 view from the north. I'm Jay Fidel. This is Stink Tech, and we have Ken Rogers here. He's from British Columbia, Canada. And he is going to help us understand what happens in Canada vis-à-vis the social safety net. Welcome to the show, Ken. Nice to have you. Hello, Jay. So let's talk about the social safety net in Canada. And my sense of it is that in Hawaii, we have a kind of small echo chamber. And we take surveys in Hawaii and tell ourselves what we're thinking. And then sometimes surveys come in from the mainland, and we get mainland news, and they tell us what the country is thinking, and that's helpful. But really, for a flattened world, a world that is interconnected, we really need to have more echo in bigger chambers all the time. So we look at, like in Mexico, we look at Latin America, we look at Africa, we look at Europe, we look at Asia, and we want to learn what's going on there. But we also need to look at Canada, because Canada's our kissing cousin, if you don't mind. And we need to know how you guys have done these things, concepts that we have, but maybe we haven't done it in the same way. Sometimes your way is better than ours, and I want to explore that with you. But today we're going to talk about the social safety net. Let's start with retirement. Let's talk about social security. Let's talk about retirement plans. How does that work in Canada? Well, very similar to the US, that the corporations used to have defined benefit plans or pension plans for their employees. That's pretty well gone now, except for the public service. The only place where in Canada the employee gets a pension that is reasonable is from their employer, as if they're a government employee that includes like a local fireman or policeman or a federal government employee or a provincial employee, all of the medical people. But in Canada, we have one very unique thing in that regard called the Canada Pension Plan. And this is a federal program where everybody that is working has a payroll deduction. And so that when they reach retirement age, they have a pension. It's about the same as a typical insurance company would have if you bought a pension plan in the US. But the advantage in Canada of having that is absolutely everybody is forced to have it. You know, the idea of a forced anything is sort of anti American to some members of the US citizenry. And accordingly, you don't have such a thing. But in that sense, you get when somebody is retired, there is at least a basic start. Well, then in Canada, you also have what's called old age security, you get an old age pension. Now, the US has some similarities, but Canada also then has an old age supplement that if your Canada pension plus your old age security and whatever other pension income or assets you have are not enough and you're still below the poverty line or you're not doing well enough, you get this extra supplement so that if you took a person that worked at $15 an hour for a lot of years, that fairly poor wage, let's call it. But their Canada pension plus old age security plus old age supplement would keep them off the street. They would not be near the poverty line, but they wouldn't be destitute. Yeah, well, we like to keep people off the street because a destitute person costs more, costs the government more than a person who's able to get along on whatever the plans are. Let me ask you some questions about what you just said. So if you work for the government of Canada, you get an automatic pension and the government pays for that, right? Yes, you have a defined benefit plan for pretty generous. Okay. And how much do you pay and how much do you get? Roughly, roughly. I don't really have good accurate numbers. I know a government, a fireman or a policeman that works for a local government and they retire, their pension income is more than half of their original income. That's what I was looking for. Also, just so that we have a framework here, what is the exchange rate between the Canadian dollar and the US dollar right now? It's a little less than 80 cents or that is an American dollar's worth about one and a quarter times or a Canadian dollar's worth 80 cents US. Okay. So when we're talking to this discussion about dollars in Canadian dollars, it's only 80 cents an American dollar. Okay. The other thing is you mentioned that there are some plans that are that you have to get that the law requires you to get them. And who does that apply to? And what does that cost you? Is that in the same vein as the government employee plan? Do you mean the Canada pension plan? Yes, like it's a payroll deduction. And I think it's about 6% of the payroll. Okay. You have to get it. It's going to be taken out of your pay. Yes. And the pension fund, the Canada pension plan runs a fund like a normal mutual fund would do. They invest the money and invest it very conservatively and they don't earn very much on it over enough years so that the the payout is not something that you jump up and down about if you were a stockbroker and trying to convince somebody how wonderful your management is. Certainly the the pay through is is not, you know, something, you know, fantastic at all. It's really it's a safety net. It's a requirement that everybody has some basic pension income. I find that interesting because, you know, in the U.S. under FDR we established Social Security and, you know, we made contributions through your life and sometimes they went up and in the end theoretically you were contributing to a fund that would pay you back a certain amount based on what the Social Security Administration and maybe Congress decided and that would be reliable and stable subject to increases every now and then. And there have been discussions mostly among the Republicans in our world to change that, to outsource it, to give it to a money manager, I guess, instead of having the government hold the money and have a, you know, an obligated payout at the end of your career whenever that is. And so I'm wondering what you think about the Canadian system vis-à-vis the American, you know, we put it in it stays in a special fund and