The National Council of Welfare (NCW) is a citizens' advisory body to the Minister of Human Resources Development Canada on matters of concern to low-income Canadians.

What's New?

TABLE OF CONTENTS

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FOREWORD

WHAT IS WELFARE?

• Eligibility

• Rates of Assistance

• Basic Social Assistance
  • A. Residence

  • B. Ages of Children

  • C. Employability of the Household Head

  • D. Type of Housing

  • E. Case History

  • F. Special Assistance

• Child Tax Benefit

• Provincial and Territorial Child Benefits

• GST Credit

• Provincial Tax Credits

WELFARE AND AVERAGE INCOMES

PROVINCIAL AND TERRITORIAL BENEFITS OVER TIME

WELFARE INCOMES AND POVERTY OVER TIME

EARNINGS EXEMPTIONS

CONCLUSION

LIST OF TABLES AND FIGURES

TABLE 2, Estimated 1999 Annual Welfare Income

TABLE 3, Adequacy of 1999 Benefits

TABLE 4, 1999 Welfare incomes as percentage of Average Incomes

TABLE 5, 1999 Provincial and Territorial Welfare Benefits in Constant Dollars

TABLE 6, 1999 Welfare Income as Percentage of the Poverty Line

TABLE 7, Monthly Earnings Exemptions as of January 1999

TABLE 8, Estimated Number of People on Welfare

TABLE 9, Poverty Line, 1999 Estimate

TABLE 10, Poverty Line, 2000 Estimate

FIGURE 1, Provincial/Territorial and Federal Contributions to Welfare Incomes, Families With Children

FIGURE 2 , Welfare Incomes Over Time As Percentage of Poverty Line, Single Employable People

THE NATIONAL COUNCIL OF WELFARE

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FOREWORD

The National Council of Welfare is grateful to the officials of provincial and territorial governments who took the time to review the factual material in this report and previous reports. The Council also appreciates the continuing support and co-operation of the Quantitative and Information Analysis Division of the Social Policy Directorate at Human Resources Development Canada, in particular the help of Anne Tweddle.

In all the years the Council has tracked welfare incomes, we have found that incomes in all parts of Canada fall well below the poverty line and represent a tiny fraction of average incomes. The fact that welfare programs continue to keep recipients - including children - in such deep poverty is deeply disappointing.

All levels of government have touted their intentions to help families with young children. Governments in several provinces and territories have also introduced programs to provide extra income supports for families with children. Unfortunately, many of these financial supports completely bypass those families that are forced to depend on welfare. As a result, very few children on welfare have seen their families' incomes improve.

Most disappointing is the effect of the federal government's massive investment in the Child Tax Benefit. Last year's version of this report showed the perverse impact of the clawback as of July 1998. This year's report shows the continuation of the pattern: the federal government gives and the provinces and territories take away. The federal government allowed the provinces and territories to claw back the increases in federal funds from families that relied on welfare.

The clawback has effectively frozen welfare incomes and dampened prospects for increases in the future. It has also made it possible for the provinces and territories to evade their responsibilities to the poorest of the poor while the federal government now shoulders a greater part of the cost.

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WHAT IS WELFARE?

Until March 31, 1996, welfare was paid under the terms of the Canada Assistance Plan (CAP), an arrangement that allowed the cost to be shared by the federal government and the provinces and territories. On April 1, 1996, the Canada Health and Social Transfer (CHST) replaced CAP. Under the CHST, the federal government reduced its transfer payments to the provinces and territories for health, education and social services. As of July 1, 1998, the Canada Child Tax Benefit has covered some of the cost of welfare for families with children.

Although people talk about welfare as a single entity, there are really 13 welfare systems in Canada: one in each province and territory, including the new territory of Nunavut. Despite the fact that each of the 13 systems is different, they have many common features. They have complex rules which regulate all aspects of the system, including eligibility for assistance, the rates of assistance, the amounts of other income recipients are allowed to keep, and the way in which applicants and recipients may question decisions regarding their cases.

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ELIGIBILITY

Once applicants meet the administrative conditions, they go through a "needs test." The welfare department compares the budgetary needs of an applicant and any dependants with the assets and income of the household. Needs, assets and income are defined in provincial and territorial welfare laws. In general, welfare is granted when a household's non-exempted financial resources are less than the cost of regularly recurring needs that the welfare department considers acceptable, for example, food, shelter, household, personal needs and special needs.

First, the needs test examines applicants' fixed and liquid assets. In most provinces and territories, fixed assets such as a principal residence, furniture and clothing are considered exempt. Most provinces and territories also exempt the value of a car, although some jurisdictions take into consideration factors such as the need for a private vehicle and the availability of public transportation. Property and equipment required for employment are generally considered exempt. Applicants are usually required to convert any non-exempt fixed assets into liquid assets and to use any non-exempt liquid assets for their ongoing needs before qualifying for welfare.

The limits on liquid assets (that is, cash, bonds and securities that are readily convertible to cash, and the cash value of life insurance in some provinces and territories) appear in Table 1. The amounts vary by household size and employability. Where a household's liquid assets are higher than the amounts in Table 1, that household is not entitled to welfare until the excess is spent on approved needs.

The amounts shown in Table 1 are the liquid asset exemption levels that were in effect in January 1999.

After welfare departments examine the fixed and liquid assets of welfare applicants, they identify all the sources of income for that household. Some types of income, such as the basic federal Child Tax Benefit (but not the supplement) and the federal GST credit, are normally considered exempt in the determination of eligibility for welfare. Welfare departments consider that income from other sources such as employment, pensions and unemployment insurance is fully or partially available for support of the household.

In most provinces and territories, welfare departments consider the supplement to the Canada Child Tax Benefit to be income that is deducted 100 percent from the family welfare cheque. Some provinces have reduced the amount of welfare they provide to families with children instead of treating the federal benefit as income. Only Newfoundland and New Brunswick allow families with children that are on welfare to keep the supplement to the Canada Child Tax Benefit.

Finally, welfare departments subtract all non-exempt income from the total needs of the household. Applicants qualify for welfare if their household's needs are greater than the household's resources or if there is a budget surplus that is insufficient to meet the cost of a special need such as medications or disability-related equipment.

The needs test was the central eligibility criterion required by the assistance provisions of the Canada Assistance Plan. The law authorized the federal government to share with the provinces and territories the costs of welfare only on behalf of households that qualified on the basis of need. Since the Canada Health and Social Transfer replaced the Canada Assistance Plan in April 1996, provinces and territories are no longer required to use a needs test to qualify for federal contributions to their welfare programs. As of the date of this report, however, no province or territory has replaced its needs test.

⁽²⁾In Prince Edward Island, single applicants were not considered unemployable unless they were disabled.

⁽³⁾For unemployed applicants who require assistance for less than four months, the exemption is $50 a month. For a single person on assistance for four months or more, the liquid asset exemption level is $200.

⁽⁴⁾This level applies to unemployed applicants with families who require assistance for less than four months. For persons with dependants who are on welfare for four months or more, liquid asset exemption levels are $1,200 to $2,400, depending on family size.

⁽⁵⁾This exemption applies to single persons over 60 years of age who are not eligible for the Old Age Security pension. Nova Scotia does not consider single applicants unemployable unless they are disabled. Married persons with a disabled partner may keep assets of $5,500.

⁽⁶⁾Quebec revised its test for liquid assets in 1998. Under the system in place from 1996 to 1998, liquid assets had to be below the monthly amount of welfare that a person would have qualified to receive. As of 1998, Quebec set standard maximum liquid asset amounts according to family size. If the applicant's assets - including expected income from other sources during the month of application - falls below the maximum, the welfare cheque for that month is calculated based on the rest of the days left in that month. Employment Insurance payments are exempt from the calculation. Heat and utility costs are subtracted from the total assets. Exemptions are uniform regardless of disability and work expectations.

⁽⁷⁾The "unemployable" category is the Ontario Disability Support Program; the "employable" category is Ontario Works, which underwent changes in 1998. Ontario may allow households applying for or in receipt of welfare to exceed the maximum exemption level if the savings will be used for an item Ontario deems necessary for the well-being of a member of the household, for example, a specially equipped van or an electric wheelchair.

