Key takeaways: What is the state of welfare in Canada?
Maytree’s Welfare in Canada report is the primary source for evaluating Canada’s progress on fulfilling the human right to an adequate standard of living for households receiving social assistance.
This webinar presented the 2023 report’s main findings and some additional analysis, and offer recommendations for what should be done to improve the incomes of people receiving social assistance.
- The report’s authors, Jennefer Laidley, Maytree fellow, and Mohy-Dean Tabbara, senior policy advisor at Maytree, provided a brief overview and presented the key takeaways.
- Sherri Torjman, social policy consultant and former vice-president of the Caledon Institute of Social Policy, spoke to the significance of this work and highlighted policy measures to improve the standard of living for households receiving social assistance.
- Maytree president Elizabeth McIsaac moderated the discussion following the presentations.
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Webinar transcript
Elizabeth McIsaac: Good afternoon, everyone, and welcome to “What is the state of welfare in Canada?” My name is Elizabeth MacIsaac, and I’m the president of Maytree, a Toronto-based human rights organization, and I will be your host and moderator for the webinar this afternoon. Thank you for joining us today.
Today’s presentation by Jennefer and Mohy is based on Welfare in Canada 2023, and the policy brief, Interpreting the data: Key takeaways from Welfare in Canada, 2023. It’s my pleasure to introduce today’s speakers.
First, Jennefer Laidley. Jennefer is a Maytree fellow and has been the lead author of Welfare in Canada since 2020. Jennefer has more than 20 years’ experience working on poverty and income security-related research, including at the Income Security Advocacy Centre, and as staff to members of the House of Commons, the BC Legislature, and Toronto City Council. Welcome, Jennefer.
Mohy-Dean Tabbara is a senior policy advisor here at Maytree and a co-author of Welfare in Canada. Mohy leads our income security policy file. He’s also responsible for the annual Social Assistance Summaries report, which is an important companion document that I encourage people to take a look at. Most recently, he has been focused on the Canada Disability Benefit, and authored a very useful report on how it should interact with existing disability supports. Welcome, Mohy.
And then following their presentation, we’ve invited Sherri Torjman to join us for her reflections on this year’s report. It is my deep pleasure to welcome Sherri today. I have had the pleasure of knowing Sherri probably for close to 20 years, most significantly about 10 years ago when I came into this role, and Sherri was leading the work that she was doing at the Caledon Institute for Social Policy. She’s been in the space of social policy for many years, but was vice president of Caledon from 1992 to 2017.
It was in that capacity that she helped to propose and design the Canada Child Benefit along with Ken Battle, who was the founder of Caledon and certainly a name well-recognized in the space of social policy architecture in Canada. It was in that role that Sherri helped to propose and design this methodology for calculating social assistance incomes that we still use today. She has also advised extensively on social policy related to people with disabilities and is arguably Canada’s leading voice in this space.
I would also say that when Sherri handed over Welfare in Canada to Maytree, very carefully, and saying, “Maytree, you can take this on now,” she did so with a bit of trepidation and a warning that this can’t get lost. And that has stayed in my mind for about the last six or seven years as we’ve been doing this work, and it is a reminder of how important it is and the commitment and passion that Sherri brings to this work. So welcome, Sherri.
And without further ado, I will hand it over to Jennefer and Mohy to take us through Welfare in Canada 2023.
Jennefer Laidley: Thank you very much, Liz. And hello, everyone. Welcome to our Welfare in Canada, 2023 webinar. We thank you very much for being with us today.
First, I want to say that I’m joining you from the unceded traditional territory of the Snuneymuxw First Nation on Gabriola Island in British Columbia, and I want to recognize their historical stewardship of and title to the land on which I live and work.
First, we want to sincerely thank the ministerial officials in the provinces and territories who provided information and confirmed the data in the report, and experts at Statistics Canada who gave us helpful information and advice. And we also want to thank our hardworking and dedicated colleagues at Maytree for their untold contributions to the report. We couldn’t produce this report without all of you.
So to start, Welfare in Canada, 2023 is the latest in a series of reports that help us understand the amount and adequacy of the total income of households who receive social assistance from various government sources in Canada. It’s also an important source of information about other aspects of social assistance programs, which we’ve organized this year into a new section called Key Features of Social Assistance.
We hope that Welfare in Canada is a useful resource for researchers, advocates, government officials, and others, and we particularly hope that it’s helpful in efforts to reduce the rate and depth of poverty that people receiving social assistance experience across Canada.
Mohy-Dean Tabbara: Thank you, Elizabeth and Jennefer, and hello, everyone. I’m coming to you today from Tiohtià:ke, or Montreal, in the traditional territory of the Kanien’kehá:ka of the Haudenosaunee Confederacy, and which has long served as a site of meeting and exchange amongst many First Nations.
Here is the outline of our presentation today.
We’ll start by telling you a bit about the report and its history. Then, we’ll contextualize the data by briefly talking about the methodology. After that, we’ll go into analysis of the data in Welfare in Canada.
First, looking at how adequate the welfare incomes were for all four household types. We’ll also touch on adequacy over time.
