Welfare in Canada provides the welfare incomes of four example households receiving social assistance in a given year.
Welfare income refers to a household’s total income from all government transfers, not just social assistance payments. Individuals and families who receive basic benefits from a social assistance program will also be eligible for financial support through tax credits, child benefits for households with children, and, where applicable, additional social assistance payments that are automatic and recurring (e.g., an annual back-to-school allowance). Together, these form the total welfare income of a household. The amount varies in every province and territory because each jurisdiction has its own distinct social assistance program as well as refundable tax credit and benefit programs.
Welfare in Canada, 2022 looks at the maximum total amount that a household would have received over the course of the 2022 calendar year, assuming they had no other source of income and no assets. Some households may have received less if they had income from other sources, while some households may have received more if they had special health- or disability-related needs.
The report looks at:
- The variation of welfare incomes across Canada
- The components of welfare incomes in each province and territory
- Long-term changes in welfare incomes in each province and territory,The adequacy of welfare incomes in each province compared to poverty and low-income thresholds
- The adequacy of welfare incomes in two territories compared to newly finalized Northern poverty thresholds
- Long-term changes in the adequacy of welfare incomes in each province,
- Asset and earned income levels as they relate to eligibility for social assistance
- Indexation of social assistance benefits, other benefits, and tax credits in each jurisdiction, and
- A breakdown of cost-of-living and shelter benefits for social assistance programs.
In each jurisdiction, the total welfare income for which a household is eligible depends on its specific composition. For illustrative purposes, this resource focuses on the welfare incomes of four example household types1:
- Unattached single who is considered employable
- Unattached single with a disability
- Single parent with one child aged two
- Couple with two children aged 10 and 15.
Welfare in Canada was established by the Caledon Institute of Social Policy to maintain data previously published by the National Council of Welfare. In 2018, Maytree assumed responsibility for updating the series.
Our methodology replicates the approach used by the National Council of Welfare. To calculate the welfare income for each household type, we make the following assumptions:
- The households started to receive assistance on January 1 and remained on assistance for the entire year
- The households had no earnings and therefore were eligible to receive the maximum rate of assistance
- The heads of all households were deemed fully employable, with the exception of the single person with a disability
- The households lived in the largest city in their province or territory
- The households lived in private market housing and utility costs were included in the rent, and
- The households filed an income tax return at the end of the previous tax year.
Changes to welfare rates or other program rates over the course of the year were accounted for. As well, basic rates and additional items (e.g., a Christmas allowance or a back-to-school allowance) were included where applicable. Special needs amounts were not included.
In 2022, the cost of living increased significantly, and the COVID-19 pandemic continued. Although no COVID-19 pandemic-related benefits were available to any of our example households in 2022, several jurisdictions provided benefits intended to address the high cost of living. Of note:
- We included additional provincial or territorial supports if they were paid automatically to social assistance recipients or, in the case of discretionary supports, if over half of recipients benefited from them
- We included any automatic top-ups to existing federal benefits, and
- As in past editions, households did not qualify for any federal or provincial/territorial benefits that were provided to replace lost employment income, given that they are assumed to have no earnings. They did not qualify for Employment Insurance (EI).
As well, households in some jurisdictions received the federal government’s climate action incentive (CAI) in 2022. These amounts are outlined in the “Components of welfare incomes” section for each jurisdiction and included under “Federal tax credits” in the tables.
Change in welfare income over time
To compare how total welfare incomes have changed over time within each jurisdiction, we used the national Consumer Price Index (CPI) to convert total welfare incomes from earlier years to their equivalent value in 2022.
As prices increase, the same amount of money is able to buy less. Adjusting for inflation reflects increasing prices, which means that the trends over time in this report represent how the value of welfare incomes, not their nominal amount, has changed over time after accounting for changes to the costs of living.
Adequacy of welfare income
To evaluate the adequacy of welfare incomes, we compare total welfare incomes in 2022 to the two measures of poverty and two measures of low income that are commonly used in Canada.
The two measures of poverty, which we apply to all provinces and two territories, are:
- The Market Basket Measure (MBM) for the provinces or the Northern Market Basket Measure (MBM-N) for the Northwest Territories and the Yukon. These measures represent Canada’s Official Poverty Line and identify households whose disposable income is less than the cost of a “basket” of goods and services that represents a basic standard of living.
- The Deep Income Poverty (MBM-DIP) threshold for the provinces or the Northern Deep Income Poverty (MBM-N-DIP) threshold for the Northwest Territories and the Yukon. These measures are defined as having a disposable income of less than 75 per cent of the MBM or MBM-N as applicable.
Statistics Canada is in the process of creating an MBM for Nunavut and our analysis of adequacy in that territory will be added to future reports after the threshold is finalized.
The two measures of low income, which we apply to all provinces, are:
- The Low Income Measure (LIM), which identifies households whose income is substantially below what is typical in society (i.e., less than half of the median income), and
- The Low Income Cut-Off (LICO), which identifies households that are likely to spend a disproportionately large share of their income on food, clothing, and shelter.
The low-income thresholds used are for after-tax income because welfare incomes are not subject to income taxation.
The exact levels of the poverty and low-income thresholds change every year and are produced by Statistics Canada. The MBM, MBM-N, and LICO change in response to changes in costs and the LIM changes in response to changes in median income.
Note that at the time of publication, the LIM levels for 2022 were not available. As a result, we have estimated the LIM thresholds for 2022. To estimate the LIM threshold, which is the same across the provinces, we increased the 2021 levels in line with the national CPI.
Adequacy of welfare income over time
To compare how total welfare incomes in the provinces have fared in relation to measures of poverty over time, we compare real total welfare incomes between 2002 and 2022 to the real value of the MBM in those same years. The MBM thresholds used reflect the base in use in each year in question (i.e., the 2000, 2008, and 2018 bases). Rebasing creates a sufficiently higher threshold than using a previous base, which typically results in a deepening of poverty in the year in which the new base is used.
The same analysis is conducted for total welfare incomes in the Northwest Territories and the Yukon, although MBM-N thresholds are only available back to 2018. Thus, for these two territories, we compare real total welfare incomes between 2018 and 2022 to the real value of the MBM-N in those same years.
People with disabilities face a higher cost of living that is not accounted for in our analysis of the adequacy of welfare incomes. Social assistance rates and some other payments are typically higher for people with a disability than for those without, but the poverty threshold for a person considered employable is the same as that for a person with a disability. As a result, the total welfare incomes of people with a disability appear to be “more adequate,” but this does not account for the higher costs of living faced by people with a disability. These costs can include additional health care or food needs, or the additional expense of assistive devices, rehabilitation, personal assistance, or house adaptation. Some of these costs may be covered through special needs benefits in the jurisdictions, typically through a separate request or application process. As noted above, however, special needs amounts and amounts that are not automatically paid are not included in our calculations.
Maytree thanks all jurisdictions for their cooperation in the production of the welfare incomes data presented in this report.
1. This applies to all provinces and territories except Alberta, where we look at the incomes of five household types. For that province, we include two unattached single with a disability households, each of whom receives benefits from a different program. See the Alberta section for more information.