The National Council of Welfare did the country a great service this week by releasing its annual Poverty Profile. It is a wealth of statistics that show, among other things, that the reduction in poverty during the mid- and late 1990s occurred primarily in two provinces — Alberta and Ontario. It was a bit surprising, however, that in its analysis and public discussion, the Council neglected to mention that these reductions in poverty coincide nicely with welfare reform in these two provinces. 

Let’s start with Alberta. It began its welfare reforms in 1993. It lowered welfare rates, restricted welfare eligibility, and severely tightened the administration of welfare by removing all discretion from front-line welfare workers. The resulting drop in welfare use was astounding. The percentage of the population on welfare dropped from 7% of Albertans in 1992 to 2% by 1999, where it has remained. 

The data in the Council’s recent report shows what happened to low-income Albertans over this period. The number of Albertans living below Statistics Canada’s Low Income Cut-offs (or LICO, which the Council calls a poverty line, despite the fact that Statistics Canada does not approve of its use in this way) dropped by more than five percentage points in Alberta between the year before the reforms and 1999. This compares with a drop of less than one percentage point for the country as a whole over the same period. 

Now move to Ontario. A big part of the Harris government’s Common Sense Revolution was welfare reforms. They reduced welfare rates and implemented a massive program of workfare. While they focussed less on administrative reforms, and continue to spend much more per welfare recipient than other provinces, the results were modestly impressive. Welfare use fell from 12% of the population to 8% in 1999, and 7% today. 

The National Council of Welfare railed against these changes. It worried that the Ontario reforms created “a system that further entrenches poverty” and reversed “the host of improvements in the welfare system made by previous Liberal and New Democratic Party governments.” The Council failed to note that the Liberal and New Democratic changes resulted in driving up the number of Ontarians on welfare to an unprecedented 13% of the population, and also increased the number of Ontarians living in poverty (to use the Council’s wording). 

The Council’s recent Poverty Profile shows that the number of people living below the LICO in Ontario fell by more than two percentage points following the Harris workfare reforms. Again, this drop was larger than the drop experienced in the rest of the country over the same period. 

Perhaps the most interesting way to look at poverty reduction during the 1990s is to consider what would have happened had poverty not fallen so much in Alberta and Ontario during the mid- to late 1990s. The answer takes a little fiddling with the numbers, but it turns out that without the reduction in poverty in Alberta and Ontario, Canada would have seen an increase, not a decrease, in the number of Canadians living in poverty during this period. 

In other words, the economic recovery over that period did little to reduce the number of low-income Canadians. The reduction in the number of low-income Canadians was concentrated in provinces that implemented some combination of lower welfare benefits, stricter eligibility rules, tightened administration and workfare. The provinces that did some or all of these (Saskatchewan could be added to this list) were responsible for all of the reduction in the number of low-income Canadians that occurred in the late 1990s. 

The failure of the Council to highlight these successful poverty reduction strategies can be seen in recent statements made by the Alberta and Ontario governments. The post-Harris regime has promoted increasing welfare rates that are still generous compared to the rest of the country. Alberta rejected a report recommending welfare rate increases on the tepid grounds that the province “couldn’t afford them.” Instead, both governments should be promoting, and continuing, their welfare reforms as poverty reduction strategies. A properly attentive National Council of Welfare should be providing them with the fodder to do so. 

The federally funded Council states that its goal is to examine and inform Canadians and governments on “social and related programs and policies which affect low-income Canadians.” It is to the detriment of low-income Canadians from coast to coast that the Council ignores the important welfare reforms in Alberta and Ontario that did so much to reduce poverty in those provinces.