⁽⁸⁾The provincial government has taken over the administration of welfare in the City of Winnipeg. The provincial Municipal Assistance Regulation does not allow any liquid asset exemption for applicants. In areas where the municipal government administers the program, it has the discretion to allow an exemption of up to $400 per person to a maximum of $2,000 per household, once a person or family has qualified for assistance.

⁽⁹⁾The level of $3,000 applies to a person with one dependant. There is an additional $500 liquid asset exemption for each additional dependant.

⁽¹⁰⁾This rate refers to people who receive welfare under the Supports for Independence program. Alberta grants an exemption of up to $3,000 if a person is severely and permanently disabled and has high needs because of the costs of personal support services. Most people with severe disabilities receive benefits under the Assured Income for the Severely Handicapped (AISH) program, rather than welfare. In October 1999, the asset limit for AISH was $100,000.

⁽¹¹⁾These exemption levels apply to British Columbia welfare recipients under age 55. The liquid asset exemption for single recipients 55 and older is $3,000. There is an additional $500 liquid asset exemption for each additional dependant.

⁽¹²⁾The exemption level for employables applies to people on assistance for less than 90 days. Higher levels are permitted for those on assistance for more than 90 days.

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Rates of Assistance

Applicants and recipients may be eligible for extra assistance in most provinces and territories if they have special needs such as medication, prosthetic devices, technical aids and equipment, special clothing or dental care. Welfare departments provide cash or "in kind" support in the form of vouchers, goods or services.

Sometimes applicants require assistance only for a special-needs item such as medication but they are able to provide for other basic needs from their own resources. In such cases, a province or territory may grant the specific amount that the household requires, provided that the applicants are eligible under the needs test.

Every province and territory has a list of special needs for which it will provide extra assistance. In some cases, only a portion of the cost of a particular item is paid. For example, the province may reimburse a certain percentage of dental costs, and the recipient is expected to pay the remaining amount.

Across Canada, welfare officials have some degree of discretion in deciding whether certain households qualify for special assistance under provincial or territorial welfare regulations. Discretion is both a strength and weakness of the welfare system. On one hand, welfare recognizes the fact that individuals may have ongoing or one-time special needs for which they require assistance. On the other hand, a person with special needs may be considered eligible for extra assistance by one welfare worker, but not by another.

Table 2 presents a national picture of estimated welfare incomes for 1999. The incomes shown are for the basic needs of four household types: a single employable person, a single disabled person, a single-parent family with a two-year-old child and a two-parent family with two children ten and 15 years of age. When we calculated the welfare incomes, we assumed that each of the households went on welfare on January 1, 1999 and remained on welfare for the entire calendar year.

The figures in the table must be interpreted with caution. They are estimates of what a particular family or a single person might receive. Welfare is a highly individualized program of income support, so every applicant could be eligible for a different amount of financial assistance because of the circumstances in his or her household.

It is especially important to understand the derivation of the social assistance figures in Column 1. These figures are both maximum and minimum amounts. They are maximum amounts in that they represent the highest level of welfare that a designated province or territory will provide to a given household unit for its basic living needs. These rates can be reduced in all provinces and territories for a number of reasons. For example, legislation in all jurisdictions allows welfare authorities to reduce, cancel or suspend benefits if an employable recipient refuses a reasonable job offer, or quits a job without just cause. In Quebec, the welfare department sometimes considers the financial support of young people to be the responsibility of their parents. In those cases, Quebec will reduce the assistance rate and demand a contribution from the parents of the welfare recipient.

These figures are also minimum amounts in that they do not generally include special-needs assistance to which a given household may be entitled, such as costs related to a disability or the cost of searching for a job.

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Basic Social Assistance

To ensure to the greatest extent possible the comparability of the data, we made a number of assumptions in calculating basic assistance. These assumptions concerning recipient households include where people lived, the ages of the children, the employability of the household head, the type of housing and the case history.

A. Residence
The rates of social assistance shown for each province or territory are for the largest municipal area. This is because maximum shelter allowances vary by region in many jurisdictions. Households living in smaller municipalities often receive lower benefits because their shelter costs are lower than in large urban centres (and most shelter allowances are based on actual shelter costs). Some provinces and territories offer supplements to compensate welfare households living in remote areas for higher living costs.

B. Ages of Children
Welfare rates for families with children in this report are based on the assumption that the child in the one-parent family is two years old and the children in the two-parent family are ten and 15 years old. Some provinces and territories vary a family's entitlement with the age of each child in the household.

C. Employability of the Household Head
In Table 2, we assigned short-term rates of assistance (which are generally lower than long-term rates) to single employable individuals and couples with children in all jurisdictions. The rates for single parents are based on the employability classifications in each province and territory.

In all jurisdictions, we have based our calculations on the assumption that the disabled person received welfare, not payments for special, long-term disability programs. In Alberta, for example, people with severe and permanent disabilities may be eligible for a special program called Assured Income for the Severely Handicapped (AISH), providing they can supply the province with medical proof of the severity of their disability. In April 2000, 25,000 Albertans received support from AISH, while 8,500 people who were classified as "not expected to work" received support from the regular welfare program.

D. Type of Housing
We assumed that the welfare households in this report are tenants in the private rental market rather than homeowners or social housing tenants. We also assumed that they did not share their accommodation. All provinces and territories reduce welfare entitlements when recipient households live in subsidized housing or share their housing.

In Newfoundland, single able-bodied people are granted welfare only under room-and-board arrangements, which are much lower than the payments for renting an apartment. The monthly room-and-board rate is only $93 a month. Three-quarters of single employable people receiving welfare under the room-and-board rate receive extra payments because of extenuating circumstances as determined by the welfare department.

Where shelter allowances do not include the cost of utilities, we added the cost of utilities to the shelter rates. We used maximum shelter rates in all jurisdictions.

Saskatchewan paid welfare recipients the actual cost of their utilities up to a set maximum amount until 1993. After 1993, Saskatchewan paid the actual costs with no limits. In last year's version of this report, the figures showed the actual average amount the province paid to welfare recipients of each family type. In this year's edition, the rate is based on the actual December 1999 payment multiplied by twelve months.

One notable change occurred in the Northwest Territories. Until 1997, there were no maximum rates for shelter. The welfare department covered the cost of actual rents, and these varied widely in the North. As of January 1, 1997, the Northwest Territories created a new welfare program with maximum rents of $450 a month for the single employable and single disabled people, $1,100 for the single parent with one child, and $1,300 for the couple with two children. The Northwest Territories covers the actual cost of utilities, but the territorial government did not provide the National Council of Welfare with the typical amounts paid. The figures for basic assistance from 1997 and 1998 are therefore much lower than those for previous years. Officials from the Territories provided us with the actual average utilities payments for September 1999, so the 1999 figures represent the September payments multiplied by twelve.

E. Case History
In order to "annualize" the rates for this report, we assumed that these four typical households started receiving welfare on January 1, 1999, and remained on assistance until the last day of each calendar year.

We calculated basic social assistance month by month for each category of recipient in each province and territory, taking into account increases or decreases in rates as of their effective dates within each year. We also assumed that welfare households did not have any income from paid work during the time they were on assistance.

F. Special Assistance
Welfare departments provide two kinds of assistance for special needs. Some supplementary allowances are paid automatically to recipients in certain groups, such as people with disabilities or parents with school-age children. These are the amounts that appear in the second column in Table 2. Examples of this type of special assistance include extra assistance for people with disabilities, money for school expenses, winter clothing allowances and Christmas allowances. The footnotes explain the special assistance in each jurisdiction.

Welfare departments also provide a second kind of assistance for one-time special needs, including items such as funeral expenses, moving costs or emergency home repairs. We have not included this type of special assistance in this report because the special needs are established on a case-by-case basis by individual welfare workers. In some cases, approval is required from an administrator, director or designated professional such as a doctor.

We have incorporated special assistance in Column 2 of Table 2 only when welfare departments would automatically provide it to certain recipients. If the welfare recipient has to provide special reasons to qualify for this assistance, our figures exclude it.

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Child Tax Benefit

In 1999, the federal government paid a basic annual benefit of $1,020 for each child under age 18 in most parts of Canada. Quebec and Alberta asked the federal government for different calculations of the basic benefits. In Quebec, payments vary according to the ages and number of children in each family. In Alberta, payments vary according to the ages of the children. In all provinces and territories, there was a supplementary annual benefit of up to $213 for each child under age seven.

