Fraser Institute Says Income Assistance Levels in Canada are Adequate
Contact:
Joel Emes, Policy Analyst
The Fraser Institute, (604) 714-4546, Email: joele@fraserinstitute.caPatrick Basham, Director, Social Affairs Centre
The Fraser Institute, (604) 714-4549, Email: patrick@fraserinstitute.caRelease Date: For Immediate Release
May 11, 1999, Vancouver, BC>>> Contrary to the claims of many social action groups, income assistance levels in Canada are more than adequate to cover the cost of basic necessities for the most vulnerable members of society, says a new study The Adequacy of Welfare Benefits in Canada, released today by The Fraser Institute.
The Fraser Institute study provides a complete accounting of all the sources of income available to an income assistance recipient, and provides the information necessary for an analysis of the adequacy of income assistance levels across Canada.
Claims that welfare incomes in Canada are inadequate are typically based on a comparison to Statistics Canada's Low Income Cut-offs (LICOs), a relative measure of income inequality that is continually misrepresented as Canada's poverty lines.
A more reasonable comparison of assistance levels, however, is to the Basic Needs Lines (BNL)-developed by Professor Chris Sarlo-which shows that the total package of cash, tax credits, and in-kind benefits available to welfare recipients covers basic needs (as defined by community standards) for all recipients except single employables and some two-parent families.
The Basic Needs Lines include what it costs to maintain long-term physical well being: a nutritious diet, shelter, clothing, personal hygiene needs, health care, transportation, and a telephone. Not surprisingly, the number of people below the poverty line is much smaller when one uses Sarlo's BNLs than when one uses LICOs as the basis of comparison.
"When poverty is measured reasonably, welfare assistance packages are more than adequate for most recipients," says Patrick Basham, Director of The Fraser Institute's Social Affairs Centre, "the intended purpose of welfare benefits is to provide temporary assistance to the truly needy, not a permanent income source."
The package available to single parents and the disabled more than covers basic needs in every province; only those, like single employables, who are expected to be able to work do not always receive enough to bring them up to the BNL.
Single-parent families, considered by many to be the most vulnerable type of welfare recipient in society, are a good example. In 1998, a single parent with two young children living in Ontario could expect $16,847 in annual welfare and child benefits, enough to cover their basic needs cost of $16,126, leaving a margin of $721.
The smallest margin in Canada for this type of recipient is in BC, at $402. The largest margin is in Quebec, at $2,867. In the other seven provinces, single parents can expect to exceed their basic needs with a margin that falls somewhere between $886 and $2,776.
The welfare benefit package for single employables does fall short of the BNL in all provinces by at least $382 (Saskatchewan) and at most $3,107 (New Brunswick). The level of benefits available to single employable recipients reflects the fact that these people are not expected to collect welfare on a long-term basis, and that provincial governments, regardless of their political stripe, have chosen to be less generous with groups they consider employable.
In addition to benefits, the provinces allow recipients to earn some employment income before benefits are reduced. When earnings exemptions for single employables are included, the gaps by which the benefits fall short of the BNL, drop to between $72 (Ontario) and $2,224 (Nova Scotia), and are even reversed in Saskatchewan and Quebec.
Established in 1974, The Fraser Institute is an independent public policy organization based in Vancouver.
For the full text of this study visit the web site at www.fraserinstitute.ca. For further information, or for a copy of "Canadian Public Spending: The for Smaller More Efficient Government, 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.