Roy Romanow's speech on the Canada Social Transfer

October 2004

Since April of this year, the CCSD has been working to draw more attention to issues surrounding Canada’s Social Transfer. We have been doing this with a multi-pronged approach that includes community meetings across the country, discussions with decision-makers and media interviews.

On October 14, 2004, we continued this effort with a luncheon address by the Honourable Roy Romanow. The event took place at the National Arts Centre in Ottawa.

The full text of his speech follows.

roy romanow-GS Marcel Lauzière, CCSD President; The Honourable Roy Romanow; Patrick Flanagan, CCSD Chair
October 14, 2004, at the National Arts Centre, Ottawa

The New Canada Social Transfer
Impetus for a Renewed Era of Innovative Social Policy in Canada?

Notes for Remarks
Honourable Roy J. Romanow, P.C.
Canadian Council on Social Development
National Arts Centre
Ottawa, Ontario
October 14, 2004

It is a great pleasure to be here with you today. I am honoured that the Canadian Council on Social Development has asked me to share my views on the Canada Social Transfer. As you know, I recommended that the CHST be divided into the Canada Health Transfer and the CST. The breakdown I recommended was 42% to Health Transfer and 58% to Social Transfer. You also know that – so far – I have been spending much of my time on the CHT and it is a distinct pleasure to be able to spend more time on the social transfer side of the equation.

In 1995, the Canada Health and Social Transfer was described as a transfer to give, and I quote, “provinces and territories the flexibility to allocate payments among social programs according to their priorities, while upholding the principles of the Canada Health Act and the condition that there be no period of minimum residency with respect to social assistance.” For this, then finance minister, Paul Martin, asked the premiers to help fight the deficit by accepting a temporary drop in funding. Some of us objected but we had no choice. It was not the subject of negotiations.

The CHST saw Ottawa diminish its role in the social policy field. On top of this, the provinces lost $7 billion in federal transfers between 1995 and 1998, - thus, placing an additional squeeze on provincial capacity to adequately fund health and social programs.

As a result, hardship was spread to Canada’s healthcare, which might - and I stress might - begin to recover as a result of the recent FMM deal. Most universities were allowed and encouraged to raise tuition fees. Most provinces cut welfare rates with Ontario leading the cuts at 21.6%. The latter could not have been done previously except that the Canada Assistance Plan, which had ground rules attached regarding what you could or couldn’t do, was also eliminated with the introduction of the CHST.

So the CHST brought with it, less money, less flexibility, and less transparency.

Now that the Canada Health Transfer has been established as a separate payment for medicare and a new agreement has been reached for the next several years, we need to focus on the social transfer side of things. While health care as a social policy has been a defining feature of what it means to be Canadian, the CST – its purposes, its standards, and the amount of resources dedicated to it – provides a crucial opportunity for us to further build the kind of nation we desire.

And yet, when the CHST was quietly split, it was done with little public scrutiny and debate over the appropriateness of the percentages attributed to the CHT and CST. Was the split appropriate? It can well be argued that the social transfer side of the equation is far more important to producing well being and healthy outcomes for our neighbors than the health side. We know that the determinants of health – things like income, early learning and care, clean air and water, education and training, and housing – contributes as much, and sometime more, to health outcomes that the “illness” system. One of the key points that I made in my Report as Health Commissioner is that we have to set a national goal of making Canadians the healthiest people in the world. And one of the keys to achieving this goal is a greater emphasis on preventative health measures and improving population outcomes.

So let me turn briefly to some of those key determinants of health to emphasize why the CST is so important.

Socio-Economic Status is the Key Determinant of Health

There is a growing body of evidence that money is one of the most important determinants of health. We’ve known that for a long time. If you’re at the bottom of the income ladder, the odds are you’re going to find yourself at the bottom of the health ladder. If you’re at the top of the income ladder, you’re more than likely going to be at the top of the health ladder. Here in Canada, life expectancy drops for every step down the ladder: the very rich live longer than the somewhat rich; the upper middle class live longer than the merely middle class; and the poorest 20 percent are more likely to die of every possible disease from which people can die. But, even with this evidence, it’s not as simple as I may have suggested.

