National Council of Welfare

Conseil national du bien-être social


  

FOR IMMEDIATE RELEASE SEPTEMBER 28, 2000

TIME FOR THE FEDERAL GOVERNMENT TO PLUG THE LEAK IN THE CANADA CHILD TAX BENEFIT

While the federal government poured millions of dollars into the Canada Child Tax Benefit for low-income families, families with children on welfare got less and less, the National Council of Welfare said in a report published today.

The federal government continues to pour millions of dollars into a benefit to low-income families, but a fatal flaw in the agreement between the federal government and the provinces and territories allows the incomes of families with children on welfare to drop.

The Canada Child Tax Benefit marked the first significant new federal spending in years and could have helped poor families on welfare make ends meet, said the report, Welfare Incomes 1999. Instead, Ottawa and most of the provinces and territories agreed that increases in federal money should be "clawed back" from welfare families and reinvested by the provinces and territories in other programs for children. A condition of the clawback was that families on welfare would be no worse off.

The federal government increased its spending on child benefits by $850 million a year with the launch of the Canada Child Tax Benefit on July 1, 1998. The benefit was increased by $450 million on July 1, 1999 and again by $450 million in July 2000.

"The National Council of Welfare has been concerned about the clawback to the Child Tax Benefit right from the start," said John Murphy of Canning, Nova Scotia, chairperson of the National Council of Welfare. "It seems evident that a program for low-income families that bypasses the poorest of the poor does not make a lot of sense."

"We are very disappointed to see that governments are prepared to see families on welfare sink into even more difficulty when they could have lent a helping hand," said Mr. Murphy. "But this situation is worse than we feared. Governments said that families on welfare would be no worse off than before but this has not turned out to be true."

"This year’s report on welfare incomes confirmed our worst fears about the clawback. Welfare incomes for families with children have deteriorated across the country – except in those two provinces that chose not to claw back the supplement to the Child Tax Benefit. In all cases, the federal government is now paying a greater share of welfare incomes than ever before, and welfare incomes for families remain far, far below the poverty line."

"While the federal government poured money into efforts to reduce child poverty, the provinces and territories were allowed to syphon it off. The rising cost of living did the rest of the damage."

 

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"The Council has seen no convincing evidence that taking money away from the poorest of poor families provides will motivate parents to enter the work force. What we know helps parents to provide for their children are a series of family supports such as job training, better minimum wages, and labour policies that help parents to balance their responsibilities to their children with their responsibilities to their jobs. Good, integrated family policy must also include early child development programs that provide the best possible early education for children while providing the dependable, affordable child care that allows parents to participate in job training and to take jobs."

"We are taking some comfort in this month’s announcement of the First Ministers’ agreement on early childhood development," said Mr. Murphy. "We are encouraged to see the two levels of government discussing the importance of children’s services, and we are pleased to see the federal government committing money to these services. Our hope is that when the details of the agreement are ironed out, we will see a good system of child care with national standards of quality and affordability."

"We are also calling on the federal government to stem the flow of money out of the pockets of families on welfare. Making sure that families with children on welfare have adequate incomes is fundamental to creating a good system of policies for Canadian families."

The report also shows that incomes for other people on welfare remain at rates far below what most people would consider reasonable. Incomes for single people were as low as nine percent of the poverty line in Newfoundland. The highest incomes for single employable people were 41 percent of the poverty line in Ontario.

The lowest benefits for single disabled people were 42 percent of the poverty line in Alberta. The highest rate was 70 percent of the poverty line in Ontario.

Welfare incomes for single-parent families ranged from a low of 50 percent in Alberta to a high of 70 percent in Newfoundland.

For two-parent families with two children, welfare incomes ranged from 45 percent of the poverty line in Quebec to 62 percent in Prince Edward Island.

Welfare Incomes is a regular publication that tracks the annual welfare incomes of four typical households: a single employable person, a single person with a disability, a single parent with one child aged two, and a couple with two children aged ten and 15.

The National Council of Welfare is a citizens’ advisory group to the Minister of Human Resources.


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