On May 15, 2018, the Quebec National Assembly unanimously adopted Bill 173, establishing a “basic income” for individuals with “severe employment limitations.” Ontario has experimented with a pilot project which offers a minimum income based on 75 per cent of the Low Income Measure (LIM)1 to some 4,000 participants. In Finland, the Netherlands and California, more modest programs are being tested. In Kenya, India, Namibia and Cherokee, North Carolina, a few extra dollars widely distributed without conditions seem to have a significant impact on living standards, access to education and entrepreneurial initiatives. Guy Standing of the International Labour Organization and billionaires Elon Musk and Mark Zuckerberg are among the advocates of a basic income as a solution to rising inequality and the insecurity resulting from globalization, technological change and deteriorating labour market conditions.2

There is strong evidence that providing some unconditional income to poor people can alleviate stress and provide a springboard for many to become financially independent. However, there is also considerable evidence that much of the money provided is squandered and reinforces antisocial behaviour such as drug addiction and alcoholism. Industrialized countries like Canada already provide considerable social support to the poor – universal health care and education being among the most important. Canada also provides a guaranteed minimum income (GMI) to people aged 65 and over and for families with children. Provincial welfare programs represent a qualified form of GMI, particularly for people with disabilities. However, welfare rates are generally at a very low level and a wide array of bureaucratic rules may reinforce, rather than alleviate, insecurity.

Kinds of GMI

A guaranteed minimum income can take the form of a universal allowance. Alternatively, GMI can take the form of a social assistance program, which targets only low-income people who receive an unconditional base amount. Other issues in designing a GMI include the level of support, the cost and its impact on other taxpayers, the requirement to work or to get training and other work skills, and whether benefits should be paid to individuals or to families.

A universal allowance would be paid to every adult legally resident in a given jurisdiction, independent of income, assets, age or marital status. Other income, earned or not, would be taxed at standard rates, although tax rates might have to be increased to fund the GMI. Additional sums might be given to people with disabilities and separate allowances would be provided for children. In some versions, a supplement would be paid to single people so that two people considered to be a couple would receive less than two independent individuals.3 There would be no obligation to work, but proponents argue that most people want to work and the economic security provided by the basic income would allow them to enter the labour force or get education on their own terms.4

A social assistance program can be considered a form of GMI if the amount of aid is unconditional – in other words, if it can’t be reduced below the minimum level. Social assistance is targeted only to those with low income; as family income increases, the benefit is reduced. Canada already has a GMI for people aged 65 and over (see box). The Canada Child Benefit of $6,496 for children under six and $5,481 for older children, combined with programs in seven provinces and the three territories, constitutes an income-tested GMI for children. Quebec offers the most additional support: a single-parent family receives a maximum benefit of $9,778 for the first child under six. It is also the only province that has a universal floor for higher-income parents. Additional benefits are provided for children with disabilities, reduced for higher-income families at the federal level but universal in Quebec.5

Assistance programs targeted toward people who are not expected to work, such as the elderly, children and people with disabilities, are true GMIs. Most welfare programs, however, require beneficiaries to actively seek a job or participate in programs designed to improve their employability, and impose penalties if beneficiaries do not comply.

In our society, employment is associated not only with income but also with social status and social integration. Employability programs are targeted particularly to young people just coming onto the labour market, to give them the skills and self-confidence necessary to earn a decent living rather than being dependent for the rest of their lives. If a large number of people are dependent on welfare programs, taxpayers may become increasingly angry at having to pay taxes to support others, thus creating a serious social divide.

The new basic income for people with severe employment constraints in Quebec has some characteristics of a universal allowance in that there will be no obligation to work and it will be provided to individuals without reference to a spouse’s income (although a person living with a spouse will receive less than a single person). Earnings will be taxed but will not reduce the benefit, and the limits for financial and other assets are set at a fairly high level.

