The Social Assistance Review Commissioners issued a low‐key release of their “Options” paper on its web site late Thursday, February 2 (see http://www.socialassistancereview.ca/commission‐publications ). Although promoted for months as an “Options Paper”, it is actually framed as Discussion Paper 2: Approaches for Reform. While various ways to go for reform of social assistance in the long‐term are presented in a technical policy terms, the paper lacks any clear, compelling overall direction to end poverty for social assistance recipients.
Questions and problems raised are barely advanced from the first Discussion Paper of last fall and, on some issues such as establishing a poverty measure for adequacy in benefit levels, the Paper actually moves the process backwards.
The Commissioners ask for further input on their discussion questions from the community by March 16. Their final report with recommendations is targeted for release in June 2012.
This interminable reform process, started almost more than three years ago with the Government’s Poverty Reduction Strategy in December 2008, offers no hope to people on OW and ODSP for any short- or even intermediate-term relief from their current intolerable living conditions. There is no compelling vision or clear overall goals proposed for ending deep poverty (Deep poverty refers to people living below 80% of the Low Income Measure – LIM).
There is nothing in the Discussion paper which speaks about the urgency for action to our political representatives, policymakers, the public nor the low income community and its supporters. Too many adults and children in Ontario continue to experience monthly cycles of chronic hunger and hardship which must be addressed now and cannot await grand plans for reform in the distant future.
Most alarming about this failure to capture the attention of our political leadership and the general public about this social injustice is the looming austerity agenda of the upcoming Drummond Commission report, which promises to suck up all the policy oxygen in the coming months and can hold only more misery for the most vulnerable among us. People on social assistance have been experiencing austerity since the 22% cut to rates in 1995, along with limited cost of living increases since 2003. The Commissioners provide no minimal bulwark against the assault on the social sector about to come down. Low income people lack a policy champion in their time of greatest need.
Main Areas Covered in Discussion Paper 2
Approaches for Reform reports out in the following sections:
Chapter 1: Reasonable Expectations and Necessary Supports to Employment. Moving social assistance recipients into the workforce is established as the primary way to get people out of poverty. This section concentrates on the need for more effective assessment and case management systems and employment support services to help social assistance recipients find and keep jobs. Pre- and post‐employment services across the different jurisdictions need to be better integrated and particular support considerations are necessary for people with disabilities who can work. Mechanisms for better communications and connections with employers must also be set up. Three different administrative approaches are proposed to create a more integrated employment services system.
Chapter 2: Appropriate Benefit Structure. The Commissioners indicate that they wish to meet three objectives in their recommendations; (1) Benefit adequacy; (2) Fairness between social assistance recipients and low income workers; and (3) Benefit levels that will maintain incentives to work. Most of the chapter devotes itself to the trade‐offs of different approaches to achieve balance among these three objectives. The paper contends that this means determining what a reasonable adequacy measure is indicating that there is no “widely accepted” (p. 24) poverty measure among the three existing choices (Market Basket measure [MBM], Low Income Cut-Off [LICO], and Low Income Measure [LIM]). A second consideration is how to set a “reference wage” fair to working poor Ontarians as the benchmark for when a recipient would leave assistance to enter the labour market. Finally, the paper contends that a reasonable “benefit withdrawal rate” is necessary to make sure that recipients entering the labour market have no unfair advantage over low wage workers who may not have access to supplemental benefits (e.g. access to free special health benefits). The Paper does acknowledge that the nature and condition of the labour market are challenges to achieving a satisfactory trade-off. Several proposed approaches to make the trade-offs are offered in the Paper. A concluding section addresses particular challenges in the benefit structure for people with disabilities on ODSP, who have extraordinary daily living costs.
Chapter 3: Easier to Understand. Complexity in the social assistance system confusing both to recipients and workers needs to be addressed. Complexity must be managed without sacrificing accountability to the taxpaying public. The Commissioners suggest consideration of moving from a “surveillance” and “monitoring” model to a more targeted “audit‐based” and “risk management” approach that would ensure compliance with system requirements (pp. 38-39). The Paper also gives attention to the treatment of assets, which affects the financial resilience of recipients trying to make the transition to work. Several approaches are proposed for relaxing limits on asset accumulation and a clear suggestion that there be one total asset limit set rather than limits designated by different asset classifications.
Chapter 4: Viable over the Long term. This short section (pp. 45-48) raises the question of whether (a) to continue the separate delivery of OW and ODSP; (b) to set up a “one‐stop delivery model that would integrate Ontario Works and ODSP at the local level” (p. 46); or (c) to have municipalities administer case management and employment services while the province delivers the income support component.
Chapter 5: An Integrated Ontario Position on Income Security. This chapter addresses the need for achieving greater compatibility and complementarity between social assistance and other service and support programs primarily administered under federal jurisdiction.
Chapter 6: First Nations and Social Assistance. In this chapter, the Commissioners report on holding separate consultations with members of First Nations communities and OW administrators. They indicate that these discussions informed their overall approaches to reform but that issues unique to the needs of First Nations communities are also addressed in this chapter. First Nations people see social assistance as a “social and economic trap” (p. 54), creating barriers to community economic development. New relationships must be developed between the federal and provincial governments and First Nations communities need to have more control and autonomy over how assistance is provided. Current agreements do not adequately cover First Nations members with disabilities, creating accessibility problems with respect to ODSP. Greater First Nations control over and access to employment services and special supports such as addiction services are also required.
Chapter 7: How to Provide Input. The Commissioners invite responses to the discussion questions provided at the end of each section by March 16, 2012 via the web site or email or by postal mailing (p. 61).
Missed Opportunity to Raise a Sense of Urgency for Action
By keeping their sights firmly fixed on long‐term overall reform of the social assistance system, the Commissioners fail to convey any sense of urgency about addressing deep poverty in the short- to intermediate-term and frame no clear goal in that regard either. Any hope for concentrated public attention on the situation of the poorest part of the province’s population is at grave risk with the low-key release of this report just several weeks before the Drummond Commission comes down with its promised austerity agenda.
No specific reference is made to the implications or prospects of the Drummond Report for people living in deep poverty despite its likely implications for the lower end of the labour market, which the Commissioners propose as the best route out of poverty for OW and ODSP recipients. A Paper that argues the need for better integration and coordination of services and benefits among all jurisdictions seems oblivious to the political and economic environment in which its policy approaches are being placed.
That is why the Commissioners should have extended themselves beyond a “policy consultant’s” role in this Paper to advocate for attention and concern that any forthcoming austerity agenda not create further hardship and misery for people living in poverty. The Commissioners have enough ammunition to so engage the debate prior to the Drummond Report’s release. They report hearing from 2,000 people in consultations across the province, receiving 700 written submissions. Since 2008, the Social Planning Network of Ontario/Poverty Free Ontario has visited 25-30 communities six to eight times each and knows the kinds of stories that the Commissioners have heard from low income people and the agencies and workers who try to support them with few resources.
People on social assistance and all living in poverty have told their stories and sorely need a policy champion to draw attention to their interests in the face of the austerity agenda about to come down.
Failing to do so in this interim report and the low‐key, under the radar release may well risk the relevance of the entire reform process as other forces will dominate the policy scene when the Commissioners’ final report is due in June.
