Poverty in Canada
The Empire Club of Canada Addresses (Toronto, Canada), 27 Jan 1972, p. 191-204
Croll, The Honourable David A., Speaker
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The Economic Council of Canada and statistics on poverty in Canada. Endeavours of the Senate of Canada to suggest a remedial process. A description of the Senate's methods and results of a study on poverty over the last three years. Factors effecting poverty. A descriptive understanding of poverty, its causes and its effects. The importance of attitude. The detrimental effects of the welfare system. Recommendations of the report. Illustrative examples of how the recommendations might work. The Canada Assistance Act. A guaranteed annual income. The elimination of poverty as a national goal. A social preview.
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27 Jan 1972
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Full Text
JANUARY 27, 1972
Poverty in Canada
CHAIRMAN The President, Henry N. R. Jackman


Today we have with us as our guest, a man whose active political career has spanned almost half a century.

History tells us that David Croll's political life began on a rainy evening in 1919 when a young immigrant law student went to the old Foresters Hall on College Street where the Liberal Party of Ontario was holding a leadership and policy conference. Our guest heard the late Mackenzie King talk about measures to help Canadian workers and poor people, a minimum wage; an 8-hour day; unemployment insurance, medicare and social justice for all. David Croll was impressed by the promise of King's rhetoric, and in the intervening years his active life has been devoted to the cause of helping the underdog. Graduating from law school, he returned to his adopted City of Windsor, became active in Liberal politics and to everyone's surprise was elected Mayor of the City of Windsor at the age of thirty. Four years later he was elected to the Provincial Legislature, becoming simultaneously Minister of Welfare, Minister of Municipal Affairs and Minister of Labour, a combination of portfolios which even in this day of the super Minister at Queen's Park would make Darcy McKeough blush.

As Ontario's Minister of Welfare, he placed his own family on a welfare food budget just to discover how inadequate it was. He encouraged hunger marches and urged the poor to be vocal and strident about their grievances. For a minister in power, David Croll's identification with the dispossessed naturally caused a certain uneasiness in Government circles, and in 1937 the real crunch came when events so determined themselves that David Croll was forced to choose. In depression torn Oshawa, housewives were doing alternate duty on bread lines and picket lines, and the issue was whether the Government was justified in sending in militia troops and provincial police to break up the pickets of the automobile workers, whose only fault was that they wanted to have their own union. David Croll handed in his resignation and in so doing issued this statement, which has now become part of the folklore of Canadian politics:

"Thousands of working men and women of the Province of Ontario have come to look to me as their protector and their champion. I feel that I cannot now fail them. In my official capacity I have travelled the middle of the road, but now that you have put the extreme alternative to me, my place is marching with the workers rather than riding with General Motors."

Croll resigned from the Government, but he would not admit that he was beaten. Returning to Windsor, he was once again acclaimed as their Mayor, and after distinguished war service he was elected to the Federal House of Commons for Toronto Spadina. The nine years that David Croll spent as a Member of Parliament may have been frustrating ones for him, as it became apparent to all that the idealism of the 'Mackenzie King of 1919 was not fulfilled by the measured caution of the King and St. Laurent Administrations of the post-war years. At times David Croll must have seemed like a voice crying in the wilderness. Some have suggested that Croll's independence of spirit, although personally admirable, could not be reconciled with the practicalities of running an Administration where loyalty to the system was valued above all else. Others have said that public attitudes of the day had not as yet progressed to ever include in the Cabinet a man of other than French-Canadian or Anglo-Saxon origins.

In any event, in 1954 David Croll was sent to the Senate by Louis St. Laurent in what may have been an attempt by the then Government to bury its own conscience. Even our guest at the time exclaimed: "I was not lead, I was pushed"; and stated "I am not going to be an ornament", immediately continuing reform policies in such fields as consumer credit, the cost of living, old age pension supplements, divorce reform, and now this his final battle for the little man, his program which can hopefully tackle the problem of poverty for the first time on a realistic basis.

