If the government reduced taxes and reduced welfare benefits more gradually, more Quebecers receiving social support would join the workforce, suggests a study released Monday by the Montreal Economic Institute (MEI), a public policy think tank with offices in Montreal and Calgary.
The study said the current welfare system “encourages long-term dependency through perverse economic incentives,” and adds that it only traps “able-bodied recipients in a vicious cycle of poverty.”
Each province has various social assistance programs, most of which provide both cash payments and benefits such as dental, vision, drug, and health care coverage.
When welfare recipients work, notes the study, social assistance payments are reduced at a sharp clawback rate above a certain threshold of earnings. In some provinces, the rate is 100 percent….