Second, we’ll analyze how social assistance benefits have changed over the last five years.
Third, we’ll share some insights from our new key features of social assistance section, focusing on indexation and earned income exemptions.
Fourth, we’ll show the proportion of welfare incomes from federal sources, which will lead to a discussion on the new Canada Disability Benefit.
And, finally, we’ll share some recommendations.
Jennefer Laidley: So just to situate the report in a bit of historical context, in 1987, the National Council of Welfare published Welfare in Canada: The Tangled Safety Net, and this report was groundbreaking in a number of ways. It was the first comprehensive national analysis of social assistance programs in Canada, and it established the methodology for calculating total welfare incomes and measuring adequacy, which we still use today. And I know our special guest speaker, Sherri Torjman, will have more to say on this. As Liz has already said, she was the author and originator of the report.
The Council then published annual reports in its welfare income series, which ran from 1989 to 2009. After the council was defunded, the Caledon Institute of Social Policy continued the work in a series called Welfare in Canada, which ran from 2012 to 2016, and Maytree picked up these reports starting with the 2017 calendar year. So now, we have a data series that goes back nearly 40 years.
And it’s important to note that Maytree continues this work to ensure that we can keep track of governments’ international human rights commitments to the right to an adequate standard of living.
Mohy-Dean Tabbara: Our methodology has remained consistent since that first Tangled Safety Net report in 1987, and this allows us to maintain the time series and to compare data year over year. I’ll just note that the report doesn’t reflect every person’s experience of receiving social assistance. It’s really intended to be illustrative rather than universal.
So in each of the 13 provinces and territories, we looked at the total incomes of four example households: unattached singles considered employable, unattached singles with a disability, single parents with one child, aged two, and couples with two children, aged 10 and 15. In total, we looked at the incomes of 56 different households across the country, and if you’re doing the math, it’s four extra households. We have one extra in Alberta, one in Manitoba, and two in Quebec.
Something to keep in mind is that we make a number of assumptions with this data, and just to mention a few:
- The heads of households are deemed employable, except for the unattached singles with a disability. The distinction is not our own making, but it’s very much still used.
- The households have no employment income, and they filed their tax returns.
- The households are new recipients of social assistance and started to receive benefits on January 1st of the year in question.
- Also, income is for the calendar year, not the fiscal year.
And of course, you can find more details on the methodology in the report.
Jennefer Laidley: So when we say “total welfare income,” what do we mean? Well, we’re referring not just to social assistance benefits. The total welfare income of a household is made up of several components, all of which are government transfers. At the provincial and territorial level, this includes the basic and additional social assistance benefits that are regularly provided to all recipients from the program in the jurisdiction where they live.
Basic benefits are those for things like food, clothing, and shelter, and additional benefits are those that are universally provided for specific costs, like a winter clothing allowance or a disability allowance. It also includes provincial or territorial tax credits and benefits, and child benefits for households with children if their jurisdiction has such a program.
At the federal level, total welfare income also includes federal tax credits and benefits, which are the GST/HST credit and supplement, and the Climate Action Incentive for households in aid of the provinces, as well as the Canada Child Benefit for households with children.
So now that we know the components of total welfare incomes, we’ll look at their adequacy. And this is probably the most important analysis in the report because it tells us how well or not well households who are receiving social assistance are doing. So how do we measure adequacy?
For households in the provinces, we compare total incomes to the Market Basket Measure, and for households in the territories, we use the Northern Market Basket Measure. We use these measures because they represent Canada’s official poverty line and are used by the federal government to track progress on poverty reduction.
And we also compare total welfare incomes to the deep income poverty threshold, which is 75% of the poverty line. And mostly for historical reasons, that for households in the provinces, we compare with the Low-Income Measure and the Low Income Cut Off. We won’t be discussing those today, but they are in the report.
Mohy-Dean Tabbara: In the next four graphs, the black line, or the black lines are the official poverty line that Jennefer mentioned, and the green lines are the deep income poverty threshold. In this first graph, the red bars are the welfare incomes of unattached singles considered employable in each province and territory.
As you can see, only one of the 14 bars crosses the black line, which means that all but one unattached single considered employable households were living in poverty. More starkly, only two of the households were living above the deep income poverty threshold, in Quebec, for the household who received the Manpower Training measure, or MAN, and in the Northwest Territories. The 12 other households were living in deep poverty.
In the case of Nunavut, New Brunswick, Nova Scotia, and Ontario, the welfare incomes are less than half the deep income poverty threshold, or about a third of the poverty line. The only household to have an income above the official poverty line of the 56 households in the report is the unattached single considered employable in Quebec receiving MAN. Social assistance recipients have been able to access these benefits in Quebec only since 2022, and since the first time, an unattached single household considered employable has crossed the poverty line.
While this is notable, and not to discredit Quebec, but very few people receive Manpower Training benefits in the province. According to CASO data, only 2% of social assistance recipients access Aim for Employment, and Manpower Training is only a subset of those recipients.