However, not everyone who has a long-term disability will be eligible for the basic income because only those who have been beneficiaries of the Social Solidarity Program (a component of the existing welfare system) for 66 months will be eligible. People whose incomes are below the amount offered by the basic income will not be eligible if they have been excluded from welfare because of their spouse’s income, the amount of their assets, or receipt of disability benefits from the Quebec/Canada Pension Plan, indemnities for a work-related accident or occupational disease or the automobile insurance program. When children with severe disabilities attain majority (at age 18), they too are not eligible until they have received Social Solidarity benefits for the required period. The new government elected in October may decide to extend coverage.

What’s wrong with a universal allowance?

Proposals for a universal allowance have been around since antiquity, and were revived in the early 1960s. According to the Basic Income Earth Network, no country (or subnational unit) has so far adopted a true universal allowance at a level sufficient to cover basic needs.6 The main argument against such a program is its cost. To finance an allowance for every resident, it would be necessary to greatly increase the tax rate on other forms of income. Logically, a universal allowance would replace most other welfare and income-tested programs. However, proposals from right-wing economists such as Milton Friedman (also put forward by the Macdonald Commission in Canada) were explicitly conceived as a way to abolish unemployment insurance and universal child benefits as well as to permit the reduction of minimum wages.7 The result would be downward pressure on the middle class, whose earnings would continue to stagnate while they would lose many of their existing social benefits and pay higher taxes.

From a left-wing perspective, trade unions have often opposed GMIs or even family allowances and earned income supplements (discussed below) on the grounds that they constitute an indirect subsidy to employers who will no longer have to pay a “living wage.”

The impact of a universal allowance depends on what it would replace.8 A rough simulation of what a $15,000 universal allowance would look like in Quebec (based on the 2015 tax-transfer system) indicates that, if there is no drastic increase in tax rates, people with incomes above $15,000 would be the principal beneficiaries. Because they are mostly not eligible for existing income-tested programs, they would not be affected by the replacement of these programs. The net benefit would be lowest for the poorest people who now receive welfare benefits, the tax credit for the GST, the Quebec Solidarity tax credit and earned income supplements.

Currently, marginal tax rates (including contribution rates for social insurance programs) for incomes above the basic personal income tax exemption are about 36 per cent in Quebec. If this rate is not changed, people with incomes below $42,000 would get a net benefit from a universal allowance of $15,000. That income ceiling represents about 60 per cent of the nonelderly Quebec population. The other 40 per cent of taxpayers would have to pay much higher taxes to finance the program.

Advocates of a universal allowance, among them Richard Pereira and Guy Standing, propose financing the program by eliminating tax shelters such as RRSPs or lower tax rates for capital gains, taxing profits from internet-based multinational corporations such as Netflix and reducing tax evasion in offshore tax havens. Additional funds for financing a GMI could come from abolishing subsidies to large corporations or bailouts for failed banks or introducing the proposed “Tobin tax” on capital transactions or ecological taxes. However, other public services such as health, education, subsidized housing, public transport and environmental cleanup are also competing for government revenue. In Third World countries, basic infrastructure and providing clean water, shelter, health care and education to all communities would do more to improve living standards, create employment and provide a base for future development than direct universal allowances.

A GMI in the form of social assistance

GMIs in the form of more generous social assistance programs are a more realistic possibility than a universal allowance, but these too are fraught with many of the same problems. The Ontario pilot project gave $16,989 to single individuals and $24,027 to couples (plus $6,000 for people with disabilities) with no obligation to work. These sums were clawed back at a rate of 50 per cent of earned income and 100 per cent of unemployment insurance or Canada Pension Plan benefits. Single individuals with incomes up to $34,000 and couples with incomes up to $48,000 were eligible for a full or partial benefit.

The purpose of this project was to test the effect of the basic income on a number of indicators including food security, mental and physical health, housing stability, education and training and labour market participation. Some 4,000 people were offered basic income payments along with a control group of 2,000 people whose outcomes were to be compared with those of the test group. The program was initially scheduled to last three years, but the new Conservative government of Doug Ford has already announced termination on March 31, 2019.9

The Office of the Parliamentary Budget Officer (PBO) estimates that applying the Ontario model across Canada would cost about $44.0 billion after deducting other federal support for the 7.5 million people who would probably benefit from the program (about 32 per cent of the Canadian population aged 18 to 64). The PBO adds that, as other studies and experiments have shown, this kind of GMI might lower labour force participation and hours worked, particularly for women. Lost income tax revenue therefore has to be added to the cost.10