Respecting Community Voices Calling for a Healthy Food Supplement
In the supplementary report on What We Heard also released with the Discussion Paper, the Commissioners offer an account of the messages received in the community consultations and submissions. SPNO/PFO’s own analysis of the written submissions posted on the Commissioners’ web site as of December 31, 2011 shows that income adequacy is the primary concern of proponents for reform.1
Four out of five posted submissions (79%) identified income inadequacy as an issue to be addressed in the Social Assistance Review, making a variety of recommendations to improve the adequacy of social assistance rates. Of all issues addressed in the submissions posted on the Commissioners’ web site, income adequacy was the most common area of concern and suggestions.
Overall, the resounding message is that rates are unquestionably low, with 63% of all submissions, and 70% of submissions addressing income adequacy recommending social assistance rate increases to cover the real costs of living.
Over and over again, submissions detail that rates are too low to provide for decent, affordable housing and a healthy diet. Forty-four per cent (44%) of all submissions recommend increasing shelter allowances to better reflect the full cost of decent housing. Of the submissions addressing income adequacy, 14% advocate for a full housing benefit.
Thirty per cent (30%) of all submissions advocate for a rate increase to provide for food and nutrition. Eleven per cent (11%) of the submissions addressing income adequacy recommend the immediate allocation of a $100 a month Healthy Food Supplement.
Notably, the Commissioners’ Discussion Paper suggests that one approach to an appropriate benefit structure could be a housing benefit available to all low income Ontarians to “ease the challenge of ensuring fairness as between people on social assistance and low‐income earners” and “[s]ince it would also help people who are struggling with housing costs but not receiving social assistance, it could help reduce the number of people who need to seek social assistance” (p. 29).
The emphasis on “fairness” between social assistance recipients and working poor people is problematic and divisive as the next section of this Bulletin discusses. Poverty Free Ontario has previously pointed out that a housing benefit that does not provide full coverage and protect food money again relegates social assistance recipients to the end of the line when it comes to meeting basic daily living costs.
Current housing benefit models target reaching only 200,000 low income people out of the 1,689,000 living in poverty (PFO Bulletins #2 and #8 at http://www.povertyfreeontario.ca/category/bulletin/).
Even a partial housing benefit is not designed and ready for implementation with any degree of dispatch. While a full housing benefit may be part of long‐tern reform, more immediate options require serious consideration and implementation.
Although the need for income increases for access to healthy food was clearly expressed in submissions to the Commissioners, including a Healthy Food Supplement, the Discussion Paper makes no reference to this as an option. The accompanying document What we Heard, offers one short acknowledgement: “There was support for the proposal to provide a monthly $100 healthy food supplement for all adults receiving Ontario Works or ODSP“ (p.18).
The Discussion Paper’s discounting of a major proposal widely supported and consistently voiced across the province since 2009 does not adequately respect community input. Further, the Healthy Food Supplement is the only income adequacy recommendation that has received official endorsement by municipalities across the province. Sixteen municipalities across Ontario have passed resolutions calling for the implementation of the $100 a month Healthy Food Supplement.2 A recently passed resolution by the City of Kingston calling for the immediate introduction of the Healthy Food Supplement, also adopted and forwarded to Premier McGuinty by the City of Belleville, notes the need for urgent action by stating “inadequate benefit levels lead to monthly cycles of chronic hunger among recipients creating health consequences with both personal and economic costs to us all.”
An appeal with this level of consistent support from communities, public health units and municipalities across this province and growing since the Social Assistance Reform Commissioners started their reform process merits more serious consideration than the Discussion Paper affords it.
Going Backwards on the Official Measure for Adequacy
It is unfathomable why Approaches to Reform re‐opens the debate on what is a reasonable official poverty measure in its discussion on an appropriate benefit structure. Claiming ‘the absence of agreed‐upon benchmarks for adequacy” (p. 24), the Discussion Paper introduces the three measures currently used nationally – Low income Cut‐Offs (LICO), Low income Measure (LIM), and Market Basket Measure (MBM) – contending that “[n]one of these is widely accepted as a poverty measure” (p. 24).
This is remarkable, given that the Ontario Government has already set the LIM as the poverty measure in its Poverty Reduction Strategy and that this whole Social Assistance Review process emerges from that Poverty Reduction Strategy. Further, the LIM is well‐established internationally by the United Nations and the European Union.3
Poverty Free Ontario hopes that re‐opening a discussion about which poverty measure to use has nothing to do with the unfavourable comparison of the LIM to the other two measures in relation to current benefit levels as shown in Appendix B (i.e. current rates show individuals and recipients in different family sizes in deeper poverty when the LIM is used).
Getting the LIM established as the Ontario Government’s primary measure of poverty in the 2008 Poverty Reduction Strategy was a major achievement for the advocacy community at the time. The issue was resolved then. The Social Assistance Review hardly advances the policy discussion by re‐opening it now just before it makes its final recommendations. This is moving social assistance reform backwards.
Adequacy Framed as an Issue of Balance between the Expectations of Recipients and Workers
Approaches to Reform addresses the issue of adequacy in terms of the “Appropriate Benefit Structure”. Adequacy in benefit levels has, of course, been the main thrust of Poverty Free Ontario, given our travels to communities around the province since 2007 and exposure to stories of chronic conditions of hunger and hardship told by recipients and the people who work with them.
In launching their discussion on adequacy, the Commissioners offer some hope that the issue of decent living conditions will frame this debate and their proposed solutions. The Commissioners report on the great disparity between the costs of basic necessities and benefit levels for individuals and families reported by the Ottawa Public Health Department. The Commissioners state: “We heard from many people that the benefit structure should more closely reflect the cost of living, including the cost of nutritious food, secure housing and community participation” (p. 20).
The Paper, however, quickly narrows the discussion from adequacy in terms of what people need to live with some measure of decency and dignity to the tension between what social assistance recipients should expect and what low wage earners will accept as fair in relation to their own low incomes. The Discussion Paper misses the opportunity to reflect broad community concern expressed in the consultation period about inadequacy in both social assistance rates and minimum wage levels. The “fairness” discussion shifts the focus to relationships within the low income community (i.e. a somewhat sanitized debate about the “deserving” and “undeserving” poor). This approach in no way challenges the Government nor the larger public to assume a moral responsibility to commit to both benefit rates and minimum wages at levels that ensure decent living conditions for all people in the bottom 30% of incomes.
The Discussion Paper hinges the adequacy discussion on establishing a satisfactory balance among the following “trade-offs”:
- an agreed upon measure for adequacy (an already resolved issue as indicated earlier in this Bulletin);
- a “reference wage” for low income workers that social assistance rates should remain below; and
- a “benefit withdrawal rate” that avoids giving social assistance recipients any advantage over low income workers as they enter the labour market.
Poverty Free Ontario does not see these issues as “trade-offs” for addressing poverty in this province. Rather they are matters demanding that Government set a decent floor for living conditions for all low income people in Ontario, which means:
- Setting a schedule for achieving adequacy by raising social assistance benefit levels over a reasonable amount of time so that no recipient is living below 80% of LIM (i.e. ending deep poverty in the province) and reducing the general poverty rate to below 4% by 2020. Of course, PFO also supports the position of the Put Food in the Budget initiative that the path to adequacy be commenced with the introduction of the $100 a month Healthy Food Supplement.
- Raising the minimum wage to $12.50 by 2014 so that all full‐time, full‐year workers earn income that would bring them 10% above the poverty line (minimal “reference wage”).
- Setting the clear objective of creating labour market conditions and job opportunities that establish a “living wage” as the true benchmark of an inclusive, healthy and equitable society (standard “reference wage”).
