.
However, as of today, Canada has no information system that would help workers in need of reskilling to find suitable education and training options that could provide sought-after skills.
The pressure to learn new skills has been building for some time and has been thrown into sharp relief. New technologies such as advanced robotics, blockchains, and augmented reality, are transforming the world of work, whether it’s running a warehouse, handling financial transactions, or constructing new buildings.
The coronavirus pandemic and accompanying economic crisis have only ramped up that pressure.
Working and learning from home have accelerated the advancement of these and other technologies that are now part of our daily lives – from learning to effectively facilitate conferences, workshops and team-building exercises using Zoom or TeamViewer, to schoolteachers and university professors designing courses that are delivered virtually.
At the same time, many workers who have lost their livelihoods due to the pandemic now face the daunting prospect of plunging into entirely new careers.
Effective training and skills programs will be central to helping these and other workers succeed in their current career path or to transition to entirely new ones. Such training can range from a half-day workshop on how to work collaboratively with a warehouse-organizing robot, or a five-year apprenticeship which integrates augmented reality tools and interfaces into the curriculum. But whatever shape it takes, these training programs will be successful only if Canadians can accurately identify the skills required for specific jobs, find the course or program that best teaches those skills, and have the ability and financial means to engage in that training.
For now, that is easier said than done. Despite the vast array of training options, it is difficult for Canadians to find answers to some basic questions: What training is available to me to learn how to do a particular task at work? Where can I learn the skills I need? Are online courses effective? Are there university or college programs available that provide the skills I need without a four-year commitment? Are training options in my home city or province as good as those in other parts of the country?
According to surveys by the Labour Market Information Council (LMIC), half of Canadian workers (25-54 years old) want more detailed information on the skills required for specific jobs. Indeed, except for salary/wage data, no other type of workplace information is more sought after than that pertaining to skills.
In a new paper for the Institute for Research on Public Policy, Mapping Canada’s Training Ecosystem: Much Needed and Long Overdue, we outline a blueprint for a comprehensive training information system that would link — or “map” — the skills sought by workers and employers to programs offered by universities, colleges and training specialists, as well as industry apprenticeship schemes.
The system mapping we propose would comprise three interlocking elements:
Such a comprehensive system would help individuals understand the skills requirements of various jobs and to find training that is best-suited to their needs and aspirations. Workers would benefit from improved job satisfaction and career planning. For employers, an efficient mapping system holds the promise of a substantial boost to productivity at a time when a serious skills shortage is looming. Manufacturers have recently cited a scarcity of skills as one of their top concerns after the pandemic-related disruptions, according to the LMIC.
Make no mistake, this is an ambitious and complex undertaking. According to Statistics Canada, there are more than 2,000 post-secondary and 64 vocational training institutions across the country. A complicating factor is that the provinces have jurisdiction over education, while labour market policy is a shared federal-provincial responsibility.
Further compounding the challenge is that system mapping must take into account the current shift taking place in most countries from training aimed at mainly providing credentials to training focused on the development and recognition of specific skills. Formal credentials, such as diplomas, degrees and certificates, are meant to signal that the holder possesses a certain set of skills and knowledge. Yet, as every employer knows, most give only a limited picture of an individual’s real abilities and potential.
We are confident that an efficient system mapping can overcome these obstacles, but only if some important conditions are met.
First and foremost is the need for close collaboration between employers, training providers and government agencies at all levels. Players with key roles in launching such a venture could include the Council of Ministers of Education, Canada (CMEC), Forum of Labour Market Ministers (FLMM), LMIC and the Future Skills Centre, among others.
We believe that a phased approach would be the best way of getting an effective, pan-Canadian mapping system off the ground. The first step would be a pilot project limited to two or three provinces or territories.
We envisage that the pilot would be implemented in stages, as follows:
Our paper is an urgent call to action. Without a trusted source of information that links training programs to skills, Canadians will have little choice but to muddle through by poking around online and relying on word-of-mouth advice. Some may end up wasting time, money and energy on unsuitable training programs. Many will not invest in training at all, hampering their ability to make a fresh start in their careers.
A successful mapping of Canada’s training programs to skills development stands to benefit not only workers and employers who gain most directly from smart training choices, but the entire Canadian economy. However, the challenge and scale of mapping Canada’s education and training systems to skills should not be underestimated. It is therefore essential to begin with a pilot project that can test and gather lessons learned to determine how best to move toward full implementation. We believe now is the time to test bold initiatives.