Another major problem with this model is its high marginal effective tax rate (METR) – that is, the combination of income taxes and clawbacks of income-tested programs. Not only was the Ontario basic income clawed back at a rate of 50 per cent, but beneficiaries would also have to pay 7 per cent for social contributions (unemployment insurance and the Canada Pension Plan) as well as taxes on other income above the personal income tax threshold of about $15,000. The METR can readily surpass 80 per cent in many cases. Such a high METR discourages gainful employment and encourages “under-the-table” undeclared income.

The Guaranteed Income Supplement (GIS), the major part of a GMI for low-income seniors, imposes a 50 to 75 per cent clawback on all other income. This creates a poverty trap because recipients face an METR that can eat up as much as 80 per cent of the savings they were counting on in retirement. Few Canadians over 65 are truly poor, but many who have earned middle-level incomes for most of their adult lives find themselves with incomes just above the poverty line in retirement.11

Earned income supplements: An alternative to GMIs

One of the main problems with welfare programs is that income from almost every other source reduces the welfare benefit dollar for dollar (100 per cent clawback), although in Quebec earnings of $200 per month for single individuals and $300 for couples are exempted. This means that, unless a person can go from welfare dependency to financial autonomy in a single leap, it is difficult to leave welfare. An earned income supplement gives back some of the money taken out of welfare payments.

After several unsatisfactory experiments with guaranteed minimum incomes, in 1975 the U.S. government created an earned income supplement, the Earned Income Tax Credit (EITC), which today remains the main cash transfer to low-income households in the United States. Quebec, in 1979, was the first Canadian jurisdiction to create an earned income supplement. It evolved into the Work Premium in 2005.12 Alberta and New Brunswick also offer this kind of tax credit. Ontario and many of the other provinces have essentially integrated an earned income supplement into their welfare programs by structuring them in such a way as to allow beneficiaries to keep some of their earnings.

After experimenting with some small-scale programs, the federal government created the Working Income Tax Benefit (WITB) in 2007. Because the Quebec Work Premium was designed mainly to help families with children (benefits up to $2,432 for a single parent and $3,612 for a couple in 2017), Quebec negotiated an adaptation of the WITB so that it is more generous for single individuals and couples without children than for families. The opposite is true in the other provinces.

Figure 1 illustrates how welfare benefits, the Quebec Work Premium, the WITB and disposable income evolve as earnings increase for a single person. An earned income supplement has three basic phases. In the first phase, earnings above the amounts exempted from welfare clawbacks (a phase-in threshold of $2,400 in Quebec) are supplemented up to a benefit ceiling (which in Quebec corresponds to the point at which welfare benefits reach $0). Both the Work Premium (maximum $558 in 2015) and the WITB (maximum ($1,617) are at their maximum here. The EITC and the WITB, but not the Quebec Work Premium, then have a short second plateau phase of constant benefits. Once earnings exceed the phase-out threshold, the supplement is clawed back at a rate of 10 per cent for the Quebec Work Premium and 20 per cent for the WITB. At the end of this third (phase-out) range, the benefit has fallen to $0.

The dotted diagonal line in figure 1 shows whether a person gets a net benefit from government programs (when disposable income is above earned income) or pays more in taxes and contributions than the value of government transfers (disposable income is below earned income). In this case, the break-even point is a little above $17,000, or less than the value of full-time work at minimum wage. The figure also shows that at this level of income, people get nothing from the Quebec Work Premium and very little from the WITB, calling into question how useful these programs are for encouraging work.

One of the major dilemmas of an earned income supplement is whether to administer it on a monthly or a yearly basis. A monthly benefit allows the recipient to receive the income immediately. In practice, because the total annual benefit is based on yearly income and beneficiaries are likely to have variable monthly earnings, they may be obliged to reimburse much of the benefit at tax time, which was the case with the Parental Work Assistance Plan in effect between 1988 and 2004 in Quebec.13

Like the EITC in the United States, the Work Premium and the WITB are administered yearly as a negative income tax. This means, however, that the supplement is paid six to 18 months after the beneficiary has made the effort to earn income. To address this problem, taxpayers can request an advance payment of up to 50 per cent of the expected benefit during the year. However, most single individuals can’t ask for an advance because the estimated benefit must be at least $500 and very few get that much.

