Canadian welfare system outdated: National Council of Welfare

Please chip in to support more articles like this. Support for as little as $5 per month!

OTTAWA, ONTARIO, December 13, 2010 - A new report from the National Council of Welfare (NCW) shows that welfare can be harder to get today than 20 years ago. This means more people were forced into destitution to qualify for welfare in 2009, when the recession's casualties were mounting.

Canadians cannot receive welfare if their liquid assets, such as cash, money in bank accounts or even retirement savings, are over the limit set for their particular circumstances. The NCW report, Welfare Incomes 2009, illustrates many cases where these asset limits have eroded, whether by inflation or design. The limit can be as low as $50.

NCW Chairperson John Rook explained there is great variability across provinces, territories and individual situations, "but in general the combination of low asset limits, low earnings exemptions and low welfare rates -- far below the poverty line -- creates the perfect trap, especially for single people. The absence of shock absorbers and springs that help people help themselves is completely counterproductive."

Getting a job is not the answer it should be. In some Canadian jurisdictions, there are no earnings exemptions at all and welfare benefits are reduced dollar-for-dollar by the amount earned. In such cases, people on welfare are left financially worse off once work-related costs, such as transportation, are taken into account.

Rook said the NCW does not just want to see people exit welfare, but to escape poverty and to thrive.

Don Drummond, former Chief Economist of the TD Bank, commenting on the report, said "Canada's welfare system is a box with a tight lid. Those in need must essentially first become destitute before they qualify for temporary assistance. But the record shows once you become destitute you tend to stay in that state. You have no means to absorb setbacks in income or unexpected costs. You can't afford to move to where jobs might be or upgrade your skills."

For those who do exit welfare, their finances do not necessarily improve because they lose welfare-related support, such as housing, health and dental care. The loss of this support can mean a major setback for these people, said Rook, and it is a large part of the disincentive barrier called ‘the welfare wall'.

The report says more effective approaches can achieve better results and points to examples of innovation and potential. Manitoba's new liquid asset policy of allowing $4,000 per person, up to $16,000 for families, makes it a leader. Lone parents in some other provinces get welfare rates that at least reach the poverty line. Raising asset and earnings limits, bringing rates up and making regular adjustments for inflation can be a part of the solution, but alone are not enough.

"To solve the problems of social assistance, we must literally think -- and act -- outside the box," said Rook, "in this case, outside the welfare system." He indicated federal child benefits provide a source of stable income for families with children and play an important role in reducing welfare use and preventing poverty. Welfare Incomes 2009 focuses on the newer Working Income Tax Benefit (WITB), which also operates outside the welfare system. It is available to welfare recipients with earnings and thus helps work pay. The WITB goes in the right direction, according to the report, but the amounts need to be increased to help welfare recipients, particularly singles, avoid or overcome the ‘welfare wall'.

The report calls for a comprehensive approach to both income support and the provision of appropriate services geared to income level rather than welfare status. The Council is encouraged by poverty reduction strategies that take this approach and is confident these kinds of investments will pay off for all Canadians.

- 30 -

The report and additional documentation are available at

The National Council of Welfare is an independent body established to advise the federal government on issues related to poverty and social development.

Thank you for reading this story…

More people are reading than ever and unlike many news organizations, we have never put up a paywall – at rabble we’ve always believed in making our reporting and analysis free to all, while striving to make it sustainable as well. Media isn’t free to produce. rabble’s total budget is likely less than what big corporate media spend on photocopying (we kid you not!) and we do not have any major foundation, sponsor or angel investor. Our main supporters are people and organizations -- like you. This is why we need your help. You are what keep us sustainable. has staked its existence on you. We live or die on community support -- your support! We get hundreds of thousands of visitors and we believe in them. We believe in you. We believe people will put in what they can for the greater good. We call that sustainable.

So what is the easy answer for us? Depend on a community of visitors who care passionately about media that amplifies the voices of people struggling for change and justice. It really is that simple. When the people who visit rabble care enough to contribute a bit then it works for everyone.

And so we’re asking you if you could make a donation, right now, to help us carry forward on our mission. Make a donation today.


We welcome your comments! embraces a pro-human rights, pro-feminist, anti-racist, queer-positive, anti-imperialist and pro-labour stance, and encourages discussions which develop progressive thought. Our full comment policy can be found here. Learn more about Disqus on and your privacy here. Please keep in mind:


  • Tell the truth and avoid rumours.
  • Add context and background.
  • Report typos and logical fallacies.
  • Be respectful.
  • Respect copyright - link to articles.
  • Stay focused. Bring in-depth commentary to our discussion forum, babble.


  • Use oppressive/offensive language.
  • Libel or defame.
  • Bully or troll.
  • Post spam.
  • Engage trolls. Flag suspect activity instead.