The unfortunate thrust of Chapter 2: Appropriate Benefit Structure is to perpetuate the myth that the interests of social assistance recipients and working poor people are in conflict with each other. Framing the adequacy discussion as an issue of fairness within the low income community is divisive and misleading.
Rather, their interests are joined in expecting a significantly raised bar for all low income people and demanding fairness and justice from a society that has structured the economy and social provision in a way that excludes and contains people struggling in the bottom third of the income scale. This is the constructive approach that the Commissioners could champion in their reform proposals rather than reinforcing past and current policy frameworks that pit social assistance recipients against working poor Ontarians.
Re-directing “Reasonable Expectations”
The Discussion Paper establishes up front that reform hinges on the “reasonable expectations” that as many social assistance recipients as possible participate in the workforce. The first two sentences of Chapter 1 state the driving force for the Commissioners review: “The government has identified employment as a key route for individuals and families to escape poverty. We agree that one of the best ways to help people to move out of poverty is to help them find work” (p. 5). The persistence of working poverty in Ontario even during periods of strong economic growth belies this glib assertion.
In our experience travelling to communities across the province, we know those on OW and ODSP who can work want to do so but there is great difficulty in getting that firm foothold in the current labour market. The vast majority of recipients hold “reasonable expectations” of a better life enabled by securing good jobs with decent wages, and are hardly motivated to remain in deep poverty or even just hovering at or slightly above the poverty line.
Poverty Free Ontario contends that there should also be a “reasonable expectation” for the provincial government to provide social assistance benefits at a level that allows recipients to meet the basic costs of the necessities of life and to live with some measure of health and dignity. Further with regard to low wage workers, there should be “reasonable expectations” that:
- The provincial government ensure that the basic minimum wage enables an earner working full‐year, full-time to live above the poverty line;
- Employers recognize that in addition to meeting the economic test of a fair return on capital for conducting a successful business, that they also have a responsibility to meet the “social test” of paying a basic minimum wage that assures an employee working full‐year, full-time lives above poverty; and
- Both government and the private sector recognize that the route to economic revitalization lies not in low and minimum wage structures but in employment based on ‘living wages” and decent working conditions that will foster not only a healthy and productive workforce but will also stimulate and sustain economic recovery by creating stronger consumer demand for goods and services.
Conclusion
The social assistance reform process drags on as any momentum offered by the Ontario Government’s Poverty Reduction Strategy recedes into distant memory. The Strategy did nothing for adults on social assistance when released in 2008, except promise a reform process that would address their intolerable living conditions.
That process took more than a year to initiate, and by the time terms of reference were framed and the Commissioners were appointed, it was 2011 with an eighteen month study process before a final report in mid-2012. After that, who knows how long before any serious implementation of the final report’s recommendations will be undertaken.
Meanwhile, Ontario has reached unprecedented poverty levels and the real incomes of people on social assistance have not even kept up with the rate of inflation over the last two years. There is more than enough evidence that tolerating poverty is harmful to the health and well-being of social assistance recipients and to community health in general.
We need continuing strong community advocacy alongside the voices of low income people, even more so as the austerity agenda looms. But, we also need policy champions with the ear of government to not only work on the future design of a more effective social assistance system, but also to propose specific and immediate action that will begin to address the hunger and hardship that recipients are barely enduring now.
Some clear and compelling messages in this regard must be sent to the Commissioners as they enter the last phase of their work.
Notes
- SPNO/PFO wishes to express its gratitude to Nicole Gagliardi, York University student in social planning, who volunteered her time to review the written submissions to the Commissioners posted to the web site and prepared the first draft of this section of this Bulletin. The Commissioners indicate that they received 700 written submissions. As of December 2011, 183 were posted to the web site, which would seem to be an adequate sample in any case for the conclusions drawn in this section.
- Municipal resolutions in support of the Healthy Food Supplement have been passed by the following City Councils: Belleville, Cambridge, Cornwall, Durham Region, Fort Erie, Hamilton, Kingston, Niagara Region, North Bay, Oxford County, Parry Sound, Port Colborne, Sarnia, St. Catharines, Wainfleet, and York Region.
- LIM 50 is the official Ontario income poverty measure, i.e. poverty is designated as having an income below 50% of the median income. LIM 50 is also the poverty measure adopted by the United Nations. The income poverty measure of the European Union is LIM 60, i.e. poverty is indicated at income levels below 60% of median income.
PDF Version of PFO Bulletin #9
The NDP released its anti-poverty platform on Friday, September 16, 2011. Perhaps anti-poverty advocates should be grateful for any nod in this direction, given electioneering by all the parties that is otherwise concentrated on middle class, pocketbook issues.
But any anti-poverty policy is not equivalent to the policy necessary to end poverty in Ontario. The NDP’s commitment to building 50,000 affordable housing units over ten years is certainly commendable as is the promise of a new emergency dental care program for 50,000 low income adults.
The reference, however, to a housing benefit for 200,000 low income individuals and families at a cost of $240 million a year when fully implemented is worrisome. In its policy platform, the Liberal Party also says that it will “consider delivering a new housing benefit for Ontarians who are struggling”. The plan that the Liberals are entertaining is the same that the NDP has committed itself to.
A housing benefit of this limited scale in a province with 1.7 million people living in poverty does not begin to address the real issue. That issue is the woefully inadequate core incomes of almost 600,000 adults on social assistance and about 800,000 low wage workers who do not earn enough to meet their basic monthly living costs.
A single individual on social assistance lives in deep poverty, $11,300 below the poverty line annually; a single mom with one child lives $9,500 below the line set by the Ontario Government as our official poverty measure. Even a full-time worker earning minimum wage for the whole year falls more than $1,000 short of the poverty line.
These figures indicate that basic incomes for all the necessities of life are inadequate and require increases in social assistance and the minimum wage over the next two-three years to enable low income people to live with some measure of health and dignity. Unfortunately, until Government job creation strategies reduce the social assistance caseloads and create better paying jobs, the cost of ending deep poverty will be much higher than $240 million for a housing benefit that will go to somewhere between 15% and 20% of the population in need.
But the cost of income supports to end deep poverty would still be just one-sixth as much as the $4.2 billion in corporate tax cuts that will be fully implemented in Ontario by 2013.
A start on the path to income adequacy for people on social assistance would be a $100 a month Healthy Food Supplement for the almost 600,000 current welfare recipients. For the working poor, minimum wage increases over the next three years could bring the full-time worker above the poverty line.
When a government commits to a strategy that deals with the fundamental issue of basic income inadequacy, then a complementary measure such as a housing benefit could support all individuals and families with higher housing costs that threaten to draw from their household budgets for healthy food and other daily necessities.
Poverty Free Ontario has a clear position on the proper place of a housing benefit within its overall plan to poverty eradication:
- A “two-track” approach to poverty eradication by 2020 – immediate action now (short-term first track) combined with specific action over the next three years (longer-term planned action).
- Core income proposal 1: Implement the $100/month Healthy Food Supplement now as the first step toward income adequacy to eliminate deep poverty among people on social assistance
- Core income proposal 2: Develop and implement a schedule of social assistance benefit increases over the next three years to bring everyone on social assistance out of deep poverty and as close to the poverty line as possible.
- Core income proposal 3: Raise the minimum wage by three annual 75 cent increments starting in 2012 to bring it to $12.50/hr in 2014 (10% above the poverty line for a full-time worker) and index it annually thereafter.