David Croll never got to be Prime Minister, in fact he never even got to be a Federal Cabinet Minister, and sat quietly on the back benches when many lesser but more accommodating men received advancement. Greatness, however, can never be measured by honours or position, and if the measurement of a man can be determined by devotion to the cause of social justice and human betterment, then David Croll truly stands among the giants; and for this reason I have the very high honour of presenting to you the Honourable David A. Croll, Q.C., Chairman of the Senate Committee on Poverty.


I am privileged in addressing this distinguished and historic club which from the time of its birth has steadfastly stood for a united Canada within the Commonwealth.

I feel certain that some of you have known poverty at close quarters--many others have a memory of gentile poverty, others are aware of its existence and its impact.

The Economic Council of Canada in its fifth Annual Report in September '68 vividly brought to the attention of Canadians the state of the nation. They were told by the Council that 25 percent of Canadians were living in poverty, defined both in relative and absolute terms. It came as a great shock to Canadians. The Council further suggested that the matter not be left in abeyance but that the Senate of Canada involve itself to seek a remedial process.

We accepted the challenge, because it had to be done and, moreover, because it had not been done since the birth of our nation, now more than 100 years.

Poverty per se had not been studied. In November of 1968 we began an odyssey that took the committee from one end of Canada to the other and ended three years later with the Senate's Report on Poverty in Canada.

We held 93 public hearings, received 209 briefs, heard 810 witnesses and printed 6 million words. In addition, the committee met with hundreds of poor in their homes and at evening gatherings. The report "Poverty in Canada" was presented to the Senate and the country on the 10th of November last.

The challenge to the Senate was that poverty is a great social issue of our time and unless we act now nationally and in a new and purposeful way, 5 million Canadians will continue to find life a bleak, bitter and never-ending struggle for survival.

It was obvious that the poor do not choose poverty. It is at once their affliction and our national shame. Unlike the poor of earlier days, they know how poor they are, and so they face the future with little hope and mounting anger. The children of the poor (and there are many) are the most helpless victims of all, and find even less hope in a society whose social-welfare system from the very beginning destroys their dreams of a better life.

The grim fact is that one Canadian in four lacks sufficient income to maintain a basic standard of living. Once caught in the trap of poverty, it becomes a trap and a web from which too few escape.

I am reminded of the temporary civil servant who was finally put on the permanent staff. Overjoyed, he broke the glad news to his wife, who, womanlike, asked what pay increase was involved. When told that the pay was precisely the same, she exclaimed, "Oh, that's ridiculous! We're living in poverty now." "I know," replied the lucky fellow. "But, thank God, it's permanent!"

Let me make very clear at the outset of my remarks that the Senate Committee which produced the Report on Poverty at no time claimed that its recommendations would wipe out poverty if only the government of the day would implement them.

To make such a claim would be to strain the credulity of the Canadian people. We produced no instant cure, no panacea for the greatest social problem of our times. What we did say was that the time was long overdue for new thinking, a new approach to poverty and that our recommendations were the first firm steps towards bringing economic and social justice to five million Canadians. We did produce guide lines and a plan which is now before the people of Canada.

You, the audience, are composed largely of business leaders in a wide variety of enterprises, men who are responsible for the conduct of large undertakings. You are able to read a balance sheet and learn from it the state of a business, whether it is prospering or ailing. Evaluation of your enterprise must be as constant as the clock.

If the social welfare business of Canada had been in the private sector, it would have long ago been declared bankrupt. The reasons are not hard to find. Resistance to change, a stubborn refusal to modernize its thinking, a failure to understand the root causes of poverty, inadequate research and the bureaucracy digging in to preserve itself and the status quo, are some of the basic causes of the dilemma in which we find ourselves today.

In tabling the poverty report in the Senate, I said at that time, "In our attitudes toward the poor we have been passionately wrong with a high degree of consistency. Good intentions alone have never lightened the burden of poverty. The ugly subculture of poverty has become a way of life for generations of Canadians who are victims of frustration, despair and apathy."

Harsh words? Yes, but they apply with complete accuracy to the situation in Canada. We are pouring billions of dollars every year into a social-welfare system that merely treats the symptoms of poverty but leaves the disease itself untouched.

