Welfare recipients can skip the Money Mart: Toronto to start handing out debit cards instead of cheques

Welfare recipients can skip the Money Mart: Toronto to start handing out debit cards instead of cheques

A Money Mart on Yonge Street (Image: Neal Jennings)

News like this is enough to make anyone believe there really might be gravy to be found at city hall. Toronto’s latest to attempt at finding savings embraces a radical new technology from the early 1990s: debit cards. Yes, the city will soon be rolling out plastic rectangles in place of cheques for some recipients of Ontario Works—and saving as much as $2.5 million in the process.

There are several benefits to this approach, as the Toronto Star explains:

About 65,000 of Toronto’s recipients receive their payments via direct bank deposit. Many of the 35,000 who receive cheques do not have bank accounts, and many cash the cheques at payday lending outlets that charge high fees they can scarcely afford.

Money Mart, for example, charges $2.99 per cheque plus 3 per cent of the cheque total. That amounts to $249 per year for a recipient who is single, $403 for a childless couple.

“Last year, we did the tax returns for about a thousand people. Their average income was $11,000,” said Diane Dyson, director of research and public policy at Woodgreen Community Services. “Even saving a couple of dollars on the transaction fees — those small differences make a big difference.”

So good on Toronto and the province for rolling out this technology, even if it’s almost 20 years since debit payment became available in Canada (and nearly 30 since Interac was introduced). Also, a special shout-out to Councillor Paul Ainslie, who did not use this opportunity for some cheap anti-poor badgering. According to the Star, Ainslie came out against using the debit cards to control what welfare recipients buy, saying, “I’ve been hearing people gripe for years, ‘People get a welfare cheque, and the first thing they do is go to the liquor store, the beer store.’ Well, usually when I get my paycheque, one of the first things I do is go to the liquor store or beer store.”

Whether this attitude survives the next provincial election or provocative Toronto Sun headline is another story, but for now it’s nice to see a city councillor not swing at a populist softball.

Debit cards to replace welfare cheques [Toronto Star]