- Complementary income proposal: Develop a full housing benefit over the next year or so available to all low income people who are still paying more than 30% of household income on housing costs even after the previous core income measures are in place in order to protect their core incomes for basic necessities from high housing costs.
It is time to move beyond partial measures that avoid the structural basis for the intolerable levels of poverty in this wealthy province. Only commitment to a serious and comprehensive poverty eradication plan combining immediate action on core income adequacy with specific and concrete steps over the next three to four years will end poverty in Ontario in this decade.
Poverty Free Ontario is an initiative of the Social Planning Network of Ontario (SPNO). The objectives of Poverty Free Ontario are:
- To make ending poverty a public issue in the 2011 provincial election;
- To urge that all political parties commit to a poverty eradication agenda if elected; and
- To ensure that all electoral candidates have poverty eradication as part of their platforms and campaigns.
Poverty Free Ontario is a non-partisan initiative. Although the election campaign is only a day old, none of the political parties and very few of the electoral candidates running under party banners have given any indication that a commitment to ending poverty within a reasonable timeframe and with a clear and serious plan is a priority issue in this election. None of the published party platforms give any prominence at all to poverty or its elimination.
While Poverty Free Ontario and the SPNO do not endorse or encourage that Ontarians vote for any particular party or candidates, we do urge Ontarians to question all electoral candidates on their commitment to ending poverty and to make their own individual choices about which candidates and political parties they believe will act to end poverty in this province.
That is why the Poverty Free Ontario campaign is getting its message – “Let’s Vote for a Poverty Free Ontario” – up in signs posted on the properties of supportive individuals and organizations in 16 communities across the province. The faith community, recognizing the moral and ethical issues of letting 1,689,000 Ontarians live in poverty, is taking some leadership in getting this message in front of the public in many of these communities: www.faithtoendpoverty.ca.
Elections are critical times for citizens to exercise the democratic option of choosing who will govern them. Everyone is encouraged to participate in the democratic process of debate, discussion and voting. SPNO, a non-profit network of 20 community-based social and community development councils across Ontario, is proud to participate in this democratic process in a non-partisan way through the Poverty Free Ontario initiative.
For further information contact:
Peter Clutterbuck, SPNO Coordinator
(416) 653-7947 cell (416) 738-3228
pclutterbuck@spno.ca
Web site: www.povertyfreeontario.ca
Is it going to be about the leader of the governing party winning a third mandate?
Is it going to be about the leader of the opposition party claiming power with a tax-cutting agenda?
Is it going to be about the third party leader riding the momentum of her federal cousins to power or significant gains?
Is the election going to be all about the fortunes of political leaders and their respective parties?
Or, is it going to be about the people of Ontario and the issues that affect their quality of life? Education, health, the environment, jobs, living conditions.
We in the Poverty Free Ontario initiative and representing twenty communities across this province are concerned that 1.7 million children, parents, and individuals in Ontario are living in poverty, the highest poverty rate in the province in the last thirty years.
Only a few short years ago, many of these people never imagined that they would be unemployed, losing their homes, applying for social assistance, and visiting food banks.
What is this election going to be about?
We believe that some part of the election debate must be about the hunger and hardship that so many living in poverty experience daily, weekly, monthly.
And we believe that this discussion must happen during this election not only for their right to live with some measure of health and dignity but also because a poverty-free Ontario would:
- be a healthier community for all of us,
- make the economy work better for all of us
- help the political system better reflect the interests of all of us.
What is this election going to be about?
Poverty Free Ontario is not a political party and we will not be running candidates for elected office.
But, we are convinced of the decency and compassion of the Ontario electorate and that Ontarians will support policies that ensure no one is left behind.
If our politicians and parties will not talk about an agenda to end poverty in this province, then we will bring the question to Ontarians directly.
We will display our support for a Poverty Free Ontario in our election signs and campaign pamphlet during the campaign.
We will encourage people to visit www.povertyfreeontario.ca and see how poverty in this province could be eradicated within this decade if our provincial government starts to act now.
We will ask our candidates in local debates, on our doorsteps, and through the media: “If elected what would you and your party do in the next four years to end poverty in Ontario?”
We will give our best efforts to make this election, not about the fortunes of political leaders and parties, but about the health and dignity of an Ontario where everyone belongs and all are included.
That’s what this election should be about.
In 2010, when questioned by supporters of the Put Food in the Budget (PFIB) campaign about where the $100 a month Healthy Food Supplement (HFS) was in the Ontario Government’s agenda, Finance Minister Duncan offered “everything is on the radar but we have to know how to pay for it”.
PFIB supporters and leaders on the Poverty Free Ontario initiative in communities across the province need to be prepared with some arguments about the inevitable questions on how to finance the kinds of proposals for which we are advocating, even though we realize that the basic issue remains the inequitable sharing of the great wealth that exists in this province and country. On March 10, Anglican Bishop Linda Nichols reminded us of that. Speaking at a PFIB public event at Queen’s Park after a meeting with Finance Minister Duncan, Bishop Nichols said:
“We don’t accept the argument that Ontario can’t afford to help the poor. That’s a morally bankrupt position. We live in a wealthy society.”
Poverty Elimination is “Self-financing” Over Time
We know that allowing people to live in poverty costs our healthcare system in Ontario about $2.9 billion annually (OAFB Cost of Poverty Report, 2008), which is about 18% of the 2011 Ontario deficit.
Research at the University of Toronto by Ernie Lightman, Andrew Mitchell and Beth Wilson tells us that a $1,000 increase in annual income to the poorest fifth of households in Ontario will result in 10,000 fewer chronic conditions and 6,600 fewer disability days lost at work every two weeks (Poverty Is Making Us Sick, 2008).
Notably, PFIB’s proposed Healthy Food Supplement (HFS) would provide $1200 in increased annual income to social assistance recipients, which would produce the scale of savings to the healthcare system noted above by the U of T study.
Since Health is one of the Ontario Government’s priorities, the personal as well as the economic benefits should put the HFS on the government’s radar. Since there are almost 600,000 adults currently on social assistance, this would cost about $700 million. This is a very high caseload because of the recent recession and would be expected to come down as the economic recovery helps more recipients leave the system.
Fiscal Options Exist
It is hard, of course, to convince politicians with arguments of long-term pay-offs when their horizons do not extend beyond the date of the next election. Hard economic times and affordability are used as excuses for inaction, even though there was no political resolve to address the issue when the economy was doing well either.
In good or bad economic conditions, governments always have fiscal options. High tax Nordic countries with the lowest levels of poverty and strong economies have demonstrated that committed and competent governments can work on multiple priorities at the same time. Candidates for elected office in the upcoming provincial election can be challenged to consider the fiscal options that exist to implement measures like the Healthy Food Supplement in the short-term and to end poverty in Ontario in this decade.
Option #1: Maintain Competitive Corporate Tax Rates at 2009 Levels
The 2009 Ontario Economic and Fiscal Outlook presented by Finance Minister Duncan projected a $4.5 billion cut to corporate income taxes between 2009 and 2013 as a way to make Ontario business more competitive in the North American market.
Actually, we will be more competitive by 2013 than we were in 2009, when our combined federal and provincial tax rates at 33% were already below all rates projected for the USA (39.5%) and the Great Lake States, our main jurisdictional competitors. Last year a KPMG competitiveness study placed Canada second only to Mexico and way ahead of the United States on a list of “tax friendly countries for business” (Toronto Star, May 12, 2010).
The Ontario Government’s objective is to reduce rates by a further $2 billion so that by 2013 the combined federal (also coming down) and provincial corporate tax rates will be 25%, making Ontario’s rate more competitive than even the lowest corporate rate in the US – the State of Texas (36%).
