Social Policy in Ontario

One-parent family poverty drops by half

Posted on June 28, 2010 in Social Security Debates

Source: Vancouver Sun — Authors: Don Cayo

SancouverSun – news/editorial
Published: Thursday, June 24, 2010.   Don Cayo, Vancouver Sun

A decade and a half of welfare-to-work policies — some offering carrots and some dependent on big sticks — have dramatically reduced poverty among single-parent families in Canada.

The percentage of single families who live in what’s considered to be poverty is down to less than half of what it was, says a new study by SFU public policy professor John Richards. But what’s been accomplished so far is the easy part, Richards cautions. Dealing now with those one-parent families who remain poor will be tougher.

What Canada got right, he says in a study being released today by the C.D. Howe Institute, is a combination of similar policies that were adopted by most provinces to encourage, or to push, single parents to go work.

Not long afterwards, the National Child Benefit — a sort of negative tax that boosted incomes for the working poor, but not for most welfare recipients — added a positive motivator for going back to work.

Similarly, there were other “sticks” like the changes in the unemployment insurance system that discouraged seasonal dependence and repeat users, and “carrots” such as more generous child care support and income supplements.

The upshot, Richards says, is that welfare dependence Canada-wide has crept back down to about five per cent, right where it was in 1970.

In B.C., the number of single-parent families who rely on welfare has dropped from 151,000 (almost half the total case load) at its peak in 1995 to about 28,000 today.

Increased non-welfare transfer income, plus what family members earn, means that the number who live in poverty has also plummeted.

In the mid-1990s, the percentage of poor single-parent families was 40 or 50, depending on whether the poverty level was assumed to be StatsCan’s Low Income Cutoff calculation, or its less frequently used Low Income Measure. By 2007, this percentage had fallen 28 percentage points on the LICO scale, and 14 percentage points as measured by LIM.

“There is a strong case that post-1995 welfare-to-work policies, together with favourable labour market conditions, were effective in lowering the lone-parent poverty rate,” Richards writes.

Yet, “Canada may well have reached the limit of welfare-to-work policy as a means to reduce poverty — at least in Ontario, Alberta and British Columbia. Further progress in lowering poverty rates requires tackling seemingly intractable problems such as low education levels among certain groups and mental illness linked to drug/ alcohol abuse.”

While recent progress against poverty is impressive, it would be cavalier to characterize the whole study as good news. Our society is, after all, only back to where we were in 1970 in terms of overall poverty levels — which is another way of saying that, looked at over three decades of perpetual policy tinkering interspersed with bursts of real reform, we’ve been running flat out to stay even.

Still yet to be faced are those “seemingly intractable problems” of the mentally ill and addicted, who are not good candidates for welfare-to-work approaches. Richards notes it will cost the provinces a lot more money to provide effective support — treatment services and, in many cases, housing — for this group, which includes the high-profile urban homeless.

< http://www2.canada.com/vancouversun/news/editorial/story.html?id=ae28a311-0223-44c2-9646-1fe912aced19 >

Tags: participation, standard of living

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