CANADA ASSISTANCE PLAN (CAP)

The Canada Assistance Plan has been considered a cornerstone of Canada’s social safety net. Beginning in 1966, CAP made the federal government responsible for half the cost of social assistance programs and set national standards for implementation. This allowed the federal government to impose some consistency among provinces with varied wealth. If the provinces wanted the money, they had to meet four requirements:

1. Welfare rates had to be high enough to meet basic needs.
2. All people in need had to be eligible for welfare, regardless of when they established provincial residency
3. Provinces had to have a welfare appeal system
4. Provinces could not require welfare recipients to work.

In 1991 the federal government imposed a limit on the funds it would pay out for social programs to more affluent provinces and this led to the situation where the federal government was paying only approximately one-third of the actual costs. In 1996 CAP was replaced by the Canada Health and Social Transfer program which combines federal funding for health, postsecondary education and welfare and transfers a designated amount of money to each province rather than transferring a percentage of actual costs. The replacement of the CAP reduced the ability of the federal government to impose national standards and led to many provinces reducing their social programs to fit within the funds transferred under the Canada Health and Social Transfer program.