Ten things to know about Canada’s 2021 federal budget

Ten things to know about Canada’s 2021 federal budget

Ten things to know about Canada’s 2021 federal budget

La version française de ce billet se trouve ici.

On April 21, the Trudeau government tabled the 2021 federal budget. The budget includes additional COVID-related measures,[1] a major childcare initiative, and various forms of support for low-income Canadians (including for housing and homelessness).

Here are 10 things to know.

1. The budget commits “up to $30 billion over five years” for early learning and childcare.  The Government of Canada sets out the following goal: “That, in the next 5 years, Canadian parents across the country have access to high quality early learning and childcare, for an average of $10 a day.” This may be the single most important social policy announcement made by any federal government at any point in the past 25 years. But in order for this to be successful, considerable cooperation will be required from provincial and territorial governments.

2. The budget announces major changes to financial assistance for post-secondary students. The Government of Canada is making the grant system more generous and the loan system more forgiving. While the value of grants had doubled as a COVID measure, the budget announces that these enhanced amounts will remain in place until July 2023. Also, students earning less than $40,000 will now be exempt from making payments on their loans, while the previous threshold had been $25,000.[2]

3. The budget proposes important support for seniors, including for long-term care and income support. The budget proposes $3 billion over five years “to support provinces and territories in ensuring standards for long-term care are applied…” The budget also proposes a one-time payment of $500 in August 2021 to Old Age Security (OAS) recipients aged 75 or over. It further proposes to introduce legislation that would permanently increase OAS payments for recipients aged 75 and over by 10%.

4. Low-wage workers will receive additional assistance. The Government of Canada announced its intention to raise the federal minimum wage to $15/hr., indexed to inflation, “with provisions to ensure that where provincial or territorial minimum wages are higher, that wage will prevail.” This directly affects over 26,000 workers in the federally-regulated private sector. The budget also proposes to expand the Canada Workers Benefit to support approximately 1 million additional Canadians in low-wage jobs, meaning “that for the first time, most full-time workers earning minimum wage will receive significant support from this important benefit…A single, full-time, minimum wage worker could receive about $1,000 more in benefits than they would under the current system…” This will be especially helpful for single adults without dependants.[3]

5. The budget proposes important new investments for Indigenous peoples. This includes “more than $6 billion to help close infrastructure gaps in Indigenous communities, and $2.2 billion for actions to end the national tragedy of missing and murdered Indigenous women and girls.” It did not announce an urban, rural and northern Indigenous housing strategy, as many advocates had expected.

6. The budget announces $1.5 billion in new funding for the Rapid Housing Initiative (RHI). Launched in September 2020, this program focuses on the creation of modular housing, the acquisition of land, and the conversion of existing buildings into affordable housing. RHI provides up-front grants for each unit, but relies on provincial and territorial governments to fund ongoing costs.

7. The Canada Housing Benefit will be enhanced. Specifically, an additional $315.4 million over seven years has been committed “for low-income women and children fleeing violence to help with their rent payments.” This benefit was first announced in November 2017. Unfortunately, many provincial and territorial governments have been slow to sign bilateral agreements with the Government of Canada, thus delaying take up.

8. The National Housing Co-Investment Fund (NHCF) has received enhancements. This includes $750 million in new funding, as well as $250 million to support the construction, repair, and operating costs of transitional housing and shelter spaces for women and children fleeing violence (however, it is not clear how much of this consists of grants vs. loans). The NHCF, originally announced in 2017, contains both grants and loans, but has been criticized for being mostly a loan program. It has also been criticized for its onerous application and approval process.

9. This government continues to increase annual funding for homelessness. This budget proposes an additional $567 million over two years, beginning in 2022-23, for Reaching Home (i.e., the federal government’s main funding vehicle for homelessness). This preserves the 2021-22 funding levels announced in the Fall Economic Statement in response to the pandemic. The budget also proposes $45 million over two years for a pilot program “aimed at reducing veteran homelessness through the provision of rent supplements and wrap-around services for homeless veterans such as counselling, addiction treatment, and help finding a job.”

