Ottawa pledged to reduce poverty among Canadians with disabilities. Then it delivered $200 a month

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The federal government’s new benefit for working-age Canadians with disabilities would deliver just a fraction of the financial support that even modest scenarios had estimated Ottawa might provide through the program.

In its federal budget, tabled April 16, the government said its new Canada Disability Benefit (CBD) would pay $2,400 a year – or $200 a month – to eligible low-income Canadians with disabilities.

By comparison, in a 2023 analysis, the Parliamentary Budget Office (PBO) estimated the benefit might provide an average of approximately $7,700 to $14,600 per year based on how the government described the program in legislation. The PBO also referenced statements made by government officials comparing the scope of the benefit to the Guaranteed Income Supplement (GIS), which is widely credited with helping to keep seniors out of poverty.

In the federal budget, Ottawa also said the new disability benefit would go to around 600,000 recipients. That figure sits partway between the PBO’s most restrictive estimate – which put the number of beneficiaries at roughly 276,000 – and its most costly scenario, under which around 1.4 million Canadians with disabilities would get the financial aid.

Both the size of the payment and the number of expected beneficiaries of the CBD came as a surprise and a disappointment for disability advocates and many Canadians with disabilities.

“The amount was so off expectations,” said Michael Prince, a professor of social policy at the University of Victoria, who resigned from a federal advisory group on disability over the budget announcement.

For years, the Trudeau government talked about a federal benefit that would supplement welfare and private insurance payments for working-age Canadians with disabilities, many of whom live in deep poverty.

A first bill introduced by the Liberal government in June, 2021, to create the benefit died on the order paper when a federal election was called later that year. Similar legislation eventually received royal assent two years later.

In an effort to ensure the timely passage of the bill, the federal government provided only a broad-brush description of the benefit in the legislations, leaving the details to be determined through regulations, Prof. Prince said. But the legislation did state that the design of the benefit should take into account Canada’s official poverty line and the added costs of living with a disability.

While Canada’s official measure of the poverty line varies across the country, social assistance falls short of that threshold by around 40 per cent on average, according to the PBO.

To bridge the widest gap, the federal disability benefit would have to amount to $14,356 a year in 2024, the PBO estimated. When using a higher poverty threshold that accounts for the additional living costs faced by Canadians with disabilities, the PBO calculated the maximum benefit at $22,701 a year.

The cost of the benefit in its first full year of implementation ranged between $2.1-billion and $20-billion in the scenarios presented by the PBO. By comparison, Ottawa pledged to spend $6.1-billion over six years, beginning in fiscal 2025, and $1.4-billion per year after that.

Elizabeth Mulholland, chief executive of national anti-poverty charity Prosper Canada, said she is hopeful Ottawa will gradually raise the benefit amount.

But Ms. Mulholland said she is concerned about the narrow qualifying criteria laid out in the budget, which ties the new benefit to eligibility for the Disability Tax Credit. Experts have widely criticized the tax credit for being difficult or impossible to access for many Canadians with disabilities.

A third major worry for advocates is whether provincial and territorial governments and insurance companies will scale back existing income supports in response to the new benefit.

The federal government has called on the key providers of financial assistance for people with disabilities to treat the new benefit as a top-up. But Ottawa’s ability to insulate the new benefit from clawbacks will depend on the success of negotiations with provincial and territorial governments and the insurance industry, Ms. Mulholland said.

“Job one is making sure what little there is does not get pocketed by others,” she said.