Canada’s Social Safety Net A Backgrounder

Canada’s Social Safety Net A Backgrounder Civics Studies 11/Social Studies 11 MUNDY 2008

Social Safety Net • Refers to the programs and policies in place by a government meant to alleviate the effects of poverty • Social Safety Net programs allow ALL people to receive income, health care and other • Examples of programs include: pension plans, medicare, employment insurance, etc. • Also known as “demogrants”

Pension Plans • Pensions are given to people who are of retirement age (65 and older) as a source of income • Given that many cannot find work due to health issues, income cannot be generated any other way • Only some had family that could take care of them – others had immigrated to Canada, while some died in WWI

Pension Plans • First introduced in 1927 during King’s minority government as coalition with Progressive Party • Basic pension = $240/a • Had to prove hardship through test • Only to British subjects who had lived in Canada 20 years or more • 70 years and older

Pension Plans • 1951 – Old Age Security Act • Granted $40/mth - taxable • 70 and older • Directly administered by Federal Government • Also created Old Age Assistance Act for those 65-69 (also $40/mth) • Jointly funded by feds and prov. gov’ts

Pension Plans • In 1964, became the Canada Pension Plan (in Quebec, the Quebec Pension Plan) • While rate before this had been raised to $75/mth, still not enough for cost of living • Thus, new program required workers to contribute monthly to CPP • Would receive about 25% of average salary upon retirement

Pension Plans • In 1975, spouces of contributors to pension plan were allowed to receive benefits of partner’s plan • Currently payments have been reduced

Employment Insurance • Monthly payments for those who have recently lost their job and are looking for work • Meant to give minimal income during time searching for new employment so that person will not lose house, car, etc. • Once person is in new job or not found work beyond a certain time, payments end

Employment Insurance • 1940 – created Unemployment Insurance • Before this, unemployed applied for payments from municipal gov’t. • From 1940, UI administered federally • People may claim by showing proof of employment between 420 – 700 hours (max $413/week) • Now called Employment Insurance

Family Allowance • A monthly allowance given to families in order to assist them in raising children • Amount determined by number of children in household

Family Allowance • First introduced in 1945 • Amounts based on age: • Under 5yrs old = $5/mth, 6-9yrs = $6/mth, etc. • Payments were non-taxable and each family received benefit regardless of income

Family Allowance • In 1978, this system was revised to become Refundable Child Tax Credit • Families with incomes under $18000/a received $200/a • Families over $26000/a received nothing • In 1992, program became $85/mth max for children up to 18 based on low-income • Child expenses were tax-deductible, though

Minimum Wage • First introduced in 1920’s both federally and in various provinces in response to workers’ strikes (including Winnipeg General Strike) • Federal minimum wage is set for federal employees, while provinces set provincial minimum wage for all other employees working within province (usually lower than federal level)

Canada’s Social Safety Net A Backgrounder