10. An assortment of other housing-related measures was announced. This includes: a national 1% tax on vacant property owned by non-residents; $600 million over seven years “to renew and expand the Affordable Housing Innovation Fund, which encourages new funding models and innovative building techniques in the affordable housing sector;” $118.2 million over seven years for the Federal Community Housing Initiative (for operators of federally-administered co-op housing units); a reallocation of $300 million in loan funds from the Rental Construction Financing Initiative to support the conversion of vacant commercial property into rental housing; $25 million in new housing funding for the Northwest Territories; and $25 million in housing for Nunavut.

In sum. This budget contains important new social investments, especially for childcare. It includes important new funding enhancements for low-income Canadians, including for affordable housing and homelessness. And it does so at a time when federal debt-serving costs are low by historical standards due to low interest rates.

I wish to thank the following individuals for assistance with this blog post: George Fallis, Martha Friendly, Rob Gillezeau, Michel Laforge, David Macdonald, Rianne Mahon, Michael Mendelson, Jeff Morrison, Steve Pomeroy, Shayne Ramsay, Sylvia Regnier, Vincent St-Martin and Greg Suttor. I also wish to thank HomeSpace Society for permission to use the photo that appears above.

[1] These include the extension of the wage subsidy, rent subsidy, and Lockdown Support for businesses and other employers until September 2021. Together, these particular measures amount to $12.1 billion in additional support.

[2]  For a thorough overview of all changes announced to post-secondary education, check out this analysis.

[3] For more on the income-related challenges of single adults without dependants, see this recent report.

Ten things to know about Canada’s 2021 federal budget

10 faits saillants à retenir du budget fédéral canadien 2021

10 faits saillants à retenir du budget fédéral canadien 2021

An English-language version of this blog post is available here.

Le 21 avril, le gouvernement Trudeau a déposé le budget fédéral 2021. Celui-ci comprend de nouvelles mesures liées à la pandémie[1], une initiative importante de services de garde d’enfants, et plusieurs initiatives pour appuyer les Canadiens à faible revenu (dont des initiatives en logement et en sans-abrisme).

Voici 10 faits saillants à son sujet.

1. Jusqu’à 30 milliards de dollars seront consacrés à l’éducation et aux services de garde pour la petite-enfance. Le gouvernement du Canada a promis qu’« au cours des cinq prochaines années, les parents canadiens de partout au pays [auront] accès à des services d’apprentissage et de garde des jeunes enfants à un coût moyen de 10 $ par jour ». C’est peut-être la politique sociale la plus importante de n’importe quel gouvernement fédéral en 25 ans. Par contre, pour que cette politique soit réalisée correctement, la collaboration des gouvernements provinciaux et territoriaux sera indispensable.

2. Le système d’aide financière pour les étudiants du postsecondaire connaîtra des changements majeurs. Le gouvernement du Canada rendra le système de bourses plus généreux, et celui des prêts plus indulgent. Bien que la valeur des bourses a doublé pour répondre à la pandémie, le budget annonce que ces mesures demeureront en place jusqu’en juillet 2023. De plus, les étudiants qui intègrent le marché du travail et qui gagnent moins de 40 000$ par année seront exemptés du remboursement de leurs prêts, alors que le seuil précédent était de 25 000$[2].

3. Le budget propose d’importantes mesures pour appuyer les personnes ainées, dont les soins de longue durée et un soutien au revenu. Le budget propose 3 milliards de dollars sur cinq ans pour « appuyer les provinces et territoires à assurer que les standards en soins de longue durée […] ». Le budget propose également de remettre un paiement de 500$ aux prestataires de la pension de la Sécurité de la vieillesse (SV) âgés de 75 ans ou plus en août 2021. Il propose également d’augmenter les paiements de la SV à ces prestataires de 10% de manière permanente.

