The Quebec government exulted recently in a substantial decrease in the number of social-assistance recipients. Yet it should be recalled that we remain the North American social-assistance champions, behind only Newfoundland and the District of Columbia.
Quebec’s social-assistance spending reached $2.7 billion in 2005-06 and involved nearly 500,000 recipients, or 6.4 per cent of the population. In the past dozen years, the number of social-assistance recipients has fallen sharply across North America. What stands out is the proportionately higher reduction among our neighbours to the south, where social-assistance rolls are down 73 per cent since the peaks of the mid-1990s, compared with 52 per cent in Canada as a whole and just 39 per cent in Quebec.
Social assistance here could be reformed in a way that lowers the dependency and poverty rates of adult recipients who are fit for work – meaning two-thirds of them.
There is much to be gained by looking to measures applied successfully in other parts of Canada and the U.S. Changes instituted in the 1990s in a number of OECD countries were intended to enhance work incentives and make jobs easier to obtain. The U.S. experience has had the broadest scope and remains the most heavily studied. The character of these reforms has included making assistance conditional, with the aim being to lead toward self-reliance.
Starting in the early 1990s, a number of states reformed their social-assistance systems. The 1996 federal reform, signed into law by then president Bill Clinton, boosted the process.
The new program focuses on the transitory nature that social assistance is meant to have and the need for recipients to seek self-sufficiency. Among the measures applied successfully are time limits on benefits, generally five years on a lifetime basis, and an obligation to work or to take part in training or community activities. Five U.S. states have experienced reductions exceeding 80 per cent.
High economic growth since the mid-1990s in the United States has certainly played a role, but a recent study shows that 44 per cent of the improvement in social-assistance levels results from reform measures rather than from other factors.
Reforms in Canada have been less intensive than in the United States. Only the Ontario, Alberta and British Columbia governments have adopted significant measures, making social assistance fully conditional on seeking work or professional training – or setting time limits on benefits. Since the mid-1990s, these provinces have experienced sharp declines in the number of recipients.
Starting in 1993, the Alberta government encouraged people fit for work to develop employment skills. It reduced some benefits, and required some recipients to seek jobs or enroll in professional training. Social-assistance levels in Alberta fell by 77 per cent between 1993 and 2005, from 7.4 per cent to 1.7 per cent of the population, with strong economic growth obviously playing a role in this performance.
In 1995, the Ontario government cut social-assistance benefits by 21.6 per cent, except for people unfit for work. The system’s eligibility requirements were tightened, as were penalties for violations. As of 1998, recipients fit for work have had to agree to take part in measures leading to employment such as education, training or community work, failing which benefits are cut off completely. Between 1995 and 2005, social-assistance levels in that province fell by 56 per cent, going from 12.4 per cent to 5.4 per cent of the population.
In 2002, the B.C. government became the only one in Canada to set a time limit on social-assistance eligibility for recipients who are fit for work. The limit is 24 months in any 60-month period. In 2003 alone, the number of recipients fell by a quarter in that province.
Why has Quebec’s performance been so much weaker?
Quebec has none of the more intensive measures found in some other parts of Canada. Quebec undertook social-assistance reforms in 1988 and 1998 that followed the North American trend, though in a less intensive form. And this movement was set back in 2005 with the introduction of a minimum base payment that contained no requirement to enter the job market. Instead, a supplement is paid for voluntary participation in job or training measures.
If the Quebec government wanted to save a greater number of recipients from the dependency trap, enabling them to enter the job market and emerge from poverty, it could conduct a more complete reform inspired by actions instituted elsewhere.
Norma Kozhaya is an economist at the Montreal Economic Institute.