NCPA - National Center for Policy Analysis

Canada Should Follow U.S. Lead In Welfare Reform

August 30, 2001

In order to significantly decrease the number of welfare beneficiaries, Canada must implement more innovative welfare reforms similar to those in the United States, concludes a new study from the Fraser Institute.

Both Canada and the U.S. have experienced declines in the number of welfare cases, both in absolute terms and as a percentage of the population.

  • However, the current number of welfare beneficiaries in Canada is still 155,000 more than at the beginning of the decade.
  • Furthermore, even after a six-year period of decline, the percentage of Canadians receiving welfare (6.8 percent) is still well above the U.S. peak (5.5 percent) prior to reform.

In the United States, the 1996 passage of the Personal Responsibility and Work Opportunity Reconciliation Act began a period of innovation in the delivery of welfare and related services at the state level.

Also in 1996, the introduction of the Canada Health and Social Transfer allowed greater flexibility in the delivery of social services by the provinces. However, only Alberta and Ontario have made significant reforms.

  • Alberta undertook large-scale reform of the welfare bureaucracy, reduced benefits, increased monitoring and fraud investigation, introduced a stronger focus on employment, and incorporated the limited use of non-profit organizations to aid in the delivery of services.
  • Alberta has experienced an impressive 66.9 percent decrease in the number of welfare recipients since the peak in 1992-1993.
  • Ontario is the only province to introduce limited workfare-mandatory employment stipulations for the receipt of benefits.

Like other Canadian provinces, it also reduced benefits, overhauled its administrative bureaucracy, focused on diversion and employment, and experimented with private contractors and the limited use of non-profit charitable organizations.

Source: Chris Schafer, Joel Emes and Jason Clemens, "Surveying US and Canadian Welfare Reform," Critical Issues Bulletin, August 2001, Fraser Institute, 4th Floor 1770 Burrard Street, Vancouver, BC. V6J 3G7, Canada, (604) 688-0221.


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