Surely business in Ontario can compete on more than just “price” (e.g. education, skill and quality of workforce, state of public infrastructure like the education and healthcare systems). A “Walmartian” competitive strategy based on the lowest “prices” (i.e. corporate taxes) will only further drain the Treasury to the point that it will erode the competitive advantages that we now have in the quality of our public institutions and services.
Do we really have to have corporate tax rates 15% below the American rate by 2013? Even if Ontario were to forego the $2 billion in this corporate tax cut schedule not yet implemented, we would still be 8% below the American rate – reclaiming about $2.0 billion or so to be available for important measures like increasing social assistance so that people in deep poverty can live with some measure of health and dignity.
Option #2: Limit New Tax Benefits to Those in Need
Cutting taxes for individuals and family households also, of course, promises to be a major part of the upcoming provincial election campaign, and, it appears, that the three major parties will do battle on “taxpayer pocketbook” issues.
While we can point to the opportunity cost to reducing and ending poverty of foregoing corporate tax revenue, it is important to point out that personal income tax cuts also have their social costs. The reduction of the cut in the provincial tax rate from 6.05% in 2009 to 5.05% in 2010 on the first $37,100 of individual earnings cost the Ontario Treasury about $1.3 billion. This is a socially inefficient use of scarce fiscal resources. Persons with taxable incomes of $37,100 or more each get $370 in tax savings ($740 in households of many wealthy and advantaged couples). In contrast, people on social assistance get nothing. A single working poor parent with a taxable income of $15,000 gets a more limited saving of $150.
This distribution of tax benefits is socially regressive and unrelated to need. It is a poor use of $1.3 billion in tax revenue, when a Healthy Food Supplement would cost half as much, be directed to those most in need, and provide immediate benefit to local economies in communities across Ontario.
An economist has calculated for the PFIB campaign that it would cost the average Ontario taxpayer $100 a year to fund the HFS – i.e. provide every adult on social assistance with $1200 more annually. While there is political resistance to this investment in the health and well-being of the poorest part of the province’s population, there is no hesitancy to give tax credits to the broad middle class and to broadcast the action. In 2010, a half-page ad in the Globe and Mail proudly informed middle class families making a household income of $125,000 a year that they will be receiving a $790 tax credit in the form of a rebate because of the introduction of the Harmonized Sales Tax.
Even allowing for some level of tax credit related to the HST change, one wonders if middle class families with household incomes well over $125,000 would be terribly averse to getting only $690 of that rebate if they knew that it would support 579,000 people on social assistance to live with more health and dignity. This might even be more compelling to the taxpaying public if it understood the cost savings to the overall healthcare system that a reduced personal tax credit would bring.
But, the Government does not choose to advertise or promote that kind of understanding to the wider public. Rather, it chooses to maximize the benefit of the tax cut to the broad middle class for its own political advantage and there is no contrary evidence that a Government of another political stripe would have acted differently.
Option #3: Extend Deficit Elimination Period to Meet Our Social Priorities
The Full-Day Early Learning Program launched last year fit the Ontario Government’s clearly expressed Education priority. In announcing the implementation of this program at a cost of $1.5 billion over three years, the Government gave no indication that it had made any special provision to pay for it.
Therefore, it must be factored into the Government’s deficit financing – that is, the program’s cost is being covered as part of the Government’s deficit management over the next three to five years. The Government is prepared to let this program add to its deficit and extend its deficit reduction period because it believes that Education is an important priority with returns far down the road in terms of the benefits of early stimulation and learning for child development. It might take a little longer to return to a balanced budget, but the benefits to Ontarians are considered worth the delay.
Similarly, the Government could decide to take the same approach with the HFS or any measure to end poverty in Ontario. It could even legitimately argue that an investment in poverty elimination is one way that it is adhering to its Health priority. As pointed out earlier, in the case of the HFS this is practically “self-financing” over time, given the clear relationship between poverty and costs to healthcare system.
Conclusion
The preceding arguments for financing the Healthy Food Supplement and other needed measures to end poverty in Ontario are compelling. We are under no illusions, however, that they will be readily accepted by the political parties and candidates running for office this October. Even the 21 sitting MPPs who completed the Do the Math survey last year and acknowledged on average that the cost of basic monthly living necessities for adults on social assistance were more than $750 higher than what they received on Ontario Works have taken no serious action to promote the HFS in their caucuses.
Paying for the HFS is not an issue of not having the means or fiscal options to act – it is an issue of the political will to include Ontario’s most vulnerable within a government’s expressed policy priorities.
The alarms are sounding, however, and not from the usual sources. Just this week, the Conference Board of Canada alerted the business community and the public to the growing inequality in our nation (How Canada Performs: Is Canada becoming more unequal? http://www.conferenceboard.ca/hcp/hot-topics/canInequality.aspx ). The gap between the lower and middle income groups and the highest income groups has grown significantly over the last 20 years. The Report shows that government tax and transfer programs have had an important effect in reducing income inequality, but these programs have been seriously eroded since the mid-1990s, leading to higher levels of inequality.
Poverty is a collective issue demanding the concerted effort of all governments. The Provincial Government is responsible for social assistance and labour market policy. Poverty Free Ontario has proposed measures in these areas that would end deep poverty in the province (i.e. 80% or lower of LIM-AT) and bring the general poverty rate down to levels comparable to the historically lowest poverty jurisdictions in the western world (4% or lower). We contend that there are viable fiscal options to finance this collective commitment as outlined in this Bulletin.
Commissioners Frances Lankin and Munir Sheikh start their consultation visits this week. Their current schedule is as follows:
- Windsor – June 28
- London – June 29
- Hamilton – July 4
- Niagara – July 5
- Toronto – July 8, 14, 15
- Kingston – July 12 (tentative)
- Peterborough – July 13
- Thunder Bay – July 20‐21 (tentative)
- Peel – July 25
- Timmins – July 26
- Ottawa – July 27
The Discussion Paper and Workbook for the community consultations on the Social Assistance Review are available at www.socialassistancereview.ca. Communities not on the Commissioners’ schedule are invited to set up their own community “conversations” on the Review and to submit the results to the Commissioners.
Poverty Free Ontario also encourages communities to conduct their own discussions in July-August. In setting dates, we recommend that you avoid the dates on the Commissioners’ current schedule and invite the Commissioners’ attendance even though right now they are committed only to the above community visits.
Asking the Right Questions
In the Discussion Paper and Workbook, the Commissioners interpret their terms of reference as making “recommendations that will enable the government to:
- Place reasonable expectations on people receiving social assistance to participate in employment, treatment, or rehabilitation and to provide them with supports to do so;
- Establish an appropriate benefit structure that reduces barriers and helps people find employment;
- Simplify income and asset rules to improve equity and make it easier to understand and administer social assistance;
- Ensure the long‐term viability of the social assistance system; and
- Define Ontario’s position in relation to the federal and municipal governments in providing income security for Ontarians.” (Workbook, pp. 8-9)
The Review’s Workbook goes on to ask a series of questions under reach of the preceding areas. But, at the end of each section, the Commissioners also invite participants to identify “any issues we have missed or misunderstood.” This PFO Bulletin offers some guidance to communities on the Commissioners’ line of inquiry and important additional questions central to the Commissioners’ task.