Imagine living on $10,000 per year in Toronto, searching for work while trying to stretch that $815 a month to cover housing, food, transportation and all other necessities. This is the reality for single people on social assistance.
To help them avoid falling into deep poverty – and the consequences that poverty has on their overall health – Ontario must increase the social assistance benefits that unemployed Ontarians who do not qualify for Employment Insurance often rely on. Single adults without dependants who are deemed employable receive about $8,800 in social assistance benefits annually, plus $980 in other tax credits and benefits (e.g., GST/HST tax credit). This income amounts to 40 per cent of Toronto’s poverty line. In other words, singles on social assistance can purchase only 40 per cent of the goods and services they need to achieve a basic standard of living.
These individuals live in deep poverty, a term reserved for those whose incomes amount to less than 75 per cent of the official poverty line, according to Statistics Canada. Just under half of the nearly 2 million Canadians living in deep poverty are working-age singles.
Poverty and health go hand in hand. Research indicates that individuals in poverty have a relatively low life expectancy and high suicide rates. They also are more likely to suffer from heart disease and mental health issues than most Canadians.
In October 2018, the federal government released Opportunity for All – Canada’s First Poverty Reduction Strategy, which set targets to reduce overall poverty rates. However, the risk in its approach is that overall poverty rates may decline without any improvements for those experiencing deep poverty. For example, families with children that once had incomes just below the poverty line could move above the line thanks to increases in the Canada Child Benefit, thereby lowering poverty rates. However, singles who remain below the poverty line – and do not qualify for child benefits – could see little improvement or fall further behind. Success should be defined by both the overall rate and the depth of poverty.
Ontario’s provincial poverty reduction strategy considers unattached individuals between the ages of 45 and 64 to be a vulnerable population. Yet the percentage of these individuals who are living in poverty increased from 32 to 36 per cent between 2012 and 2017, according to the last annual report on the status of the strategy. Ontario has work to do. Why not start by increasing benefits?
One reason policymakers tend to avoid increasing benefits is that they fear this will make paid work less attractive, a valid concern but only to a point. In a recent report for the Institute for Research on Public Policy, I investigated how increases to social assistance benefits over time increase the number of singles who take up social assistance across Canada. I found that a 10 per cent increase in benefits leads to just a two to five per cent increase in the number of singles who sign on. Although there is a link between benefits and caseloads, it is a weak one. Work provides dignity. It provides purpose and breaks the stigma of unemployment. These factors counteract, in large part, concerns that more generous benefits would drastically reduce the desire to work.
Singles are the household group most likely to face homelessness and to use food banks. Homelessness results in a wide range of health problems. And those who are homeless often face major barriers in accessing health care services.
A national study estimates that a $1,500 per year increase in social assistance benefits for an employable single without dependants would reduce the use of shelter beds on any given night by nearly 20 per cent. Also, research finds that overall rates of food security improved among social assistance recipients in British Columbia after a one-time increase in benefit levels in that province.
Singles on social assistance are more likely to report the negative effects of social isolation. Isolation often results in depression, poor sleep quality, accelerated cognitive decline, poor cardiovascular function and impaired immunity.
Less homelessness and improved food security would result in better overall health and less use of public health care, meaning cost savings to governments to partially offset the additional costs of increased benefits and a modestly higher number of people taking up social assistance. Further, better benefits could encourage more economic and social interactions, which would reduce the negative mental health effects from social isolation.
Reducing poverty can improve health. Although poverty reduction measures of recent decades have succeeded in boosting the incomes of seniors and low-income families with children, not enough has been done for singles on social assistance. To hit federal and provincial poverty reduction targets while mitigating the risks of deep poverty, Ontario must extend higher social assistance benefits to singles.
A woman caring for her older mother is told she cannot make a direct application to a specialized provincial home-care program because her mother needs a referral from a case coordinator. She waits 2 months before her mother gets assigned a coordinator, and then a couple more for assessments and a doctor’s letter. Finally, she submits the 10-page application form, which takes her 12 hours to complete, and is then told she will have to wait 2 to 3 months more to get a response.
Among older Canadians and their caregivers, stories like this are all too common.
Navigating our often-fragmented systems of support and care in Canada can be an arduous task, but it is especially so for older adults with complex health conditions. Many struggle on their own to find and access services or have to rely on families to do it. Canada needs, straight away, a dedicated strategy to transform the navigation of supportive services from a private struggle into a public responsibility.
