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.
1 Quebec, Ministère du Travail, de l’Emploi et de la Solidarité Sociale, Government Action Plan to Foster Economic Inclusion and Social Participation, 2017–2023 (2018).
2 In his former life as a university professor, Blais was a leading advocate of a universal allowance with no conditions. See François Blais, Un revenu garanti pour tous : introduction aux principes de l’allocation universelle (Montreal: Boréal, 2001).
3 Welfare benefits for those people with limited employment capacity will be increased from the $11,448 paid in 2017 to $16,728 by 2023. The difference will be made up by the Quebec tax credit for solidarity and the federal GST tax credit. The market basket used is that calculated for municipalities with fewer than 30,000 inhabitants, the second highest among the MBMs calculated for Quebec.
4 Travail, Emploi et Solidarité Sociale Québec, Avis à la clientèle : ajustement de votre prestation de base : document d’information. However, the government clawed back this entire amount for people living in subsidized residences by increasing the fees for these residences. These people were allowed $203 a month for their personal expenses in 2017.
5 This history is taken mainly from Dennis Guest, Histoire de la sécurité sociale au Canada (Montreal: Boréal. 1993)
6 Canada, Department of National Health and Welfare, Income Security for Canadians (1970), Appendix IV.
7 John F. Osborne, “The Evolution of the Canada Assistance Plan,” Appendix to the Nielsen Task Force Report on the Canada Assistance Plan, 1985.
8 Viviane Labrie, La hauteur de la barre à l’aide sociale, Quelques jalons de 1969 à aujourd’hui, Institut de recherche et d’informations socio-économiques (IRIS), Decembre 2016. In this document, the evolution of disposable income from 1969 to the present day, including various tax credits, is presented graphically.
9 Quebec, Ministère de la Main-d’oeuvre et de la Sécurité du Revenu, Pour une politique de sécurité du revenu, document d’orientation (1987). The most systematic estimates were done by Denis Fugère et Pierre Lanctôt, Méthodologie de détermination des seuils de revenu minimum au Québec (Quebec, Ministère de la Main-d’oeuvre et de la Sécurité du Revenu, 1985). Compared to the Paradis white paper, Fugère et Lanctôt considered clothing part of minimum needs in line with CAP criteria, but excluded communications. They also proposed more generous amounts at the intermediate and higher levels.
10 Quebec, Ministère de l’Emploi, de la Solidarité sociale et de la Famille, Government Action Plan to Combat Poverty and Social Exclusion (2004), p. 22; Quebec, Ministère de l’Emploi et de la Solidarité sociale, Government Action Plan for Solidarity and Social Inclusion, 2010–2015, p. 14.
11 The committee produced a progress report in March 2017, The Concept of Guaranteed Income and its Applications, for which there is an English summary. It also published a three-volume final report in November 2017, Guaranteed Minimum Income in Quebec: A Utopia? but only Volume 1 is available in English and Volume 3 has yet to be published.
12 Expert Committee, Final Report, Volume 1 (2017), Recommendation 8, p. 110.
13 Even with the proposed increases, welfare benefits will continue to be lower than those paid to most victims of work-related accidents or diseases or automobile accidents, who receive 90 per cent of their previous net income as well as generous health care, rehabilitation and measures to adapt homes and other equipment. On the other hand, the welfare program is often more generous than disability benefits paid by the Quebec Pension Plan (QPP). The maximum QPP benefit in 2016 was $15,489, but average benefits were $10,925 for men and $10,385 for women. Already, many QPP beneficiaries are also eligible for welfare benefits, although accessing them may mean first spending all their financial assets and selling some of their physical assets. See Retraite Québec, Statistiques 2016 (Régime de Rentes du Québec, 2017), p. 82.
14 The Quebec credit is worth only $496. In other provinces, the federal disability credit is worth $1,217, but in Quebec, it is worth only $1,016 because of the Quebec abatement. If it became a refundable credit, Quebecers would receive the same amount as other Canadians.
15 Quebec, Government Action Plan (2018), p. 21. In the first year, some 28.2 per cent of beneficiaries leave either because they find a job or for some reason other than retirement or moving onto federal benefits for the elderly. In the second year an additional 9.6 per cent of beneficiaries leave, and in the third year another 5.5 per cent. After that, the percentage of leavers is on the order of 3 per cent or fewer per year.
a Finances Québec, Coût de garde quotidien. Families with incomes above $50,545 pay an additional fee of up to $13.15 a day for a first child and $6.58 for a second child in 2017. There is no additional contribution for children using an after-school childcare program.
b For 1997: Quebec, Ministère de la Sécurité du Revenu, Rapport annuel 1996–1997 (Quebec City: Publications du Québec, 1997). For 2017: Quebec, Ministère du Travail, de l’Emploi et de la Solidarité Sociale, Rapport statistique sur la clientèle des programmes d’assistance sociale (December 2017). In December 2017, 48 per cent of single parents were classified as having temporary constraints, 11 per cent as having severe constraints and 41 per cent as having no constraints.