On this slide, we have the unattached single with the disability households in orange. The official poverty lines and deep income party thresholds are the exact same as those of the unattached singles considered employable. I mention this to emphasize that the additional cost of living for a person with a disability is not factored into these thresholds, so poverty here is likely underrepresented. Even with this in mind, all 15 unattached single with disability households were living in poverty in 2023. Only five households lived above the deep income poverty threshold.
In Alberta, for those receiving AISH, Newfoundland and Labrador, PEI, the Yukon, and Northwest Territories. For the household in PEI, this is the first time their income crosses the deep income party threshold, which is a positive change. For three provinces and one territory, the gap below the deep income party threshold is very significant. The least adequate welfare incomes were Nunavut, Alberta for those receiving BFE, New Brunswick, and Nova Scotia.
And here’s the same graph for single parent with one child households in light blue. Again, none had incomes above the poverty line in 2023, and only four were living above the deep income poverty threshold in Quebec, PEI, the Yukon, and the Northwest Territories. And here, the least-adequate welfare incomes were Nunavut, Nova Scotia, and Ontario.
And here’s the fourth household, the couple with two children households in navy. All 14 households were living in poverty in 2023. In three jurisdictions, households had welfare incomes above the deep income poverty threshold and relatively close to the poverty line in PEI, the Yukon, and both households in Quebec. All other couple with two-children households were living in deep poverty, and the least adequate were Nunavut, New Brunswick, and Ontario.
Overall, in 2023, 98% of example households, or 55 of the 56, were living on incomes below the official poverty line. Also, 79% or 44 of the 56 households were living below the deep income poverty threshold.
Jennefer Laidley: So now that we’ve had a look at adequacy in 2023, we also look in the report at how adequate incomes have been historically. We’re highlighting unattached single households here, primarily because they’re the households living in the deepest poverty, but you’ll see the analysis for households with children in the report.
The timeframe that we’re looking at starts in 2002, as that’s how far back the Market Basket Measure goes. You’ll see some breaks in the data in 2008 and 2018, which is when the Market Basket Measure was rebased. But the first thing that we find is that incomes for the vast majority of households have been below the poverty line and even below the deep income poverty line for most of the period.
In some instances, we find a pattern like the one on the left here for Ontario, where adequacy has been pretty stagnant and actually decreasing over time, especially more recently. In many instances, we find a pattern like the one on the bottom-left for BC, where adequacy has also been pretty stagnant, but improved quite a bit in 2020 when additional benefits related to the COVID-19 pandemic were available to households on social assistance, but then declined when those benefits were no longer available.
And in a very few instances, we find the pattern like the one on the right, which is for PEI, where adequacy has also historically been very, very low, but is on a trajectory of improvement recently, which is very hopeful.
And to look at adequacy over time in a bit of a different way, we tried to get a sense of the recent investments being made by the provinces and territories in social assistance benefits. These benefits are the foundational supports that households rely on, and they make up the largest proportion of households’ total welfare incomes.
So we compared the change in basic and additional benefits between 2018 and 2023 to the national rate of inflation in that period as measured by the Consumer Price Index, which was 17.7%. And I have to note that we didn’t include payments related to the COVID-19 pandemic or high inflation because they were one-time or time-limited and didn’t result in permanent improvements. And we only included 50 of the 56 households for reasons that are complicated, but you can find out more about in the policy brief.
Now, the good news is that all 50 households saw an increase in social assistance benefits over the five-year period, but only 27 saw an increase that was above the rate of inflation, while 23 saw an increase that was below the rate of inflation. Now, in this graph, above-inflation changes are indicated by the blue bars, and below-inflation are indicated in red, and the national rate of inflation is there in the black line.
So first, for our two unattached single households, we can see that 12 of the 25 households received an above-inflation increase over five years. That’s 48% of the unattached single households.
But we can also clearly see that households in some jurisdictions saw increases over five years that were much higher than others. PEI provided the highest increases, followed by Nunavut and BC. There’s a large increase in Saskatchewan and Alberta for one-household, and smaller increases in the Northwest Territories and for one-household in Nova Scotia and the Yukon. The lowest increases were in Ontario, but also in Newfoundland and Labrador, Manitoba and New Brunswick, and for one household in Saskatchewan and Nova Scotia.
And on this next slide, you’ll see the same analysis for households with children. Here, we see that 13 of the 25 households received above-inflation increases. That’s 52% of households with children. Again, PEI had the highest increases, followed by BC, Alberta, Nunavut, and the Yukon. We see a large increase for one household in Quebec and Saskatchewan, and a lower increase for one in Nova Scotia. And at the other end of the scale, again, Ontario had the lowest increases, followed by Newfoundland and Labrador, New Brunswick, the Northwest Territories, Manitoba, and one household in Nova Scotia and Saskatchewan.
So switching gears a little bit here, as we’ve already said, there’s a new Key Features of Social Assistance section in the Welfare in Canada report this year. We used to include the data in this section in appendices, but this year, we tried to give it a little bit more visibility in this new section.
And one of these key features is indexation. Now, indexing means automatically increasing benefit and credit amounts with the rate of inflation. This ensures that the value of benefits and credits keeps up with the cost of living over time, which is very important, particularly in a period of high inflation that we’re just coming through.
