Our methodology for calculating total welfare incomes replicates the approach instituted by the National Council of Welfare and continued by the Caledon Institute of Social Policy. Using this approach allows us to compare total welfare income amounts and their adequacy over time.

“Total welfare income” refers to the total amount of income a household receives from all government transfers, including but not limited to social assistance payments. Individuals and families who receive benefits from a social assistance program will also be eligible for other forms of financial support from both the federal and provincial/territorial governments, which include:

• Additional social assistance payments that are automatic and recurring, where applicable,
• Federal and provincial/territorial tax credits, and
• Federal and provincial/territorial child benefits for households with children.

Together, these form the total welfare income of the household. The amount varies in every province and territory because each jurisdiction has a distinct social assistance program, and each has its own refundable tax credit and benefit programs.

To calculate the total welfare income for each household type, we made 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, except for 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.

Our calculations accounted for changes to welfare rates or other program rates over the course of the year. Basic rates as well as automatic and recurring additional items (e.g., a winter allowance or a back-to-school allowance) were also included where applicable. Special needs amounts and/or those available only by request or separate application were not included.

Our 2024 calculations also accounted for any special payments intended to address the high cost of living resulting from high rates of inflation, if they were paid automatically to households receiving social assistance or, in the case of discretionary supports, if over half of the recipients benefited from them. Similar additional payments relating to the COVID-19 pandemic and high inflation were also included for the years 2020 to 2023.

As well, households in eight jurisdictions – Alberta, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, Prince Edward Island, and Saskatchewan – received the federal government’s Canada Carbon Rebate payments (formerly the climate action incentive) in 2024. These amounts are outlined in the “Components of welfare incomes” section for each of these jurisdictions and are included under “Federal tax credits” in the tables.

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 were assumed to have no earnings. They did not qualify for Employment Insurance or Canada Pension Plan benefits.

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 2024. 

As prices increase, the same amount of money can 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 compared total welfare incomes in 2024 to measures of poverty and low income that are commonly used in Canada. 

The two measures of poverty that we applied to welfare incomes in all provinces and territories are:

• The Market Basket Measure (MBM) for the provinces or the Northern Market Basket Measure (MBM-N) for the territories. 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 territories. These measures are defined as having a disposable income of less than 75 per cent of the MBM or MBM-N as applicable.

The two measures of low income that we applied to welfare incomes in the 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 typically subject to income taxation. These thresholds are not available for the territories as they do not accurately reflect the realities of life in the North.

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 thresholds for 2024 were not available. To estimate the 2024 LIM thresholds, which are the same across all provinces but vary by household size, we increased the 2023 levels in line with the national CPI.

Adequacy of welfare income over time

We examined adequacy in the provinces and territories over time, although the timeframes for each are slightly different. 

To compare how total welfare incomes in the provinces have fared in relation to measures of poverty over time, we compared current total welfare incomes between 2002 and 2024 to the current 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 applied. (A helpful overview of the Market Basket Measure and the process of “rebasing” is described in Devlin, N. et. Al. (2023). Launch of the Third Comprehensive Review of the Market Basket Measure. Statistics Canada. Income Research Paper Series.)

We conducted the same analysis for total welfare incomes in the territories, although MBM-N thresholds are only available back to 2018. Thus, for the territories, we compare current total welfare incomes between 2018 and 2024 to the current value of the MBM-N in those same years.

Jurisdictional review

Our calculations of the components of welfare incomes in each province and territory as well as the data in the Key features of social assistance section are sent to officials in each jurisdiction for their review and comment prior to publication. Their feedback and corrections are taken into account in the final data included in our analyses. The assistance they provide each year is critical to the accuracy and reliability of the Welfare in Canada reports. 

Important considerations

Disability

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 benefits 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 income of a person with a disability may appear to be “more adequate,” but this does not account for the higher costs of living faced by people with disabilities. These costs can include additional health care or food needs, and/or the additional expenses of assistive devices, rehabilitation, personal assistance, and house adaptation. Some of these costs may be covered through special needs benefits provided by the jurisdictions, typically through a separate request or application process. As noted above, however, special needs amounts and amounts that are not automatically paid were not included in our calculations.

Market Basket Measure

To assess adequacy, the Market Basket Measure is compared to disposable income, which Statistics Canada defines as total income (including government transfers) minus income tax and several non-discretionary expenses. Among deducted expenses are public health insurance premiums, direct medical expenses including private insurance premiums, CPP/QPP and EI contributions, union dues, childcare expenses, and spousal support payments. In this report, however, the MBM is compared to the total income of households receiving social assistance, not their disposable income. Total incomes are higher than disposable incomes, so it is likely that the extent of income inadequacy is underrepresented in the report. 

For Nunavut, the MBM-N thresholds have been adjusted to account for the housing tenure type of our example households, which is different than that in all other jurisdictions. Our example households in Nunavut are assumed to be living in social housing rather than private market rental accommodation, as is the case for the majority of social assistance recipients in the territory. As such, the thresholds we used have been adjusted to include the subsidized rental unit type rather than the non-subsidized rental unit type that is generally used by Statistics Canada in MBM and MBM-N threshold calculations. For Statistics Canada’s MBM-N reference family living in Iqaluit, this translates to reducing the shelter component of the MBM-N by half. However, even the adjusted thresholds are not fully representative of the actual shelter benefits received by our example households, which are very low given that social housing shelter costs are heavily subsidized by the Nunavut territorial government. As a result, it is likely that our calculations have overestimated the depth of poverty of the example households in Nunavut. 

As well, Statistics Canada uses a four-person reference family in its MBM and MBM-N calculations for all jurisdictions except Nunavut, where a five-person reference family is used as it is more representative of life in the territory. As a result, the equivalence scale used to calculate MBM-N thresholds for our example households in Nunavut is different than that used for all other jurisdictions.