For instance, take our health system: It works fairly well if you’ve broken your leg, but less well if you need help managing multiple chronic conditions. Older adults are more likely to have to move across care settings – for example, from hospital to a seniors’ residence or back home. They require the support of various professionals, including specialists in medical and social care, such as geriatricians or case coordinators as well as system bureaucrats. The onus is often on older adults and their caregivers to navigate access to needed services, and to coordinate and manage these services over time.
Navigation also entails dealing with multiple service providers. For instance, an older adult with dementia, living at home with family in Nova Scotia, might be assessed by the family doctor, then by a home-care coordinator from a public health authority. They might then receive home care that is overseen by supervisors from one or more for-profit home-care agencies, and perhaps receive information about dementia or access other services from the non-profit Alzheimer Society. The family caregiver might learn he or she can also receive some compensation from the provincial caregiver benefit program, and the older adult might eventually ask that person to assume power of attorney.
Working between and within programs and services in such situations, families complete forms, make appointments, contact professionals, prompt providers for assessment results or updates on the status of their case, and mitigate the risk of errors in bureaucratic processes, like paperwork.
Managing these tasks successfully requires an assortment of skills. Families must be highly resourceful, literate and persistent to navigate separate, unintegrated health care and social service systems. They need to know the right questions to ask, and must develop the ability to negotiate and be assertive with professionals.
In a recent IRPP study, service users and family members give powerful testimonials of the hurdles they consistently face in navigating health and social care systems. Many caregivers say the burden can be overwhelming.
In that study, I argue that as a society we vastly underestimate the economic and social costs involved – including the stress and frustration generated, and, for caregivers, the time that they could have spent taking care of themselves and their loved ones, or in paid employment.
Caregivers express increasing frustration with how supportive systems and services are structured and organized – especially when it comes to health care. Separate and uncoordinated services, complex and burdensome administrative procedures, and lack of user-friendly information are the main culprits.
What to do? Better information about available services is needed, but this is far from sufficient. Efforts to provide more integrated services in various sectors that are actually grounded in the preferences and needs of both service users and families (as opposed to the needs of systems or professionals) could have the biggest impact. But, so far, progress on this front has been incremental at best. In professional health care mandates, at least, recognizing family caregivers not only as care providers but also in some cases as legitimate recipients of care or services themselves (such as respite or navigational support), would be an important first step in this regard.
An immediate solution is for provincial governments to increase the number of dedicated system navigators, like those often made available to cancer patients to help steer them through various tests, specialist appointments and support programs. Navigation support could potentially be mandated as part of the responsibility of primary care teams, the diverse group of professionals engaged to provide comprehensive support once a person makes first contact with medical services. This could help place the onus for (and costs of) care coordination onto the system itself, and it could make governments more aware of the value of integrated care.
Recognizing that navigation challenges are not unique to health care systems, however, we might also ask: Is there a role for publicly funded social workers, even librarians, given their expertise in digital literacy and information-searching, and their accessibility within local communities?
The harsh reality is that older Canadians living with chronic illnesses, disabilities and cognitive impairment are regularly hindered, along with their caregivers, by the efforts required to access and coordinate fragmented health and social care services. It’s time for this burden to shift from a private one to a public one.
Are Canadians fated always to be “hewers of wood and drawers of water,” our prosperity dependent on raw resources rather than our ingenuity? Canada has the right conditions for innovation: a well-educated workforce, strong research institutions, openness to skilled immigration, generous R&D tax credits and proximity to the large US market. So why does Canada rank poorly among industrialized countries in terms of innovative output? Policymakers have wrestled with this puzzle for decades, and for good reason: innovation is essential to the wealth and welfare of a nation. It is an engine of economic growth and a driver of global competitiveness.
In our recent study for the IRPP, we argue that a key reason for the disconnect between our innovation potential and our performance is Canadians’ propensity to develop innovations and then transfer (or “assign”) their patented technologies to foreign entities rather than scaling up and commercializing their inventions. In doing so, they forgo property rights over the use of their inventions and the opportunity to profit from the innovations that they pioneered.
