The Rise and Fall of Social-Assistance Use in Canada, 1969-2012

20 Pages Posted: 14 Feb 2014  

Ronald D. Kneebone

University of Calgary - The School of Public Policy; University of Calgary - Department of Economics

Katherine White

Alberta Treasury Board and Finance

Date Written: February 13, 2014

Abstract

Between 1994 and 2008, social-assistance usage rates across Canada fell at a remarkable rate, with the fraction of the non-elderly population drawing social assistance dropping by half over the 14-year period. Because social assistance can be considered the final layer of the public social safety net — designed to catch those people in need of support but unable to find it from family, friends or non-government agencies — such a dramatic decline in social-assistance usage deserves attention and explanation. Is it a positive sign suggesting that the country has made significant strides in keeping people from needing to receive social assistance or is it a sign that public policies have simply made it too difficult for those deserving of support to receive it? We do not try to answer these questions in this briefing note. Our goal is rather more modest; to simply draw attention to a dramatic fall in social assistance usage across Canada to levels not seen since the early 1970s.

While the fall in social assistance usage has been observed right across Canada, the pattern and magnitude of change has varied by province. For example, despite being subject to similar economic forces, Ontario and Quebec have seen very different patterns in their respective social-assistance usage rates. In Ontario, social assistance use was traditionally much lower than in Quebec but this changed in the 1990s. Although both provinces suffered a serious recession in the early 1990s, the social assistance usage rate increased more and did so more quickly than in Quebec. In recovery, the social assistance usage rate has fallen steadily in Quebec and is today at the level it was in 1970. In Ontario, the social assistance usage rate fell but plateaued at a level higher than pre-recession levels. Today the rate in Ontario continues to climb, is higher than in Quebec, and is well above what it was in 1970. These two provinces, with similar economies but having quite different movements in social assistance use, offer an interesting comparison for those interested in evaluating each province’s policies toward social assistance.

In the West, social-assistance usage rates also saw a long downward trend following dramatic increases in the mid-1990s. Similar to elsewhere, usage rates in Western Canada saw only minor increases in response to the 2008 recession. By 2012, social assistance usage in all Western provinces had fallen well below that in Ontario and Quebec; in Alberta, for example, the rate is only half that in central Canada. Perhaps the most dramatic changes have occurred in the Maritime Provinces where 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. Remarkably, the rate of social assistance use in Nova Scotia, New Brunswick and PEI is currently below that in Ontario.

In trying to explain these trends and interprovincial differences, researchers will surely focus on the fact that the timing of the dramatic fall in social assistance usage is very close to the federal government’s decision in the mid-1990s to halt shared funding of social assistance with the provinces. The end of shared financing promoted province specific changes in social assistance policies and it is plausible to associate the changes in these policies with the fall in social assistance usage. What exactly were those changes in each province, and a balanced assessment of their impact, requires careful analysis. We do not perform that analysis in this report; what we have done is assemble and present the data on social assistance use that is a necessary prerequisite of that analysis.

Keywords: welfare, Canada, social, assistance, use, rate, poverty, recession, government

JEL Classification: H53, I3

Suggested Citation

Kneebone, Ronald D. and White, Katherine, The Rise and Fall of Social-Assistance Use in Canada, 1969-2012 (February 13, 2014). SPP Research Paper No. 7-5. Available at SSRN: https://ssrn.com/abstract=2395363

Ron Kneebone (Contact Author)

University of Calgary - The School of Public Policy

Calgary, Alberta
Canada

University of Calgary - Department of Economics ( email )

2500 University Drive, NW
Calgary, Alberta T2N 1N4
Canada

Katherine White

Alberta Treasury Board and Finance ( email )

Room 534, Oxbridge Place
9820 - 106 Street
Alberta
Canada

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