Budget Decisions on Social Assistance Call Commitment into Question

29 April 2010

Dear Premier McGuinty,

As organizations committed to the mission to reduce poverty, we write to express our serious concern about recent moves your government has taken on the poverty front.

More than a year into Ontario’s efforts to reduce poverty by 25% by 2013, your government has made the following moves that call into question your government’s commitment to meeting its own poverty reduction goals:

1. Ending the Special Diet Allowance Program without a previous and clearly thought through replacement plan, which will result in a significant drop in income for people on social assistance who have health-related nutritional needs;
2. Allowing, for the first time since 2006, social assistance rate increases to fall below the rate of inflation.

These actions are distressing, and – without adequate and commensurate resolution – threaten the health and safety of many struggling individuals in this province.

We keenly appreciate the fiscal constraints facing Ontario post-recession. We also acknowledge and have publicly celebrated the important positive steps taken in the 2010 budget. These include additional investment to improve enforcement of employment standards enforcement for precarious workers as well as your government’s commitment to permanently fund subsidized child care and invest in full-day early learning and child care. We were also very pleased to see the full-day early learning and child care legislation pass on April 27, and to see an additional $6 million in fee subsidies, growing to $51 million over five years.

These are key measures that support low-income families, but do little to directly support their health and well-being. We are deeply concerned about the actions you have taken that affect the most vulnerable people our society – those on social assistance.

By ending the special diet allowance, doctors, nurses, medical officers of health, labour organizations, activists, advocates, and many others warn that your government is putting the security, dignity, and even the lives of many sick Ontarians at risk. They cite the clearly demonstrated relationship between poverty, food insecurity, and poor health.

Others have raised concerns about what this decision says about your government’s commitment to strengthening Ontario’s human rights system, which was apparent in Bill 107, the Human Rights Code Amendment Act, in your first mandate.

Your own Social Assistance Review Advisory Council expressed disappointment with the decision to end the special diet allowance.

If an adequate replacement program to provide people with the finances required to support special dietary needs is not forthcoming, this decision will result in increased sickness, increased housing insecurity, and rising future health care costs.

The decision also underscores the critical need for your government to create a coherent plan to provide livable incomes to people on social assistance. This is because the incomes of people on Ontario Works and the Ontario Disability Support Program fall far short of what is needed cover the costs of housing, nutritious food and, for those with health issues, to be able afford special foods to stay healthy.

We feel strongly that your commitment to poverty reduction has reached a crossroads. Over the coming weeks you will have three opportunities to clearly demonstrate your determination to get the 25 in 5 poverty reduction commitment back on track.

1. Affordable Housing Strategy: Since housing takes up such a large part of a low-income person’s budget, what your government does now to make housing more affordable will make a big difference. Your Long-Term Affordable Housing Strategy will lay out a plan this spring that requires immediate action. By bringing in affordable housing measures this spring, you could help poor Ontarians – including those on social assistance – lower their budgetary costs, and create jobs at a time when the province needs them.
2. Social Assistance Review: Your Social Assistance Review Advisory Council will also make its recommendations this spring on the scope and direction of a comprehensive review for income security in Ontario, giving you an opportunity to fix a system that has long been broken and to align it with an agenda for poverty reduction and shared prosperity in Ontario.
3. Nutrition Supplement: Finally, resolution to the loss of the special diet allowance has yet to be worked out. This highly disturbing development in your government’s policy program must be remedied. The 25 in 5 Network for Poverty Reduction is currently working with its partner groups to provide recommendations to your government on the principles that must underlie the replacement program, which we will forward to you in the coming days. However, we feel strongly that your government must immediately address the broader issue of income insecurity that people on social assistance are forced to endure.

Entire nations are recovering from the worldwide economic meltdown of 2008. Recovery efforts can, and will, test the mettle of many governments. Your challenge is to not let today’s fear hamper the future of the poorest of the poor – they are relying on your humanity, your vision and your leadership.

As a network, we strive to ensure the voices of the voiceless are heard in the halls of power. We have been supportive of your promises to reduce poverty and the steps you have taken so far to realize these promises. Our most important commitment is to the poor of this province – as should be yours.

We request a meeting with the core Ministers responsible for carrying out your poverty reduction plan to discuss our hopes and concerns:

· The Hon. Laurel Broten, Minister Responsible for Poverty Reduction
· The Hon. Madeleine Meilleur, Minister of Community and Social Services
· The Hon. Deb Matthews, Minister of Health and Long-Term Care
· The Hon. Jim Bradley, Minister of Municipal Affairs and Housing.

