BC's U-Turn on Welfare Reform Spells Disaster

In a disastrous U-turn on welfare reform, the BC Government de-legitimized what was one of Canada’s most important social welfare reforms to date; a limit that capped the amount of time employable adults could collect welfare to 2 out of every 5 years. Late on Friday afternoon, February 6th, the BC Liberals announced a series of new exemptions to the time limits, including one that exempts anyone abiding by their work plan. The policy change effectively nullifies the time limit rule and speaks more to the government’s immediate political concerns than any genuine concern for those still struggling to make the transition from a life of welfare dependence to one of self-sufficiency.

The backtracking was not entirely unexpected considering that the BC Liberals have compromised on nearly every major reform: spending reductions, taxes relief and reform, and privatization. Now, in order to further placate the demands of organized labour and other left-leaning special interest groups, the welfare system will be transformed back to a system of near-permanent entitlement rather than temporary insurance. Unfortunately, this move will harm society’s most vulnerable citizens.

Why are strict time limits important? They transform welfare from a system of entitlement to one of insurance and temporary relief. In other words, confronted with time limits, welfare recipients change their behavior to minimize casual relief so that future eligibility can be preserved in times of emergency. By abandoning benefit time limits the BC Government is sending a dangerous message that welfare is guaranteed as an entitlement. It doesn’t take a rocket scientist – or, for that matter, an economist – to predict that people will begin to use the system more casually once again, perpetuating a tragic cycle of low income and welfare dependency that transcends generations.

Welfare time-limits in BC were at least partially inspired by the success of US welfare reform. In the US, five-year lifetime limits were imposed on welfare recipients with waivers (referred to as exemptions in Canada) made available for up to 10 percent of cases. As a result, US welfare rates have fallen by sixty percent since 1996 and have remained stable throughout a somewhat difficult recession. More importantly, between 63 and 87 percent of those leaving welfare have found employment (USHHS, 2003). Poverty rates have fallen to pre-1980 levels. Finally, single mothers with little education or work experience have made the most impressive gains in both employment and income. The poverty rate among women who left welfare in 1996 fell by about 50 percent in just five years, and continued to fall the longer a woman was off welfare (O’Neil and Hill, 2003).

Undoubtedly, the latest Liberal U-turn will undo much of the reform’s early success – 85,000 people have left the welfare rolls since spring 2001. Welfare rates will increase along with the associated costs, most appropriately measured not in dollars but in lives lost to poverty and despair. Employment rates and income levels of those now working towards independence will fall along with lower expectations that social and economic conditions can be overcome through work and perseverance. How this can be viewed as a triumph is more than a little puzzling until one realizes that those in opposition to the reforms advocate unrestricted income redistribution. In other words, their goal is not to assist people in moving towards a self-sustaining, productive life but rather simply to provide income and support programs.

Advocates of this redistributive system also ignore the reality that supporting casual welfare use by employable individuals’ guarantees less money will be available for other more pressing social concerns. In the US, for example, the reduction of casual welfare use enabled the states to redirect more funding to support programs for single mothers in transition. The added costs of supporting employable welfare recipients means less monies will be available to assist such transitional cases in BC.

If British Columbians truly want to help people without creating dependency then time limits, with some allowance for exemptions, is the solution. Such policies have been pursued in the US to great effect: lower welfare rates, higher income and employment levels, and reduced poverty. Unforgivably, this time it is society’s most vulnerable who will pay the price of the BC Government’s latest waffling.