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Time to Act on Canada Disability Benefit Promise

This article was originally published in The Hill Times on April 11, 2024.

Will the federal government make good on its long-promised Canada Disability Benefit in Budget 2024? That’s what people with disabilities and their supporters will be looking for among the hundreds of initiatives Finance Minister Chrystia Freeland is likely to roll out. And, hopefully, any announcement will come with details on the structure of the new benefit, and whether it will truly meet the needs of people with disabilities.

In working out these details, the government should be careful not to poison the new benefit with measures that would accidentally disincentivize employment for people with disabilities.

Canada needs these workers. And they need employment.

Cardus research has shown that paid work is important for people with disabilities—as it is for everyone—not only for financial security, but also for thriving in other ways. Having a job is associated with better physical and mental health, strong family relationships, and greater involvement in the community. Further, our research has found that, unsurprisingly, people with disabilities want to work, and most are able to do so. Employing their talents is essential for them to thrive, and for the economic growth of our country.

Nevertheless, poorly-designed benefit programs can create conditions that disincentivize people from entering the labour market. One way that this can happen is by cutting off the benefit too quickly when a person’s other sources of income rise. The combination of reduced income-support benefits and higher taxes on employment income can result in situations where someone is actually worse off because they have decided to work more. This is toxic to employment, and the federal government cannot allow it to happen.

The federal employment insurance (EI) program has developed a useful model to avoid the worst of these situations. Known as Working While on Claim, it reduces EI benefits by 50 cents for every dollar of income earned from a job. That means that recipients are almost always better off the more they work. While it does not eliminate obstacles to work, it significantly reduces them.

Cardus has participated at several stages in consultations with Employment and Social Development Canada on the design of the Canada Disability Benefit. In our most recent interaction with the department’s public servants, we were impressed with the policy analyst’s awareness of the issues surrounding work incentives for people with disabilities. It is clear that the public service has done its research on this area.

That said, we anticipated that there would be agreements with provincial and territorial governments to address the challenges of the complexity of designing a new federal benefit alongside provincial benefits, but so far we have not seen evidence that this is happening. It is hard to see how the Canada Disability Benefit could be properly implemented without this co-ordination.

It will now be up to Freeland and the cabinet to ensure that employment for people with disabilities takes priority in the design of the Canada Disability Benefit. It is critical that the government get this right. Canadians with disabilities cannot afford a new program that makes it more difficult for them to enter the labour force. And Canada cannot afford to miss out on their talents and contributions.

  • Renze Nauta is work and economics program director at Cardus and Andreae Sennyah is director of policy at Cardus.

April 11, 2024

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Any new Canada Disability Benefit must not disincentive work for people with disabilities.