The working poor, that huge army in the labor force whose income is grossly insufficient, are not helped by a system which is archaic and unworkable in terms of human needs. Forty per cent of the working poor, those who work full time for low wages and could do better on welfare, resist welfare and make do. We hear very little about these people.

We fashioned a social welfare machine, lubricated it with our dollars and then turned our back on its operation. It has become a social wasteland and an economic morass into which we pour more than 7 billion dollars each year without reaping any but the most meagre returns.

We recommended that the welfare system be scrapped because it is obsolete, lacking in regard for human values and unable to alleviate poverty let alone eliminate it. It has no defenders only offenders. Not one person came forward to praise or defend it.

Let me remind you that the members of the Senate Committee on Poverty were not starry-eyed dreamers insulated from reality--middle of the road extremists sometimes. They shared many of the views held by Canadians generally, views built on myths surrounding the poor. People in the country are convinced that hidden away among the nation's welfare recipients are a great number of healthy, qualified men and women who are able to support themselves by their own efforts.

Certainly there are some pretenders and offenders on the welfare rolls but the vast majority are the elderly--disabled--illiterate--children--mental--deserted, divorced and widowed mothers with children.

Many more can't work. They lack skills, stability and women who have family responsibilities.

The number who beat the game are never more than one per cent. That has been the American experience and that has been our experience.

But after three years of constant confrontation with poverty across Canada; of seeing first-hand the consequences of this sickness; after talking to the poor and poverty stricken and hundreds of lay and professional persons, the committee members emerged from this experience with a new outlook and a determination to bring about a new beginning and to begin a meaningful dialogue with the Canadian people. We don't pretend that the Report on Poverty is the best report that could have been written. Its impact lies in the fact that it came from the Senate. It's now on the Agenda. The dialogue has begun.

The plan we propose has a philosophical basis which is essential to its success and which is conspicuously lacking in the existing social-welfare system--a clearly defined work incentive. We want those in the labor force and particularly the working poor, the disadvantaged citizens of this country, to participate in their own salvation.

It is a sad commentary on our economic system that the working poor toil for poverty wages that are generally less than they would receive on welfare. Many of those who receive minimum wages would be better off at basic welfare levels.

What kind of a system have we developed that says it is more profitable to go on welfare than work? And so I repeat, our recommendation will put an end to that system. It will reverse that trend. Under the new system it will be more profitable to work full time, part-time, broken time, or over-time. Work and benefit is the theme of our submission. The plan we propose is to be phased in during the '70's or sooner.

The central recommendation in the report calls for a guaranteed annual income using the negative income tax on a uniform, national basis, based on need. Incorporated in it would be a work incentive to ensure that those who work will receive and keep more income than those who do not. The plan to be financed and administered by the federal government making uniform cash payments to all resident Canadians in economic need. Payments would vary by family size and need and would establish a floor level below which no family unit would be permitted to fall. The plan has its essential ingredient--income--maintenance--work incentive.

The report deals with many matters but was very clear that education and training for relevant skills were diplomas out of poverty.

To avoid piecemeal and fragmented approach to income security, we recommend income from the federal government, services from the provincial government, delivery of all services under the umbrella of The Canada Assistance Act which is now on the books and adequate to meet requirements.

We also recommend the repeal of all income providing social measures wherever they may be found and there are about 200 of them, leaving only three untouchable measures:

(i) The Canada Pension Plan;
(ii) Unemployment Insurance; and
(iii) Agreements with Native Canadians.

Immediately the report was made public, government spokesmen said it was too expensive. There wasn't time to read it let alone to digest the report, but still it was possible to come to an instant conclusion that Canada couldn't afford to undertake such a drastic change in its social-welfare policy.

Putting the human aspect of the problem aside, a guaranteed annual income, together with the other recommendations we have made, will increase our gross national product by an estimated $z billions annually. This will come about by lifting the working poor to a stage of productivity enjoyed by the more fortunate class of Canadians and from increased consumer spending.

