Canada's Working poor and the Working Tax Benefit

The WITB is a refundable tax credit paid to persons and families with low earnings; it is intended to raise the incomes of the working poor and to provide an incentive to move from welfare to work. During the decade since its introduction, the major criticism of the WITB has been that it is a decidedly modest benefit, which is reduced and even lost completely at levels of net income well below the poverty line.

This research note provides some detailed information on the working poor, who make up about one half of all working age persons living in poverty. About one third of the working poor are full-time/full year workers who will likely receive little or no WITB benefit in provinces with a significant minimum wage standard. The WITB is thus effectively targeted to low wage precarious workers in part time and part year jobs.