This growing trend is revealed in patent data from the US, where Canadian inventors are most active in filing patent applications. For example, of the over 9,000 patents granted in 2017 by the US Patent and Trademark Office that were developed all or in part by Canadian resident-inventors, 45 percent were immediately assigned to firms or other entities outside of Canada, a percentage that has more than doubled over the past 20 years. And of those that remained in Canadian hands, a significant number are subsequently reassigned or sold off. The bottom line is that Canadian invention too often does not result in Canadian ownership of patented technologies.
Why is this relevant to the innovation input-output gap in Canada? Patent ownership is key for innovators — especially small- and medium-sized enterprises (SMEs) — looking to commercialize inventions and scale up. By establishing property rights through patents, innovators are better able to signal their inventions’ value to venture capitalists, protect their assets and compete in global markets. If instead they transfer or sell their patented technologies to larger firms, SMEs could face high royalties or costly litigation on inventions they helped to create and, even worse, be deterred from innovating in related technological areas. This is particularly relevant to innovation in Canada, where SMEs accounted for more than 50 percent of the value added to Canada’s output from 2010 to 2014.
So why would Canadian inventors not obtain and retain patent rights on technologies they develop? In some cases, the inventors are employees of foreign enterprises, and are obligated to assign the patents on their inventions. In other cases, such as start-ups, exploiting the patent requires firms to raise capital for product development and production and then for scaling up and competing in global markets. This entails substantial costs of obtaining, retaining and protecting patents in global markets, which can simply be too great to overcome relative to the benefits. Indeed, the opportunity to sell the invention to large US technology firms that are both fierce competitors and keen buyers of Canadian patents can be the most attractive option in these circumstances.
What does this mean for policy? Impeding the transfer or sale of patents in Canada to foreign entities is not the answer. In fact, it could be counterproductive for the research activity in Canada (including that conducted by foreign subsidiaries) that is necessary to enhance the country’s innovative capacity. Nor would strengthening Canada’s patent system likely enhance Canada’s innovation standing in the world, as scaling up for global markets depends on the ability to obtain and retain ownership of international patents.
Rather, efforts to facilitate Canadian innovators’ access to global markets and incentivize the commercialization of their new products and processes are more likely to be effective. These would include providing legal advice on how to navigate international patent systems; reducing costs of satisfying patent standards, including searching existing patents that could undermine patent validity; eliminating bottlenecks in accessing global markets; and mitigating the risk of patent invalidity and infringement.
Some of these measures are included in the federal government’s Intellectual Property Strategy, a promising but modest policy that aims to increase awareness and exploitation of patents with the goal of increasing the value of Canadian innovations. Its impact should be carefully monitored, and if the policy is successful, it should be scaled up and sustained. Of course, patent ownership alone will not turn Canada into an innovative superpower. A greater array of public policies and private strategies will be needed to make the most of Canada’s innovation potential. However, providing appropriate support for innovators so that they find it profitable to retain patents — not for their own sake but as a strategic tool for accessing global markets — could help to tip the sell-versus-scale-up balance toward the latter and improve the country’s economic prospects.
Canada faces a triple innovation challenge: decreasing productivity growth, a growing gap in R&D investments and a need to harness innovation more directly for the good of society. Those challenges cannot be tackled if the country remains in its supply-side policy silo.
Decades of government-led attempts to promote productivity and innovation through measures like R&D tax credits, subsidies, and venture capital have not produced the desired results. Relying on these supply-side policies to spur innovation and the generation of knowledge and new technology will not do the job.
Governments need to recognize that for businesses, the incentive to innovate stems from the uptake and market demand for leading-edge technologies. Further, if businesses do not use the latest technologies they fall behind in productivity, and if businesses do not sense the market is ready to absorb their innovations, they are reluctant to innovate.
To get out of this trap, Canada needs to do more to support processes and practices that ensure a better match between demand for and supply of innovation.
Although recent initiatives implemented as part of Canada’s Innovation and Skills Plan show some promising signs, I argue in a recent study for the Institute for Research on Public Policy, what is needed is a more balanced approach: one that focuses on the demand-side by promoting the adoption and spread of new technologies and by creating new markets for innovative products and solutions.
Moving in this direction would require a new mindset on the part of governments and a willingness to organize innovation policy differently in order to realize the potential benefits of connecting innovation demand, R&D investments, productivity and societal problem solving. A key part of this transformation entails positioning the public sector as innovation-demanding and absorbing partners for innovative firms. By leveraging the “power of the public purse” through strategic procurement, Ottawa could lower the risks and uncertainties that hamper business innovation and in turn boost productivity. Governments could also make better use of subsidies or tax incentives to encourage companies to purchase emerging technologies and train people to use them.