Other work incentives in Quebec

The Government Action Plan to Foster Economic Inclusion and Social Participation, which underlies Bill 173, introduced some new work incentive measures for welfare beneficiaries with no employment constraints as well as modifying some of the existing parameters.

  • The maximum Work Premium for single individuals will increase from $730 to $940, which will also increase its phase-out point to about $21,000. For couples without children, the maximum benefit will increase from $1,138 to $1,467 with a phase-out threshold of about $32,000.
  • The monthly exemption of $200 ($300 for a couple) will increase by 20 per cent of earnings. For example, a single welfare beneficiary who earns $500 in a month will be allowed to keep $200 plus $60 (= 20% x ).
  • The Action Plan proposed a one-time employment retention bonus of $1,000 for people who enter the labour market and stay there for a certain time. The details are to be announced later.
  • Under the Aim for Employment Program, an individual plan with a financial bonus is set up for each new welfare recipient with the objective of providing training or work experience or helping with a job search. Bonuses for this program and other similar measures have been increased under the Action Plan.
  • A person who has received welfare benefits for at least 24 of the last 30 months, with sufficient earned income to leave welfare, can receive a supplement of up to $200 a month for up to 12 months. This criterion was relaxed from 36 months of the last 42.
  • Additional funds will be allocated to help the 16- and 17-year-old children of welfare recipients return to school and complete their secondary diploma as well as to improve success in school for all children from disadvantaged backgrounds.
  • Other money will allow young people to develop and carry out social engagement projects as a way of promoting skills and self-confidence.
The central question: Reversing the growing trend toward inequality

GMIs have returned to the forefront of political debate because of growing inequality and the rise of right-wing populist movements around the world with roots in those sections of the population that can no longer find stable, decently paid work. Unprecedented numbers of migrants to Europe and the United States fleeing wars, natural disasters and stagnant economies are shunted into the low end of the labour market where they suffer the worst abuses, but also put pressure on conditions for other workers.

Guy Standing and others advocate a universal and unconditional basic income for all individuals because “unless the progressives of the world offer a politics of paradise, class will be all too prone to listen to the sirens luring society onto the rocks.”14

Fighting poverty requires getting at its root causes: that is, the unprecedented power of big multinational corporations that move their production around the world in such a way as to keep wages down, destroy labour standards and avoid environmental restrictions. If income is not distributed equitably during the production process, redistribution through a GMI cannot eliminate poverty. How to reverse the growing trend toward inequality is the central question of the 21st century. The answer will require political programs coordinated internationally to tax the big companies, control the behaviour of financial institutions and prevent these corporations from eroding the powers of individual governments to establish labour and environmental standards. A new wave of large-scale unionization is also necessary to rebuild working conditions firm by firm.

In the meantime, it would be utopian to expect the federal or provincial governments to provide a guaranteed minimum income sufficient to meet some poverty measure (such as LIM or the Market Basket) for all welfare recipients. Nevertheless, taking inspiration from the Ontario pilot project, it might be feasible to establish a GMI at a level identified with short-term needs on the principle that if you can’t pay your rent, you don’t know where your next meal is coming from and your clothes are in rags, you are not in a position to reenter the labour market. As in Ontario, the clawback rate could be reduced from 100 to 50 per cent and the earned income supplements readjusted appropriately. Employment support programs are also important, especially for young people, but may need to be better linked to real employment opportunities.

Continue reading “Guaranteed Minimum Incomes: Are They the Answer to Poverty?”

In December 2017, the Quebec government released the Government Action Plan to Foster Economic Inclusion and Social Participation,1 its third action plan as provided for by the 2002 Act to Combat Poverty and Social Exclusion. This plan was presented as a first step toward a guaranteed minimum income as promised by the Minister of Employment and Social Solidarity, François Blais.2 It represents the first significant investment in welfare benefits and the fight against poverty since the adoption of the 2002 law, except for the improvement in child benefits adopted in 2004.