4. Les travailleurs à faible revenu recevront plus d’appui. Le gouvernement du Canada a annoncé qu’il avait l’intention d’augmenter le salaire minimum à 15$/heure, indexé selon l’inflation, « avec des dispositions destinées à garantir que lorsque le salaire minimum provincial ou territorial sera plus élevé, ce salaire prévaudra ». Cette mesure touche plus de 26 000 travailleurs du secteur privé assujetti aux règlementations fédérales. Le budget propose également l’expansion de l’Allocation canadienne pour les travailleurs afin d’appuyer plus d’un million de Canadiens avec des emplois à faible revenu. Signifiant « que pour la première fois, les personnes travaillant à temps plein au salaire minimum bénéficieront d’un soutien considérable grâce à cette importante allocation […] Un travailleur seul à temps plein touchant le salaire minimum pourrait recevoir environ 1 000 $ de plus en prestations que ce qu’il reçoit dans le système actuel ». Cela viendrait appuyer davantage les adultes célibataires sans personne à charge[3].

5. Le budget propose d’importants nouveaux investissements pour les peuples autochtones. Cela comprend « plus de 6 milliards de dollars pour aider à combler les lacunes en matière d’infrastructure dans les communautés autochtones et 2,2 milliards destinés à des mesures pour mettre fin à la tragédie nationale des femmes et des filles autochtones disparues et assassinées ». Malgré l’avis de plusieurs experts, ces nouveaux investissements ne comprenaient pas de stratégie pour le logement autochtone urbain, rural et nordique.

6. Le budget annonce 1,5 milliard en nouveaux fonds pour l’Initiative pour la création rapide de logements (ICRL). Lancée en 2021, ce programme sert à construire de nouveaux logements mobiles, l’acquisition de terrains, et la réaffectation d’édifices en logements abordables. L’ICRL offre des subventions pour la mise sur pied de chaque unité, mais a recours aux gouvernements provinciaux et territoriaux pour financer les coûts opérationnels.

7. L’Allocation canadienne pour le logement sera améliorée. On consacrera 315,4 millions de dollars sur sept ans pour « pour accroître le soutien financier offert directement aux femmes à faible revenu fuyant la violence et leurs enfants afin de les aider à payer leur loyer ». L’annonce de cette prestation remonte à novembre 2017. Malheureusement, plusieurs gouvernements provinciaux et territoriaux tardent à signer des ententes bilatérales avec le gouvernement du Canada, retardant sa mise en oeuvre.

8. Le Fonds national de co-investissement pour le logement (FNCIL) a été amélioré. Ceux-ci comptent 750 millions de dollars en financement, et 250 millions de dollars pour appuyer la construction, la réparation, et les frais de fonctionnement des logements temporaires pour les femmes et les enfants fuyants la violence (il n’est toutefois pas clair quelle proportion de ces montants sont des subventions ou de prêts). Le FNCIL, qui date de 2017, a fait l’objet de critiques puisqu’il offre surtout des prêts, et en raison de son onéreux processus de demande et d’approbation.

9. Ce gouvernement continue à augmenter le financement des initiatives pour lutter contre l’itinérance. Le budget propose 567$ million de dollars de plus, sur une période de deux ans, débutant en 2022-2023, pour le programme Vers un chez-soi (la stratégie canadienne de lutte contre l’itinérance). Le gouvernement maintient donc le niveau de financement issu de l’énoncé économique de l’automne 2021. Le budget propose également 45 millions de dollars sur deux ans pour un projet pilote « visant à réduire le nombre de vétérans en situation d’itinérance à l’aide du versement de suppléments de loyer et de la prestation de services complets pour les vétérans sans abri comme le counseling, le traitement de la toxicomanie et [de] l’aide à trouver un emploi ».

10. Une variété d’autres mesures reliées au logement ont également été annoncées. Parmi celles-ci : une taxe d’un pour cent sur les propriétés vacantes appartenant à des non-résidents; 600 millions de dollars sur sept ans « pour renouveler et élargir le Fonds d’innovation pour le logement abordable, ce qui favorise de nouveaux modèles de financement et des techniques de construction novatrices dans le secteur du logement abordable »; 118,2 millions de dollars sur sept ans pour l’Initiative fédérale de logement communautaire (pour les entrepreneurs de logements coopératifs administrés par le fédéral); une réaffectation d’un prêt de 300 millions de dollars du programme de Financement de la construction de logements locatifs afin d’appuyer la transformation de propriété commerciale vacante en logement locatif; 25 millions de dollars pour de nouveaux logements dans les Territoires du Nord-Ouest; 25 millions de dollars pour de nouveaux logements au Nunavut.