This table shows which of the provincial and territorial benefits and credits are indexed and which are not. We didn’t include federal benefits because the GST credit and the Canada Child Benefit are both indexed, and the amount of the Canada Carbon Rebate changes in a bit of a different way.
And you can see that there are many more red Xes than green check marks in this table, which is a problem, because when benefits aren’t indexed, their value can be eroded over time, as we saw in the previous slides. One bright spot is that four jurisdictions have indexed basic social assistance benefits since 2021, which is great. But overall, not nearly enough of the benefits that are provided by the provinces and territories are indexed.
Now, indexing wouldn’t of course make up for the deep levels of inadequacy we saw earlier, but they would at least protect benefits against the impact of inflation.
Mohy-Dean Tabbara: Another key feature that we include in the Welfare in Canada report is earned income exemptions, which is essentially how much are social assistance benefits called back when a recipient earns wages from work? Every social assistance program in all 13 provinces and territories partially exempts earned income, though the approach varies greatly by jurisdiction and sometimes by program.
As you can see on the map, the most common approach is a combination of a flat-rate and a percentage. They’re colored in green on the map. This means that in those jurisdictions, earned income, up until a certain threshold, is fully exempt. Afterwards, social assistance benefits are reduced by a certain percentage.
The other approach used in Canada is just a flat-rate exemption. This is the case for all programs in BC and Saskatchewan, which are in red on the map. One program in Manitoba and three of four programs in Quebec also use this approach, which are both in blue. With a flat-rate approach, earned income is fully exempt up until a certain threshold. Then social assistance benefits are reduced dollar for dollar, so no gradual callbacks like in the percentage approach. To the individual, this is equivalent to 100% income tax rate.
This is only one aspect of earned income exemptions, which has many other dimensions that we can dissect. However, what is clear is that in jurisdictions that have a percentage earned income exemption above the flat rate, households receiving social assistance have at least the opportunity to improve their standard of living through work.
Jennefer Laidley: And to switch gears again a little bit, one of the findings in our policy brief is that the proportion of income that households receiving social assistance get from the federal government is very small, and that’s the case particularly for unattached single households.
This graph shows how much of total welfare income for these households comes from the federal government. That’s the part in each column that’s in dark blue at the top, and how much comes from the provincial or territorial governments, and that’s the amount in light blue. So we can see that the federal government’s share of income for unattached single households doesn’t exceed 10% in any instances. In any instance, rather. In fact, it’s only between 2 and 10%. So given how inadequate total welfare incomes are for unattached singles, there’s clearly a lot more that the federal government can do.
And on this next slide, we see the proportions for households with children, which are different, and that’s primarily because of the Canada Child Benefit. You’ll see that households with children received between 20 and 46% of their income from federal sources. So while the provinces and territories are still doing most of the heavy lifting, even for these households with children, the federal government has really stepped up for them, and they need to do the same for unattached single households who don’t have other sources of income to fill the adequacy gap.
Mohy-Dean Tabbara: As you know, one ongoing effort by the federal government is the Canada Disability Benefit, or CDB, which is expected to be delivered in the summer of 2025. The draft regulations are out, and just a reminder, the deadline to submit comments is September 23.
So what would be the impact of CDB on social assistance recipients? This graph is a recreation of the adequacy graphs that I presented earlier. The 2023 welfare incomes of unattached singles with a disability are in navy, and the proposed CDB is in orange.
The first thing you might notice is that the CDB looks relatively meager, even compared to the already-modest sums of welfare incomes. The second thing you’ll notice is that even with the orange top-up, none of the bars cross the black line, which is the poverty line. This means that the CDB in its current form would not lift any of the households in the report out of poverty. What is clear is that the proposed CDB maximum of $200 a month is not enough.
I’ll also note that this graph actually shows the best-case scenario, where we assume that all recipients of disability-specific social assistance programs can access the CDB, but we know that this isn’t the case. Social assistance recipients face a number of obstacles to benefit from the CDB, and this is on top of existing barriers that already serve to marginalize people with disabilities. We’ll touch on a few, but of course there are others.
First, as it stands, most jurisdictions will claw back the CDB dollar-for-dollar from social assistance, like they do to other unearned income like the Canada Pension Plan Disability Benefit. To prevent this, all jurisdictions must exempt the CDB as income in their social assistance regulations. So far, only five have committed to do that.
I’ll mention that if you’re interested in participating in a campaign to exempt the CDB, we have a toolkit on our website for each of the remaining eight jurisdictions. We’ll add a link in the chat.
Second, the Disability Tax Credit Certificate will be used as proof of disability for CDB eligibility, even though its definition of disability is narrow and will exclude many social assistance recipients with disabilities. Instead, eligibility should be determined according to the Accessible Canada Act definition of disability.
Third, as the CDB is a benefit, accessing it is expected to require a three-step process. First, qualify for the DTC certificate; two, file a tax return; and three, apply for the benefit through Service Canada. If it was a refundable tax credit rather than a benefit, it would be easier to access by eliminating the third step.
