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- National Council of Welfare Statement on the Release of Welfare Incomes 2009
National Council of Welfare Statement on the Release of Welfare Incomes 2009
December 13, 2010, Ottawa
Delivered by John Rook, Chairperson
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Thank you all for coming today.
I’m John Rook from Calgary and I am the Chairperson of the National Council of Welfare. I am going to speak to you about the highlights of our report and then Glen Shepherd, Council member from Montreal, will provide remarks in French.
Following Glen, we have two speakers well able to convey the human reality of our research. Joane Dallaire provides budget counseling to low-income residents in the Ottawa area and Barb Gosse designs and runs programs to help social assistance recipients get ahead.
I also want to acknowledge the many people, some in this room and others across the country, who have been part of the struggle against poverty for a long time.
The first thing I want to underscore is that the Council’s reports on Welfare Incomes provide the only regular Canada-wide picture of the country’s social assistance systems. Welfare Incomes 2009 shows us, sadly, that welfare can be harder to get today than 20 years ago. This means that while the recession’s casualties were mounting in 2009, more people were forced into destitution in order to qualify for income support.
Canadians can’t get welfare if their liquid assets, such as cash, money in the bank or even retirement savings, are over a set limit. In many cases, these limits have eroded, whether by inflation or by design. For most Canadians, it is almost unimaginable to have no income, to see their savings disappear and have to reach a point where their housing is at risk and they are down to their last few dollars before they will be considered for welfare.
It is quite astounding how much variability there is across provinces, territories and individual situations. In general, however, low asset limits, low earnings exemptions and low welfare rates create the perfect trap, especially for single people. The absence of shock absorbers and springs that help people help themselves is completely counterproductive.
Getting a job is not always the answer it should be, despite many reasons why employment is important. If welfare is reduced dollar-for-dollar by the amount earned, you are left worse off once you’ve paid for transportation and other work costs. The less you’re able to gain from a job, the harder it is to get ahead. If your housing, health or dental services depend on being on welfare, that also creates a barrier to getting ahead.
And getting ahead is the goal for the Council—we don’t just want to see people leaving welfare—we want them to escape poverty and to thrive. This makes sense from a human perspective and an economic one. Don Drummond, former Chief Economist of the TD Bank, reviewed our report and he agrees.
He describes Canada's welfare system as “a box with a tight lid. Those in need must essentially first become destitute before they qualify for temporary assistance. But the record shows once you become destitute you tend to stay in that state. You have no means to absorb setbacks in income or unexpected costs. You can't afford to move to where jobs might be or upgrade your skills.”
I can really relate to Don’s image of the box with a tight lid. Our report points to some areas where the lid has been loosened. Manitoba’s new liquid asset policy allowing $4,000 per person, up to $16,000 for families, makes it a leader in that area. Lone parents in some other provinces get welfare rates that reach the poverty line, and that helps lift the lid. Regular adjustments for inflation are also part of the solution, but these alone are not enough.
“To solve the problems of social assistance, we must literally think—and act—outside the box, in this case, outside the welfare system.” Federal child benefits provide stable income for low-income families and help prevent poverty and welfare use. The newer Working Income Tax Benefit (WITB) also operates outside the welfare system. It’s available to welfare recipients with earnings, so it helps work pay and provides a few extra dollars a month. The WITB has potential, but if it’s going to reduce welfare use or prevent poverty, especially for single people, the amounts will need to be increased.
Ultimately, we need a comprehensive approach to both income support and the provision of services geared to income level rather than welfare status. The Council is encouraged by poverty reduction strategies that take this approach and we’re confident these kinds of investments will pay off for all Canadians.