If rich people live healthier and longer lives than poor people, then is it logical to assume that wealthier countries generally have healthier populations than poorer countries? Well, the answer is yes – but only up to a point.

In developing countries, as the average income goes up, life expectancy does also. But in developed countries there is something more important than the average income, and that’s the size of the gap between rich and poor. It seems that in countries where the gap is large, life expectancy is not as high as in countries where average income may be lower, but the gaps between rich and poor are smaller.

In a country like Canada, such a finding should sound alarm bells throughout the nation. Why? Because we have a growing gap between rich and poor and the gap is growing annually. Just two years ago, a study carried out at York University showed that of all of the years of life lost in Canada before the age of 75, about 23% can be traced to differences in income.

Income supports are crucial for a minimum standard of living. Due to the lack of good jobs that provide economic security, too many people are working at near minimum wage and struggling to make ends meet. The increase in contract, temporary, or part-time work means that there are too many individuals who no longer qualify for Employment Insurance, or are only eligible for a short period of assistance due to tightened eligibility rules, even though they may have paid into the plan.

For individuals or families who do not qualify for Employment Insurance, welfare is the program of last resort. In Ontario, a lone-parent family with two children receives $554 in a shelter allowance and $532 in a basic needs allowance. But, the average rent in Toronto for a two-bedroom apartment is $1,047 which means that this family is left with $39 for food, clothing and all other expenses. Because of cuts to welfare and the claw back of the Canada Child Tax Benefit for people on welfare, too many people are forced to choose between either paying the rent or feeding the kids. Income matters.

Physical Environments are a Key Determinant

But things like a secure supply of healthy, nutritious, and affordable food, access to good quality recreation and fitness programs and school-based physical education are also fundamental to personal wellbeing.

Quality affordable housing is a critical part of our physical environment. People who are homeless aren’t healthy. People who live in sub-standard housing that is overcrowded, cold and damp are not healthy. I saw this in Iqualiut; in aboriginal communities; in inner core big city areas. The Victorians understood this. Their most effective weapons against infectious diseases were programs to improve housing standards.

So, if we want Canadians to be the healthiest people in the world, we need to improve the quality of our physical environment, including investing more in affordable housing. The wait list for affordable housing is as unacceptable as is the wait list for medical care.

And what of our early, childhood years?

The Early Years are a Key Determinant

The income that your family has determines the quality of your childhood years, your education, the type of job you have, the kind of housing and community you live in, the type of recreation and fitness programs to which you have access – all of which directly affect health. According to Dr. Fraser Mustard and the Honourable Margaret Norrie McCain in the study titled The Early Years, they said “… the period from conception to six years sets a base for learning, behaviour and health over the life cycle.”

We know for a fact that a child subject to deprivation or stress is far more likely to experience mental illness, obesity, adult on-set diabetes, heart disease and a shortened life span. Even if these children move into a better environment after childhood, they suffer poorer health throughout their lives. Thus government investments and initiatives in early childhood education and development is vital – given the link between access to child care and income security.1 Support to families with children is essential. This includes affordable, regulated childcare to enhance children’s well-being and development. We should be encouraged by the Federal government’s commitment to a national childcare program, especially if it is truly national and has some standards and real accountability to go along with it.

“Determinants” and Health

So, the main “determinants” – and I’ve only mentioned a few – education is key in lifelong learning - that will likely shape health and life span are the ones that affect society as a whole. If we want Canadians to be the healthiest people in the world, we have to deal with them at that level.

We need to take a holistic approach and invest “upstream” at the broad determinants level. That’s where, eventually the direct financial investment will be smaller, the results and returns bigger, and the payoff longer. If we only put our money “downstream,” the investment will be larger, the results smaller, and the payoff shorter. That’s why the CST is so important. While I certainly understand the current pressures facing the illness system, the imbalance in favour of the CHT at the expense of the CST does not represent healthy long-term public policy.

If we ensure that the determinants of health are in place for all Canadians with sufficient funding from the Canada Social Transfer, it can prevent illness and promote a holistic sense of wellbeing for all, which could undoubtedly, ease the pressure on Medicare. Improve the quality of life in Canada and reflect our values. A new CST can kick start a renewed, exciting era of innovative social policy in Canada.