As of July 1, 1998, the federal government provided all families with incomes under $20,921 with a supplement to the Canada Child Tax Benefit. If a family had one child, the supplement was $605 a year or $50.42 a month. Families with two children received a supplement of $1,010 a year or $84.16 a month. As of July 1, 1999, the supplement was $785 a year or $65.42 a month for a family with one child and $1,370 a year or $114.17 a month for a family with two children. Our calculations show the lower rate from January to June 1999 and the increase from July to December 1999.

Only those families on welfare who lived in Newfoundland and New Brunswick saw an increase in their incomes because of the supplement to the Canada Child Tax Benefit. The other provinces and territories clawed the money back in different ways. In Prince Edward Island, Nova Scotia, Ontario, Manitoba, British Columbia, Yukon and the Northwest Territories, the welfare departments consider the supplement to be non-exempt income that triggers a cut in the families' welfare cheques. In Quebec, Saskatchewan and Alberta, the provincial governments have actually cut welfare benefits by the amount of the supplement to the Child Tax Benefit. In our calculations, we have shown the basic Canada Child Tax Benefit and the supplement under the column called Federal Child Tax Benefit and we have shown the deductions in the column for social assistance.

As a result of the clawback, the already complex system of welfare programs has become even more complicated. With all the new rules and variations in welfare across the country, it is now almost impossible for welfare recipients to be sure that they are receiving all the benefits to which they are entitled.

The National Council of Welfare is very concerned by the fact that the clawbacks under the Canada Child Tax Benefit discriminate against families on welfare. Our 1998 report, Child Benefits: Kids Are Still Hungry, estimated that only 36 percent of poor families with children would benefit from the Canada Child Tax Benefit. Fifty-nine percent of two-parent poor families but only 17 percent of poor single-parent families would be allowed to keep the benefit. As women head most single-parent families, we believe that this constitutes discrimination on the basis of gender.

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Provincial and Territorial Child Benefits

Nova Scotia uses the money it claws back from the supplement to the Canada Child Tax Benefit to support the Nova Scotia Child Benefit for all families with net annual incomes below $16,000. Beginning in July 1998, families received $250 a year for their first child and $168 for the second child. As of July 1999, families received $324 for the first child and $242 for the second child. Our calculations show the lower amount from January to June 1999 and the higher amount for July to December 1999.

In October 1997, New Brunswick introduced a provincial Child Tax Benefit worth $21 a child each month, retroactive to April 1997. There have been no increases to the Benefit since then.

Quebec provides a family allowance over and above the federal Child Tax Benefit. This was worth $81.25 a month for each child from January to July 1999, then $66.25 a month for each child from August 1999 on. Quebec also paid a special allowance to families worth $9.77 a month for the first child under six, a single-parent supplement and a supplement to the family allowance.

The Saskatchewan Benefit provided $75 a month for families with one child and $167 a month for families with two children until June 1999. In July 1999, Saskatchewan reduced this amount by the amount of the increase in the federal government's payment under the supplement to the Canada Child Tax Benefit. From July to December, these families received $60 a month and $137 a month respectively. Saskatchewan also provides an allowance of $35 a month to the single-parent family.

In July 1996, British Columbia introduced the BC Family Bonus as part of a package of initiatives known as BC Benefits. The Family Bonus is an income-tested monthly payment to all low-income families with children that have filed income tax returns for the previous year and have applied for the Child Tax Benefit. Families on welfare received $103 a month per child for January to June 1999 and $105 a month from July to December 1999 from the BC Family Bonus. This amount includes the federal government's contribution for the supplement to the Child Tax Benefit. BC reduced its basic welfare payment by the value of the BC Family Bonus.

Northwest Territories uses the money it claws back from the supplement to the Canada Child Tax Benefit to support the NWT Child Benefit for all families with net annual incomes below $20,921. Beginning in July 1998, families receive $330 annually for every child. The amount did not change in 1999.

The new territory of Nunavut adopted most of the welfare policies of the Northwest Territories. Its Nunavut Child Benefit provides $330 a year for each child.

Several provinces and territories also provide incentives to low-income workers with children. We have not included these programs in our calculations because we base our estimates on the welfare incomes of parents with no earned income.

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GST Credit

Single adults, including single parents, also received an income-tested supplement to a maximum of $105 in 1999 if their 1998 incomes were higher than $6,456.

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Provincial Tax Credits

TABLE 2, ESTIMATED WELFARE INCOME BY TYPE OF HOUSEHOLD
	Basic Social Assistance	Additional Benefits	Federal Child Tax Benefit1	Provincial/ Territorial Child Benefits	Federal GST Credit2	Provincial / Territorial Tax Credits	Total Income
NEWFOUNDLAND3
Single Employable4	$1,102				$199	$40	$1,341
Disabled Person5	$6,940	$1,500			$237	$40	$8,717
Single Parent, One Child6	$11,316		$1,928	$85	$495	$100	$13,924
Couple, Two Children7	$12,064		$3,230	$215	$608	$200	$16,317
PRINCE EDWARD ISLAND8
Single Employable	$5,316				$199		$5,515
Disabled Person9	$7,116	$1,092			$234		$8,442
Single Parent, One Child10/FONT>	$9,277		$1,928		$465		$11,670
Couple, Two Children11	$13,786	$175	$3,230		$608		$17,799
NOVA SCOTIA
Single Employable12	$4,374				$199		$4,573
Disabled Person	$8,568				$241		$8,809
Single Parent, One Child13	$9,865		$1,928	$287	$478		$12,558
Couple, Two Children14	$12,586		$3,230	$209	$608		$16,633
NEW BRUNSWICK
Single Employable	$3,168				$199		$3,367
Disabled Person	$6,696				$203		$6,899
Single Parent, One Child15	$8,772	$900	$1,928	$252	$467		$12,319
Couple, Two Children16	$9,828	$1,000	$3,230	$504	$608		$15,170
QUEBEC17
Single Employable18	$6,024				$199		$6,223
Disabled Person19	$8,712				$239		$8,951
Single Parent, One Child20	$8,341		$1,928	$2,200	$488		$12,957
Couple, Two Children21	$10,243	$139	$2,210	$1,800	$608		$15,000
ONTARIO22
Single Employable	$6,240				$199	$383	$6,822
Disabled Person23	$11,160				$293	$306	$11,759
Single Parent, One Child24	$10,789	$105	$1,928		$498	$385	$13,704
Couple, Two Children25	$13,378	$407	$3,230		$608	$507	$18,130
MANITOBA
Single Employable	$5,352				$199		$5,551
Disabled Person26	$7,157	$870			$230		$8,257
Single Parent, One Child27	$8,941		$1,928		$459		$11,328
Couple, Two Children28	$12,867		$3,230		$608		$16,705
SASKATCHEWAN29
Single Employable	$5,540				$199		$5,739
Disabled Person30	$7,140	$1,020			$225		$8,385
Single Parent, One Child31	$8,253		$1,928	$1,230	$466		$11,877
Couple, Two Children32	$11,713	$215	$3,230	$1,824	$608		$17,590
ALBERTA 33
Single Employable	$4,764	$60			$199		$5,023
Disabled Person34	$6,384	$474			$203		$7,061
Single Parent, One Child35	$9,019	$60	$1,843		$453		$11,375
Couple, Two Children36	$13,774	$210	$3,327		$608		$17,919
BRITISH COLUMBIA37
Single Employable38	$6,046	$35			$199	$50	$6,330
Disabled Person39	$9,252	$35			$256	$50	$9,593
Single Parent, One Child40	$10,548	$80	$1,928	$553	$502	$50	$13,661
Couple, Two Children41	$12,396	$190	$3,230	$1,306	$608	$100	$17,830
YUKON42
Single Employable43	$10,790	$155			$228		$11,173
Disabled Person44	$10,790	$1,655			$258		$12,703
Single Parent, One Child45	$15,198	$572	$1,928		$503		$18,201
Couple, Two Children46	$21,840	$685	$3,230		$608		$26,363
NORTHWEST TERRITORIES47
Single Employable48	$8,299				$214		$8,513
Disabled Person49	$10,639				$261		$10,900
Single Parent, One Child50	$17,791		$1,928	$330	$503		$20,552
Couple, Two Children51	$22,152		$3,230	$660	$608		$26,650
NUNAVUT52
Single Employable	$10,188				$214		$10,402
Disabled Person53	$12,288				$261		$12,549
Single Parent, One Child54	$25,381		$1,928	$330	$503		$28,142
Couple, Two Children55	$29,746		$3,230	$660	$608		$34,244