it comes out at a specified amount. When you talk about having someone manage the money, you're talking about a GOP plan, which is clearly going to, if that ever happens, it will result in lower payouts, you know, to the beneficiaries. Can you compare on that basis? I don't think the fund, whoever's managing the fund makes a heck of a lot of difference. The, you know, the professionals that the government has managing their pension funds, whether it's the Ontario Teachers Fund or, you know, the Federal Canada Pension Plan fund, their management is not much different than the average mutual fund in terms of performance. The, you know, it's really, when you get overall social security, what you need is a whole combination of things like the basic pension is just one piece. What do you do, for example, with poverty all the way along? Example, single women that have children, you know, you have in the U.S., you have a earned income tax credits or you have a child tax credit. Well, those are, you have to fill in a tax return and you have to have some work to get, to have a credit that makes any sense. You know, the difference philosophy in Canada is we have the child tax benefit, which is just paid monthly. There's just a cash payment monthly. It's not a deduction or an exemption. No, no, it's just, but it relates to last year's taxable income. So that if you have no income, you get to, you know, a check anyhow, you know, for every child. That's one of the fundamental points I wanted to raise with you. It just seems to me, and this is over conversations you and I have had many, many times, that the Canadian system, although it, you know, it comes and goes and it has a certain amount of politics, as we do, but the Canadian system cares more about people. They care more about the social safety net. They don't want to see anybody on the street or suffering. Am I right about that? Relative to the U.S., yes, but there are countries in Europe, you know, the Netherlands, Denmark, the Northern countries in particular, France also, where their level of social safety net in total, if you take everything combined, is really more generous than the Canadian. And we simply, in my mind, watch what these Europeans do and experiment with. And if something makes sense, we try to copy it. For example, you know, pre-care, child care subsidies, should you pay more than $10 a month to have your child in kindergarten so that women can work. And when we have such well educated women, it's a shame not to be able to have them be able to work if they would like to. So you've got to take the whole package. For example, the Canada Child Benefit or Family Allowance that used to be called the Monthly Check, those are fairly generous items. For every single child, $550 a month until they're six years old and $450 a month until their turn 18. Now, if your income is greater than $30,000, that starts to phase out. But really, you still get most of it when your income is still about $60,000. Well, you've got, in addition to that, you have what I call unemployment insurance. Well, the U.S. has unemployment insurance and Canada has unemployment insurance and the criterias are almost exactly the same. That is, you get some money when you're out of work and it's not your fault that you're bounced out of work. And it lasts for a certain length of time and it relates to how much money you did earn. Well, the specific numbers in Canada are better than the ones in the U.S., but they're not as generous as some of the ones in Europe. For example, in Canada, it's federally administered generally. And so you'd have about, oh, I'd say up to 55, it's 55% of whatever your pay was, up to about $60,000 a year. And so in Canada, the average payout was about $635 a week. Well, the U.S. program that's managed by the states and they're all dramatically different, averaged $380 a week. Well, the U.S. one lasts for exactly half a year, like 26 weeks, if you meet all the criteria and you work for the required length of time. In Canada, it's 45 weeks. That's just kind of the differences. There's just minor fine-tuning and every couple years, every rule in the U.S. changes and every rule in Canada changes and they keep going to be better and better and better. Like the U.S. is far better today and it was 10 or 12 years ago and so is Canada. But you know, you say better, you mean the benefits are higher numbers? Yeah, sorry, to a Canadian better is having less poor people, less poverty. You know, sometimes a lot of Americans don't think that's a good thing. They think if they're poor, they should just suffer. Yeah, no, that's coming out. That's part of the whole libertarian thing. Let me ask you some questions raised by what you were just saying. First of all, let me get this straight. In the U.S., we have unemployment insurance state by state and that's why the wide disparity. In Canada, is the unemployment insurance state as province by province or is it national? It's federal but each province can top it up if they want to. But for example, in the United States, Massachusetts is the most generous on unemployment insurance and their amount is greater than the Canadian one. The last number I saw was a little less than $800 where Mississippi was the worst and it was about $270 a month. Well, the Canadian at 635 average in the U.S. at 380 average is there but you've got more generous states and less generous states. But you still have to count a whole bunch of other factors. For example, a concept of straight welfare. You don't have any income, you don't this, you don't that. Does this state want to keep you with a roof and food or not? And Canada has a, if you can plead enough and you're poor enough, you can meet the rules. You can get straight welfare and it's not very big but it's still $600 a month for one person. This raises the question of homelessness. In the U.S., you can go on the street. You can be in a pickle where the government won't help you. You don't qualify for any significant support and you're on the street and I'm thinking of all these people, for example, that were busted by big health care without