Sincerely,

Michael Creek and Greg deGroot-Maggetti
Co-chairs, 25 in 5 Network for Poverty Reduction

cc: Tim Hudak, MPP, Leader of the Official Opposition
Andrea Horwath, MPP, Leader of the New Democratic Party of Ontario

The sting of recession and deep-seated poverty will continue for too many Ontarians who were left behind in today’s provincial budget, says the 25 in 5 Network for Poverty Reduction.

“While the provincial government held the line on some poverty reduction promises, it has thrown 162,000 Ontarians with special dietary needs into limbo by announcing the replacement of the Special Diet program with another initiative – the details of which are yet to be worked out,” says 25 in 5 co-chair Michael Creek.

“There are a lot of unanswered questions about the adequacy of the new nutrition supplement.”

Creek acknowledged the government’s decision to raise social assistance rates by 1%, but criticized it for falling short of need. It amounts to a paltry $5.85 a month for a single person on Ontario Works.

“That’s not even enough to take a return TTC trip in Toronto,” Creek says. “That’s playing small at a time when the province needs to step up.”

The budget also offers no answer to the hundreds of thousands of workers who lost their job to recession and are poised to run out of Employment Insurance (EI).

“We’ve seen neighbours lose their jobs to this recession – men, women, young Ontarians, newcomers to Ontario – and they can’t get back in. They’re exhausting EI benefits, they’re falling onto welfare rolls, they’re running out of retirement investments and there’s no answer for them.”

The budget comes through on replacement of federal dollars for child care subsidies and funding for enforcement of employment standards. But it lacks new investments in other areas like the Ontario Child Benefit, housing affordability, employment equity, and social assistance adequacy and protection of assets.

“Without an investment plan in this budget, Ontario will fail at reaching its goal of reducing poverty by 25% by 2013,” Creek says. “As a result, families will fall behind and Ontario will fall behind. For Ontario to fully recover from the last year of recession, we need all hands on deck to bring us back to prosperity. This budget fails to get us there.”

The Network is calling for continued action on poverty reduction in the next budget to ensure all Ontarians get back on their feet as quickly as possible in order to contribute to a strengthened economy.

“Ontario needs all hands on deck as we face up to demographic pressures and global competition for good jobs. We have more work to do to cut poverty in Ontario – we cannot afford to waste anyone’s potential as we build a stronger economy. The next budget must lay the foundation for a strong, well-equipped workforce where everyone at their best ready to keep Ontario moving forward,” said Mike Creek, co-chair of the 25 in 5 Network.

The Network is calling for action in the March 25 budget to stimulate good jobs, save child care spaces, improve access to affordable housing and training, and introduce social assistance reforms that enable dignity and opportunity.

“The March 25 budget presents a critical opportunity to turn the corner on poverty, or risk losing too much ground to achieve the cut in poverty rates that the government committed to by 2013. We need this government to maintain a steady hand, to stick to its commitments for the long term, and to be there for the vulnerable when help is needed most. Now more than ever inaction isn’t an option.”

In December 2008, the government introduced a Poverty Reduction Strategy with a target of reducing child and family poverty by 25% by the year 2013.

The 25 in 5 Network for Poverty Reduction – a multi-sectoral network endorsed by more than 1,500 organizations and individuals throughout Ontario – continues to advocate for stronger and more effective action on poverty reduction and to track government’s action on the commitments made in the Strategy.

Read the government’s Throne Speech here
Read 25 in 5’s Pre-Budget Submission here

Close Encounters of the Thirties Kind, by social policy expert John Stapleton, is a blow-by-blow account of the similarities between Ontario circa 1930s and today.

“Life was definitely harder back in the Great Depression but the similarities between the types of struggles then and now are eerily familiar,” says Stapleton. “Instead of learning from history, our governments are making many of the same mistakes.”

The report finds 11 similarities between the Great Depression and the Crash of 2008:

1. Both downturns were caused by unplanned economic crashes;
2. Hugh stock market upticks followed both crashes, fuelling debate about the length and shape of the downturn;
3. One year after the crash, governments suffered from ‘optimism bias’;
4. The welfare to wage ratio was, and is, at historic lows;
5. Prior to each crash, the Ontario government ordered a study of social needs – the 1930s reports helped shape future social service programs;
6. Both Ontario governments championed the value of community mobilization;
7. The impulse to blame the victims of recession was equally strong;
8. Immediately following the crash, the federal King government was as silent on the need for help then and as the federal Harper government is now;
9. Workfare existed then and now, but rarely at any other time in Ontario history;
10. The provinces were scared, running deficits and struggling to pay the bills;
11. Then, as now, cash-strapped municipalities bore the brunt of demand from desperate citizens without adequate help from senior governments.