En conclusion. Ce budget consacre d’importantes nouvelles sommes à des initiatives sociales, surtout par le biais de services de garderie. Il prévoit également de nouveaux fonds pour les Canadiens à faible revenu, incluant du logement et des mesures pour lutter contre l’itinérance. Il le fait également à un moment où les coûts liés au service de la dette sont faibles en raison de taux d’intérêt bas.

Je souhaite remercier les personnes suivantes pour leur appui à la rédaction de ce billet : George Fallis, Martha Friendly, Rob Gillezeau, Michel Laforge, David Macdonald, Rianne Mahon, Michael Mendelson, Jeff Morrison, Steve Pomeroy, Shayne Ramsay, Sylvia Regnier, Vincent St-Martin et Greg Suttor. Je souhaite également remercier HomeSpace Society pour l’usage de la photo ci-dessus.

[1] Ceux-ci comprennent le prolongement de la subvention salariale, la subvention sur le logement, la mesure de soutien pour les entreprises et d’autres employeurs jusqu’en septembre 2021. La somme de ces mesures totalise 12.1 milliards de dollars en appui additionnel.

[2]  Pour une analyse complète des nouvelles mesures affectant le postsecondaire, jetez un coup d’oeil à cette analyse (en anglais).

[3] Pour plus d’informations concernants les défis financiers des adultes célibataires sans personne à charge, consultez ce rapport récent (en anglais).

L’isolement, la distanciation physique, et les prochaines étapes concernant le sans-abrisme : Un survol de 12 villes canadiennes

L’isolement, la distanciation physique, et les prochaines étapes concernant le sans-abrisme : Un survol de 12 villes canadiennes

L’isolement, la distanciation physique, et les prochaines étapes concernant le sans-abrisme : Un survol de 12 villes canadiennes

An English-language version of this blog post is available here.

Pendant la pandémie de la Covid-19, les fonctionnaires des grandes villes canadiennes ont travaillé de pair avec les responsables de la santé et d’autres secteurs afin d’augmenter la distanciation physique chez la population itinérante. Dans un récent rapport (disponible en anglais ici), j’offre un survol de ce à quoi ressemble la situation à Toronto, Montréal, Vancouver, Calgary, Edmonton, Ottawa, Winnipeg, Québec, Hamilton, Régina, Saskatoon et Saint-Jean.

Voici 10 points saillants issus du rapport.