What kind of Canada?

Canada is seen as a progressive and fair country. And fairness has always been the guiding principle and public policy outcome for Canada. It needs to be even more so in the future.

The United Nations’ Human Development Index ranked Canada number one in six out of the seven years between 1992 and 1998. In 1998, however, the United Nations noted that the index did not take into account disparities. Canada’s place had fallen to number 10 on the list that tracks the degree of poverty in nations.

Like Medicare, Canada’s social safety network is well-known and envied around the world. Unfortunately, Canada seems to have been suffering a decline. And while we are still envied by many others around the world, we all see that there has been an erosion in our innovation and sustainability of social programs since the 1990s.

We need to look around and see if we want to live in a Canada with a strong, reformed and modernized social safety net or a Canada where there is a growing gap between rich and poor.

Do we want a country where there is a minimum standard of living for those who need a bit of help or do we want to see more homeless people on the street? Are we willing to pay a little more in taxes if needed and have our different levels of governments redistribute income for a fairer society, to allow those most vulnerable some dignity?

Let me be clear. I am not advocating for the status quo or at least the status quo of ten years ago. You will not hear me say, “we need to save our social safety net.” Because I believe that we need to develop new ideas on how to preserve the reasons and objectives for the social safety net rather than methods that may not have worked.

What Should be Done

Canadians want government to lead the way with a social vision, to have compassionate and collective approaches to social programs and services efficiently and responsively. A new vision that defines what we owe each other is needed. We need to ensure that our poorest citizens are not left behind.

The CCSD’s call for a national debate on the Canadian Social Transfer is exactly what is needed.

The Council’s calls for more accountability through the further delineation of post-secondary education and social programs make sense.

And, increased, stable, and predictable funding is necessary.

I agree with CCSD that Ottawa and the provinces, informed by a broad engagement with Canadians, need to have an agreement on – in the words of the CCSD – “a common set of principles and objectives to guide social policy, similar to the tenets of the Canada Health Act”. One way to achieve this might be through administrative arrangements, like SUFA, the Social Union Framework Agreement signed by the Federal and all but one provincial government in 1999 had these common objectives.

1. Ensure access to all Canadians wherever they live or move in Canada to essential social programs and services of reasonably comparable quality;

2. Provide assistance to those in need;

3. Ensure adequate, affordable, stable and sustainable funding for social programs.

In order for social transfers to work for all Canadians, there must be a minimum but generous floor that no province can go below. Safeguards need to be in place to prevent a race to the bottom. There must be no fracturing of programs which should be reasonably available for Canadians as matter of our citizenship. This is a matter of basic human rights.

And on the issue of accountability and measurement of outcome not enough has been done. CCSD – here, too - has proposed some interesting ideas.

Friends, I want to congratulate the CCSD for leading a pan-Canadian discussion to raise awareness about the social transfer and its potential for fostering programs the nation desires.

In closing, let me emphasize again, that we need to move beyond reforming health care to deal with the many determinants that affect the wellbeing and quality of life of Canadians. We need the CST’s critical role in this to be understood by Canadians and our governments.

How important is it that we do this?

Well, historians and health experts tell us that we have had two great revolutions in the course of public health. The first was the control of infectious diseases, notwithstanding some of our recent challenges. The second was the battle against non-communicable diseases.

The third great revolution is about moving from an illness model to all of those things that both prevent illness and promote a holistic sense of wellbeing.2

In my view, the wellness model needs to be informed:

  • By inspired leaders who genuinely share power with those less fortunate;
  • By a commitment to social inclusion and Civil Society that provide opportunities for all of our neighbors to participate in the things that count in our neighbourhoods across this country; and
  • By an understanding that hopelessness kills and hopefulness is a prescription for a good and healthy society.

That’s my kind of revolution. It can provide a Canadian model for the world to emulate.

Thank you.


1 Family Service Association of Toronto Community Social Planning Council of Toronto Falling Fortunes: A Report on the Status of Young Families in Toronto July 2004 p 18

2 Lester Breslow, “From Disease Prevention to Health Promotion”, JAMA, Volume 281, Issue 11.


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