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HomePolicy Articles Article Summary

A Working Income Tax Benefit That Works

Commentary by Ken Battle, Michael Mendelson

In 2005, the federal government’s mini-budget contained a Working Income Tax Benefit proposal that would give low-income earners a cash supplement to bolster their wages. Ken Battle and Michael Mendelson welcome this proposal, arguing that it could help reduce poverty and remove barriers to employment. However, they caution setting up this Tax Benefit could prove problematic.

The authors discuss several implementation options and associated complexities that may result. One option may be to deliver the Working Income Tax Benefit as a tax credit, similar to the GST. Another option would be to use the Employment Insurance’s record of earnings.

Battle and Mendelson argue that the Working Income Tax Benefit could be broadened from a federal program to a national reform. For example, they posit that the federal government could assist by assuming some of the welfare caseload where it could better deliver the benefits. Meanwhile, however, the provinces could reinvest some of the savings into income supplement programs that meet national goals but are tailored to each province’s particular needs. The authors applaud the federal government proposal, concluding it is an excellent starting point for reforming Canada’s ailing income security system.

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Policy Publication Details

Author(s): Ken Battle; Michael Mendelson;
Publisher: Caledon Institute of Social Policy [ Visit Website ]
Year Published: 2005; Publisher Type: Research Institute
Publicly Available: Yes Research Focus: National;
Registration Required: No Language: English
Payment Required: No Publication Format: Adobe PDF

Subjects / Categories:

Policy Articles / Fiscal & Budgetary / Tax Policy
Policy Articles / Fiscal & Budgetary / Tax Policy / 2005
Policy Articles / Fiscal & Budgetary


Keywords / Tags:

tax benefit; employment insurance; poverty; employment barriers; federal government; welfare; tax credit; income security;