  1. Le rapport a été commandé par la Calgary Homeless Foundation (CHF). En tant que planificateur du système d’aide aux itinérants, la CHF souhaitait faire un survol des actions prises par les autorités responsables en sans-abrisme dans d’autres villes pendant cette période sans précédent. Initialement, le rapport était destiné à un usage interne, mais la CHF a décidé de le rendre public afin que les intervenants en sans-abrisme, des chercheurs, et des militants d’ailleurs puissent mieux comprendre le portrait national.
  1. Les autorités responsables en sans-abrisme au Canada ont augmenté la distanciation physique grâce à de nombreuses mesures. Ils ont augmenté les mesures de distanciation physique dans les refuges existants, mis sur pied de nouvelles installations et créé des espaces prévus pour l’isolement et la quarantaine. Toronto et Vancouver se démarquent à cet égard puisque les deux villes ont garanti un nombre important de chambres d’hôtel pour qu’elles servent à ces fins.
  1. Les intervenants en sans-abrisme dans la plupart des grandes villes canadiennes ont continué à déplacer les gens des abris d’urgence vers des logements permanents. Ils ont également innové. Par exemple, plusieurs villes ont développé de nouveaux modèles pour déplacer les personnes itinérantes vers des logements permanents. Le rapport offre des explications détaillées à cet égard.
  1. Les réseaux de coopération entre les organismes se sont améliorés pendant la crise; cela est particulièrement vrai des intervenants en santé. Dans plusieurs cas, il existait la perception que les responsables locaux en santé étaient peu engagés à adresser le sans-abrisme, mais qu’ils ont amélioré leur approche pendant la pandémie. Il est espéré que ces formes de collaboration se maintiennent.
  1. Plusieurs autorités responsables dans le secteur du sans-abrisme ont exprimé leur frustration par rapport au manque de collaboration du secteur correctionnel. Le rapport souligne que les intervenants du secteur correctionnel libèrent les détenus sans prévoir leur hébergement, et sans faire appel aux intervenants en sans-abrisme afin de coordonner une transition vers un refuge d’urgence (il faut toutefois noter que Québec est une exception importante à cet égard).
  1. À travers le Canada, un nombre surprenant d’espaces prévus pour les itinérants demeurent ouverts (ou sont en cours de relocalisation). En d’autres mots, les nouvelles mesures de distanciation physique mises en place semblent durer plus longtemps que prévu. Ce « nouveau normal » variera cependant d’une ville à l’autre. Par exemple, la plupart des refuges à Calgary et Edmonton ne s’attendent pas à pouvoir se conformer à l’exigence de deux mètres.
  1. Il reste encore des défis dans le secteur. Bien que cela varie à travers le Canada, les défis suivants perdurent dans tout le secteur : le recours au sommeil extérieur; les salles de toilettes partagées ainsi que d’autres espaces partagées (sans compter les couts additionnels liés au nettoyage de ces espaces partagés); et le nouveau sans-abrisme engendré par le ralentissement économique[1].
  1. Le gouvernement fédéral canadien a annoncé d’importantes sommes de nouveaux financements depuis le début de la pandémie. Le gouvernement canadien a annoncé 157,5 millions de dollars en financement ponctuel pour Vers un chez-soi en mars 2020 (Vers un chez-soi est le véhicule de financement principal utilisé par le gouvernement fédéral pour lutter contre le sans-abrisme). De plus, en septembre 2020, le gouvernement canadien a annoncé 236,7 millions de plus pour Vers un chez-soi, ainsi qu’un milliard de dollars pour des logements modulaires, l’acquisition de terrain, et la transformation d’édifices existants en logement abordable.
  1. Toutefois, ces mesures de financement demeurent temporaires. Depuis le début de la pandémie, il n’y a eu aucune amélioration permanente au financement des initiatives luttant contre le sans-abrisme. Une telle amélioration pourrait : appuyer les intervenants locaux à maintenir la distanciation physique améliorée; appuyer la transition de plus de gens à partir des refuges d’urgence et des campements extérieurs vers des logements permanents; aider à payer les couts supplémentaires liés au nettoyage et au personnel liés au « nouveau normal » mentionné ci-dessus.
  1. Le rapport recommande le renforcement de l’Allocation canadienne pour le logement (ACL). Récemment lancée, l’ACL est essentielle à la Stratégie nationale sur le logement et offre une aide financière aux ménages à faible revenu pour leur permettre de payer leur loyer. Il est attendu que la moitié de cet argent proviendra du gouvernement fédéral et l’autre, des gouvernements provinciaux et territoriaux. L’ACL devait être lancée le 1er avril 2020; toutefois, seulement cinq provinces ont signé l’entente. Le gouvernement fédéral pourrait augmenter son apport à l’ACL afin d’encourager le restant des provinces et territoires à en faire autant. Par exemple, le gouvernement fédéral pourrait offrir d’assurer les deux tiers ou les trois quarts des couts.

En conclusion : Les autorités responsables en sans-abrisme à travers le Canada ont travaillé ardemment afin d’améliorer la distanciation physique pendant la pandémie. L’augmentation permanente du financement fédéral aiderait à maintenir le « nouveau normal » tout en trouvant des solutions permanentes de logement abordable pour les personnes itinérantes.

J’aimerais remercier Susan Falvo, Michel Laforge et Vincent St-Martin pour leur appui pendant la rédaction de ce billet.

 

[1] J’ai récemment écrit un autre rapport sur le sans-abrisme engendré par le ralentissement économique. Ce rapport, commandé par Emploi et Développement social Canada, est paru en décembre 2020 et est disponible ici.

