The rise and fall of welfare analysis in Canada

As a lifelong student of social assistance caseloads in Canada, I looked forward to The Rise and Fall of Social Assistance Use in Canada, 1969-2012 by Ron Kneebone and Katherine White. My interest became even more avid when I read that the authors had cited some my data to come to their conclusions.

The report is reasonably fair in its approach even if it does not mention or analyse the most important reasons why welfare caseloads have risen and fallen in Canada.

But that was before I read the news release supporting the report which comes to remarkably different conclusions than the report itself. Its chiding tone and speculative welfare baiting made me wonder if the real news release supporting the report was somehow mislaid or ‘separated at birth’.

I wondered if the drafters of the news release rolled the dice and bet that the media would cover the release and not the report itself. If they did, they guessed right.

The release insinuates that Ontario’s programs are more generous than other provinces especially in comparison to those in Quebec and speculates that policy missteps played a role in encouraging more people to go on welfare in Ontario. It goes on to highlight that Ontario’s caseloads are among the highest in the country.

So let’s start with the first question: are Ontario’s caseloads actually higher than in every other province? With almost 40% of Canada’s population, of course they are. Ontario is by far Canada’s largest province. Ontario also has the most children, the most seniors, the most cars, the most houses, malls and mailboxes. So what?

Simple arithmetic from the report takes us straight to the answer if we are prepared to compare apples to apples.  We just have to keep in mind that Ontario’s population is 66% higher than Quebec’s. Ontario has 13.6 million residents. Quebec has 8.15 million.[1]

Ontario’s social assistance caseload, (according to Table 2 of the report) shows that Ontario has exactly 66% more welfare recipients than Quebec (550,441 vs. 330,707). This means, on the face of things that Ontario’s rate of social assistance recipiency is the same as Quebec’s, not higher.

But that’s not the whole story. We need to remember that Employment Insurance is a large social insurance program that keeps those who have lost their jobs from going on welfare.   EI rules in Quebec are less stringent than in Ontario.For example, Ontario has almost exactly the same number of EI recipients (152,000 in Ontario vs. 150,000 in Quebec)[2].  On a per capita basis, Quebec has more than a 60% higher rate of reliance on EI.

What this means is that Quebec’s overall rate of reliance on basic income security programs for the jobless is actually higher than in Ontario. So much for Ontario’s supposed plight in comparison to Quebec.

Looking further eastward, the news release reserves special congratulation for the Atlantic Provinces  where it notes: “…social assistance usage is only half what it was just 15 years ago and currently sits below any level observed in those provinces since 1970.  Kneebone and Wright are quoted as saying “Remarkably, the rate of social assistance use in Nova Scotia, New Brunswick and PEI is currently below that in Ontario”.

This is the point where I start to ask the question: What planet are we on? Is it not extremely well known that EI is a completely different program in Atlantic Canada and that Ontario is saddled with the toughest EI rules (both entry and duration in benefits) in Canada?

Hold on to your hats! The (per capita) percentage amounts by which EI active claims exceed Ontario’s in each of the four Atlantic Provinces are as follows: Newfoundland and Labrador: 447%; PEI: 348%; New Brunswick: 281%; and Nova Scotia: 166%.

I can only agree with Kneebone and Wright that it is remarkable that the rate of social assistance use is higher in Ontario than the Atlantic Provinces. Ontario would look like 1970 too if its residents had access to Atlantic EI benefits.

And that’s a cautionary tale respecting further cuts to EI in the provinces that have the more generous EI rules.  Make Atlantic Canada live on a diet of Ontario’s EI rules and watch what happens. It won’t be pretty.

But there are other interesting things going on. It’s not just about ‘denominator neglect’ and different EI rules.

Children receiving social assistance are also an important part of this story.  Delving deeper into the numbers, I became puzzled by the number of children in families that receive social assistance, especially in Ontario and Quebec.

Heading to government websites, I discovered that in December 2012, Quebec reported 103,000 children in families receiving social assistance.  Interestingly Ontario reported 250,000 children[3] in social assistance families. This (almost) 150% difference is way out of whack with the population differences between the two provinces.

On the face of it, Ontario’s number of children per social assistance recipient is 0.45 children per case and Quebec’s number is 0.31. Only two answers can account for the data discrepancy: either Ontario’s social assistance recipients have 46% more children than Quebec’s or Quebec has removed many more children from its statistics through its separate child benefit program. Maybe the difference is a result of universal child care. May be it’s Quebec’s low birth rate

Who knows? The one thing that we do know is that Quebec does not have far fewer children in receipt of social assistance due to policy missteps or greater generosity in Ontario.

All in all, Kneebone and White’s paper is still a useful addition to the literature on current and historical social assistance caseloads.  It begins a new discussion that I have tried to start a hundred times.

But whoever wrote the news release appears to have little interest in this discussion or the facts. Their purpose is to peddle shopworn bromides about Ontario’s welfare program while using Kneebone and Wright as a foil.

I can’t say that it won’t work as welfare bashing is a potent force in this country and doesn’t like being confused by facts, analysis or arithmetic.

Still, we can hope that we are better than this.

John Stapleton

February 22, 2014

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