A better way to set welfare rates

November 1, 2006

Last week’s announcement by Premier Campbell that the government will increase the shelter allowance for people receiving welfare is welcome news. This long-overdue policy reversal shouldn’t wait until February’s Provincial Budget to be implemented. And overall rates must be increased (not just the shelter allowance). But at least the Premier has acknowledged that rates are too low.

The Premier’s promise also lays bare how arbitrary and deeply political the process of setting rates and eligibility rules has become. Rates have remained frozen for years, as inflation eats away at their real value. They are only now being increased because the rise in homelessness has become impossible to ignore, and the resulting political pressure is finally forcing our leaders to act.

It is difficult for most of us to imagine actually living on what welfare provides:

  • A single person without a recognized disability currently gets $510 per month for everything – housing, food, clothing, transportation, heat and electricity, toiletries, etc. A single parent with one child receives $968, and a person with a disability gets $856.
  • People without a disability receive less today, in straight dollars, than they did 12 years ago.
  • Add inflation to the mix, and rates today are 20–26 percent lower.
  • Even people with disabilities, who saw a $70 increase in monthly benefits last year, get 12 percent less (after inflation) than they did in the mid-1990s.
  • According to the Dieticians of BC, it is impossible to eat a nutritious diet on welfare. People are dependent on food banks and other charities, and they are unable to meet the Premier’s goal of healthy eating – a reality with implications for current and future health budgets.
  • At current rates, women often feel they have no choice but to stay in or return to abusive relationships, or resort to survival sex.

Clearly, the process for setting welfare rates desperately needs to be depoliticized and grounded in some transparent and objective rationale.

  • Welfare rates should be tied to a realistic estimate of the basic cost of living. Calculations by both the Social Planning and Research Council of BC and Human Resources and Social Development Canada show that welfare rates need to be about double their current level if they are to meet minimum living costs.
  • Rates should be adjusted every year with inflation. The Conservative government of Newfoundland recently indexed its welfare rates to inflation — the first province in Canada to do so. BC should follow Newfoundland’s lead.

Beyond rates –– and absent from the Premier’s announcement –– is the issue of access. In fact, this likely has a greater impact on homelessness. The process of seeking social assistance has become so restrictive and complicated to navigate that it systematically discourages and denies many who need help, and some of these people end up on the streets.

If we’re really going to tackle homelessness, the entire application process requires greater accountability. It should be the subject of an independent review or public inquiry, and redesigned so it is appropriate for the majority of people who need assistance.

Of course, these measures should be only part of a much more comprehensive anti-poverty strategy. How the gains of economic growth are to be shared now stands out as one of the biggest challenges facing our province. And with the Olympics fast approaching, the need for action is urgent.

A good starting point, however, would be to immediately increase welfare rates by 50 percent and improve access for those in need. These measures would cost about $500 million and $200 million respectively. That may sound like a lot, but consider that last year’s budget surplus was $3 billion, the current year’s surplus is on track to be a similar size, and next year’s surplus will be larger still. The money is there.


Seth Klein is the BC Director of the Canadian Centre for Policy Alternatives, and co-author of "Denied Assistance: Closing the Front Door on Welfare in BC."