Canadian and U.S welfare reform

Welfare rolls in both Canada and the United States reached all-time highs in the 1990s. One province and a few states introduced reforms to slow the rate of increase or reduce the escalating cost. However, in both countries local reforms were limited by the conditions attached to federal financing.

In 1996, both countries introduced federal legislation designed to reduce welfare dependency. In just a few years, those reforms dramatically cut the number of people dependent on cash assistance:

  • The number of individuals receiving welfare in the United States fell 46 percent from 1994 to 2002.

  • Canadian welfare rolls fell 38 percent over the same period.

  • As a result, the proportion of the population dependent on welfare fell from 5.5 percent to 2 percent in the United States and from 10.7 percent to 5.9 percent in Canada.

    The U.S. legislation ended the entitlement to welfare. Analysts say that although Canada's 1996 reform was less successful in ending "welfare as we know it," it may hold the key to the larger goal of dismantling the welfare state. In Canada, federal welfare funds were block-granted and welfare programme design was left up to each province. In both countries, the next step in welfare reform should be greater decentralisation, experts say.

    Source: Sylvia Leroy And Jason Clemens, Ending Welfare As We Know It: Lessons From Canada, Brief Analysis No. 457, September 25, 2003, National Center for Policy Analysis.

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    For more on Federal Welfare Reform

    FMF Policy Bulletin\30 September 2003
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