Reasonable Expectations: A Labour Market with a Basic Minimum Wage Above Poverty
Under the heading “Reasonable Expectations and Necessary Supports for Employment”, the Workbook asks five questions (p. 11) related to:
- meeting the needs of employers and connecting social assistance recipients with employers;
- developing the skills of social assistance recipients to better meet employers’ needs
- making employment services more effective and accessible;
- reducing multiple barriers to employment for recipients; and
- connecting people with disabilities better to employment services.
People on social assistance and low income working people have consistently met their personal responsibilities with respect to taking employment:
- In 2004, 60% of parents and single adults living in poverty were employed but with insufficient earnings to live above poverty.
- One‐third of all Ontario children living in poverty in 2008 were in families with full‐time, full‐year hours of work (LICO-Before Tax).
- In terms of education, 80% of low income parents in Canada had completed high school, 50% had some post‐secondary education (2004) and 45% of the unemployed in Canada had completed post‐secondary education studies (2010).
Their main problem is a low wage job market where a single earner working full‐time, full‐year still falls $1,064 below the poverty line.
Poverty in Ontario is a structural issue. Even the Commissioners acknowledge that “questions around what work should pay” is another approach to income security (p. 4). Employment services for people on social assistance, however, will help only if the labour market provides decent work with adequate ages and benefits to enable people to escape and stay out of poverty.
The Commissioners state that the adequacy of wages in the labour market “is outside the mandate of our review” (p. 4). Yet, any reforms proposed to the social assistance system, even improved employment services and supports, will depend on a labour market that provides jobs that sustain individuals and families above poverty.
Poverty Free Ontario recommends that the Ontario Government build on its previous positive action of raising the minimum wage in 75 cent increments over three years to reach $10.25/hour in 2010 by a second set of three annual 75 cent increases starting in March 2012. This would bring the basic minimum wage to $12.15/hour in 2014 and, indexed annually thereafter, would ensure that an earner working full‐year, full‐time would have an income 10% above poverty.
Poverty Free Ontario encourages participants in the community consultations to give the Commissioners permission to address the larger structural labour market issue in their proposals for serious social assistance reform. Let the Commissioners report out on all that they heard, whether within or outside their interpretation of their mandate.
Questions to Commissioners Lankin and Sheikh:
- Will you report concerns expressed in the community that the success of social assistance reform and investment in employment services to recipients will depend on labour market policies that provide jobs with adequate wages to ensure earners live above the poverty line?
- Further, will you point out in your report that Government action to increase gradually the minimum wage since 2008 has started to bring low wage workers out of poverty and should be completed by three additional annual 75 cent increases starting in 2012 that would bring all Ontario earners working full‐year, full‐time above the poverty line by 2014?
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Benefit Levels that End “Deep Poverty”
Under the heading “Appropriate Benefit Structure”, the Review’s Workbook asks five questions (p. 16) about:
- setting social assistance rates;
- designing benefits that deal with the trade-off between ensuring adequate income support and ensuring that people are better off working;
- new benefits that could be provided to all low income individuals and families;
- improving social assistance by changing asset limits and exemptions; and
- designing and delivering benefits for people with disabilities
The Workbook suggests that there are trade‐offs to be made “between ensuring adequate income support” through social assistance and “ensuring that people are better off working” (p. 4). Unfortunately, this perpetuates the myth of the “welfare wall”, which holds that benefit levels approaching adequacy act as a disincentive to employment for recipients and is unfair to low wage working people.
There is no evidence that social assistance recipients who can work avoid employment in order to retain their benefits. As noted earlier, the main barrier to becoming “better off working” is the quality of jobs at the low end of the labour market, which both denies opportunity for social assistance recipients to et a firm foothold in sustaining employment and also keeps low wage working people in poverty.
Set Rates to End Deep Poverty. At current benefit levels, people receiving social assistance live in “deep poverty”, defined as having incomes below 80% of Ontario’s official poverty measure (Low Income Measure – After Tax, LIM-AT).
|
Poverty Line
(LIM-AT – 2008)*
|
Annual Income (2008)*
|
Basic Income Gap
|
| Single Adult on OW |
$18,582 |
$7,352 |
$11,230
(39.6% of LIM-AT)
|
| Lone parent with one child on OW |
$26,279 |
$16,683 |
$9,596
(63.5% of LIM-AT)
|
| Single Adult on ODSP |
$18,582 |
$12,647 |
$5,935
(68.1% of LIM-AT) |
* Using comparable data for 2008 as the latest year for which Statistics Canada has published LIM-AT figures.
In terms of setting social assistance rates, Poverty Free Ontario urges the Commissioners to propose a comprehensive plan to end deep poverty by 2015.
Further, Poverty Free Ontario believes that the Commissioners have a unique opportunity well before their final report date of June 2012 to address the serious hardship and hunger that almost 600,000 recipients are currently experiencing by calling for the immediate addition of a $100/month Healthy Food Supplement to the Basic Needs Allowance for all adults receiving OW or ODSP.
Questions to Commissioners Lankin and Sheikh:
- In your final report in June 2012, will you propose a comprehensive plan that would ensure no one receiving social assistance in Ontario is living in deep poverty by 2015
- Will you issue an interim report or statement following your community consultations and prior to the provincial election that:
- Expresses your intent to propose a comprehensive plan for social assistance reform to end deep poverty in Ontario by 2015?, and
- Call for the immediate addition of a $100/month Healthy Food Supplement to the Basic Needs Allowance for all adults receiving OW or ODSP?
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No Earnings Claw‐backs While Still in Poverty. In presentations and discussions in twenty communities between March and June 2011, Poverty Free Ontario consistently heard social assistance recipients express frustration at the low earnings exemption level before loss of benefits from employment earnings started and at the high rate (50%) of benefit loss for every dollar earned over the exemption limit. Participants enthusiastically supported the proposal that not one dollar of earnings should be clawed back through benefit reductions until an OW or ODSP recipient’s earnings reached the poverty line.
Benefits for People with Disabilities. Poverty Free Ontario supports the positions of the ODSP Action Coalition on benefit levels and employment expectations for people with disabilities.
Questions to Commissioners Lankin and Sheikh:
- Will you propose reforms recommending that no claw-backs or benefit reductions are applied against earned income for people on social assistance until they reach the LIM-AT applicable to their individual or family situation?
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Caution on Potential New Housing Benefit for All Low Income People. The Discussion Paper indicates that one possible way to avoid treating social assistance recipients and low income workers inequitably is “to make some benefits available to all low income people, whether or not they are receiving social assistance.” (p. 4) Examples given include the Ontario Child Benefit and the National Child Benefit Supplement for low income parents.
Although not explicitly identified in the Workbook, it is expected that the Commissioners will explore community interest in a housing benefit for all low income people as a way to address the income support issue.
Poverty Free Ontario offers several important cautions on the notion of a housing benefit:
- It is critical that a housing benefit for all low income people assure coverage for the portion of the high cost of housing that drains money away from the low income household’s budget for food and other necessities of life. It is generally accepted in Rent-Geared-to-Income provisions that households paying more than 30% of their gross incomes for housing require subsidy in order to meet all their costs for basic living necessities. Housing benefit proposals that Poverty Free Ontario has heard discussed suggest that the 30% threshold is being considered for families, but a 40% threshold is being considered for individuals, which again imposes an artificial divide between the “deserving” and “undeserving” poor. Further, housing benefit models under discussion do not necessarily provide full coverage for the amount over #0% or 40%, but only about three-quarters of the difference.
