Stop stigmatizing and delegitimizing poverty reduction in Canada

In Canada, poverty dropped by a whopping 55.8% from 2015 to 2020, a reduction that few if anyone really expected by 2030 let alone much earlier.

But when Canada achieved this legislated goal in record time, there was neither announcement nor self-congratulation. There was no news release and no celebration.

The problem for the Government of Canada is that it met its own legislated poverty goals largely through the implementation of robust but temporary pandemic benefits.

There was no objective for these benefits to reduce poverty. They were put in place to help Canadians stay safe and weather the ravages of a once-in-a-century event.

Now the government has the difficult problem of having reduced poverty temporarily.

But it is doing more (and less) than that.

It was silent when its own officer of Parliament -the Auditor General of Canada -admonished the government for paying benefits to ineligible applicants and by creating disincentives to work.

It then redoubled collection efforts by infusing more than $50 million to deal with what it called abuse of the system in its 2023 Budget.

This hopefully inadvertent outcome of panning its own efforts to keep Canadians safe – while surpassing all of Canada’s poverty reduction goals – delegitimizes poverty reduction in Canada.

This is really bad news and our government needs to do something about it[1].

The first thing it needs to do is to admit – in their legitimate haste to get a set of programs out the door – that the programs were badly designed, poorly communicated, changed again and again and horribly administered.

Everyone will give them a pass for this because it was important to get the programs ‘out the door.’ But we should not tolerate the government persisting in collection efforts that are impoverishing the people that they once vowed to protect.

The second thing the Government should do is to acknowledge that the poorest people in Canada: income (social) assistance recipients – were faced with the awful dilemma of choosing between two laws to break.

Most of Canada’s income assistance programs have laws that force them to apply for any benefit for which they may be eligible including pandemic benefits. Here is Ontario’s law[2]:

If the administrator is not satisfied that a member of a benefit unit is making reasonable efforts to obtain compensation or realize a financial resource or income that the person may be entitled to or eligible for, the administrator may determine that the person is not eligible for basic financial assistance or reduce the amount of basic financial assistance granted by the amount of the compensation, financial resource or income that in his or her opinion is available or would have been available had reasonable efforts been made to obtain or realize it.  O. Reg. 134/98, s. 13 (1).

This means that most (if not all) social assistance recipients in Canada were legally obligated to apply for the CERB and CRB regardless of their own opinion[3] as to whether they were eligible for benefits.

In 2019, there were approximately 2.0 million beneficiaries of social assistance in Canada or 5.1% of Canada’s population. Almost all of them lived in poverty.

In the period immediately before the pandemic in 2019, Canada’s poverty rate was 10.4%.  In other words, over half of Canada’s poor were obligated to apply for pandemic benefits because they would have been cut off their benefits had they not applied.

The federal government has never acknowledged the dilemma of forced application for pandemic benefits. They have never acknowledged that provincial and territorial welfare and housing programs ‘dined out’ on these programs and collected hundreds of millions through benefit clawbacks and rent increases.

The third thing the government should do is to recognize that of the millions who lost their jobs at the onset of the pandemic, many distressed employers could not pay the employees that they furloughed. But CERB rules stipulate that there is no eligibility for pandemic benefits unless payments were received.

The intent of pandemic benefits was to ‘have the back of Canadians’. But the people who were not paid by their employers – those most in need of help – were disentitled from the CERB. The government should retrospectively change this rule and pay benefits to people who worked for eligible amounts but did not get paid.

The fourth thing the government should do is publicize a common set of eligibility criteria for the CERB and the CRB. To this day – June 12, 2023 – there are three very different government-published sets of CERB and CRB eligibility criteria on government of Canada websites.

The government should codify these websites and publish the correct eligibility criteria that are in the law as the law is what Tax Court uses to adjudicate cases. Time and again, Tax Court judges have been forced to clarify that error-ridden websites have no status in law and that the appellant must still pay back the money they collected in good faith.

The fifth thing the government should do is desist from requiring ordinary Canadian pandemic benefit applicants to have a set of books and an accounting system that would meet forensic standards – standards that CRA does not require for reporting income for taxation purposes.

In essence, the standards CRA required for reporting income for CERB purposes is far stricter and more detailed than the standards required for the purposes of income taxation.

The sixth thing the government should do is to refrain from collecting repayments of pandemic benefits from anyone living in poverty. In this regard, Canada has an official poverty line called the Market Basket Measure (MBM). Incredibly the CRA does not use Canada’s legislated poverty measure in its assessment of hardship. It uses a lower standard – the LICO – that Statistics Canada has long repudiated as not being a poverty line.

Finally, the government of Canada should hold a national celebration to observe its singular achievement of reducing poverty by 55% in one third the time that was required in its own goals enshrined in Canadian law.

Once Canada has undertaken these seven steps, it will have begun the process of destigmatizing and legitimizing its poverty reduction efforts. If they do not take these steps, the government will have done terrible damage to its poverty reduction efforts.

We can only hope that the government will begin once again, to view poverty reduction as a legitimate goal for our nation.                                                                                                                                                                                                                                                                                   

Js- 11-6-2023

[1] This blog is a follow-up to Erica Alini’s comprehensive feature in the Globe and Mail on Saturday June 11, 2023


[3] Even now, eligibility rules for the CERB and CRB are unclear.