Lawyer, Policy Wonk, Author, TV Talking Head

Twitter: chrisschafer

No Road Ahead for Welfare Reform?

Posted In:  ArticlesMedia    

Fraser Forum In Ontario, the stage appears set for a provincial election. Photo-ops are being arranged, announcements are being made, households are being de- luged with Ontario government advertising, and the Progressive Conservative government recently released its election platform entitled The Road Ahead. Despite the fact that many observers of Ontario provincial politics have commented on Premier Eves’ inclination to- wards indecisiveness and policy flip-flops, the Road Ahead document is characterized by a notable firming up, advocating further tax cuts, mortgage interest deductibility, and a ban on teachers’ strikes and vagrancy in the province.

Unfortunately, missing from the above list of campaign platform promises is a pledge to further welfare reform in Ontario by implementing a welfare benefit time limit. Time limits on welfare benefits end the entitlement to welfare that has characterized such programs since their inception. This policy comission is surprising since Mike Harris campaigned successfully on welfare reform in the 1995 election campaign by proposing and eventually implementing  “workfare.” However, according to Eves, welfare benefit time limits are not palatable, or, in his words, just so “far, far out there” (Benzie and Lindgren, 2003). A similar reaction greeted Mike Harris’s welfare reforms. Nevertheless, considering the success of the Harris reforms in Ontario and of the 1996 reforms in the United States, Eves would be wise to reconsider his position.

In 1996, the United States implemented an historic welfare reform known as the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) (see Schafer, Emes, and Clemens, 2001). Under PRWORA, states had to impose a lifetime limit on welfare benefits of 5 years (unless they were prepared to foot the entire bill for any period above that limit them- selves). In fact, many states established shorter, 2-year limits. This development has changed the tone of welfare provi- sion in the US, effectively ending the presumption of an entitlement to welfare among employable recipients. Coupled with other reforms such as immediate work requirements and sanctions for reasons of non-compliance with welfare regulations, the US has managed to dramatically outpace Canada in terms of reductions in the number of welfare recipients (Clemens, Emes, and Schafer, 2001).

Reducing the number of welfare recipients is important because of the gains in employment and increases in earnings that accompany such declines, as witnessed in the US (see, for example, O’Neill and Hill, 2002). These encouraging results no doubt gave British Columbia the courage recently to embark on similar welfare benefit time limits, a first of its kind in Canada (for a more detailed examination of recent BC reforms, see Schafer and Clemens, 2002). In that province, each month that a welfare recipient receives assistance now counts towards a 24-month time limit. Employable recipients are limited to a cumulative 24 months of welfare out of every 60 months. Upon the expiration of the time limit, rates are reduced as follows: no eligibility for employable singles; no eligibility for employable couples with both adults at the time limit; and $300 per month for employable couples with one adult at the time limit. Undoubtedly, in the

US changes have effectively ended the presumption of an entitlement to welfare.

months and years ahead, former welfare recipients and their families in British Columbia will reap the benefits that accompany employment.

As a provincial election in Ontario draws closer, politicians of all stripes should embrace further welfare reforms. They should do so not only for political reasons, but because it makes sense for both recipients (current and potential) and taxpayers. Such a win-win proposi- tion is rare in the political arena, but whichever party is able to implement such ideas will be rewarded.