As I write, Bill 173, which would implement the part of the Plan that increases benefits for people with severe employment constraints, is being debated in the National Assembly. Under Bill 173, there will be a “guaranteed minimum income” of $18,029 (2017 dollars) by 2023 for a single person who has a severely limited capacity for employment and has received social solidarity benefits for five and a half of the last six years. According to the government, this corresponds to the market basket measure (MBM) of low income established by Statistics Canada.3 The guaranteed minimum income is expected to reach 84,000 individuals by 2023, of whom 93.2 per cent are single and most of the rest belong to couples without children. Disposable income for a couple where both members have limited capacity will increase from $18,912 to $26,400. Women represent 46.2 per cent of potential beneficiaries and men 53.8 per cent.

The Action Plan includes 43 measures in all and will cost nearly $3 billion over the next six years. Beneficiaries of the last-resort financial assistance program (people who have no employment constraints or only temporary constraints) will receive an increase of $540 a year by 2021. Those people who have severe employment limits but who don’t meet the criterion of having received social solidarity benefits for five and a half years will get an increase of $1,236 by 2021. Beginning in February 2018, benefits were increased by $73 a month for people with severe limits and by $15 a month for other beneficiaries.4 Since federal and Quebec child benefits are considered sufficient to cover the needs of children, single parents get the same welfare benefits as individuals without children and couples receive the same amount whether or not they have children (see box p.54).

Other significant measures proposed in the Action Plan include $242.7 million for more social housing, $105.6 million for better access to child care and prekindergarten classes for four-year-olds, and additional money for local and regional governments and community groups working to combat poverty.

This article is the first of two parts. Here I look in detail at the evolution of antipoverty policy in Quebec up to the current and future stages of the Action Plan. In Part 2, to be published in the Winter/Spring 2019 issue of Inroads, I focus on complementary measures designed to encourage labour force participation and compare these policies with those of other provinces. I will also update the discussion of future stages of the plan in light of the results of the October 1 Quebec election

The evolution of social security in Canada

Since the beginning of public support to the indigent in 16th-century Europe, policymakers and charitable groups have distinguished between those who are “deserving” and those who are not.5 To a large extent, this distinction has to do with whether people, initially men for the most part, are able to work. The first public welfare plans were targeted to people presumed unable to work: the blind, the disabled, war veterans, victims of industrial accidents and, beginning in 1927, the elderly. Allowances for Needy Mothers – single mothers or those with disabled husbands – were first instituted in 1920 in British Columbia, but not until 1937 in Quebec. In contrast to men, single mothers had to produce a certificate of morality, generally from their parish priest, to be considered “deserving”; unmarried mothers and widows with a bad reputation were not eligible, and divorce was nonexistent.

As early as 1909 in Quebec and 1914 in Ontario, workers’ compensation plans were adopted, in large part to protect employers from expensive litigation following industrial accidents. For workers, these insurance plans meant they no longer had to prove that they were not responsible for the accident.

During the Great Depression, massive unemployment led municipalities, with some support from provincial governments, to provide direct support to able-bodied men and their families. After a failed attempt in 1935, a 1940 constitutional amendment gave the federal government the specific right to establish an unemployment insurance program, thus recognizing a failure of the industrial system rather than an individual fault. Unlike assistance programs that carry a social stigma and often require first using up assets, unemployment insurance benefits are deemed to be a right for those who have contributed and are searching for work.

In 1957, as unemployment rose, the federal government adopted the Unemployment Assistance Act to cost-share provincial programs for assistance to the unemployed who were not eligible for the insurance program. The gaps in coverage of the various categorical assistance programs for the blind, the disabled, the elderly, single mothers and certain farmers, as well as the unemployed, led to the creation of the Canada Assistance Plan (CAP) in 1966.