Fourth, the example of households with disabilities in the Yukon and the Northwest Territories have social assistance benefits that are already above the CDB income threshold, meaning they would receive a reduced CDB amount. The household in Alberta receiving AISH is very close to the threshold and likely will cross it before the CDB is delivered in 2025.
The CDB’s income threshold should be increased to at least a margin above all social assistance benefit amounts.
And now, in terms of recommendations, we decided to separate them between federal and provincial, and I’ll start with federal recommendations. So as we highlighted, the federal government must deliver a Canada Disability Benefit that is generous and accessible and supplements existing supports.
Also, other than the CDB, the federal government should invest in targeted income supports for all people living in poverty across Canada. And just to mention a few, they can increase the amount of the Canada Social Transfer, to provide more funds for provincial and territorial social assistance benefit increases; they can enhance the Canada Workers Benefit by adding a floor amount and increasing the maximum benefit; they can permanently keep the one-time enhancements to the GST/HST tax credit that were made in both 2022 and 2023; and they should also consider further enhancements to the GST/HST tax credit, like the groceries and essential benefit proposed by IRPP.
And also, they should consider increasing the maximum benefit amount for the Canada Child Benefit, CCB, as well as broadening access to those who are currently not eligible, such as families with precarious immigration status.
Jennefer Laidley: And our recommendations at the provincial and territorial level are, first, that the investments should be made in higher social assistance benefits and tax-delivered income supports; second, that commitments must be made by all jurisdictions to not claw back the new Canada Disability Benefit from social assistance benefits; third, that governments at all levels need to index all the benefits provided to low-income households so that they’re not eroded by inflation; and, fourth, earned income exemptions need to be improved so that households who are able to work can improve their incomes through employment.
And so that takes us to the end of our presentation. Thank you all very much for attending the webinar today. We really appreciate your interest and attention, and we look forward to hearing from you in the question-and-answer segment, and I’ll send it now back to Elizabeth.
Mohy-Dean Tabbara: Thank you, everyone.
Elizabeth McIsaac: Thank you, both. That was a tremendous overview of what is an incredibly dense report with a lot of information, so kudos to you for getting that into the 25 minutes. It was a high and difficult bar to get.
It’s my pleasure to hand it over to Sherri. I’m really looking forward to hearing your reflections on the report this year, the trends that are being seen, and any commentary you feel you want to offer at this point.
Sherri Torjman: Sure. And thank you, Elizabeth. Thank you for the invitation to participate in this conversation. I really appreciate the opportunity.
I want to thank Jennefer and Mohy for your fantastic work on this report year after year. I know how very difficult it is, so congratulations on this work. And thank you to Elizabeth and the entire Maytree team for your continued support of Welfare in Canada.
I say this because it’s so important to continue to protect this work and this data source. It was such a difficult start. It has such a tough history, and I just want to share it with you very briefly so you can appreciate how very important and essential this work is.
It was back in 1986, and Ken Battle was at the National Council of Welfare. It was a body advisory to the Minister of Health and Welfare at the time. And he was concerned that there was no information at all in the country with respect to welfare. We had no idea how it worked. There was no definition of any of the terms, of any the programs or procedures, of the rates of assistance.
He hired me in 1986 to do the first national report on welfare, and it was tough getting that going, getting it accepted. Ken Battle comes honestly by his name, because it was such a battle to make sure that we could get access to the data. It took the better part of two years to understand the program, to develop a methodology that was relatively comparable across the country, to get the provinces onside and maintain their trust. And you’ve done that so well with provinces and territories. So important.
The work continued, as you were saying, Elizabeth, at the National Council of Welfare until the federal government announced in a budget it was closing. And by that time, Ken and I had moved to the Caledon Institute that Ken had set up with Alan Broadbent at Maytree, and we knew that was the end of welfare incomes, and we knew we had to continue it in some way, but we hadn’t planned on it.
And so we did a rapid emergency fundraising blitz. We did a crowdfunding campaign. At the time, it was very new, and we were told by the platform, nobody in the world has ever raised funds for a research project, so go ahead and do it, but good luck with that. We did a little video called Data Rescue, and in a few days, we had raised the money to continue this work for a little while. Anne Tweddle continued the work at that time, and then thank you Maytree again for having picked this up.
So by way of brief introduction, unfortunately, we haven’t seen great improvements in adequacy. There have been some, I think, positive stories, and you’ve very clearly pointed that out. But overall, adequacy is still a problem. And there are two components to adequacy, as you’ve pointed out: the actual amount of the benefit, federal and provincial components, and indexation.
And I’m so happy that you’ve put some emphasis on indexation or included it as part of the general text, because indexation is vital, not only with respect to the value of benefits, but also in the design of any program. If the design is not indexed, then the thresholds within those programs can fall over time, and fewer and fewer people have access to the maximum benefits. In some cases, people actually can’t even meet thresholds.
And so for so many reasons, it’s important as a basic human right, I think we should be looking at indexation as part of design. It’s great that there’s more attention being paid to it, it’s terrific that more jurisdictions have indexed their benefits or part of their benefits, but this should be a given without any question.
