Government promotes changes to benefit for working poor
OTTAWA — The federal government is on a promotional blitz to tout a key promise in its latest budget aimed at one day providing benefits to the working poor.
The government is keen to promote the changes and an extra $1 billion in annual spending for one of the few federal benefit programs that targets singles and families by subsidizing their wages with a tax credit.
Wednesday saw Liberals promote the benefit on social media and elsewhere: Prime Minister Justin Trudeau spoke about it in Toronto, as did Social Development Minister Jean-Yves Duclos in Montreal.
The Liberals, though, face the same struggle as the previous Conservative government in selling the merits of a program that has cross-party support: It isn’t all that simple to explain.
“It’s probably, in my view, the most important item in this year’s budget,” said Sean Speer, a onetime economic adviser to former prime minister Stephen Harper.
But “because of the complexity of its design, it will go unfortunately go largely unnoticed by the general public and that’s too bad.”
The Liberals are rebranding a Harper-era program as the Canada Workers Benefit, adding $170 to the maximum payment and extending eligibility higher up the income scale to provide more money to more low-income workers — addressing two key concerns about the program unearthed during a federal poverty study in six communities.
“We listened closely to advice from anti-poverty activists, frontline workers and, of course, the lived experiences of Canadians themselves,” Trudeau said Wednesday about the changes to the program. He said the revamped program “creates opportunities and incentives, and rewards people for staying and getting into the workforce.”
The bump in benefit payments won’t come until 2020.
The government said the measures will lift 70,000 people above the poverty line, although it’s not clear how it calculated the poverty-reduction benefits. A federal report last year said 746,000 Canadians were in families in 2014 where the main income earner was “working poor.”
Tammy Schirle, an economics professor at Wilfrid Laurier University, said the improvements to the program, while positive, were much more modest than many experts would like to have seen.
She said the benefit targets the main earners in a family and does less for secondary earners who are generally women. If the government wants the program to support more women getting into the labour force, it would need to structure the benefit based on individual rather than family income, Schirle said. “That makes it a much more expensive program, of course. Whether or not there’s political support for that I’m not sure,” she said.
The program will also become more expensive in the future with the rise of the “gig” economy and a rapidly aging workforce. The financial strain is expected to come from aging workers who will step away from the labour force for health reasons, young workers taking longer to transition into the workforce and increasing reliance on multiple, short-term contract jobs instead of full-time employment.