⁽¹⁾ The Federal Child Tax Benefit column shows $1,020 of the basic benefit and $213 as a supplement for the child under seven in the single-parent family. The two-parent family with two children aged ten and 15 was eligible for $2,040 ($1,020 for each child). As of July 1, 1998, the single-parent with one child received a supplement of $605 a year (or $50.42 monthly) and the couple with two children received a supplement of $1,010 a year ($84.17 monthly). On July 1, 1999, the value of the supplement rose to $785 a year (or $65.42 a month) for the single-parent family and $1,370 a year (or $114.17 monthly) for the couple with two children. All provinces and territories except Newfoundland and New Brunswick deducted the value of the supplement from the welfare payments to families. Further changes to the supplement will appear in future editions of this report. Quebec and Alberta asked the federal government to vary the amount of the Child Tax Benefit, so the child benefit figures for these provinces differ.

⁽²⁾The GST credit is paid in quarterly instalments. The special GST supplement for single persons and single-parent families is included in the totals for the year.

⁽³⁾As of 1997, Newfoundland allows all welfare recipients to keep the provincial refund for the Harmonized Sales Tax. Each adult receives $40 and each child receives $60.

⁽⁴⁾These rates apply to single able-bodied people under age 50. Rates of assistance to people over 50 are higher. Until June 1996, it was the practice of the Newfoundland welfare department to grant most single employable people welfare at room and board rates. The 1996 provincial budget made room and board the rule for all single employable people on welfare, except in exceptional cases. This rate has been calculated for a single employable person boarding with relatives in St. John's. On August 1, 1999, monthly room and board rates rose by two percent from $91 to $93. Three-quarters of single employable people receiving room and board rates on welfare receive extra payments because of extenuating circumstances.

⁽⁵⁾The additional benefits column includes the flat-rate special allowance of $125 a month for a single person with a disability. It is paid only to individuals who are severely disabled and who require supportive services to aid independent living. When rents are greater than $149 monthly, the welfare department can provide a further $61 a month. On August 1, 1999, monthly rates rose two percent from $401 to $409.

⁽⁶⁾On August 1, 1999, the monthly welfare rate rose from $494 to $539. When rents are greater than $149 monthly, the welfare department can provide a further $61 a month.

⁽⁷⁾On August 1, 1999, the monthly welfare rate rose two percent, from $618 to $630. When rents are greater than $149 monthly, the welfare department can provide a further $61 a month.

⁽⁸⁾As of 1997, Prince Edward Island considered the GST credit exempt income so the amount was not deducted from basic social assistance.

⁽⁹⁾Additional benefits include the special care allowance of up to $40 a month to help pay for the special needs arising from a disability and the personal comfort allowance of $51 a month for items of personal care.

⁽¹⁰⁾Prince Edward Island deducts the value of the supplement to the Canada Child Tax Benefit from basic social assistance.

⁽¹¹⁾Prince Edward Island deducts the value of the supplement to the Canada Child Tax Benefit from basic social assistance. The additional benefits column shows back-to-school benefits of $100 and $75 for the children.

⁽¹²⁾Under special circumstances, Nova Scotia will allow single people to receive an additional $225 shelter allowance. These calculations do not include the higher rate for special circumstances.

⁽¹³⁾Nova Scotia deducts the value of the supplement to the Canada Child Tax Benefit from basic social assistance. Nova Scotia then uses the money it claws back to support the Nova Scotia Child Tax Benefit. As of July 1, 1998, families receive $250 a year for their first child and $168 a year for their second child. On July 1, 1999, the payment rose to $324 a year for the first child and $242 for the second child. To qualify for the Nova Scotia Child Tax Benefit, the family net annual income on federal tax returns must be lower than $16,000. Families do not have to have earned income. This amount appears in the provincial child benefits column.

⁽¹⁴⁾Nova Scotia deducts the value of the supplement to the Canada Child Tax Benefit from basic social assistance. Nova Scotia then uses the money it claws back to support the Nova Scotia Child Tax Benefit. As of July 1, 1998, families receive $250 a year for their first child and $168 a year for their second child. On July 1, 1999, the payment rose to $324 a year for the first child and $242 for the second child. To qualify for the Nova Scotia Child Tax Benefit, the family net annual income on federal tax returns must be lower than $16,000. Families do not have to have earned income. This amount appears in the provincial child benefits column.

⁽¹⁵⁾New Brunswick allows families to keep the supplement to the Canada Child Tax Benefit.. The additional benefits column shows the Income Supplement Benefit, a shelter subsidy that assists families with children paying high shelter costs. The maximum subsidy for eligible households is $90 per month from November to April and $60 per month from May to October.. The provincial child benefits column shows the New Brunswick Child Tax Benefit of $21 a month.

⁽¹⁶⁾New Brunswick allows families to keep the supplement to the Canada Child Tax Benefit.. The additional benefits column shows the combined amount of the Income Supplement Benefit and the School Supplement ($50 a year per child). The provincial child benefits column shows the New Brunswick Child Tax Benefit of $42 a month beginning in April 1997.

⁽¹⁷⁾The value of the Quebec Sales Tax Credit is included in basic welfare assistance. The single disabled person was classified under the Financial Support Program. The single-parent family is classified as "unavailable" under the Work and Employment Incentives Program, and the others were classified as "non-participating."

⁽¹⁸⁾Basic assistance rates increased to $502 a month in January 1999. The actual assistance could be lower than the rates indicated here if Quebec deemed the recipient eligible for a "parental contribution" as defined by Quebec law.

⁽¹⁹⁾Basic social assistance for people with disabilities rose to $726 a month on January 1, 1999.

⁽²⁰⁾Quebec reduces its payments for families with children by an amount equivalent to the supplement to the Canada Child Tax Benefit by reducing the Family Allowance. The basic social assistance column shows the rate for the Work and Employment Incentives program, which Quebec increased on January 1, 1999. The column also includes the payment for young children, for the first child, and for the first child of a single parent. The shelter subsidy for recipients with dependent children rose from $72 a month to $80 a month in October 1999. Quebec asked the federal government to vary the amount of the federal Child Tax Benefit according to the age of the child and the number of children in a family. The provincial child benefits column shows the Quebec family allowance and the Family Allowance Supplement for the first child in a family. Quebec reduced the value of the Family Allowance Supplement on August 1, 1999 by an amount equivalent to the increase in the supplement to the federal Child Tax Benefit.

⁽²¹⁾Quebec reduces its welfare payments for families with children by an amount equivalent to the supplement to the Canada Child Tax Benefit.. The additional benefits column includes the school expense allowance of $46 for each dependent attending primary school and $93 for each dependent in secondary school. Quebec asked the federal government to vary the amount of the federal Child Tax Benefit according to the age of the child and the number of children in a family. The provincial child benefit column shows the Quebec Family Allowance.

⁽²²⁾The provincial tax credits column shows the combined amount of the Ontario Sales Tax and Property Tax Credits for 1998 based on the recipients' shelter costs.

⁽²³⁾Assistance for a single disabled person is based on the Ontario Disability Support Program, formerly known as GAINS-D. Rates were last increased in April 1993.

⁽²⁴⁾Ontario deducts the value of the supplement to the Canada Child Tax Benefit from basic social assistance. Additional benefits are the winter clothing allowance of $105 for each dependent child.

⁽²⁵⁾Ontario deducts the value of the supplement to the Canada Child Tax Benefit from basic social assistance. The additional benefits column shows the combined amount of the back-to-school allowances ($69 for the ten-year-old child and $128 for the 15-year-old) and the winter clothing allowance of $105 per child.

⁽²⁶⁾The additional benefits column shows the disability benefit which was $70 a month until October 1999 when it rose to $80 a month.

⁽²⁷⁾Manitoba deducts the value of the supplement to the Canada Child Tax Benefit from basic social assistance.

⁽²⁸⁾Manitoba deducts the value of the supplement to the Canada Child Tax Benefit from basic social assistance.