In any business, if a service or product proves unacceptable to the public, it is scrapped or significantly changed. You don't stick with it simply because this is what has always been done. In the public service area, we have stayed with an unacceptable product--a welfare system which is a hangover from another era and which has no relevance today.

We Canadians are a conservative people, a small C conservative, thank heavens. In all walks of life the time inevitably comes when there must be new thinking, new concepts, new methods. But we are evolutionists,--we do things slowly, oh so slowly.

Let me give you a few examples of what I mean. In 1966, universal old age security at age 65 was a Senate proposal--it was then being paid to those 70 years of age and over--a revolutionary concept which many Canadians found difficult to accept. Today. the age has been reduced to 65 and there is a supplementary payment to those in special circumstances. When the recommendation was made by the Senate Committee, of which I was chairman, we estimated the cost might be about 150 million dollars. The cry went up immediately--we can't afford it. Less than two years later we not only could afford it but we added a supplement and it's now one of the programs to which we point with considerable pride as the old age security cheques keep coming into the Canadian homes.

All of you recall the great debate in this country in 1968 when we couldn't afford medicare or so went the argument, but we could, we did and are better off for it and richer--richer in a sense that the greatest pauperizer of all was, and is, sickness. It not only pauperized families, sometimes generations. That to our everlasting credit has been brought to an end.

A philosopher once said that all good ideas pass through three stages--ridicule, discussion and adoption.

Social ideas with political amplification pass through five stages:

(1) Those opposed--impossible.
(2) Unconstitutional.
(3) It may bankrupt the country.
(4) Not a bad idea, but you are going about it in the wrong way.
(5) Well--we were for it all the time.

But in the field of social-welfare, we continue to carry on as we did in our grandfather's time. Governments resist new ideas; it is easier to do it the way we did yesterday than to undertake new ways.

The social-welfare system we have today will never break the poverty cycle which condemns children born in poverty to grow up and live their lives in poverty, as did their fathers before them. Some escape the poverty trap, but they are few. For nearly all there is lack of education, lack of opportunity, lack of incentive. We feed and clothe and shelter them but in the end they remain second-class citizens.

A guaranteed annual income will cost more than we are wasting and misspending today. How much more? Well, the Senate Committee said that if the plan had gone into effect in 1967, the net cost would have been between $600 million and $700 million which would have been about one per cent of the gross national product. Projecting this figure to 1970, or 1971, the cost of the program would be about one per cent of the gross national product of $84.5 billion. The gross national product will be $100 billion in 1972. Truly we are dripping with wealth. The poor in this instance don't even get the drippings.

The price of reform is always high, but the stakes are high. I repeat, we are not so naive as to believe that we can abolish poverty overnight. But what we can and must do is move slowly but steadily in that direction, blunting the effect of poverty by all the means within our power and within our material resources. Have you ever given thought to what might have been and should have been if after the war when the colonial and other subjugated people were breaking their shackles, the people of the United States had done something for the Blacks and had continued to do more from year to year? Ask yourself, would it have been necessary for thousands of communities in the United States to build walls around compounds? Isn't there a lesson for all of us?

The report rejects the bland assumption that we can't afford to give a more enlightened deal to the people living below the poverty line. We can't afford to continue pouring billions into welfare in what is little more than a holding operation.

What does the guaranteed annual income do? In essence, it simply means providing a floor below which the income of Canadian families will not be allowed to fall. We recommend that for a family of four the guaranteed income be $5,000. That for a start it be fixed at 70% of $5,000., that is $3,500., and that it be increased progressively in accordance with our capabilities. Initially, basic allowances would be reduced at the rate of 70 cents for every dollar of other income, and the worker would retain 30 cents. This is not as high as we would have liked, but the committee had to consider what was possible and what was not. We had to make a start somewhere.

To prevent the guaranteed annual income from becoming eroded by inflation and thus obsolete, we have recommended that the poverty lines we developed be geared to the average standard of living and to the gross national product. Those below the poverty line should be exempt from taxation. Presently the low income groups pay a disproportionate amount of indirect taxes. Carter documented that beyond question.

