Document Type

Working Paper

Publication Date



In this article, Professors Stephanie Ben-Ishai and Saul Schwartz examine several ways in which the government becomes a creditor of economically disadvantaged Canadians and its role in limiting the options available for resolving the resulting overindebtedness. Specifically, the authors explore how government transfer programs, and the debts that result from benefit overpayment, affect those already marginalized by poverty. Ben-Ishai and Schwartz then argue that the two main remedies available to Canadians facing insolvency - credit counselling and bankruptcy - are simply too costly for low-income individuals, a term the authors use to describe those who are poor even before they incur the serious debts leading up to an insolvency. Low-income Canadians coping with government debt are shown to be in a unique and difficult position with respect to repayment. Using the overpayments that can occur within transfer programs such as Ontario Works (OW) and the Ontario Disability Support Program (OSDP) to illustrate the particular issues affecting low-income individuals, the authors demonstrate the lack of recourse this group has when dealing with insolvency. Ben-Ishai and Schwartz analyze this issue using the statutory framework, interviews with government program officials and data on social assistance overpayments to cast doubt on the assumption that those with low income have no need for bankruptcy and credit counselling. In so doing, the authors ultimately question whether existing insolvency remedies are serving the needs of all Canadians.