Rural Poverty in Canada. An invited submission to the Senate Standing Committee on Agriculture and Forestry. Bill Reimer November 9, 2006

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1 Rural Poverty in Canada An invited submission to the Senate Standing Committee on Agriculture and Forestry Bill Reimer November 9, 2006 I was very pleased when reading the materials and discussions related to this Committee s deliberations so far. Rather than stick with a narrow approach to poverty, agriculture, and forestry, the Committee has chosen to treat its mandate in more comprehensive terms thereby recognizing the many ways in which poverty challenges are complex and interrelated to so many other economic, social, and political factors (Kunz and Frank, 2004). Without this recognition, any policy or program proposal arising from these deliberations is bound to be limited and misguided. I have had the advantage of previous discussions with Dr. Apedaile regarding his submission to the Committee. Since it fits so closely to my own perspective it frees me to focus on several features of rural society that may provide useful opportunities for policy responses. Rural poverty is related to many other conditions and processes. Agricultural and more generally, trade policy, for example, are intimately linked to the fate of rural communities as clearly represented by Dr. Bollman s presentation a couple of weeks ago. Figure 1 reflects such a point by showing the relationship between integration into the global economy and population change for small rural sites. As the exposure to the global economy increases, rural communities typically suffer decreases in their population Figure 1: Global exposure means low population growth % pop chg low medium high Exposure to the Global Economy There are few surprises in these figures in fact, Dr. Stabler documented them before this Committee in 1994 (Apedaile et al., 1994). At that time, however, he also cautioned Senate\ReimerRuralPovertyInCanadaNotes01.doc (11/10/2006) 1

2 us about the negative side of this trend emphasizing that the human and social costs of those who are marginalized by the process will be substantial without concerted supports. It is to these supports that I wish to turn for within them we may find some policy options that can mitigate the negative impacts of low income. As the OECD (2006) has recognized, low incomes are problematic because they limit people s access to essential goods and services, affordable housing, good health, well being, and participation in the social networks that provide support and identity. Low income may not be so problematic in a society that provides these services independently from income status. This is the promise of our formal health, education, welfare, and justice systems. It is also the promise of more informal supports family, friends, neighbours, churches, and charities that step in when people are suffering the slings and arrows of outrageous fortune. In rural areas, however, the very processes that diminish the population base also decrease the number and proximity of these services, both formal and informal. Our research has demonstrated how education, health, welfare, and commercial services have moved to regional centres from the small towns of rural Canada (Ryser and Halseth, 2006). This means that those who do not have easy access to transportation or the social networks that can support transportation are marginalized from these services. Transportation services, therefore, become an important focus for policy responses. Creating more options for private, public, and informal services in rural places is bound to benefit the key groups suffering marginalization through lack of access to transportation young people, elderly, women, and those with low incomes. Tax benefits, grants, fuel rebates, experiments with transportation pooling, and New Deal allocations for innovations could all be used to these ends. Such an approach would represent a made for rural equivalent to the green requirements for urban transport. Social support for vulnerable populations is not only a matter of formal services, however. Our research has documented the many ways in which people turn to a variety of informal networks when faced with challenges in their lives from employment and housing to health and child care. Figure 2 identifies the types of support used by single mothers in our rural field sites, for example (Reimer, 2004). We see that single mother households make more use of all four types of support than other households including the more informal types found in Associative and Communal types of relations. Senate\ReimerRuralPovertyInCanadaNotes01.doc (11/10/2006) 2

3 % used by HH Figure 2: Social Support of Single Mothers Single mothers make more use of social supports than others Market Bureaucratic Associative* Communal* Single Mothers (N=26) Others (N=1379) Policies and programs designed to support these types of populations, therefore, would be well advised to consider how they might in turn support the more informal social groups that provide such services to vulnerable people. An important part of such initiatives must include the recognition that funders legitimate concerns for fairness and accountability often serve to overburden such informal groups. Instead of simply adding it to the list of demands on these groups, therefore, mechanisms to bear the extra costs incurred should be taken on as the responsibility of the funders. The informal economy is also an important part of the rural safety net. As Figure 3 shows, participation in the informal economy is a significant feature of both rural and urban economies with rural areas surpassing urban particularly in the lower income ranges (Reimer, 2006). Figure 3: Participation in the informal economy by income 240 Informal Economy more important in rural areas min / day < $10K 10-19K 20-39K 40-59K >60K Urban Rural Senate\ReimerRuralPovertyInCanadaNotes01.doc (11/10/2006) 3

4 Rather than treat the informal economy as a pariah, therefore, we should consider it an important aspect of the safety net for low income people and a contributor to the formal economy at the same time. The informal economy also serves as a training ground for the formal economy, a testing and confidence-building mechanism for both potential employers and employees, and a cushion for the expansion and contraction of formal economic activities. A closer look at these data reveals some important qualifications, however (cf. Figure 4). Considering self-employment as an important bridge to the formal economy especially for women we see that rural women experience such a transition considerably differently than their urban sisters. Figure 4: Participation in the informal economy by rural-urban and employment status (Women only) min / day Selfemployment reduces IE activities for urban women only unemp self-emp paid Urban Rural For urban women, moving from unemployment to self-employment includes a reduction in the time they spend on informal economy activities. For rural women, on the other hand, self-employment means double duty since their time spent in informal economic activities is not diminished unless they move into paid work. The implications of these conditions are typically not included in the policies or programs directed to entrepreneurship but they should not be overlooked if those programs are going to be effective. Program training, supports, conditions, and expectations must be adapted to accommodate these realities if they are to be successful in rural areas. In conclusion, my message is threefold. First, I support the Committee s efforts to explore and embrace an inter-sectoral approach to understanding and addressing the issue of rural poverty. Second, I assume we need poverty reduction strategies of at least two types: Senate\ReimerRuralPovertyInCanadaNotes01.doc (11/10/2006) 4

5 those that focus on modifying the drivers of poverty and challenging the policies and programs contributing to it, and those that build the supports for people who are most vulnerable to its negative effects. My comments focus primarily on the latter approach. Third, I have tried to make visible the important contribution of the informal supports and the informal economy to the process of poverty reduction or at least to the mitigation of its social and personal effects. This means considering programs and policies that serve to strengthen these informal mechanisms, build the social networks and groups that provide the services, and remove the obstacles to their effectiveness. References Apedaile, L. Peter, Jack Stabler, Ray Bollman, Frances M. Shaver, Bill Reimer, and Tony Fuller(1994)"Agriculture and Rural Restructuring in Canada." Presentation to the Joint House of Commons and Senate Standing Committee on Agriculture. With, Ottawa, (October), 49p. Kunz, Jean Locke and Jeff Frank (2004) Poverty: Thy Name is Hydra, Horizons, 7(2)4-8. OECD (2006) The New Rural Paradigm: Policies and Governance, Paris:OECD Publications Oyen, Else (2003) Poverty Production A Different Approach to Poverty Understanding, International Social Science Council, Comparative Research Programme on Poverty, http// Reimer, Bill (2004) Social Exclusion and Social Support in Rural Canada, Presentation to the World Congress of Rural Sociology, Trondheim, Norway, July 27. Reimer, Bill (2006) The Informal Economy in Non-Metropolitan Canada The Canadian Review of Sociology and Anthropology, 43:1(Feb)23-49 Ryser, Laura and Greg Halseth (2006) Service Restructuring and Building Capacity in Rural and Small Town Places Presentation at the CRRF National Conference, Gatineau, QC ( Senate\ReimerRuralPovertyInCanadaNotes01.doc (11/10/2006) 5