 

L’isolement, la distanciation physique, et les prochaines étapes concernant le sans-abrisme : Un survol de 12 villes canadiennes

Isolation, Physical Distancing and Next Steps Regarding Homelessness: A Scan of 12 Canadian Cities

Isolation, Physical Distancing and Next Steps Regarding Homelessness: A Scan of 12 Canadian Cities

La version française de ce billet se trouve ici.

During the COVID-19 pandemic, officials in Canada’s major cities have partnered with health officials and others to create more physical distancing for persons experiencing homelessness. In a recent report (available here) I provide an overview of what this has looked like in the following cities: Toronto; Montreal; Vancouver; Calgary; Edmonton; Ottawa; Winnipeg; Quebec City; Hamilton; Regina; Saskatoon; and St. John’s.

Here are 10 things to know.

1. The report was commissioned by the Calgary Homeless Foundation (CHF).
As the System Planner for Calgary’s Homeless-Serving System of Care, CHF was interested in scanning what homelessness officials in other cities were doing during this unprecedented time. While the report was initially intended for internal use, CHF decided to release it publicly so that homelessness officials, researchers and advocates in other cities could learn more about the national picture.

2. Homelessness officials in Canada’s major cities have created more physical distancing through a variety of measures.
They have created more physical distancing at existing shelters, opened new facilities, and created space for both isolation and quarantine. Toronto and Vancouver are noteworthy in that both cities have secured large numbers of hotel rooms.

3. Officials in most of Canada’s large cities have continued to move persons directly from emergency shelters into permanent housing.
They have also developed innovations. For example, several cities have developed new models of moving people from homelessness into permanent housing. The report discusses these in detail.

4. Networks of cooperation have generally improved during this crisis; this is especially true with health officials.
In several cases, local health officials were perceived to have not been very engaged in homelessness prior to the pandemic, but improved their approach during the pandemic. It is hoped that these improved forms of collaboration will continue.

5. Many homelessness officials have expressed frustration with the lack of cooperation from the corrections sector.
The report finds officials in correctional facilities commonly discharge inmates without housing plans and without reaching out to homelessness officials to coordinate a transition into emergency shelter (however, Quebec City is an important exception here).

6. Across Canada, a surprisingly large number of newly-created spaces for persons experiencing homelessness are staying open (or re-locating).
Put differently, the new physical distancing arrangements put in place during the pandemic appear to be having a remarkable amount of staying power. The state of this ‘new normal’ will vary by city, however. For example, most emergency shelters in Calgary and Edmonton do not expect to be able to comply with a two-metre requirement.

7. Challenges remain in the sector.
While the current situation varies across Canada, the following challenges remain in the sector as a whole: outdoor sleeping; shared bathrooms and other common areas (as well as the additional costs of cleaning associated with these shared spaces); and new homelessness created by the economic downturn.[1]

8. Canada’s federal government has made important new funding announcements since the start of the pandemic.
The Government of Canada announced $157.5 million in one-time funding for Reaching Home in March 2020 (Reaching Home is the federal government’s main funding vehicle for homelessness). Further, in September 2020, the Government of Canada announced an additional $236.7 million for Reaching Home, along with $1 billion for modular housing, the acquisition of land, and the conversion of existing buildings into affordable housing.

9. However, all of these funding enhancements are temporary.
There has been no enhancement to permanent federal homelessness funding announced since the start of the pandemic. An enhancement to permanent funding could: support local officials in maintaining the improved physical distancing; assist in transitioning more people from both emergency shelters and outdoor encampments into permanent housing; and help pay for increased cleaning costs and staffing needs associated with the ‘new normal’ discussed above.

10. The report recommends the enhancement of the Canada Housing Benefit (CHB).
Central to the National Housing Strategy is the recent launch of the CHB, providing financial assistance to help low-income households afford their rent. It is expected that half of this money will come from the federal government, and the other half from provinces and territories. The CHB was supposed to launch nationally on 1 April 2020; however, just five provinces have formally agreed to terms on the new benefit. The federal government could increase the value of this benefit, which could encourage provinces and territories to sign on. For example, the federal government might offer 2/3 or 3/4 cost-sharing.