A 1970 federal White Paper stated that “securing the recognition of assistance as a right under specified statutory conditions is an objective of the Canada Assistance Plan”6 and that provincial rates of assistance are often too low to provide adequate support. Under CAP, the federal government offered to finance 50 per ceent of the costs of a provincial welfare program whose sole criterion for eligibility was a gap between resources and basic needs. In this sense, CAP represented a first incarnation of a guaranteed minimum income for the nonelderly. Until 1996 when CAP was abolished, many provinces distinguished between recipients who were able to work and those who were not, in spite of the requirement to cover needs unconditionally. In the 1980s, the federal government itself negotiated exceptions to the rule.7

A reasonable minimum income?

CAP defined basic needs to include food, clothing, shelter, fuel, utilities, household supplies and personal necessities. Using these criteria, Quebec fixed basic welfare benefits at $12,706 in 1970 (in 2017 dollars), although from 1973 to 1989 they fluctuated at around $10,500.8 During this period there was no distinction between those able to work and others, but benefit levels for people under age 30, with no children and no serious health problems, were set at slightly over a third of benefits granted to others. This led to pressure on doctors to artificially diagnose mental or physical health problems to allow young people to qualify for benefits.

Age discrimination ended in 1989 when a Liberal government adopted a new program based on ability to work and willingness to participate in measures designed to increase employability. In 2000, the current vocabulary concerning employment limitations was introduced, although the same structure with at least five different levels of support was retained. In addition to rates for people considered to have no limitations, those with temporary limitations and those with severe limitations, there are bonuses for people participating in a prescribed program and penalties for those refusing to participate.

The 1989 reform was preceded by several studies estimating minimum needs based on the expenditures of low-income working families, generally the lowest decile. A 1987 white paper published by Manpower and Income Security Minister Pierre Paradis9 distinguished three levels of needs:

  • Short-term needs, defined as those requiring monthly expenditures: food, housing, communications, household upkeep and personal care;
  • Medium-term needs, including clothing;
  • Long-term needs, including transportation, leisure activities and furniture.

Table 1 compares, in 2017 dollars, the levels of benefits as estimated in the Paradis orientation document with levels established by the 1990 reform and those for several subsequent years.

As we can see, in 1990, a base amount of $9,905, slightly more than the estimate of short-term needs in the Paradis white paper, was paid to people categorized as “available” for work or for an employability program although not yet participating in one. However, those who had refused an employability program, “nonparticipants,” received only $8,479. In 1997, the “available” category was abolished, which meant that everyone not participating in a program received only $8,385 even if they were willing to participate. But that was not the end of cutbacks, which often took the form of nonindexation of benefits.

In its first Action Plan, the government promised to index benefits at 100 per cent of inflation for people with severe employment limitations, but at only 50 per cent for recipients with no limitations or temporary limitations. The second plan promised full indexation and noted that between 2003 and 2010, the disposable income of single people living on social assistance declined by 4.3 per cent and that of childless couples by 4.1 per cent. On the other hand, because of the improvement in child benefits, families had increases on the order of 11 to 13 per cent.10

As Table 1 shows, basic benefits in 2017 were lower by $2,400 a year than the Paradis estimates of minimum needs. They were even $850 below the amount given to nonparticipants in 1997. Even after the $540 increase promised by the Action Plan, welfare benefits of $8,076 for people without employment limitations will be well below the level of short-term needs estimated by the white paper in 1987, below standards proposed by CAP in 1969, and below levels paid up until 1998, even taking into account the penalties imposed on nonparticipants in 1997.

In 2005, the government amended the law so that the basic amount was guaranteed and there were no longer supposed to be any penalties for failure to participate in a program. However, in November 2016, it adopted Bill 70, which introduced the Aim for Employment Program (AEP) and abolished the Youth Alternative Program. The regulations adopted in the fall of 2017 require new welfare recipients to participate in the AEP and provide for penalties up to $224 a month for people who fail to meet their obligations under this program. In other words, even the base amount is no longer guaranteed.