In terms of adequacy, that’s where we really have a problem. As we know, social assistance increases are not an easy sell politically or to the general public. It doesn’t mean we should stop doing it, but we really need to look at some of the other associated benefits that we can work on in the meantime while we’re still pushing for increased social assistance benefits.
I’ll start by talking about families with children, and then I’ll stop for a few minutes. I hope that we have time to go into the Canada Disability Benefit and single employable social assistance recipients. But let me talk about families with children, because I found it really shocking, to be honest with you, that families are living below the poverty line for most of the country, and below the deep poverty line. It’s unthinkable that in Canada this continues to this day. And so what can we do?
And when we worked at Caledon on proposing and designing the Canada Child Benefit, it was difficult. It was a difficult process in the sense that that benefit has two key objectives. The first objective is poverty reduction, and we all talk about it in that way. But there was a second objective as well, and that was called parental recognition. And it meant that any family with children, because they incurred additional costs just automatically by virtue of extra people in the family, should be assisted in some way.
And so when we worked on the initial design, and we did this with officials at the Department of Finance, we were looking at how do you balance providing a benefit to the great majority of Canadian families, while at the same time, making sure that you’re providing adequate assistance to very low-income families? And so it was a real balance. We sort of modeled this, and put more money here, and then more money on this end.
And I’m suggesting that maybe we need to take a look at that design again. It’s been almost 10 years. Maybe we need to do some modeling. Maybe it’s going up very high. I don’t want to in any way, please, interfere with the design that we finally arrived at. It came after years and years, even decades of different iterations of the Canada Child Benefit, and I think we’ve arrived at what Ken would call a relatively elegant structure.
But at the same time, we have a problem at the lower end of the income scale, and maybe it’s time for an income supplement for lower-income families. Maybe it’s time to push it a little bit down the income scale, or have a steeper reduction rate at the higher end. There may be ways of doing this, but I really would like to see perhaps some of that work done so that we can take care or at least make a further dent in that particular problem and with those households.
The MBM is being revised. The third comprehensive review is underway, and as you know, results will be released in 2025. I think it would be important to make sure that the base amount of the child benefit is adequate relative to that new basket and what is contained in that new basket. Jennefer and Mohy, you’ll have to do your rebasing again, and thank you for your fastidious work in doing that. But again, is it still adequate? And maybe we need to look at that too.
And third, if there is any increase in any federal benefits, we have to make sure that there is no clawback. And this applies to the Canada Disability Benefit, it applies to any increases to the Canada Child Benefit, or any federal benefit for that matter. That’s another human right. And I know this is not popular to say, but I personally believe in attaching some conditions to the Canada Social Transfer, which at this time is totally unconditional. And it goes out there, it’s not tracked.
And I think that the work that you’re doing is very important too in terms of our ability to track what happens to welfare incomes, because if there is an increase in a federal benefit, we can clearly see from your work whether there has been an associated reduction the following year in provincial benefits or whether they’ve not increased it in any way or pulled away something. And so you’re your report and your work I think provides an important safeguard for future increases.
So I think we have to be a little bit more tough on this clawback issue. It’s not appropriate. The purpose of increased payments is to improve people’s quality of life, and we shouldn’t be playing around with that at all as a basic principle. Maybe I’ll stop there, and I’d love to talk about the Canada Disability Benefit and single employable recipients, but just open it up to colleagues as well.
Elizabeth McIsaac: You packed a lot in there, Sherri. I’m still just trying to tease out all the elements you brought up, and I think a couple of them are really important around revisiting the assumptions that we had when some things were designed, and we applauded it. It was the right thing. I think the GIS is another one. How are we doing on seniors? Do we need to revisit? Mohy’s done some work on that as well. Child benefit, I see Layla in the chat has commented that they’re working on that too, so it’s constant work. We need to constantly iterate.
And your point around indexation and in terms of human rights, we have this thing called progressive realization, which means we have to keep moving forward. And if we move back, which is what happens with non-indexation, we are effectively retrogressing, and that is a violation. So that’s a really important point. I want you to keep going, though. I want you to talk about adequacy as it relates to people with disabilities, and is the CDB going to do it?
Sherri Torjman: No. Unfortunately, no. That was a big disappointment, a real policy disappointment. And I say that because of the way in which this policy had been announced. In the 2020 Throne speech, the federal government announced a new Canada Disability Benefit, and it said modeled on the guaranteed income supplement. The words were in there.
And I think that raised a lot of expectations, a lot of hope in the country, because the guaranteed income supplement is a form of basic income. It’s not necessarily a basic income that collapses all programs and provides just one tax-based program. It doesn’t work in that way. But it is an income guarantee, so it is a form of guaranteed income.
And what it does is keeps all the programs in place, all the pension-related programs currently in place, but it guarantees that over and above that amount, that combined amount that you may have as an individual, it will provide a supplement up until a certain level. Now, we may not agree on the value of that level. It may be too low, and Mohy, even your research may find that this should be raised, but nonetheless, we have an income guarantee for Canadians aged 65 and over in Canada.