The poor of Canada, the dispossessed, are largely an invisible problem. They are with us but not of us, we don't come in contact with them. We know they exist and most of us believe something should be done about it, but that's about all.

"Many times in our history we have declared war on poverty. Banners have been unfurled, trumpets have sounded, brave speeches have been made on the eve of battle, but never has the battle been fought. There have been skirmishes, but not wars. This shallow and inconclusive contact with the enemy appears to have satisfied the collective conscience of the more fortunate majority."

We have opened a dialogue with the poor. Our plan is to involve them and they so much want to be involved. They're really tired of having other people continually tighten their belts. That dialogue has been widened to include the whole Canadian community. This is good. We who carried out this mission of exploration do not pretend to have all the answers to a social question that has bedevilled mankind down through the centuries. But for the first time in our history, something definite, innovative and challenging has been placed on the agenda for our consideration. Let us deal with it fairly and without prejudice.

In that way we can move into the remaining years of the 1970's with the knowledge that the concept of poverty can be defeated and the actuality of poverty can be ameliorated, if there is the will and the courage to fight it with new tools.

The elimination of the scourge of poverty from the land is a vital national goal. It cannot be achieved without the compassion, the understanding, and the co-operation of the Canadian people. The test of national progress is surely not merely in providing more for those who have much--but also in providing enough for those who have too little. We must move from welfare strategy to income strategy; from services to money; from helplessness to hope; and from despair to destiny. We propose to pay people, not governments.

Five million fellow-Canadians, a veritable army of the dispossessed, cry out for action that will free them from the trap of poverty. They ask to be treated with the decency and dignity due to fellow human beings, and if their voices are becoming more insistent, it is understandable in the light of their experiences.

I am pleased that you gave me the opportunity to present you with a social preview of tomorrow.

Senator Croll was thanked on behalf of the Empire Club of Canada by Mr. Norman Borins, Q.C.

EDITOR'S NOTE: By the 1970's, Canada's social welfare policies and the official attitude to the problem of poverty were coming under close scrutiny. Many observers questioned the efficacy of the various forms of social assistance that had evolved over the past forty years. In spite of the expenditure of over $7-billion annually, the Economic Council of Canada reported that over 20% of all Canadians were living below the poverty line.

Senator David Croll, Q.C., became Chairman of the Special Senate Committee on Poverty and undertook to make a comprehensive report on the problem and to recommend a solution.

"The Croll Report"--the chief recommendations of which are outlined in this Address, suggested a "guaranteed annual income" with built in "incentives" to encourage welfare recipients to seek employment. The Croll proposals received a great deal of publicity, but to date, have not been accepted by the government.

The Federal Government's own White Paper on income security was issued in November of 1970 and outlined in detail, proposals "to redistribute to the best effect, the money already in the system".

The Government proposals recommended increased benefits for the poor to be financed in part by reducing existing benefits (family allowances, old age security) to upper and middle income families. Government policy seemed to be rejecting the principle of universality, which for the past 40 years, had underlain Canada's social security programs and appeared to be moving much closer to the "negative income tax" or "guaranteed annual wage" suggested in the Croll Report.

Since 1970, however, the Federal Government appears to have backed away from much of the philosophy in its own White Paper and has rejected the "guaranteed annual wage" as being too expensive for the present. Whereas, Senator Croll suggested that his program might have cost an additional $600-$700-million in 1969 and perhaps $900-million in 1970, both Health Minister John Munro and Finance Minister John Turner, have claimed the program would cost several times as much.

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Poverty in Canada

The Economic Council of Canada and statistics on poverty in Canada. Endeavours of the Senate of Canada to suggest a remedial process. A description of the Senate's methods and results of a study on poverty over the last three years. Factors effecting poverty. A descriptive understanding of poverty, its causes and its effects. The importance of attitude. The detrimental effects of the welfare system. Recommendations of the report. Illustrative examples of how the recommendations might work. The Canada Assistance Act. A guaranteed annual income. The elimination of poverty as a national goal. A social preview.