⁽²⁹⁾Until 1993, Saskatchewan paid actual utility costs up to a maximum amount. After 1993, Saskatchewan paid actual costs with no limits. Previous editions of this report showed the maximum rates, although few welfare recipients actually received the maximum. In Welfare Incomes 1997 and 1998, the calculation showed the actual average amount paid to welfare recipients of each family type. In Welfare Incomes 1999, the utility rate is based on the actual December 1999 rate multiplied by twelve.

⁽³⁰⁾Additional benefits for people with disabilities in Saskatchewan include an allowance of $40 a month and a special care allowance of $25 a month for tasks they are unable to perform themselves. As of 1996, all disabled people on welfare are entitled to a special transportation allowance of $20 a month.

⁽³¹⁾On July 1, 1998, the supplement to the Canada Child Tax Benefit began. Saskatchewan lowered its welfare rates by the amount of the supplement.. The provincial child benefits column shows the Saskatchewan Benefit of $75 a month and the Saskatchewan Child Differential Allowance of $35 a month, both of which began in July 1998.

⁽³²⁾On July 1, 1998, the supplement to the Canada Child Tax Benefit began. Saskatchewan lowered its welfare rates by the amount of the supplement.. The additional benefits column includes education-related expenses: $130 for children aged 14 and over and $85 for children between the ages of six and 13. The provincial child benefits column includes the Saskatchewan Child Benefits of $167 a month beginning on July 1, 1998.

⁽³³⁾The single employable person, the single-parent family and the two-parent family are classified under the Employment and Training Support program, and the single disabled person is classified under the Assured Support program.. The additional benefits column shows a "co-payment allowance" of $5 a month for each adult.

⁽³⁴⁾The additional benefits column shows a monthly supplement of $20 for January to September which was raised to $78 monthly in October 1999 for any person eligible for Assured Support, and a monthly "co-payment allowance" of $5 for each adult.. People with severe and permanent disabilities are eligible for further assistance of $855 a month through the Assured Income for the Severely Handicapped program. People with severe and permanent disabilities whose needs exceed the amount provided under the Assured Income for the Severely Handicapped program are also eligible for special allowances of up to $3,000 a month to help pay the costs of personal supports as well as a handicap allowance of $175 a month. In April 2000, 25,000 Albertans received support from AISH while 8,500 people who were classified as "not expected to work" received support from the Assured Support program.

⁽³⁵⁾On August 1, 1998, Alberta reduced its basic social assistance rates for families with children by the amount of the supplement to Canada Child Tax Benefit. Alberta varies the amounts of the federal Child Tax Benefit according to the age of the child.. The additional benefits column shows the monthly "co-payment allowance" of $5 for each adult.

⁽³⁶⁾On August 1, 1998, Alberta reduced its basic social assistance rates for families with children by the amount of the supplement to Canada Child Tax Benefit. Additional benefits include education-related expenses: $100 for children aged 14 and over and $50 for children between the ages of six and 13. Alberta asked the federal government to vary the amounts of the federal Child Tax Benefit according to the age of the child.

⁽³⁷⁾Provincial Tax Credits are the B.C. Sales Tax Credit, which is payable to low-income households throughout the income tax system. The amounts shown ($50 per person per year) were paid in 1999 for the 1998 tax year.

⁽³⁸⁾As of January 1996, British Columbia imposed an "employable reduction" on single employable people in their second and subsequent months on welfare. Single employables receive $546 a month in their first month on welfare and $500 a month subsequently. The amount under "Additional Benefits" shows a Christmas allowance of $35 for a single person.

⁽³⁹⁾The amount under "Additional Benefits" shows a Christmas allowance of $35 for a single person.

⁽⁴⁰⁾On July 1, 1998, British Columbia reduced basic social assistance for families with children by an amount equivalent to the value of the supplement to the Canada Child Tax Benefit. In July 1996, British Columbia introduced the B.C. Family Bonus. The Family Bonus is an income-tested monthly payment to all low-income families with children who have filed income tax returns for the previous year, and have applied for the Child Tax Benefit. Families on welfare receive $103 per child per month, which is deducted from their welfare, resulting in no change to the families' total income. The provincial child benefits column shows the B.C. Family Bonus. Previous editions of Welfare Incomes showed B.C. Family Bonus under the additional benefits column. The amounts under "Additional Benefits" show a Christmas allowance of $70 for the single-parent plus $10 for the child.

⁽⁴¹⁾On July 1, 1998, British Columbia reduced basic social assistance for families with children by an amount equivalent to the value of the supplement to the Canada Child Tax Benefit. In July 1996, British Columbia introduced the B.C. Family Bonus. The Family Bonus is an income-tested monthly payment to all low-income families with children who have filed income tax returns for the previous year, and have applied for the Child Tax Benefit. Families on welfare receive $103 per child per month, which is deducted from their welfare, resulting in no change to the families' total income. The provincial child benefits column shows the B.C. Family Bonus. Previous editions of Welfare Incomes showed B.C. Family Bonus under the additional benefits column. The amounts under "Additional Benefits" show a Christmas allowance of $90, and school start-up fees of $42 for a child between the ages of five and 11 and $58 for a child 12 and older.

⁽⁴²⁾Yukon last raised welfare rates in April 1991. This edition of Welfare Incomes includes the maximum payment for utilities. Previous edition did not include utilities payments.

⁽⁴³⁾Additional benefits include the Christmas allowance of $30 per person and winter clothing allowance of $125 for adults and children 14 and older.

⁽⁴⁴⁾Additional benefits include the Christmas allowance of $30 per person and winter clothing allowances of $125 for adults and children 14 and older. Disabled welfare recipients also receive a supplementary allowance of $125 a month if Yukon considers them "permanent exclusions from the labour force."

⁽⁴⁵⁾Yukon deducts the value of the supplement to the Canada Child Tax Benefit from basic social assistance. Additional benefits include $6 a week for babysitting expenses, a $60 Christmas Allowance and a $200 winter clothing allowance.

⁽⁴⁶⁾Yukon deducts the value of the supplement to the Canada Child Tax Benefit from basic social assistance. Additional benefits include school allowances of $50 for the 10-year-old and $65 for the 15-year-old, $120 for a Christmas Allowance and $450 for winter clothing.

⁽⁴⁷⁾In January 1997, the Northwest Territories redesigned its welfare system. Until then, Northwest Territories paid actual shelter costs. Rates are now fixed, but the government pays the actual cost of fuel. Welfare recipients may be eligible for additional support if they undertake activities the territory considers "productive choices". "Productive choices" may include activities such as work, training, raising children under the age of three, and voluntary activities.

⁽⁴⁸⁾Northwest Territories raised the monthly food allowance for single people from $152 to $162 in August 1998.

⁽⁴⁹⁾Northwest Territories raised the monthly food allowance for single people from $152 to $162 in August 1998. Under special circumstances, Northwest Territories will pay higher shelter costs for welfare recipients with disabilities. This figure assumes that the person with disabilities did not receive the higher shelter payment.

⁽⁵⁰⁾Northwest Territories deducts the value of the supplement to the Canada Child Tax Benefit from basic social assistance. Northwest Territories then uses the money it claws back to support the NWT Child Tax Benefit. As of July 1, 1998, families with incomes below $20,921 receive $330 a year for each child. Families do not have to have earned income. The NWT Child Tax Benefit appears in the provincial/territorial child benefits column. Northwest Territories considers that raising a child under three is a "productive choice," so the parent and child each get a clothing allowance. This is included in the basic social assistance column. Northwest Territories raised the monthly food allowance from $273 to $295 in August 1998.

⁽⁵¹⁾Northwest Territories deducts the value of the supplement to the Canada Child Tax Benefit from basic social assistance. Northwest Territories then uses the money it claws back to support the NWT Child Tax Benefit. As of July 1, 1998, families with incomes below $20,921 receive $330 a year for each child. Families do not have to have earned income. This amount appears in the provincial/territorial child benefits column. Northwest Territories raised the monthly food allowance from $485 to $524 in August 1998.