- The introduction of a housing benefit must contribute significantly to moving people living on social assistance toward income adequacy for their overall necessities of life. Ontarians receiving social assistance are very familiar with claw‐backs on benefit programs applying to all persons on low income. Presumably, the Commissioners would recommend against a claw‐back for a housing benefit that is supposed to apply to both social assistance recipients and low income working people. Currently, however, a portion of the Basic Needs Allowance to social assistance recipients is designated for shelter costs. Unless, social assistance rates are also increased in the direction of adequacy for basic living needs, there is the risk that rates are also increased in the direction of adequacy for basic living needs, there is the risk that administration of a partial housing benefit will be offset with a loss or reduction in the shelter allowance portion of the OW and ODSP recipient’s overall benefit, leaving them only marginally better off.
Poverty Free Ontario recognizes that a housing benefit for social assistance recipients and low wage workers may well have a place in the overall income security reforms that the Commissioners will propose by June 2012. Under conditions where overall benefit levels bring social assistance recipients out of deep poverty and where minimum wage levels assure low income workers earn above the poverty line, a housing benefit can be an important complementary protection against variable high housing costs in communities across the province.
A full housing benefit is a complement to the core income of a low income individual or family, not a substitute for the basic income required to meet daily living requirements. It should be designed as a protection for household money for food and other necessities of life.
Questions to Commissioners Lankin and Sheikh:
- Should you propose a new housing benefit,:
- will it be available to all low income individuals and families with housing costs above 30% of gross household income?
- will it provide full or partial coverage of the difference between 30% of their housing costs and the actual costs of those in need?
- will it reduce the shelter allowance portion of OW and ODSP recipients’ benefits?
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Special-Purpose Benefits
The Commissioners will also seek input on eligibility for special-purpose benefits and inquire whether some may best be delivered outside the social assistance system. The Special Diet Allowance is one such benefit identified.
The Ontario Government’s 2010 budget proposed changes to the Special Diet Allowance (SDA) that threatened an important supplementary support to individuals and families with health-related dietary needs not adequately covered through existing benefits. Since an internal review of the SDA was completed, the eligibility process has been tightened up and the number of qualifying medically necessary conditions has been reduced significantly.
The Commissioners have a chance to serve the interests of OW and ODSP recipients in two ways through their Review:
- Distinguish the issue adequacy in benefit levels in general that enable access to affordable and nutritious food for all recipients from support for recipients with special dietary requirements; and
- Reinforce the importance of a supplementary Special Diet Allowance available fairly to recipients with medically necessary dietary requirements.
Clearly, the administration of a Special Diet Allowance in a way that would open its eligibility to low income working individuals and families would be beneficial in general to personal and community health.
Questions to Commissioners Lankin and Sheikh:
- Will you recommend that the Ontario Government retain and expand as required a Special Diet Allowance to ensure that OW and ODSP recipients and qualifying low income workers and working families will have access to food essential to medically prescribed special dietary requirements?
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Federal and Provincial Jurisdictions in Income Security
The Commissioners also express the need for better integration of the federal and provincial provisions for income security in general. They point to the growing burden on social assistance as lower numbers of Ontario’s unemployed receive Employment Insurance. These are legitimate concerns and improved coordination and integration between the federal and provincial governments on income security issues are highly desirable.
Federal-provincial jurisdictional considerations and discussions for long-term income security reform should not, however, delay provincial action in the short and intermediate terms on the two clear areas of sole provincial responsibility:
- Basic incomes through social assistance which ensure a life out of poverty for parents and adults with limited access to employment; and
- Labour markets with decent work that enable full-time, full-year earners to live above poverty.
Poverty Free Ontario urges community participants to reinforce with the Commissioners the imperative that the Province of Ontario fulfills its obligations to both social assistance recipients and low income working people, regardless of the federal government’s position on income security.
Questions to Commissioners Lankin and Sheikh:
- Will you recommend action by the Ontario Government on social assistance reform and labour market policy regardless of any proposals or discussions with the federal government in the longer-term with respect to more integrated income security policy?
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Conclusion
Poverty Free Ontario urges communities to affirm the opportunity that the Social Assistance Review Commissioners have not only to propose serious and comprehensive reforms to the social assistance system in Ontario, but also to make sure that the issue of poverty and poverty eradication is part of the policy debate in the upcoming provincial election. Currently, no political party is giving the issue of poverty any prominence at all in its party platform.
The Commissioners would best serve this issue with an interim report on their deliberations with the community by August or early September prior to the provincial election date of October 6.
2009 Figures Show Growth Rate of Poverty in Ontario the Highest of All Regions in Canada since 2007 Election
As the public debate starts to warm up in Ontario for the October election, Statistics Canada’s release of the 2009 poverty rates yesterday point to the importance of firmly placing poverty on the provincial political agenda. Using the official poverty indicator adopted by Ontario as part of its poverty reduction strategy in 2008 (Low Income Measure After Tax – LIM-AT), Ontario’s poverty rate increased to 13.1% in 2009, a growth rate of 17% since the 2007 provincial election year (See Table following).
While Ontario’s poverty rate is slightly below the LIM-AT for Canada at 13.1%, the rate of Ontario’s poverty growth has increased the highest of all other regions of Canada and reached a total of 1,689,00 Ontarians in 2009, which is 277,000 more people living in poverty than in 2007.
While the rate of poverty growth by age group is lowest among children at 3.5%, Poverty Free Ontario notes that the proportion of working age adults (18 to 64 years old) living in poverty increased from 11.2% to 13.4%, a growth rate of 19.6%. Ontarians 65 years and older also show an extremely high poverty growth rate of 41.9% since 2007, although the overall proportion of seniors in poverty still remains below 9%.
The figures illustrate that the poverty levels in Ontario among unattached males (24.1%) and unattached females (25.0%) remain exceptionally high. The poverty growth rate among unattached men under 65 years old was 6.9%, off-setting the almost equivalent 7.2% rate of poverty decrease for unattached women under 65 over the two-year period.
Among the population living alone, however, unattached elderly women have fallen into poverty at the highest rate since 2007 (20.1%).
This first review of Statistics Canada’s poverty figures for 2009 indicates that, although measures to end child and family poverty need to be maintained and strengthened, the rate of poverty among working age adults, seniors and adults living alone is entrenched and growing rapidly. A comprehensive strategy to end poverty among all parts of the population is sorely needed to stem and reverse this direction.
It is critical that poverty eradication become a major issue in the Ontario provincial election.
PDF Version of PFO Bulletin #2
Social Assistance Review Commissioners Release Discussion Paper and Workbook
On Thursday, June 9, Social Assistance Review Commissioners Frances Lankin and Dr. Munir Sheikh released the Discussion Paper and Workbook for their summer consultation on the Social Assistance Review and notice of the web site on which further information and updates will be posted www.socialassistancereview.ca.
The Commissioners will be making visits to eleven selected communities across Ontario for conversations and consultations on the Review and are encouraging community and individual input to the process until September 1, 2011. The release includes a guide to convening and conducting community conversations for the purposes of collecting ideas and suggestions for improving the social assistance system and overall income security reform and sending same to the Commissioners.
The Commissioners plan to issue an Options Paper in November for further input and consultation before formulating their recommendations over the winter and releasing their final report in June 2012.
Poverty Free Ontario on the Social Assistance Review Commission
Poverty Free Ontario will monitor the progress of the Commissioners’ Review. This Bulletin is a preliminary assessment. Poverty Free Ontario will have more to say on the social assumptions and policy directions that are guiding the Review and their prospective impacts on poverty eradication through subsequent Bulletins and its web site (www.povertyfreeontario.ca).
