Bill C-22 | Front Page

22 November, 2023

Understanding the Report from the Parliamentary Budget Officer

First Reflections

By Michelle Hewitt, Chair – Disability Without Poverty

Recently a report was published by the Parliamentary Budget Officer called The Canada Disability Benefit: Model and Scenarios. Given that it’s the first report that puts any numbers to what the benefit might look like, it has caused a lot of excitement! However, it’s important to look at what this report is, and what it isn’t.

First, what – or who –  is the Parliamentary Budget Officer? Well, he’s an actual person called Yves Giroux, but he represents an important function. According to their own description,

  • “The Parliamentary Budget Officer (PBO) is an independent and non-partisan agent of Parliament that provides independent and non-partisan financial and economic analysis.
  • Officers or Agents of Parliament are parliamentary entities rather than governmental entities. They are responsible directly to Parliament and are independent from the government.
  • The PBO does not provide policy recommendations in its responses to requests from parliamentarians or in its reports. 
  • The PBO provides impartial and independent estimates of the financial impact of policy proposals on the budget, as well as other factual information on the effects of a policy, if requested. PBO costings focus on providing an assessment of the financial impact of a policy proposal.  
  • They do not contain advice as to the merits or otherwise of the policy proposal”, taken from various sections of the PBO website.

It’s a fine distinction to understand. The PBO is part of Parliament but not part of government. Government is made up of those elected officials, both those who hold power and those in opposition. Parliament is a constant in the background. Perhaps think of Parliament as the building, and the PBO is one of the bricks, whereas government is the people inside.

So, this report is not a recommendation to government. The amounts it contains are not what the Canada Disability Benefit (CDB) will be. It’s really important to remember that.

In the report, the PBO has created 3 scenarios based on how they think they benefit could happen. All of the scenarios take the CDB at its word that it will reduce disability poverty, as they all look at an amount that will lift most disabled people to the regular poverty line. Their modelling has calculated that to be $14,356 a year which is roughly $1200 a month. One scenario adds in a 30% increase for the cost of disability, making the maximum for the benefit to be $22,701 a year, which is roughly $1900 a month.

I have to remind you. This is not what the Canada Disability Benefit will be. It’s one thought from an influential office of Parliament.

Looking at each of the scenarios can give us an idea of what the benefit might look like.

Table with 3 scenarios for Canada Disability Benefit. See p. 6 of following PDF https://distribution-a617274656661637473.pbo-dpb.ca/cc0930a87cbe514f3939754dd7b28f97483325caccb8ff82b44362d6876f83a9

Notice the first sentence of each scenario. It says that all scenarios cover the gap between disability assistance payments and the poverty line.

Scenario 1 includes most things we, at DWP,  would want to see. The benefit is individualized – it’s clawed back on an individual’s income, which means an amount is set beyond the poverty line where the government would say you’re not eligible any longer – but not based on the family’s income. It’s  nontaxable, and includes the cost of disability, at 30%, which is a guess, but not a bad one!

All three scenarios look at whether someone can have both the CDB and the Disability Tax Credit (DTC) or just one. It could be said that that makes the presumption that the DTC covers the cost of disability – which is not something we would see as accurate. We are not in agreement with there being a choice between DTC or CDB. Disabled people should get both.

Scenario 1 is based on self reported disability status, whereas scenarios 2 and 3 use the DTC. This is a huge difference, because only 40% of the disabled people who should be registered for the DTC are registered for it, for many, many reasons.

In scenarios 1 and 3, the benefit is not taxable, and the benefit is clawed back based on the individual’s income. It’s really important that it’s based on an individual, because it gives dignity and autonomy to disabled people to have an income of their own that is not based on what the rest of the family earn. In scenario 2, the benefit is taxable and clawed back based on family income. This makes it the lowest amount of the three, and as we will see, the fewest people able to take it up. We do not support this scenario at all.

The purpose of this report is to provide cost estimates. This table probably explains the way that works for each scenario in the clearest way.

Table with benefit amount and costs with the 3 scenarios. See p. 18 of following PDF https://distribution-a617274656661637473.pbo-dpb.ca/cc0930a87cbe514f3939754dd7b28f97483325caccb8ff82b44362d6876f83a9

As you can see, scenario 1 costs the most because the most people are using it. This is great to see – 1.3 million disabled people receiving a supplement to their other benefits that takes into consideration the cost of being disabled.

Scenario 2 and 3 have a much smaller number of recipients – scenario 2 has only 20% of the number of people in scenario 1, and scenario 3 has only 26% of the people in scenario 1. This is because it uses the Disability Tax Credit (DTC) as the gateway to receiving the benefit, a terrible way to go for disabled people – but the cheapest way for the government.

I repeat. These scenarios are not what is going to happen, and they are not a recommendation to government. But, it’s a great tool for us to see how much the different decisions impact the number of people who will be able to access the benefit, and the cost to deliver it. There’s also a tool on the website where you can changes these parameters for yourself.

Yves Giroux, the PBO, is quoted as saying:

Due to the lack of basic information in legislation, most parameters are still unknown, leading to cost estimates that vary widely. Across the three scenarios we examined, the cost of the CDB program could total between $2.1 billion and $20.1 billion in the first full fiscal year of implementation. Leaving virtually all parameters of such an important program to be determined solely by Cabinet, rather than Parliament, is surprising.

I think there’s a strong message here. We know the history – we know that this is a framework legislation and that the details are only now being worked on. There’s little point in going back over why that happened. However, the message is clear. We need those parameters in place. We need to hear what the regulations governing the Canada Disability Benefit are going to be, and we need to know fast.

The clock is ticking. We must get funds to disabled people quickly.

Tables above can be found here.

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