⁽⁵²⁾Nunavut Territory was created on April 1, 1999. Welfare policies were based on those of the Northwest Territories but with some modifications. Rates for Nunavut are based on the amounts granted to people living in Iqaluit. Under the administration of the Northwest Territories welfare system, rates for Iqaluit were often higher than rates in Yellowknife. Utility rates are based on actual average utility payments for September 1999. The shelter portion of Nunavut welfare can be raised under exceptional circumstances to cover the actual cost of housing. Welfare recipients may be eligible for additional support if they undertake activities the territory considers "productive choices." "Productive choices" may include activities such as work, training, raising children under the age of five, and voluntary activities.

⁽⁵³⁾People with disabilities receive a monthly disability allowance of $175 if they are over 60 or have a certificate from a doctor.

⁽⁵⁴⁾Nunavut deducts the value of the supplement to the Canada Child Tax Benefit from basic social assistance. Nunavut then uses the money it claws back to support the Nunavut Child Tax Benefit (a continuation of the NWT Child Tax Benefit). As of July 1, 1998, families with incomes below $20,921 receive $330 a year for each child. Families do not have to have earned income. This amount appears in the provincial/territorial child benefits column.

⁽⁵⁵⁾Nunavut deducts the value of the supplement to the Canada Child Tax Benefit from basic social assistance. Nunavut then uses the money it claws back to support the Nunavut Child Tax Benefit (a continuation of the NWT Child Tax Benefit). As of July 1, 1998, families with incomes below $20,921 receive $330 a year for each child. Families do not have to have earned income. This amount appears in the provincial/territorial child benefits column.

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Adequacy of Benefits

Each year, Statistics Canada calculates low income cut-offs for households of different sizes living in communities of different sizes. They approximate levels of gross income where people are forced to spend much of their income on food, shelter and clothing.

The National Council of Welfare regards the cut-offs as poverty lines. Like any poverty lines, they have their limitations, but they are widely accepted as a benchmark for judging income adequacy in Canada. Other studies of poverty, especially local surveys using a "market basket" approach, have produced comparable results.

Some provincial governments maintain that the poverty lines are an especially imperfect measure of poverty when it comes to welfare incomes, because the lines are based on pre-tax income and welfare benefits are not taxable. In reality, most of the incomes in Table 3 are so low that there is no difference between taxable and non-taxable income. For example, single employable people in Newfoundland with total incomes of $1,341 were abysmally poor by any standard. Even if they had earned income instead of receiving welfare income, they would have been exempt from income tax because their earnings were so low.

Some provinces and territories also contend that welfare is intended to provide only the bare necessities of life, while incomes at the level of the low income cut-offs are high enough to allow some discretionary spending as well. The National Council of Welfare has no sympathy for that argument. The fact is that the cut-offs already represent very low levels of income. The only "discretion" many welfare recipients have is how to cut back on food when the money starts running short toward the end of the month.

As Table 3 shows, no province had welfare rates consistently closer to the poverty lines than elsewhere. Rates in some provinces and territories, especially rates for single employables, are far below the lines. Welfare incomes which reach only one fifth or one third of the poverty line are unacceptably low and should be raised at the earliest possible date. How anyone manages to live on welfare rates of only nine percent of the poverty line - as a single employable person in Newfoundland is forced to do - is beyond our comprehension. Rates this low cannot be described as anything other than punitive and cruel.

Column 1 of Table 3 shows welfare incomes for different types of households in the ten provinces in 1999. None of the territories is included in this table because they are specifically excluded from the survey used to generate the low income cut-offs.

Column 2 indicates the estimated 1999 poverty lines (the low income cut-offs of Statistics Canada, 1986 base) for the largest city in each province. The poverty gap, or difference between total income and the poverty lines, is shown in the next column. The last column represents total welfare income as a percentage of the poverty line, that is, welfare income divided by the poverty line.

Welfare incomes for single employable people remained by far the least adequate during 1999. Rates ranged from nine percent of the poverty line in Newfoundland to 41 percent of the poverty line in Ontario.

The lowest benefits for single disabled people stood at 42 percent of the poverty line in Alberta. The highest rate was 70 percent of the poverty line in Ontario.

Welfare incomes for single-parent families ranged from a low of 50 percent in both Manitoba and Alberta to a high of 70 percent in Newfoundland.

For two-parent families with two children, welfare incomes ranged from 45 percent of the poverty line in Quebec to 62 percent in Prince Edward Island.

Table 4 compares the welfare incomes of our four typical households with average incomes for the appropriate household type in each province.

The averages for 1999 are based on data collected by Statistics Canada in the Survey of Labour and Income Dynamics, inflated by the Consumer Price Index.

For the single employable person and the single disabled person, we used average incomes in each province for unattached people under the age of 65. For single parents, we used the average incomes of single parents under 65 with children under 18. The size of the sample of single parents was too small to be reliable for Newfoundland and Prince Edward Island. For the two-parent family, we used the average incomes of couples under 65 with children under 18.

Welfare incomes are far, far below average. In 1999, a single employable person on welfare received from eight percent to 29 percent of the average income received by single people under 65. In 1999, the disabled person on welfare got 26 to 49 percent of the average. Single-parent families on welfare had incomes worth 38 to 61 percent of average incomes. It is worth noting that average incomes for single-parent families in general remain far below average incomes for couples with children. The two-parent family on welfare had income between 23 and 32 percent of average incomes.

The figures consist of those benefits shown in Table 2 that are exclusively within provincial and territorial jurisdiction, in other words, total welfare incomes less the federal Child Tax Benefit and the GST credit. Comparable figures for other years were calculated from Welfare in Canada: The Tangled Safety Net and previous editions of Welfare Incomes.

Using the Consumer Price Index, all the dollar figures in Table 5 are expressed in constant 1999 dollars to factor out the effects of inflation and to show the real purchasing power of welfare benefits over time. The percentages in the last two columns show increases or decreases in real purchasing power.

The table provides comparisons of provincial and territorial benefits for 1986 to 1999 for the single employable person, the single-parent family and the two-parent family. The National Council of Welfare did not include a single person with a disability in its original calculations of welfare incomes for 1986, so the comparison for this group is available from 1989 only. The National Council of Welfare first estimated welfare incomes in the Northwest Territories in 1993, so the table shows comparisons only since that time.

Most welfare recipients in Canada saw further erosion of their already precarious financial situation in 1999. Between 1998 and 1999, the cost of living rose by 1.7 percent. Welfare benefits were frozen or decreased in most jurisdictions. When the change from 1998 to 1999 appears as -1.7 percent, it means that the welfare rates were frozen and welfare recipients lost 1.7 percent of their purchasing power to inflation.

In Newfoundland, small increases in welfare payments for single employable and disabled recipients kept the value of welfare incomes close to the previous year. However, even with the introduction of the Newfoundland and Labrador Child and Family Benefit, the provincial contribution to welfare for families with children failed to keep pace with the increase in the cost of living. Newfoundland redesigned its welfare programs in 1999, and reduced the welfare payments slightly.

In Prince Edward Island, the welfare incomes of the single employable and single disabled person dropped in value simply because of freezes in their provincial welfare benefits. The provincial portion of incomes for families with children dropped considerably, by 5.7 percent for the single parent, and by 6.3 percent for the couple with two children. This is because Prince Edward Island claws back the supplement to the federal Child Tax Benefit. While the federal government gives money to poor parents, the province takes it away. This results in a significant drop in the province's contribution to families.

Nova Scotia also claws back the supplement to the federal Child Tax Benefit. Although the province gives families with children a payment under the Nova Scotia Child Benefit, the amount is much smaller than the amount the province takes from families on welfare. The result is that the provincial contribution to welfare incomes drops by 3.9 percent for the single parent with one child, and by 8.1 percent for the couple with two children. The incomes of single employable people on welfare in Nova Scotia dropped by 2.9 percent because of a change in welfare policy. As of 1999, welfare recipients are no longer eligible for a clothing allowance during their first three months on welfare. The single disabled person's welfare was frozen, so it simply dropped in value by the cost of living.

In New Brunswick, welfare incomes were frozen and dropped by the cost of living, 1.7 percent. New Brunswick does not claw back the supplement to the federal Child Tax Benefit, so the incomes of families with children lost only by the cost of living.

In Quebec, there were very slight increases in the payments to single employable and single disabled welfare recipients, which raised their incomes slightly higher than the cost of living. Quebec claws back the supplement to the federal Child Tax Benefit. Even with Quebec's programs for families with children, its provincial contribution to welfare incomes fell well below the cost of living, by 4.2 percent for the single parent and by 5.6 percent for the couple.