And so when there was an announcement about the Canada Disability Benefit being modeled on the CDB, I’m sorry, on the guaranteed income supplement, and being used to address poverty, there was great excitement and a lot of work, a lot of excellent work done by organizations and groups throughout the country. Congratulations on everything that you did. It’s not wasted.
I really think we need to see this moment as a moment in time and a foundation for future increases for moving that benefit along and saying $200 a month maximum is not adequate. There are policy precedents for this. For example, the Ontario Basic Income Pilot from several years ago paid a monthly amount of $500 to participants with severe disabilities, so that would be about $6,000 a year. In today’s dollars, just over $7,200 a year.
So at that time, there must have been a lot of work and research that went into that amount. Why would we pay $500? It’s certainly far more adequate than the 200. That is a maximum amount, maximum 200. That is family income-tested. So if you have a family that has other benefit, you may not necessarily get that amount yourself. It could have been designed as a refundable credit, as you pointed out. It could have just been tagged onto the DTC.
I guess my only hope is that if we keep the format that we have in place or what they’ve identified, maybe we can move it into an income supplement, because its complex design really makes it look like an income supplement. With all the reduction rates and turning points and everything that they’ve done, maybe we can build on that foundation. It’s certainly something that I would really like to see happen. Eligibility is a whole other issue, but I’ll leave it there for now.
Elizabeth McIsaac: I think we would need another two hours to treat this fully.
Sherri Torjman: Probably. Yes.
Elizabeth McIsaac: Thank you for that. So we’ve talked about children, we’ve talked about seniors, we’ve talked about people with disabilities. A growing part of people experiencing poverty and deep poverty are working-age single, unattached adults. Sherri, you mentioned it, and I want to include Mohy here as well, because Mohy, you’ve done some work on this as well. Is there an opportunity here for the federal government? I’m going back also, Mohy, to your recommendation for federal government activity. Is there something more that could happen that could help stack some of this?
And really thinking about, as Sherri said, not a single basic income that is sort of a universal basic income or a single vehicle, but stacked elements that create a safety net with many threads that can be stronger than a single thread. So thinking about that and single working-age adults, Mohy, do you want to go first, and then we’ll turn back to Sherri again?
Mohy-Dean Tabbara: Yeah, for sure. I feel like very often when we think of welfare incomes, we think of that this is a responsibility of provinces and territories. But as you mentioned, you and Sherri, the federal government has a role to play.
And in our human rights approach, we always talk about maximum available resources should be invested to better support people and bring them to an adequate standard of living, and that hasn’t been the case recently. And as the graph that Jennefer showed, it was under 10% for an attached single who is considered employable. And so there’s a lot of opportunity. And even though creating a new program is always exciting, often, it’s very difficult, first of all, to do, and also, usually, at the beginning, it’s not what we expect.
So another option is to improve existing programs, and that’ll probably be the case with the CDB. The version that we have is not ideal, as we talked about, but there will be opportunity to improve it. Just like in the past, the Canada Child Benefit was improved gradually.
The two programs that I think the federal government can do more with, one is the Canada Workers Benefit, because at the moment, you need to have at least $3,000 of employment income to access it, and that means that none of our households access the Canada Workers Benefit.
And this can be remedied by adding a floor amount. So a floor amount that is accessible by people who have no income or very little income, and also by increasing the maximum benefit, to better support not just people receiving social assistance, but also working for individuals who often live below the poverty line.
The other piece of this is in the last few years, because of inflation primarily, the federal government has been providing one-time supports through the GST/HST tax credit, and next year will be the first year since that we don’t include it. And that’ll be a reduction in supports for working-age people and actually everyone who accesses this support.
So I think there should be a push for the federal government to make these enhancements permanent. And I also mentioned the proposal by the IRPP, which is a really interesting proposal, and I encourage you all to explore.
Sherri Torjman: I agree with your recommendations, Mohy, and I want to commend Maytree on the work that you’ve done on the Working Income Tax Benefit or the Canada Workers Benefit, and some of the variations that you have proposed.
I think first of all, for any benefit to be seen as an income supplement for work or as an incentive to work, you have to know that you’re getting it. And in the case of the Canada Workers Benefit, you do have to apply. But the way in which it’s delivered makes it very difficult for anybody to know exactly how much they’re getting and how much their work behavior is actually generating some kind of increase in their incomes.
And so there’s a lot of work, I believe, that has to be done, first of all, with respect to adequacy. It’s $1,500 as a maximum for a single person, and 26 now, I think, for a family. It’s not very much, because when you think about work-related expenses, you probably have more work-related expenses when you include everything than what that amount is worth. And again, it has to be transparent. It’s also difficult to get on because, you have to fill in a six-page form, Schedule 6, on the income tax form, and how many people can readily do that without assistance?
So I think there’s a lot of ways in which we can improve that Canada Workers Benefit, which is now interestingly enough being described by the federal government as a refundable tax credit. So it sort of went somehow from an income supplementation program now to being called a tax credit, and it sort of makes you wonder why that particular change was made. I’m not sure it really helps people understand the benefit any better.
But one of the things that I think that you have done that’s really important, Jennefer, you made reference to this in your remarks, that you’ve included a section on earnings exemption and the other features of social assistance. And provinces and territories can do a lot, as you’ve recommended, I think, to improve this area.
