According to Laura Turner, Canada experienced a larger drop in welfare rolls between 1995 and 2004 than did the US, even though we instituted tough welfare reform laws and they, well, didn't. That suggests welfare reform "worked" largely because of the superheated economy of the late-90's, rather than a rejiggering of the perverse incentives set by modest income supports. As it is, I'm not really an opponent of welfare reform (though I would have constructed it a bit differently), but this is interesting data.
On the other hand, maybe Canada's not so kind after all. The report (pdf) Laura's using does indicate that has seen dramatic cuts across the region (for instance: "a single employable person in Prince Edward Island got provincial benefits of $10,039 in the peak year of 1986 and a comparable benefit of $5,988 in 2004. That represented a loss in dollars of $4,051 or a drop in income of 40.4 percent."), and even admits that "the notion of keeping welfare recipients very poor is deeply ingrained in the modern-day political psyche almost everywhere in Canada." So has the strategy of our northern neighbors been to simply make welfare inadequate, and thus force an exodus from, the rolls? What say you, Canadian readers?