insurance or even with insurance and they went bankrupt and they have no money and the hospitals won't take them beyond a certain point. It depends on what hospital and what state but there are situations where you get sick and you're on the street and nobody's going to take care of you when you die. That's really awful but we have that. We have that here and so the question is could that happen? Could this kind of thing without any money and the state or the province whatever comes around and says no, no, no, no. We're not going to let you go on the street. We're going to take care of you because we know that's a moral cliff we're not going over. The best way to describe that is to look at downtown Seattle and downtown Vancouver. They both have a mega-scale tent city but in both cases the root cause is almost the same. That is, there's drugs and lack of looking after mentally ill. If you're to line up, who is on the street living in a tent? They're nearly all people who especially the ones that I've seen in Seattle and Vancouver are just absolutely atrocious. How many people there are living in a tent on a street right in downtown and they tend to make little tent cities or large tent cities. They group together and if the authorities come and move them they move to some other location all as a group and the process to try to have them moving around but the price of housing is a big problem. Now Hawaii, you have such wonderful weather 12 months a year. Now Seattle and Vancouver both do get temperatures that go down to zero degrees Fahrenheit or at least below freezing Fahrenheit, 32 degrees Fahrenheit but still if you have a sleeping bag you can live on the street in Seattle or Vancouver where you sure couldn't in other cities like Edmonton or Calgary and that's much like saying in Minneapolis. You certainly couldn't live in that huge city in the middle of the winter in a tent very easily. That's why so many people are in Vancouver in Seattle as they've just they've moved there. You know it's another show Ken but I would like to talk with you about how homelessness has increased dramatically not only in Seattle and Vancouver and San Francisco and LA and New York and so forth but everywhere in the country including Hawaii and then everywhere in the world. I mean it's a show we should do you know downline but for me there's got to be an explanation of this somehow it's got to be connected to some significant vectors that we've seen over the past 20 years. It's really remarkable but let me go back to one of the things that I mean or maybe you didn't say and that is supposed in American social security if your spouse dies you get a payment okay for the death of your spouse. If you are if you are disabled a handicap for some reason social security will give you a special payment and so forth and I'm sure I'm missing a few things but social security has more than simply a retirement benefit all by itself. Does the Canadian system have more than a retirement payment by itself? Yeah you have the whole combination of things. One of the most important components is is healthcare. You know where American you have lots of people go bankrupt because of a health problem and inadequate insurance like uninsured people and the US is gradually getting better and better and better at that like their recent legislation to negotiate drug prices is part of it. Well in in Canada you know all of the Canadian citizens are covered by the you know Canadian health system so that if you have cancer you go to a cancer clinic and and the government pays for a hundred percent of it if you have a heart attack you go you know you're in a hospital the government pays a hundred percent of it you don't you know your relatives don't go bankrupt trying to look after fixing you you know having a stint in your heart equivalent. The you know combination of factors to me in social security net is a whole list of things whether you're talking food stamps you know which is an American thing we don't really have food stamps but you you have a system of charities that work probably picking an aside one of the neatest safety nets that I've ever seen or heard of was in Salt Lake City um and I was I lived there for a few years and I lived in a neighborhood where I'd say 95 percent of the people were Mormon religion and the church sponsored a program whereby if uh you know like under a Mormon you have a term a Mormon pantry and everybody's encouraged to have a pantry of of goods that can keep that so you could survive for half a year if uh if everything blew up well they they had a particular thing as as if somebody suddenly became unemployed members of the same local church they called it a stake but that local group uh several people were assigned to look out for that family and uh in effect somebody became unemployed and a truck would roll up to the front door and they would fill up the pantry gratis you know but it was not a government program it was a volunteer program and even uh you know members of that local church that had um positions that could get that person re-employed uh you know if he was a carpenter you know who who in the congregation was a general contractor or you know built buildings and and that person would be given the responsibility to help this guy find a job for this lady and and uh and it was a pretty nifty system uh much like you know the way the Mayans used to build roads and so on like everybody contributed you know one sixth of their year or one tenth of their year whatever it was to the state and everybody was assigned a role according to their capability um you know and in a sense that's what the Mormon church did there and I bring that up since I know there's a fairly hefty Mormon element in Hawaii and I don't know if they have a dense enough population to to do such a thing there but it was quite fantastic how well this worked and how you know people were just pulled up by their socks and and that um our business there ended up where you know my immediate subordinate came to me and said we we need somebody to fill this new job and I says well you didn't have