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Authors: Mel Hurtig
Tags: General, Political Science
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recent years there has been a substantial erosion in social safety nets. 3
In 1995, Paul Martin and the federal government reduced transfers to the provinces and introduced a lump-sum transfer to include social assistance, health, and post-secondary education. Where once there had been shared-cost accountable programs, there were now different levels of programs across the country, with the provincial governments having full responsibility.
So what did the provinces do? They promptly brought in tough rule changes that made benefits much more difficult to obtain, while at the same time they cut the real value of social assistance benefits. By 2000, recipients were typically getting only about 30 percent of the Statistics Canada low-income cut-off levels.
In Ontario, thanks in large degree to Mike Harris’s drastic cutbacks, the number on welfare dropped from just over 500,000 in 1994/1995 to some 200,000 in 2005, and the provincial government clawed back up to $1,463 from low-income families receiving the federal government’s child benefit supplement. Meanwhile, welfare cuts and inflation cut the purchasing power of benefits by roughly 40 percent. 4 Individuals who have to depend on social assistance receive only $536 a month, almost 70 percent below the Statistics Canada low-income cut-off. And while Ottawa sends a monthly cheque for $162 per child to the lowest-income families, Ontario claws back over $121 from children whose parents receive the meagre social assistance. 5 In March 2007, Premier Dalton McGuinty introduced a new Ontario child benefit which, by 2011, should end that province’s clawbacks.
Let’s turn to B.C. In the words of the respected Vanier Institute of the Family, “The situation in British Columbia is startling,” with a sharp drop in welfare recipients and a huge increase in child poverty. In B.C., the province with the highest child poverty rate, 90 percent of those who applied for welfare in 2001 were successful. After the Campbell government’s brutal tightening of the eligibility rules, by 2004 only 51 percent were granted assistance. Huge numbers of men, women, and children with a genuine need were left out of the system. Between 2000 and 2005, in a booming economy, child poverty in B.C. increased by almost 8 percent.
As for wealthy Alberta, one can only have bitter contempt for the egregiously low levels of social assistance in a province with no deficit or debt, enormous surpluses, low taxes, and punishingly inadequate welfare programs.
Then there’s our ridiculous federal and provincial tax systems. In a May 2006 editorial, the Globe and Mail said,
As it stands, the nexus between welfare and work is a mess. Provincial and federal systems interfere with each other, often to disastrous effect. Suppose a single parent with one child somehow scrounges an extra $10,000. The marginal taxrate for those extra dollars of income is an incredible 78 percent. And that does not include the potential loss of benefits such as subsidized prescription drugs and housing. 6
Yes, difficult as it may be to comprehend, that was 78 percent!
As TD Bank Financial Group economists Don Drummond and Gillian Manning pointed out in a 2005 paper, the system in Ontario insanely penalized anyone on welfare who begins to earn an income: “Under the original Harris scheme, a welfare recipient who earned a dollar could lose more than a dollar in benefits.” And even under changes made by the McGuinty Liberal government in Ontario, a social assistance recipient earning a dollar loses 50 cents in benefits, the equivalent of a 50 percent marginal tax rate. In the 2003 provincial election campaign, the Liberals promised to end the Mike Harris clawback of the $122-per-month-per-child national child benefit supplement, a supplement that has frequently meant the difference between food and no food. Four years later, at the time of this writing in 2007, they had still failed to do so.
Tom Walkom writes:
Welfare systems
In 1995, Paul Martin and the federal government reduced transfers to the provinces and introduced a lump-sum transfer to include social assistance, health, and post-secondary education. Where once there had been shared-cost accountable programs, there were now different levels of programs across the country, with the provincial governments having full responsibility.
So what did the provinces do? They promptly brought in tough rule changes that made benefits much more difficult to obtain, while at the same time they cut the real value of social assistance benefits. By 2000, recipients were typically getting only about 30 percent of the Statistics Canada low-income cut-off levels.
In Ontario, thanks in large degree to Mike Harris’s drastic cutbacks, the number on welfare dropped from just over 500,000 in 1994/1995 to some 200,000 in 2005, and the provincial government clawed back up to $1,463 from low-income families receiving the federal government’s child benefit supplement. Meanwhile, welfare cuts and inflation cut the purchasing power of benefits by roughly 40 percent. 4 Individuals who have to depend on social assistance receive only $536 a month, almost 70 percent below the Statistics Canada low-income cut-off. And while Ottawa sends a monthly cheque for $162 per child to the lowest-income families, Ontario claws back over $121 from children whose parents receive the meagre social assistance. 5 In March 2007, Premier Dalton McGuinty introduced a new Ontario child benefit which, by 2011, should end that province’s clawbacks.
Let’s turn to B.C. In the words of the respected Vanier Institute of the Family, “The situation in British Columbia is startling,” with a sharp drop in welfare recipients and a huge increase in child poverty. In B.C., the province with the highest child poverty rate, 90 percent of those who applied for welfare in 2001 were successful. After the Campbell government’s brutal tightening of the eligibility rules, by 2004 only 51 percent were granted assistance. Huge numbers of men, women, and children with a genuine need were left out of the system. Between 2000 and 2005, in a booming economy, child poverty in B.C. increased by almost 8 percent.
As for wealthy Alberta, one can only have bitter contempt for the egregiously low levels of social assistance in a province with no deficit or debt, enormous surpluses, low taxes, and punishingly inadequate welfare programs.
Then there’s our ridiculous federal and provincial tax systems. In a May 2006 editorial, the Globe and Mail said,
As it stands, the nexus between welfare and work is a mess. Provincial and federal systems interfere with each other, often to disastrous effect. Suppose a single parent with one child somehow scrounges an extra $10,000. The marginal taxrate for those extra dollars of income is an incredible 78 percent. And that does not include the potential loss of benefits such as subsidized prescription drugs and housing. 6
Yes, difficult as it may be to comprehend, that was 78 percent!
As TD Bank Financial Group economists Don Drummond and Gillian Manning pointed out in a 2005 paper, the system in Ontario insanely penalized anyone on welfare who begins to earn an income: “Under the original Harris scheme, a welfare recipient who earned a dollar could lose more than a dollar in benefits.” And even under changes made by the McGuinty Liberal government in Ontario, a social assistance recipient earning a dollar loses 50 cents in benefits, the equivalent of a 50 percent marginal tax rate. In the 2003 provincial election campaign, the Liberals promised to end the Mike Harris clawback of the $122-per-month-per-child national child benefit supplement, a supplement that has frequently meant the difference between food and no food. Four years later, at the time of this writing in 2007, they had still failed to do so.
Tom Walkom writes:
Welfare systems
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