In sum: Homelessness officials across Canada have worked hard to improve physical distancing during the pandemic. Permanent increases in federal funding would help them both maintain this ‘new normal’ and find more permanent, affordable housing for persons experiencing homelessness.

[1] I have recently written another report about new homelessness created by the downturn. That report, commissioned by Employment and Social Development Canada, will be released in December 2020.

I wish to thank Susan Falvo and Vincent St-Martin for assistance with this blog post.

Lifting singles out of poverty in Canada

Lifting singles out of poverty in Canada

Lifting singles out of poverty in Canada

I’ve written a report for the Montreal-based Institute for Research on Public Policy making the case for higher social assistance benefit levels for employable single adults without dependants. The link to the report is here.

Here are 10 things to know.

1. In Canada, most employable adult singles without dependants who receive social assistance get less than $10,000/yr. in benefits. This amount of money is ridiculously low (keeping in mind that this figure includes all forms of tax credits received by the recipient). A person with this income must use it to pay for housing, food, transportation and other basic necessities (to see benefit levels in every province and territory, check out Welfare in Canada).

2. In relation to Canada’s official poverty line, social assistance benefit levels for this household group are dismal. ‘Welfare income’—which includes social assistance benefit levels, child benefits and all forms of tax credits—brings couples with two children to between 75% and 95% of the federally-defined poverty line, depending on the province (see figure 1 below). However, welfare income for employable singles without dependants typically comes to about 50% of the poverty line for this particular household type.

  

3. In most provinces and territories, $10,000 is less than half of what a minimum wage earner would earn in one year working full-time hours. Historically, policy-makers and economists have often been nervous about setting social assistance benefit levels high enough to make paid work unattractive. However, that shouldn’t be a major concern right now in most parts of Canada, as the differential between welfare incomes and minimum wage rates is currently quite substantial.

4. Increases to social assistance benefit levels could help Canada’s federal government achieve its poverty reduction targets. In Canada, we say a household is in ‘deep income poverty’ if it makes less than 75% of the official poverty line. Canada’s Poverty Reduction Strategy, unveiled in October 2018, seeks to track progress on this indicator. Increases in social assistance benefit levels would be a very easy way for progress to be made in this respect.

5. Doing so could also help provincial and territorial governments achieve their poverty reduction targets. All provinces and territories now have their own poverty reduction strategies; many of these strategies include targets pertaining to reducing the number of people under the poverty line (New Brunswick’s strategy actually seeks to reduce deep income poverty by 50%). Increasing social assistance benefit levels would help all provinces and territories achieve their targets.

6. More than half of people in Canada who are in ‘deep income poverty’ are singles. Not only do singles receive very low social assistance benefit levels relative to other household types, but they also do not realize many of the economies of scale that come with cohabitating (e.g., shared rent, shared utility costs, etc.). This reality makes this household group all the more worthy of policy attention.

7. Higher social assistance benefit levels can result in less homelessness. It’s intuitive for many of us that higher social assistance benefit levels would both reduce the likelihood of a person losing their housing and also increase the likelihood of a person experiencing homelessness to obtain rental housing on the private market. Research by Ron Kneebone and Margarita Wilkins confirms this, estimating that a $1,500/yr. increase in social assistance benefits for an employable single without dependants would (in 2011) reduce the use of shelter beds on any given night by nearly 20%.

8. Higher benefit levels can improve food security. A recent study in British Columbia confirms this, finding that overall rates of food security improved among social assistance recipients after a one-time increase in social assistance benefit levels in that province. 

9. Less homelessness and improved food security would almost certainly result in public cost savings. The costs of homelessness to the taxpayer are well documented, as are the healthcare costs associated with food insecurity. Put differently, increasing public expenditure on social assistance would likely result in public savings elsewhere.

10. While higher benefit levels would likely lead to more takeup, this increased takeup would be modest. That is precisely the finding of a recent Canadian study that I co-authored with Ali Jadidzadeh. We found that a 10% increase in the real value of social assistance benefit levels for this same household group would likely result in an increase in caseloads of less than 5%.

In sum. When it comes to social assistance across Canada, employable single adults without dependants are a very neglected subgroup. Increasing their benefit levels would likely result in less poverty, improved food security and less homelessness.

