The overwhelming majority of Canadian households that rely on social assistance are living in poverty owing to insufficient payments, and the situation is worsening in many provinces because of the inflation crisis, a new report has found.
Social-assistance payments vary greatly by province, according to the report published Thursday by Maytree, a Toronto-based human-rights organization. For example, an unattached individual with a disability – someone who lives alone and doesn’t have dependents – could have received $23,473 last year in Alberta, but just $11,648 in New Brunswick. This accounts for both provincial and federal government supports.
The constant, however, is the inadequacy of social-assistance incomes. Fifty-five of the 56 example households tracked by Maytree – based on province or territory, household size and someone’s ability to work – received payments in 2023 that were below the poverty line. Most households were living in deep poverty.
“We continue to fail people in Canada who are living on incomes from social assistance,” said Jennefer Laidley, a fellow at Maytree and the report’s lead author, in an interview.
Cost of living: The absence of inflation indexing is making us poorer
Social assistance is often a last line of support for people in serious financial need, including the unemployed and people who can’t work because of disability. Recipients can range from people living alone to two-parent households with children. Total incomes are comprised of provincial, territorial and federal supports such as benefit programs, tax credits and rent supplements.
Canada’s inflation crisis has only added to the financial stress facing many households. This is a particular risk in provinces that don’t automatically adjust benefits for inflation to preserve their value.
While the annual inflation rate peaked at roughly 8 per cent two years ago, it’s still running above the Bank of Canada’s 2-per-cent target. The Consumer Price Index rose by 3.9 per cent on an average annual basis in 2023.
Five of the 10 provinces – Alberta, Manitoba, Ontario, New Brunswick and Quebec – made inflation adjustments to at least some of their benefits last year.
Alberta, for example, resumed the indexation of social assistance in 2023 after scrapping the practice in 2019. Benefit rates in the Ontario Disability Support Program are now adjusted annually for inflation, as of mid-2023.
Ontario, however, has taken a piecemeal approach to indexing. Benefit rates under Ontario Works – a program for people in need of financial and employment assistance – haven’t changed since the fall of 2018. More than 440,000 people were beneficiaries of Ontario Works as of early this year, a figure that’s grown as the labour market weakens.
According to Maytree’s calculations, an individual considered employable could have received $10,473 in total social-assistance income last year in Ontario – the lowest support in inflation-adjusted dollars since 2012.
The arbitrary nature of social policy making can be a help or hindrance. The federal government disbursed a “grocery rebate” last year to help people with inflationary pressures, and several provinces sent additional cost-of-living payments to their residents. (Most of Ottawa’s benefits and tax credits are adjusted for inflation.) But some jurisdictions that offered cost-of-living payments in 2022 did not do so again in 2023.
Over all, 24 of the 44 example households in the provinces saw their social-assistance incomes rise by more than inflation, according to Maytree’s report. The remaining 20 households took an inflation-adjusted hit to incomes.
While indexing and one-off cheques are helpful, Ms. Laidley said the prevailing trend is that social-assistance incomes largely fall below the poverty line. Statistics Canada’s Market Basket Measure is the country’s official poverty line, based on the cost of goods and services that represent a modest standard of living.
The poverty line varies by location and household size. In the Toronto area, the benchmark for an unattached individual was $28,766 last year, Maytree estimates. Deep poverty is when social-assistance incomes are less than three-quarters of the benchmark.
Unattached individuals tend to have the toughest financial circumstances. In most provinces, their assistance incomes are less than 50 per cent of the poverty line.
“If we wanted to reduce the proportion of people living in poverty in Canada, we could do that,” Ms. Laidley said. “Cash transfers can be changed,” she added, pointing to financial supports deployed quickly during the pandemic.
Maytree’s calculations for annual income assume that recipients are tax filers and thus eligible for supports that are delivered through the tax system. The incomes are based on assistance that is widely available to the various household types.
For example, Maytree does not include a special diet allowance in Ontario Works that provides additional funds to people with an approved medical condition. As a result, households may receive more or less than the organization’s baseline amounts.
Social-assistance incomes “were deeply inadequate in 2023,” Ms. Laidley said. “They were that way in 2022, 2021 and virtually every year, as our report goes back to 1986.”