such a thing yesterday when did this pop up you know and it really was that fellow was a member of the church given responsibility to help this fellow find a job and and when this guy came on he was not fully qualified for what was needed but not only did the guy who who hired him but the rest of this staff stood on their head and put in extra hours to make sure this guy pulled his weight like they covered him until he was able you know that was part of that system um that's a lot better that's a lot better than a government system well that's that's that's what I was going to ask you you know uh when when my wife and I were just dating um her family in kawaii they were modest means um had what I thought was a kind of groaning table and every day after the work at work time the people in the community who needed food would come around to their home and they would feed my my wife's family would feed them on a regular basis and this was the way life was in kawaii I'm not sure that happened so much anymore I I don't think it does happen much anymore and and what I wanted to ask you was you know you measure the quality um of the social security system caring for the poor you know the the the social safety net um by how much need there is in the non-governmental community how much needs being met in the non-governmental communities if I can if I tell you that in a given location or sovereignty there are fewer charities whether they be religious or not uh feeding people then what I'm telling you is the government is arguably more successful in that place because it doesn't need you know the help of the LMO's an area organization but if I tell you that there's an enormous number of charities and LMO's in the organizations feeding people because they are in crisis then what I'm telling you too I think is that the government is behind the curve and um and the government should take note that it is not meeting its social burden what do you think about that well it's your opinion of what the government's obligation is like you know if if somebody is able to work but is not working why should the other people pay for that person to have you know free room and board uh you know that's a simple concept so that in in both Canada and the U.S. uh you know if you want to give um straight welfare um what do you have to do to qualify now in Canada you can actually get straight welfare um it's not very big Ken this reminds me of Andrew Yang who ran for president on a democratic ticket I guess uh back last time and he had a guaranteed income that's right so I mean a guaranteed income is in arguably going to help people who don't work who don't want to work or don't care work or who can't work uh and and you know it's a statement of the way maybe the future should be operated maybe it's a statement of way where Europe is going you know we take care of you no matter what nobody stars nobody is in need uh whether you want to be a you know a feather better or not doesn't matter um we're going to everybody it lives the good life or at least a modest life um and maybe that's maybe that's where it's going but I wanted to ask you my final question to you today is you know there are political forces working on these programs they don't happen by themselves they're not purely historical there are political vectors and forces and and lobbyists working on these programs working on the the side of it that says we have to help everybody guaranteed income what have you guaranteed welfare and there are those on the side uh that say we don't want that we we take the libertarian part of you if you want to eat you got to work period um and we have that as you know and it's accentuated these days under the GOP um we have that in this in this country too and I wonder if you could care for me the kind of vectors that are happening the political vectors that are happening in Canada on both sides of the that issue um we don't have a very strong libertarian force in Canada uh we may have in the near future because you know our conservative party that is in minority position in the government now um they're most likely new leader is is pretty small conservative uh but I don't think that you know you have to be in the midstream or you won't get any power in Canada as a party and I think that electing as a leader you know a far right wing leader is simply going to result in the party doing worse than they did last time you know they only got about 30 percent of the vote um there's a certain rationality in that you know yes but but you really have um difficulty looking after everybody and in your example of the homelessness the the tent cities that are growing or the you know people living in tents on the street in homelessness especially in every city where the price of housing is high um you know that that's not simply a question of does somebody want to work you know you have how capable are most of those people to even work you know the mental illness question the drugs questions though those are dramatic factors that affect the very concept of you know how many people are living below the poverty line well you may have um you know some disease problem that's dominant for example in Canada we have a a very large native population and you know they genetically um have pretty adverse effects with alcohol and so you have a huge percentage are alcoholic and they make up a good portion of people living on the streets and and and and how do you deal with that it's not like it's it's a social security net question but it's not answered with unemployment insurance you know child welfare payments etc I think we're out of time Ken great discussion lots of points to drill down on and to follow up in later shows thank you so much Ken Rogers retired businessman in British Columbia Canada comparing notes with us thank you so much bye Jane thank you so much for watching think tech hawaii if you like what we do please like us and click the subscribe button on youtube and the follow button on vimeo you can also follow us on facebook instagram twitter and linked in and donate to us at thinktech hawaii.com mahalo