 

I wish to thank Susan Falvo, Lynn McIntyre, Vincent St-Martin and Val Tarasuk for assistance with this blog post.

Social assistance: Do higher benefit levels lead to higher caseloads?

Social assistance: Do higher benefit levels lead to higher caseloads?

Social assistance: Do higher benefit levels lead to higher caseloads?

I’ve recently co-authored a journal article[1] with Ali Jadidzadeh that asks the question: Do higher social assistance benefit levels lead to greater take-up? The short answer is yes, but that doesn’t mean we shouldn’t increase benefit levels.

Here are 11 things to know about the study.

1. The study looks only at employable adult singles without dependants. Other studies asking the same question have looked at other household groups; but ours focuses on single adults without dependants in part because this group receives very little public policy attention, and in part because they comprise most persons experiencing absolute homelessness in Canada.

2. While the study measures the impact of a variety of independent variables on caseloads, the one we were most interested in was benefit levels. Other independent variables considered in the study are: the official unemployment rate; ‘working poor’ income (e.g., third and fourth decile income); population variation over time; and social assistance rule changes.

3. The study uses three alternative models to estimate the impact of these variables. Essentially, different measurement techniques have their strengths and weaknesses, so it’s common for statistical work like this to use a variety of approaches so that the reader can compare findings.

4. The first model finds an important relationship between benefit levels and caseload growth. Specifically, it finds that a 1% increase in the real (i.e., inflation-adjusted) value of benefit levels results in a 0.372% increase in caseloads. This model uses pooled Ordinary Least Squares (OLS), an approach that doesn’t account for provincial fixed effects (i.e., characteristics of provinces that don’t vary over time). These results should therefore be taken less seriously than the other two models.

5. The second model finds a rather modest relationship between increases in benefit levels and caseload growth. Specifically, it finds that a 1% increase in the real value of benefit levels results in just a 0.157% increase in caseloads. This approach uses fixed effects OLS, meaning it accounts for unobservable provincial characteristics.

6. The third model finds the relationship to be a bit stronger. This approach uses Panel Fully Modified OLS and finds a 1% increase in the real value of benefit levels to result in a 0.457% increase in caseloads. This approach is considered good when researchers want to study long-run relationships between continuous (i.e., quantifiable) variables. It’s a relatively new approach that has gained currency in the past five years.

7. There’s an important takeaway from this. Specifically, a 10% increase in the real value of social assistance benefit levels would likely result in caseload growth for this group of between 1.57% and 4.57%. Many observers would consider this to be modest caseload growth.

8. Rule changes are important, but they are difficult to measure. In the mid-1990s, several large provinces introduced strict eligibility criteria (including the introduction of work-for-welfare provisions). The study finds their impact in reducing caseloads to be statistically significant. However, in general, it is very challenging for statistical analysis to measure the impact of rule changes on caseloads.

9. The unemployment rate has a modest impact on caseloads. In the first model, a one percentage point decrease in the unemployment rate is found to be associated with a 7.3% drop in caseloads (in the second model, it’s associated with a 5.8% drop). One implication from this is that provincial and territorial officials should not expect job creation alone to wipe out social assistance caseloads for employable singles.

10. The study cautions policymakers against focusing too much on the sizes of caseloads. In other words, when deciding on the appropriate levels of benefits, the study encourages policymakers to consider positive outcomes associated with higher benefit levels.

11. Higher social assistance benefit levels can help accomplish other policy objectives. As the study points out, they can reduce the percentage of Canadians living in poverty, reduce levels of food insecurity, improve health outcomes and reduce homelessness (all of which can result in savings of their own to the taxpayer). So if higher benefit levels also result in modest caseload growth, that may not be so bad. 

In sum. There are many positive outcomes associated with higher social assistance benefit levels. Having said that, when policymakers decide to increase benefit levels, they should budget for some increased take-up.

I wish to thank the following individuals for assistance with this blog post: Susan Falvo, Ali Jadidzadeh, Richard Shillington and Vincent St-Martin.

[1] For a full copy of the article, please email me at falvo.nicholas@gmail.com.