One classic example is that of Germany, which in the late eighties and early nineties put in place subsidies for businesses to invest in computer-aided manufacturing and design technologies with remarkable results in terms of market uptake and firm productivity.
More important, governments can play a key role in promoting research and innovation based on the needs of society more broadly and mobilizing citizens, businesses and public bodies as potential buyers of innovative solutions. This could be done, for example, by issuing a call for innovative solutions to address fundamental challenges like climate change or demographic change, or to reduce government’s environmental impact and costs through more eco-friendly goods and services. Much of this is already being done in Europe, with schemes like Austria’s innovation-promoting procurement strategy and Germany’s High Tech Strategy 2025.
Such mission-oriented approaches can provide the means to focus research, innovation and investments on solving critical problems, while also spurring growth, jobs and resulting in positive spillovers across many sectors. Innovation is key, and linking societal purpose and economic benefit should be the guiding focus for a future-proof innovation policy in Canada
The report card on Tax-Free Savings Accounts (TFSAs) at 10 years shows that, despite being designed to assist people in lower-income brackets make better retirement-savings decisions, TFSAs are still falling short of this goal. In a recent Institute for Research on Public Policy paper, I urge policy-makers to focus on improving TFSA use among low-income savers. With a combination of improved education, default rules for savings accounts and perhaps a “savings credit,” their retirement incomes could be boosted. Further, this would spread the benefits of TFSAs more evenly across the population; at present, benefits are slanted towards high-income savers.
The value of TFSAs for low-income seniors was trumpeted in the 2008 budget speech, which noted that TFSAs “will provide greater savings incentives for low- and modest-income individuals because neither the income earned in a TFSA nor withdrawals from it will affect eligibility for federal Guaranteed Income Supplement and tax credits.”
The fact is, low-income savers who choose to save in Registered Retirement Savings Plans (RRSPs) over TFSAs are leaving money on the table. This is because, in retirement, RRSP withdrawals are taxable, and they also reduce the government benefits their holders might have qualified for if they had saved in a TFSA. Too many future recipients of the federal Guaranteed Income Supplement (GIS) — the income transfer for low-income seniors — are not getting the advice they need to shed their RRSPs, and some are still, wastefully, saving in them.
While growing numbers of low-income Canadians are using TFSAs, RRSPs still dominate. The data are clear: although a substantial minority of low-income savers have opened up TFSAs — about 36 per cent of seniors without an employer pension plan — about 90 per cent of all their savings are still in RRSPs.
Why do low-income earners still seem to prefer RRSPs over TFSAs? To some degree, the transition to TFSAs will take several decades. But a major reason is likely that financial institutions are not tailoring appropriate financial advice for low-income savers. Anecdotal information suggests that the advice that low-income Canadians obtain from banks is incorrect. Banks, and even financial-advice periodicals, tell low-income seniors they would be foolish to cash in their RRSP before age 65. This is often bad advice.
The inability to improve TFSA usage among low-income Canadians underscores legitimate equity concerns about TFSAs, where most benefits still go to higher-income Canadians. Plus, economists and the Parliamentary Budget Office have shown that the long-run cost of TFSAs in terms of federal and provincial tax revenues, mainly from this high-income group, will be large.
The data also show that inequities in terms of who benefits from TFSAs are growing. Between 2014 and 2016, the assets in TFSAs worth over $500,000 more than doubled from $45 million to $108 million, and the assets in TFSAs worth over $1 million increased from $20 million to $49 million. These inequities will continue to grow as lifetime contribution limits expand: The 2019 TFSA lifetime contribution limit is $63,500 and it will reach $100,000 by 2025.
What to do? At the 10-year mark, the federal government should focus on boosting the benefits for low-income Canadians with options to encourage more effective saving decisions. This could include a “savings credit,” which — similar to RESPs — would provide matching grants for a certain amount of TFSA contributions for lower-income savers. As well, it should investigate ways to ensure that financial advisers, especially those in banks, give better advice to GIS-bound seniors.
Of course, these fixes cost money. But the amount of money required pales in comparison to the long-run government costs from TFSAs. Should they not be addressed soon, the federal government should consider capping lifetime contributions of TFSAs — at around $100,000 to $250,000 — to avoid creating more TFSA millionaires while shortcomings persist among lower-income Canadians.