Since March, the Social Planning Network of Ontario has taken the Poverty Free Ontario initiative to eighteen communities across the province and has received an enthusiastic response to its analysis of the issues in social assistance reform and its proposals for ending deep poverty in Ontario by upgrading the social assistance system
Poverty Free Ontario promotes a two-track approach to social assistance reform calling for a first track of immediate implementation of the $100/month Healthy Food Supplement as the important initial step toward establishing adequate benefit levels for all adults on OW and ODSP. While this action is taken now, the second track of the longer-term review and reform process for upgrading social assistance should get underway.
Poverty Free Ontario calls on Commissioners Lankin and Sheikh to issue an interim report prior to the provincial election:
- expressing their intent to propose a comprehensive plan for ending deep poverty in Ontario by 2015 so that no individual or family on OW or ODSP must live on incomes below 80% of LIM-AT (i.e. in “deep poverty” using Ontario’s official poverty line); and
- recommending that the Ontario Government of whatever political make-up introduce the $100/month Healthy Food Supplement without waiting for the release of the Commissioners’ final report.
An interim report by the Commissioners in early September would help the community to make poverty eradication an issue during the provincial election campaign.
Applying the Poverty Free Ontario Lens to the Review’s Discussion Paper and Consultation
The Commissioners’ Discussion Paper and related materials are encouraging and helpful to serious social assistance reform in the following ways:
- The Commissioners interpret their mandate as giving them “freedom to examine not only all aspects of social assistance, but to consider all other aspects of the overall income security system that may impinge upon social assistance outcomes.” (p. 2). This could be consistent with Poverty Free Ontario’s proposed two-track approach. One important aspect of the current social assistance system requiring immediate action is the intolerable inadequacy of benefit levels to recipients.
- The Commissioners express a commitment “to provide adequate income security to those who cannot work” (p. 2).
- The Commissioners acknowledge that a main barrier to social assistance recipients successfully moving into employment is the lack of other essential supports such as stable housing, childcare, and the costs of medical supports such as prescription drugs.
- The Commissioners address the issue of supporting employment opportunities for persons with disabilities, indicating some sensitivity to the important balance between opportunity for meaningful work and the security of adequate income support regardless of employment status.
- The Commissioners suggest that “opportunity planning” or “intensive case management” models would be more supportive to better outcomes for people on social assistance. This would indicate the prospect of workers in the system being freed of the burden of applying heavy and punitive monitoring practices, which would be beneficial both to the experience of social assistance recipients with the system and to the job satisfaction of workers in the system.
- The Commissioners show a determination to address the complexity and inconsistent application of the regulations and rules that create additional hardship, stress and frustration for people on social assistance.
There are a number of areas covered in the Commissioners’ Discussion Paper, however, that should be approached with more caution as communities start to prepare their input to the consultation process.
- Extending the Notion of “Reasonable Expectations”. The Commissioners are strongly suggesting an employment-focused reform of the social assistance system, which establishes “reasonable expectations” on the recipient with respect to participation in the labour market. Poverty Free Ontario contends that there should also be a “reasonable expectation” for the provincial government to provide social assistance benefits at a level that allows recipients to meet the basic costs of the necessities of life and to live with some measure of health and dignity.
With respect to expectations about employment at the low end of the labour market, Poverty Free Ontario suggests further that the Commissioners should also point to the “reasonable expectations” of:
- The provincial government to ensure that the basic minimum wage enables an earner working full-year, full-time to live above the poverty line; and
- Employers to recognize that in addition to meeting the economic test of a fair return on capital for conducting a successful business, that they also have a responsibility to meet the “social test” of paying a basic minimum wage that assures an employee working full-year, full-time lives above poverty.
- Perpetuating the Myth of the “Welfare Wall”. Unfortunately, the Discussion Paper promotes the notion of the “welfare wall”, expressing the need to “deliver a benefit structure that provides an adequate level of support, without creating barriers to work – barriers that discourage people from seeking work because it may not pay enough in income and benefits.” (p. 4)
Poverty Free Ontario has challenged the legitimacy of the “welfare wall” contentions as not being founded on any empirical evidence. The Discussion Paper carefully presents the issue as “ensuring people are better off working” and states that this challenge suggests the need for “difficult trade-offs” between the interests of social assistance recipients and low wage workers – a perpetuation of the pitting of the working poor (deserving poor) against the welfare recipient (undeserving poor).
The Discussion Paper then presents three approaches to this dilemma:
- Allowing the recipient to keep a portion of his/her benefits and related services and top up their income with employment earnings until the person leaves the system, judged in the Paper as unfair to low wage working people.
- Setting benefit levels below the low wage job rates so that recipients will see that they are “better off working”, which conflicts with the notion of income adequacy.
- Providing some benefits to all low income people whether on social assistance or working such as the Ontario Child Benefit (e.g. a housing benefit).
A fourth option presented by the Commissioners as “outside the mandate of our review but within the broader context of income security – looks at questions around what work should pay, and raises issues related to ‘living wages’ and access to prescription drug and other benefits from employers.” (p.4)
As stated earlier with respect to a basic minimum wage, Poverty Free Ontario agrees that the issue of what work should pay is critical to ending working poverty, and is unclear why the Commissioners put this limit on their income security review mandate, which they otherwise interpret fairly broadly.
With respect to the first three approaches in the Discussion Paper, Poverty Free Ontario contends that the existing social assistance system can be used now to improve adequacy significantly starting with the introduction of the $100/month Healthy Food Supplement. Given the intolerably low current benefit levels, allowing recipients who do find work to keep their employment earnings until their earnings reach the poverty line for their family situation is the only path of decency and dignity. There need be no conflict with the interests of low income workers if a similar path toward gradually increasing the basic minimum wage to enable the full-time, full-year worker to make earnings above the poverty line (Poverty Free Ontario recommends 10% above the LIM-AT based on a $12.50 hourly rate in 2014 achieved in three annual 75 cent increments starting in 2012).
- The Inadequacy and Risks of a Housing Benefit Approach. Poverty Free Ontario remains concerned that the framing of the three possible approaches to the benefit structure in the Discussion Paper favours a housing benefit over any significant increases in the direction of adequacy for social assistance rates. Poverty Free Ontario would support a full housing benefit that is available to all low income households paying more than 30% of their gross income on housing costs. Current proposals under consideration do not satisfy that requirement as far as Poverty Free Ontario can determine.
Plus, the development and implementation of a housing benefit with satisfactory coverage of the low income population in need will take some time, while social assistance recipients continue to live in deep poverty for lack of any rate increases since 1995. The Discussion Paper continues the Ontario Government’s misrepresentation of the cost of living adjustments to benefits since 2004 as “rate increases”, when in fact they were increases for inflation and not increases in the actual real income to recipients (p. 11). The 1% cost of living adjustments in social assistance in the last two budgets have not equalled the actual 2% rate of inflation in 2010-11.
Another major caution about a housing benefit as an alternative to setting adequate benefit rates is the same kind of “restructuring” that occurred when the OCB was introduced in 2008 while the rate for parents on social assistance was cut as well as their winter clothing and back-to-school allowances. Social assistance recipients will likely be subject to loss of the shelter allowance portion of their basic benefit if the housing benefit is introduced for all low income people through similar rate “restructuring”. Will this be one of the “difficult trade-offs”?
PDF version of PFO Bulletin #1