Because when any household that’s employable is trying to improve their circumstances through paid employment, they face huge taxback, primarily in the form of the welfare taxback. In other words, welfare takes back the better part of the income that they earn, but they also have to pay, depending on the amount, payroll taxes, income taxes. They may lose some of the value of their refundable tax credits.
Ken and I did a report at the Caledon Institute called the Welfare Wall, where we documented the components of the welfare wall, which means that once you’re on, it’s hard to get off. And the biggest component of the welfare wall was the earnings exemption or the welfare taxback, where you’re actually paying most of your hard-earned income back to the province.
So if we’re really serious about exemptions and incentives to work, we have to get far more serious about really assisting people. Helping with the cost of going back to work, providing some reward for going back to work, making sure it’s easy to find transportation or whatever resources people might need.
And on that note, you mentioned IRPP work, and I just want to mention very briefly a report that they had published a few years ago. It was Research by Toronto and Social Services Employment and the Ontario Centre for Workforce Innovation. They studied 69,000 single employable people on welfare, and they found incredible diversity.
Contrary to the conventional wisdom, which is not so wise, it’s not just single young males who quit school and who are not interested in working. 38% were women, 38% were over age 45, 30% had post-secondary educational credentials. So what is going on here and how are we helping people in a responsible, responsive, respectful way?
I think we need a network of supports with advocates and with peers to make sure people’s rights are protected, but to really help people with their circumstances, why there’s such diversity here. So we count cases, but we also need to understand causes. And I think when we understand causes, our responses will be far more effective and appropriate for this particular group which is always at the bottom of the barrel.
Elizabeth McIsaac: So I want to pick up on that. How do we understand what needs to change? And that leads to our advocacy, because the truth is, a lot of people in this room today, this virtual room, are listening to this to understand how can they use this report? How can they use these findings to further the opportunity to make change? And where have we been effective in making some of those changes happen, whether it’s a question of rates or eligibility or other elements of improving the circumstance of social assistance recipients?
Jennefer, I want to turn to you for some comment on that. How do we best use this for change?
Jennefer Laidley: I want to say two quick things in relation to something Sherri said. I’m so glad to hear you talk about the Canada Social Transfer. The loss of conditionality in the Canada Social Transfer I think was an immense loss. Besides the amount of the transfer, the loss of conditionality has been an immense loss to all of us. I could go on about that for a while.
This year, for the first time, we’re including information not only about earned income exemptions, but also about some unearned income exemptions in the report. That’s employment insurance, CPPD, and workers’ compensation programs. I know some of the folks who are on the line right now will be very interested to have a look at that section.
But to get to the issue of advocacy, one of the problems I think in advocating around social assistance is that, well, there are many problems. One is that if you’re trying to build a network, build public support for improvements to social assistance programs, that’s hard. People don’t have a good sense of how welfare programs work. They don’t see themselves as needing social assistance, and of course, because of stigma, they don’t have a very good opinion of folks who are receiving welfare, so it’s difficult to muster that large public outcry.
And of course, this issue of kind of shaming governments into doing the right things. Well, governments know that benefits are low. They know that people are living in poverty. They’ve known this for a very long time. This is kind of how welfare programs were set up. They’re set up in order to be inadequate as a sort of incentive to work.
So I think public education is key. Public education and organizing is key. One of the next steps that we’re taking with Welfare in Canada is to reach out to organizations across the country and communities doing organizing and advocacy work to talk with them about their experiences, to talk with them about how welfare in Canada can be made real for them and the people that they’re working with and advocating with and on behalf of, and we’re really looking forward to getting this work rolling.
One of the questions in the survey that Liz talked about earlier is whether or not you are interested in having a conversation with us about how we can assist you. I’m talking to the folks out there who are watching, so if you’re doing that survey and you want to take part in one of these conversations, please do include your information there.
The only way that we can make a difference is by making enough noise. I mean, one of the things that I found really interesting in one of the slides was Ontario has provided the least amount of improvements to social assistance benefits over the last five years, and PEI has provided the most, but these are both conservative governments. So what does this tell us?
This tells us the change is possible no matter what stripe of government you have in your jurisdiction. It tells us that there are a number of different impacts or ways that we can impact decision-making for governments, so let’s start having those conversations and try to build some network across the country to improve our ability to work towards improvements.
Elizabeth McIsaac: Thank you for that. We are sadly at 1:58. We have very strict rules at Maytree about finishing on time, so I’m going to take this opportunity to say thank you to the three of you.
Jennefer and Mohy, your work on this has been unbelievably fastidious, to use Sherri’s word, and the integrity of the report holds, and it is Canada’s only source on this. Periodically, I want to say to government, “Take it back. This is your responsibility,” but I don’t want to, because I think we do such a great job of it, so thank you to your work on this.
Sherri, it’s such a wonderful opportunity to have you weigh in on all of this. Your thoughts on this are so important because you were one of the designers and creators. So thank you so very much for joining us today, and your thoughtful commentary on the report as it’s looking.