Ontario's single employable and single disabled welfare recipients lost by 1.7 percent, or the cost of living, because there were no increases in their provincial payments. The single parent and couple with children lost 4.9 percent and 6 percent respectively because Ontario claws back the supplement to the federal Child Tax Benefit.

Manitoba's single employable welfare recipients lost 1.7 percent of the value of their income because of a freeze in their provincial assistance. Single disabled recipients received a slight increase in their special benefits which reduced the erosion by the cost of living. Manitoba claws back the supplement to the federal Child Tax Benefit, so the families with children lost 5.8 percent of the value of provincial assistance for the single parent, and 6.6 percent of the income for the couple with two children.

In Saskatchewan, the figure for assistance for utilities is now based on the December 1999 rate. In previous years, this report used the September rate. This is a slightly higher figure, so it masks the fact that there were in reality no increases in the provincial payments to people on welfare. In reality, single employable and single disabled welfare recipients saw a decline in the value of their welfare incomes equivalent to the cost of living. Because Saskatchewan claws back the supplement to the federal Child Tax Benefit, the value of the provincial payments to families with children declined significantly.

In Alberta, value of the single employable welfare recipient's income declined by the cost of living. Alberta increased the Personal Needs Supplement for welfare recipients with disabilities, so the value of their incomes increased slightly. Because Alberta claws back the supplement to the federal Child Tax Benefit, the value of the provincial contribution to the income of the single parent declined by 2.8 percent, and the value of Alberta's contribution to the income of the couple on welfare declined by 4.9 percent. This occurred even though Alberta increased the shelter allowance for both types of families with children.

In British Columbia, the single employable and single disabled person saw the value of their provincial incomes decline by the value of the cost of living. British Columbia claws back the value of the supplement to the federal Child Tax Benefit, so these families saw a decline of 4.9 percent and 6.1 percent respectively for the single parent and couple with children.

The incomes of single employable and single disabled welfare recipients in Yukon were frozen between 1998 and 1999. The two families with children saw a decrease in the value of Yukon's contribution to their incomes because Yukon claws back the supplement to the federal Child Tax Benefit.

The value of the Northwest Territories' contribution to welfare incomes appears to have increased significantly. This is because in the previous edition of this report, Northwest Territories was not able to provide an estimate of its payments for utilities. In fact, welfare incomes in the Territories have not increased, and the Territories claws back the supplement to the federal Child Tax Benefit. Although the Territories began the NWT Child Benefit in July 1998, this increase in its contribution did not entirely offset the decrease caused by the clawback.

The view of welfare incomes over the last decade is bleak. The purchasing power of welfare incomes fell everywhere in Canada for most of the 1990s.

Many of the welfare rates shown in Table 5 peaked in 1986 or 1989 and fell more or less steadily since then. In Alberta, for example, provincial benefits for single employable recipients as measured in 1999 constant dollars plummeted from $8,578 a year in 1986 to $4,824 in 1999, a decline of 43.8 percent. The peak years in Prince Edward Island were 1986 and 1989, followed by cuts year after year ever since.

The patterns were substantially different in Quebec, Ontario, Manitoba and British Columbia. In these provinces, welfare rates peaked in the early to mid-1990s. The end result was the same, however, as welfare rates declined further and further by the end of the decade.

In most cases, it was single employable people on welfare who suffered the most. Between 1986 and 1999, welfare benefits for a single employable person in Newfoundland dropped by a shocking 76.2 percent. A sizeable increase in Quebec resulted from a decision to raise abysmally low rates for single employable people under 30. Even then, a single employable person in Quebec received only $6,024 a year in 1999.

The charts at the end of this section show the effect of the clawback on the total welfare income of a single-parent family with one child and on a couple with two children. We have calculated welfare incomes over time by adjusting the amounts to the cost of living as we did in Table 5. All the annual welfare incomes are expressed in 1999 dollars.

We have separated the portion of welfare incomes that is paid by the province or territory from the portion that is paid by the federal government. Each chart has a white bar that shows the contribution of the provincial or territorial government. The provincial or territorial contribution is the amount found in Table 5.

The black bar shows the federal government contribution to the welfare incomes of these families on welfare. This amount includes the GST, the federal Child Tax Benefit and its supplement. The federal portion of welfare incomes has grown every year because of increases in the federal government's support to low-income families. As of July 1, 1998, a single-parent family with one child received a supplement of $605 a year (or $50.24 a month) and the couple with children received $785 a year (or $65.42 a month). As of July 1, 1999, the supplement for the single-parent family increased to $785 a year ($65.42 a month) and for the couple with two children, $1,370 a year ($114.17 a month). On July 1, 2000, the federal government again increased the supplement, this time to $955 a year ($79.58 a month) for the single-parent family, and to $1,710 a year ($142.50 a month) for the couple.

Together, the white and the black bars show the total welfare income for the single-parent family with one child and for the couple with two children for the period since the National Council of Welfare began calculating welfare incomes in 1986. What these graphs show is that in those provinces and territories where the governments have clawed back the supplement to the federal Child Tax Benefit, the federal government is providing a larger and larger share of the welfare incomes, but the total welfare incomes of families with children have not improved. With few exceptions, the white bars that show the share of welfare incomes that is paid by the provinces and the territories become smaller as the years go on.

In Newfoundland, the total 1999 annual welfare income of a single-parent family with one child was $13,924. This was made up of a contribution of $11,501 from the province and $2,423 from the federal government. This is a very slight increase over the 1998 total income of $13,695, and is still well below the 1994 peak of $14,090. In 1994, the federal government contributed only $1,874. Even with the increase in the federal government's contribution, various cutbacks and freezes in the provincial contribution throughout the 1990s have brought the total welfare income down from the 1994 rate. The increasing federal government contribution has brought the total welfare income up slightly, despite the fact that the province is contributing less to the welfare income than it has since the National Council of Welfare began to track welfare incomes.

The couple with two children had a total annual income of $16,317, up slightly from $15,464 in 1998. Almost all the increase in the welfare income is because of the increase in the federal government's supplement to the Child Tax Benefit. The Newfoundland and Labrador Child and Family Benefit began in August 1999, but is worth only $17 a month for a family with one child and $43 a month for a family with two children. The total 1999 welfare income of $16,317 is slightly lower than the 1986 total welfare income of $16,915, but in 1986, the federal government contributed only $1,504, while in 1999, it contributed $2,423. As in the case of the single-parent family, Newfoundland's contribution to this family's welfare income is less now than ever before, while the federal government's contribution is more than it has ever been.

New Brunswick is the only other province that does not take away the money the federal government gives families on welfare. The New Brunswick Child Tax Benefit has provided an extra $21 a month for each child since October 1997. As a result of these two measures, a single-parent family with one child saw modest gains in its total welfare income, from $12,125 in 1998 to $12,319 in 1999, and the couple saw its income rise from $14,731 in 1998 to $15,170. Because of a combined effort by the province and the federal government, the total welfare income of the single-parent family is now the highest it has been since the National Council of Welfare began to track welfare incomes. Both the federal government and New Brunswick now contribute more to the single-parent family's income than ever before.

Unlike Newfoundland and New Brunswick, which chose not to claw back the supplement to the federal Child Tax Benefit, Prince Edward Island reduced its welfare payments by the amount the federal government gave to parents on welfare. The province also failed to provide increases to welfare that might have helped welfare incomes to keep pace with inflation. As a result, the total welfare income of both a single-parent family with one child and a couple with two children in PEI declined even as the federal government pumped billions of dollars into a system intended for poor families. Their incomes were $11,875 in 1998 and $11,670 in 1999, and $18,102 in 1998 and $17,799 in 1999 respectively. For both families, this is a drop in total welfare incomes from a peak in the early 1990s.

The same pattern holds for Nova Scotia. The province clawed back the supplement to the federal Child Tax Benefit. Although Nova Scotia used that money to provide a provincial child benefit, it never gave families enough money to keep pace with the cost of living. Total welfare incomes declined very slightly for the single-parent family from $12,609 in 1998 to $12,558 in 1999, and for the couple with two children from $17,135 in 1998 to $16,633 in 1999. In the case of both types of families with children, the black portion of the bar in the chart is larger than ever, showing how the federal government is now contributing more than ever to family incomes.