The report, available here in PDF format, calls on senior governments to take the lessons of the 1930s and act swiftly to minimize Ontario’s current recession.

Hit and Miss: Ontario’s 2009-10 Budget - PDF, 188 Kb.

Commitments made by Premier Dalton McGuinty today to invest in two important poverty reduction initiatives bode well for all Ontarians, says the 25 in 5 Network for Poverty Reduction.

“Increasing the Ontario Child Benefit will help protect families during an economic downturn,” says Jacquie Maund, Ontario Campaign 2000.

“Matching federal infrastructure dollars to build more affordable housing and to repair existing social housing units is a smart economic stimulus and an investment that will keep tens of thousands of poor Ontarians out of the cold during this recession,” says Michael Shapcott, Wellesley Institute.

The announcements represent two of five core initiatives the 25 in 5 Network for Poverty Reduction asked the Ontario government to invest in for this coming budget year.

“Today’s announcement goes part way down the path of poverty reduction,” says Sarah Blackstock, Income Security Advocacy Centre. “But considering Ontario is in the eye of the global economic storm, there is more to be done.”

“To reach the goal of reducing poverty by 25% in the next five years – and to keep a lid on deepening poverty – next week’s budget needs to go further,” says Pat Capponi of Voices from the Street.

The 25 in 5 Network for Poverty Reduction expects the March 26 budget to also include investments in these areas:

• A $100 Healthy Food Supplement, adults on social assistance to help them access healthier food and a new housing benefit for low-income renters.
• Building 7,500 new affordable child care spaces, crucial to supporting parents who need to work and retrain for the demands of a changing economy.
• A commitment to hire new employment standards officers to ensure more workers have their wages and their basic rights protected through this downturn.

To arrange interviews with 25 in 5 spokespersons, please contact: Trish Hennessy (416) 551-2059.

Government Release

• Helping Families in Need

Media and Community Responses

• Low-income Ontarians, and provincial economy get welcome boost from new investments – The Wellesley Institute
• Ontario budget to boost child benefit, social housing funds – CBC.ca
• Affordable housing to get $1.2B boost – Toronto Star
• Ont. speeds up increase in child benefit to July 1 – CTV.ca
• Municipalities Welcome $1.2 Billion Investment in Social Housing – Association of Municipalities of Ontario

Tax cuts are the worst possible economic stimulus with Bank of Canada interest rates heading to zero, and may well have a negative effect on the economy, says a report released today by the Canadian Centre for Policy Alternatives (CCPA).

A budget that resolves to stave off the worst of a recession while protecting the most vulnerable will make an immediate difference in the lives of all Ontarians – and will safe-guard the health of the province’s economy for years to come.

Now is the time to tell our elected representatives at Queen’s Park that poverty reduction must be a priority for Ontario’s upcoming budget.

The 25 in5 Network has identified five immediate spending priorities – along with a series of other initiatives, outlined in the 25 in 5 Blueprint:

1. A $100 monthly Healthy Food Supplement to help all adults on social assistance access healthier food;
2. An increase to the Ontario Child Benefit to $92 a month in 2009 budget and $125 a month in 2010 budget to protect Ontarians during the economic downturn;
3. Building 7,500 new affordable child care spaces, crucial to supporting parents who need to work and retrain for the demands of a changing economy;
4. Leveraging federal infrastructure dollars to build more affordable housing;
5. A Housing Benefit to help low-income renters meet the rising cost of housing.

By making these investments in the upcoming budget, the province can stimulate the economy while making significant progress on the government’s promise to reduce child poverty by 25% in the next 5 years.

Send a message to Finance Minister Dwight Duncan and Premier McGuinty. Tell them that making good on the province’s commitment to invest in poverty reduction is key to addressing the economic challenges facing Ontario today. Let your voice be heard.

Email the Finance Minister at dduncan.mpp.co@liberal.ola.org and the Premier at dmcguinty.mpp.co@liberal.ola.org. Also email your local Member of Provincial Parliament – find out their contact information by looking here.