Welfare - No Fair: Generous Welfare System Increases Dependency

Ontario's welfare ranks swell by 183% since 1984, cost $7 billion

Vancouver, B.C. >>> A liberal approach to welfare benefits and eligibility has disastrous effects both on the treasury, and more importantly, on the individual and the family, according to a book released today by The Fraser Institute.

Welfare -- No Fair: A Critical Analysis of Ontario's Welfare System (1985-1994) examines the profound impact of changes to Canada's largest provincial welfare system between 1985 and 1994. The evidence suggests that governments re-examine their approach to encouraging self-sufficiency and independence for the needy.

The amount spent on welfare in Ontario increased from $1.4 billion in 1985 to almost $7 billion in 1994. During this time Ontario went from being the province with the least number of welfare recipients per capita to the province with the most (see Chart 1). "Far from reducing the number of people receiving welfare, Ontario's generous reforms increased dramatically the welfare caseload throughout the decade," said Rico Sabatini, author of the study.

According to Welfare -- No Fair, benefit levels increased more during 1985-94 than at any other time since the inception of the General Welfare Assistance Act in 1958, rising significantly more than earned income and inflation. By 1994 Ontario had the most generous benefit levels of all provinces.

The direction of welfare reform in Ontario was set predominantly by the Social Assistance Review Committee (SARC), which predicted that the number of people using the system could be reduced by 60% to 70%. Instead, the number of welfare recipients in Ontario increased by 183%, from 486,300 individuals in 1985 to 1,379,000 in 1994.

In 1985 the Ontario government embarked upon extensive reforms to its welfare system. The goal of the reforms was well-intentioned: a re-designed system that would enable individuals to achieve independence. To accomplish this goal, the system was made more accessible, benefit levels increased, and "barriers" to employment removed. The system de-emphasized fraud and abuse while allowing eligibility criteria to expand. People were allowed to remain on assistance at benefit levels which in many cases exceeded the incomes they could earn through employment. Single parents were not expected to upgrade their skills or look for employment. Little was expected in return for benefits.

"It is ironic that liberals have appealed to society's sense of communal responsibility and moral obligation . . . towards the 'poor', but avoided asking for these same obligations or standards from the recipients of society's benevolence," said Sabatini.

The liberal approach in Ontario between 1985-1994 has had disastrous effects, not only increasing welfare spending but also entrenching welfare dependency. The experiment failed because it was based on fallacious assumptions, most notably that the more responsive welfare is to the needs of recipients, the more self-reliant recipients will become. The evidence suggests instead that individuals and families stop doing what governments will do for them.

To order a copy of Welfare -- No Fair: A Critical Analysis of Ontario's Welfare System (1985-1994), please contact David Hanley at (604) 688-0221, ext. 582, or visit our Web site at http://www.fraserinstitute.ca.

Established in 1974, The Fraser Institute is an independent public policy organization based in Vancouver, with offices in Calgary and Toronto.

For further information contact:

Suzanne Walters, Director of Communications,
The Fraser Institute, (604) 714-4582,
Email suzannew@fraserinstitute.ca

info@fraserinstitute.ca
4th Floor, 1770 Burrard Street, Vancouver, BC, Canada, V6J 3G7
Tel: (604) 688-0221 Fax: (604) 688-8539 Book Orders: 1-800-665-3558 ext. 580

You can contact us at the above email address for any comments or information requests. Please report any dead links or technical problems.