For both family types in Quebec, the chart illustrates how total welfare incomes have declined very slightly each year from 1994, despite significant restructuring of Quebec's family benefits. All the while, the federal government's contribution to the family income increased. For the single-parent family, there was a decline from $12,995 in 1998 to $12,957 in 1999, and for the couple with two children, a decline from $16,079 to $15,000 between 1998 and 1999. Quebec asked the federal government to vary the amount of the Child Tax Benefit, so these numbers are not consistent from 1998 to 1999.

The Ontario charts show the dramatic impact of the provincial government's decision to cut welfare incomes by 21.6% in October 1995. Although the federal portion of welfare incomes began to grow when the federal government introduced the Child Tax Benefit, the impact of the provincial government's draconian welfare cuts overshadows any increases in federal help. Ontario's decision to claw back the supplement to the federal Child Tax Benefit ensures that welfare families do not enjoy any improvement in benefits. The single-parent family received $13,928 in 1998 and $13,704 in 1999, and the couple with two children saw its income decline from $18,414 to $18,130 between 1998 and 1999. Again, the black part of each bar is larger each year, showing how the federal government's portion of welfare incomes has grown.

The Manitoba charts show how welfare incomes for both family types have declined through the 1990s. The single-parent family's income reached a peak of $13,567 in 1992, and the income of the couple with two children reached $22,492 that year. Incomes for both family types have declined steadily since then, though the federal government's contribution to the welfare income is now higher than ever.

Manitoba claws back the supplement to the federal Child Tax Benefit. The absence of increases in welfare payments has allowed the cost of living to erode the value of welfare incomes. For single-parent families, this meant a decline from $11,523 in 1998 to $11,328 in 1999. For the couple with two children, incomes dropped from $16,989 in 1998 to $16,705 in 1999. Manitoba has announced that as of July 2000, the province would no longer claw back further increases to the supplement of the federal Child Tax Benefit. The impact of this decision will be assessed in future editions of this report.

Saskatchewan claws back the supplement to the federal Child Tax Benefit by reducing the Saskatchewan Child Benefit by the value of the federal supplement. The clawback, combined with the erosion of inflation, has brought the value of welfare income down slightly. However, a change in the way Saskatchewan reported the payment of utilities for families on welfare in 1999 masks the changes in overall welfare income between 1998 and 1999. Because of the change in Saskatchewan's method of reporting welfare incomes for this report, the income of the single-parent rose from $11,492 in 1998 to $11,877 in 1999. The income of the two-parent family rose from $16,974 in 1998 to $17,590 in 1999.

For both family types in Saskatchewan, welfare incomes have dropped significantly since 1986 when the National Council of Welfare first began to track welfare incomes. In 1986, single-parent families received $13,873 and two-parent families received $20,359. This significant decline in total welfare incomes has occurred despite the fact that the federal government has never given so much money directly to families on welfare.

The charts show how welfare incomes in Alberta have decreased since 1986. At that time, the single-parent family received $13,952 and the couple with two children received $21,814. A series of welfare reforms in Alberta caused the total incomes of these families to decline throughout the 1990s until they began to rise in 1998.

Alberta claws back the supplement to the federal Child Tax Benefit. However, the province made several small increases to portions of its welfare payments in 1998 and 1999. These helped the total welfare income of single parents to rise slightly, but did not make up for the cost of taking away the supplement. The shrinking white bars in the chart show how Alberta's contribution to the total welfare income of both families has dwindled each year from 1991 onward. The increase in the black bars shows how the federal government's share has grown. The single parent received a total of $11,276 in 1998 and $11,375 in 1999; the couple received a total income of $18,017 in 1998 and $17,919 in 1999.

Total welfare incomes for families with children in British Columbia have dropped steadily since 1994. This occurred both because of various small cuts and freezes in the welfare system and because of the clawback of the supplement to the federal Child Tax Benefit. Although the province created its own provincial child benefits package, the new BC Family Benefits have never been high enough to make up for its other welfare policy decisions. While a single-parent family had a welfare income of $14,795 in 1994, the income dropped to $13,882 in 1998 and to $13,661 by 1999. The couple with two children had a welfare income of $19,338 in 1994, but that income had eroded to only $18,109 by 1998 and $17,830 by 1999.

Yukon also claws back the supplement to the federal Child Tax Benefit. The charts show that total welfare incomes jumped between 1996 and 1997, but this was due to a change in the way Yukon reported the cost of utilities, not an actual increase in welfare payments. Since then, the cost of living has eroded the value of the overall welfare income, while the clawback to the federal Child Tax Benefit has increased the proportion of welfare income that is in fact paid by the federal government, not the Territory. The single-parent family had a welfare income of $18,510 in 1998 and only $18,201 in 1999. The couple with two children received $26,811 in 1998, which dropped to $26,363 by 1999.

Northwest Territories claws back the supplement to the Child Tax Benefit, and the territory made no increases in welfare payments in 1999. However, the Territories changed the way it reported its welfare payments to cover utilities. As a result, the value of total welfare incomes for the single-parent family fell by the cost of living between 1998 and 1999, but due to the change in reporting of utilities the figures indicate a rise from $19, 289 in 1998 to $20,552 in 1999.

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Welfare Incomes and Poverty Over Time

The territories are not included in this table because they are excluded from the Statistics Canada survey that is used to generate the low income cut-offs. The National Council of Welfare did not include a single person with a disability in its original calculations of welfare incomes for 1986, so the figures for disabled people begin in 1989.

The last column shows that between 1998 and 1999, the standard of living for people on welfare did not improve for most cases. In both Newfoundland and New Brunswick, the two families with children saw their welfare incomes come closer to the poverty line. This is because these two provinces have allowed all families with children to keep the supplement to the Canada Child Tax Benefit when all the other provinces and territories took the extra money away from families on welfare.

The single parent in Nova Scotia saw a very slight improvement in benefits.

In Quebec, families with children also made a slight gain on the poverty line.

In Saskatchewan, all cases saw an improvement in benefits, but this is largely due to the change in the way the Saskatchewan government reported utility rates for this report.

In Alberta, the disabled person and the single parent with one child saw slight improvements.

The column showing changes between 1986 and 1999 shows that in only nine cases were there improvements in the welfare rate as it compares to the poverty line. In Newfoundland, the adequacy of welfare incomes for single employable people dropped by a shocking 257.7 percent.

At no point between 1986 and 1999 did any province or territory provide welfare benefits which allowed welfare recipients to reach the poverty line. As Table 6 shows, the highest rates ever achieved were still substantially below the poverty line. In 1989, Prince Edward Island provided benefits for single employable people which reached 66 percent of the poverty line, and for couples with children which reached 78 percent of the poverty line. In 1992, 1993 and 1994, Ontario provided welfare incomes to single parents which reached 80 percent of the poverty line. In all cases, these incomes have since deteriorated significantly.

Table 6 also illustrates the disparity in incomes between the different types of families in need of assistance. The poorest of all welfare recipients in Canada are always single employable people. Newfoundland now has the dubious distinction of providing incomes far below the worst incomes in other provinces and territories.

The adequacy of incomes for people with disabilities has remained relatively stable in comparison to the incomes of other welfare recipients. During recent welfare reforms in the 1990s, provinces and territories frequently exempted people with disabilities from cuts to benefits. The value of the incomes ranged from a high of 77 percent of the poverty line in Prince Edward Island in 1989, where the incomes for people with disabilities dropped to 60 percent of the poverty line in 1998. The least adequate assistance for disabled people was in Alberta from 1996 onward, where incomes reached only 42 percent of the poverty line. We note that in Alberta, people with severe and permanent disabilities are eligible for further assistance through the Assured Income for the Severely Handicapped program.

The maximum welfare income a single parent received was 80 percent of the poverty line in Ontario in 1992, 1993 and 1994. The value of the income received by a single parent with one child was only 49 percent of the poverty line in Alberta in 1997.

The lowest welfare income in Canada for a couple with two children on welfare was 44 percent of the poverty line for families in New Brunswick in 1989 and 1990. The highest income for families on welfare was 78 percent of the poverty line in Prince Edward Island in 1989.