The Poverty Line and Welfare: Shish Kabob Statistics - Part 2: Alberta's Welfare System

Welfare in Canada, to anyone who has observed, has taken a small nosedive. The purpose of welfare was originally introduced “as a last resort for people with no other source of support.” Welfare, in its design, does not pay enough to survive, and if it’s a last resort, then that means there is no escaping.

The welfare benefits are also getting smaller. This is, in part, a necessity for budgeting purposes. More people are relying on welfare, and this is in part because of how Canada establishes a poverty line (see part 1 here). Because there is only so much money going around, they have to counter by writing smaller cheques in larger quantities. Just about every province has seen a reduction in welfare rates, thus actually increasing the amount of poverty.

Nowhere is this more apparent than in the province of Alberta. Because of the amount of work in the province, people from all of the country, and even the world have been flocking to the province in droves. But many people are unqualified and end up living in poverty. 48% of the homeless here work, and many end up on welfare. The province has nearly doubled in size since 1996, going from just under 2 million, to almost 3.3 million citizens. The City of Calgary has a population of 1.1 million and over 5,000 homeless. The rush of new citizens has driven the cost of housing up, almost doubling for a purchaser, and tripling for a renter. Many try to go to income supports, but end up worse off.

Alberta was once a national leader in social programs. The Social Credit Government (SoCred) of the 1940s and 50s, brought in a number of social programs, particularly after World War II. These included maternity benefits, food and shelter for transients, and placement for persons with disabilities.

Then the nationals brought in the CAP (Canada Assistance Plan) which forced provincial social programs to:

• Provide assistance to every person in need, regardless of the cause of that need.
• Take into account a person’s basic requirements in setting the benefits rate.
• Set up an appeals process.
• Not force recipients to perform work against their will as a requirement to receive assistance.

These guidelines were set in 1966, and the cost of assistance would be split 50-50 between the provinces and the federal governments.

Alberta, under SoCred Premier Earnest Manning, more powers were given to municipalities to assist in poverty, under the theory that the local governments know their constituents best. The same act also provided more help for the Métis people living in the province. By the standards of the day, Alberta had some of the best social assistance programs in the world.

The Conservatives took over in 1971 and continued to improve on the state of welfare. The Lougheed years introduced a widow’s pension, and in 1979, Assured Income for the Severely Handicapped, better known as AISH.

The Getty period introduced us to the first struggle. Premier Don Getty’s Alberta hit its first major recession. Stock markets crashed, oil prices dropped, and the National Energy Program, designed to make a made-in-Canada oil price, led to a major reduction of income for the province. But despite the recession, Getty refused to cut down on social spending; after all, this was when people would need it more than ever. By 1993, Getty would amount 6 billion dollars in provincial debt.

Ralph Klein took over in 1993, promising to eliminate the debt, and just about every single social program suffered King Klein’s wrath. During his reign, he slashed welfare rates by almost 50%. A single mother used to receive $14,000. By 1996, that would be limited to $9,000. AISH was frozen. Hospitals were imploded, nursing homes were shut down, and as the population started to rise more sharply, no new schools were being built. In addition, several new policies began that were in direct violation of the CAP agreement. These included:

• Turning away individuals, unless they exhausted all other avenues, regardless of their reasons.
• Worker’s trying to direct individuals to work in order to receive benefits.
• Basic requirements were no longer taken into account.

Expenses for basic shelter were also reduced by $100 for a single recipient, and $50 for most other families. There were many changes designed to prevent fraud (which actually makes about 3% of total welfare cases.) It became more difficult for common law families to apply for welfare. The amount a single parent could earn dropped 25%, and lone-parents had to actively seek work once their youngest child was six months old. The previous threshold was two years. Workfare had become the new welfare.

The reforms worked, at least in Klein’s eyes. In the first year, welfare cases dropped dramatically. By 1999, cases were down almost 63%. Most of that was in 1993-94 period. As one researcher puts it the goal was “to make a job – any job – more attractive than welfare.” The trouble is, welfare never was very attractive, and people were using it as a last resort. Immigrant families with multiple children were left with huge debt while on parent went to school, and another worked an often extremely low income job. 33% of the people who had left welfare after the first year of changes were working, but could only work part-time. The average earnings in those categories were $8.74 per hour. And they would be lucky to get that, with minimum wage set at $4.90

Under pressure with the economic boom after 2002-2008, the Klein/ Stelmach governments were finally forced to make some changes for the better. AISH rates were raised slightly, minimum wage increased to $7.00 – now $8.40, and the Adult Health Benefit (to cover cost of prescriptions, eyes care, basic dental) was extended to low income Albertans who were employable. The Stelmach Government also raised minimum wage, and AISH benefits, while also making it easier for AISH recipients who wanted to work, by increasing the amount they can earn at work without any deductions from their support.

In the end, we are starting to see the Alberta Government take a step in the right direction, but I do not see the Alberta of the 70’s and 80’s ever returning. Welfare recipients are still earning less than they were in 1986, the cases of the working poor and the working homeless are higher than they have ever been, and to qualify for any supports means jumping through too many hoops. It is still more difficult to qualify, and too many people are left falling through the cracks. And that is where the skewers come and pierce this system into a shish kabob.