In 2017, Employment and Social Solidarity Minister Blais set up an expert committee to document and analyze Quebec’s existing income-support system and to make recommendations “with a view to introducing a guaranteed minimum income.”11 Among its 23 recommendations, the committee noted that “there is no explicit reference threshold in the income support system in place in Quebec.” It recommends establishing such a reference threshold, distinct from the poverty line, which would “take into account the ability of individuals to increase their disposable income through work.” For people with no employment limitations, “the reference threshold should enable them to meet all of their immediate needs.”12 While awaiting further study, they suggest a level of 55 per cent of the market basket, which would correspond to a disposable income of $9,907 in 2017.

People with severe employment limitations

In the last 20 years or so, benefit levels for people with severe employment limitations have been fairly constant at about $11,500, equal to the estimate of long-term needs in the 1987 White Paper. The GST and solidarity tax credits add more than $1,000. For beneficiaries who will not yet be eligible for the guaranteed minimum amount, benefits will rise to $12,684 by 2021.

A first justification for giving more to people with a limited capacity for employment is that, although they are encouraged to earn employment income and the government has put in place a number of measures to support this effort, most cannot increase income a great deal through work. A second justification is that they have additional costs because they are on welfare for a long period and need to pay not only for clothing, communications and transportation but also for upkeep of furniture and other household items. It is generally considered that they are also entitled to some leisure activities.

Welfare recipients pay nothing for medicines covered by the Quebec prescription drug insurance plan and low-wage workers pay very little. The program was adopted in 1996 in large part so that people with chronic diseases and high drug costs could continue to be financially independent in spite of their large outlay for medical expenses. In addition, the government pays the costs of special needs such as dental and optometric care, orthotic or prosthetic devices and adaptation of housing for most welfare recipients, as well as for other low-income citizens who might otherwise become welfare recipients.

A third justification for giving more generous welfare benefits to people with disabilities is that transportation and many other activities are more expensive for them and they often need materials or equipment which are not covered by government plans. Statistics Canada suggests that to cover medical costs and child care, disposable income needs to be 7 per cent higher on average than the MBM for a household not to be considered poor. However, the amount required is generally greater for people with severe health problems, which means that the proposed guaranteed minimum income will probably still be insufficient to “lift over 100,000 people out of poverty” as the government promises.13 Although federal and Quebec tax credits for people with disabilities are intended to compensate for these additional basic needs, because these credits are not refundable, welfare recipients whose income is too low to be taxable can’t access them. If the credits were refundable, all people with disabilities could receive them, independently of their income.14

Furthermore, it will take six years before only some of those who have severe employment limitations actually receive the promised minimum income, although there will be increases on the order of $900 a year every year until 2022 for people who have already completed the requirement of five and a half years on social solidarity benefits. The government justifies this requirement on the grounds that a significant number of social solidarity recipients leave the program on their own during the first six years. In fact, the graph provided by the minister shows that most of the departures occur in the first three years.15

To sum up

As in the past, the Quebec and federal governments consider people with disabilities “deserving” and give them more assistance than other poor people. The improvements promised in the 2017–2023 Action Plan will undoubtedly improve the quality of life for a significant number of single people and childless couples, but people with severe physical or mental limitations will continue to occupy one of the lowest rungs on our social ladder.

Despite the constraints, many would prefer to engage in gainful employment – to increase their income but also to be less isolated and to make a contribution to society. Increases to the earnings exemption (from $100 to $200 a month) and to the Quebec Work Premium will help supplement income, and the government also offers other supports such as adapted equipment and subsidies for attendants. It is to be hoped that the government will continue to work with groups representing people with disabilities to adequately support their desire to participate in the labour market and to simplify the multitude of existing programs.

For recipients with no employment constraints or only temporary constraints, the Action Plan promises several modest improvements including a $540 increase in basic benefits over a five-year period. However, even with this increase, benefits will still not be enough to cover any of the estimates of basic needs proposed over the years by the Quebec government itself, even when bonuses for participating in employment programs are included. In addition, in April 2018, new regulations came into effect which allow the government to cut as much as $224 a month for participants in the obligatory Aim for Employment Program. Thus, there can be no claim that the Action Plan provides for a guaranteed minimum income – however minimum – for people with no employment limitations.

Continue reading “Is Quebec’s Action Plan a Step Toward a Guaranteed Minimum Income?”