Montreal – The ongoing cost-of-living crisis has highlighted the deficiencies in Canada’s social safety net. Provincial social assistance programs, which are supposed to provide enough money to buy food and other essential needs, fall short while the rate of food insecurity rises.

A new report from the Institute for Research on Public Policy outlines the various cash-transfer mechanisms that the federal government could use to increase income supports to low-income households. Report author Gillian Petit focuses on reforms to already existing cash-transfer programs delivered through the Canada Revenue Agency, including the GST/HST credit, the Canada Child Benefit and the Canada Workers Benefit, because these reforms could be implemented more quickly than designing an entirely new benefit.

To determine which of the potential cash-transfer scenarios the government should implement, Petit sets out the following criteria:

• Does the benefit reach those who need it most, notably working-age unattached adults, single parents and those with the lowest income?
• Does the benefit reduce barriers to access for marginalized and vulnerable groups?
• Is the benefit adequate and does it allow recipients to purchase basic needs?
• Is the cost of the benefit reasonable and feasible?

Based on these criteria and her analyses of the various options, Petit recommends that the federal government expand the existing GST/HST credit for families with working-age adults and their children. The existing GST/HST credit has several advantages: it reaches all family types including working-age, unattached single adults and single-parent families, and is well targeted to low-income households. However, the existing credit provides modest support: in the 2023-24 benefit year, it provided a base benefit of $325 a year per adult and $171 a year per child.

The report recommends the federal government adopt one of two options: a GST/ HST credit of either $100 a month per working-age adult spread relatively evenly among low- and middle-income households or $150 a month targeted to those in deep poverty. Both scenarios would improve access to basic needs for low-income households at a comparatively moderate cost.

In addition, Petit recommends that the expanded GST/HST credit be distributed monthly to spread the payments evenly throughout the year and give recipients more stability to pay monthly bills. She also recommends that the federal government implement the automatic tax filing pilot program announced in the 2023 budget to help Canadians who currently do not file their taxes receive the benefits to which they are entitled.

“There is an urgent need to increase income supports to low-income households. The federal government needs to act now to provide more generous targeted transfers to specific groups to reduce poverty rates and food insecurity and to improve access to basic needs,” says Petit.

Improving Access to Food and Essential Needs: Options for a More Generous Cash-Transfer Benefit can be downloaded from the IRPP’s website (irpp.org).