Ontario Roadmap for Income Security Reform proposes redress in first 3 years

Just 29 years ago, the Social Assistance Review Committee delivered its 674 page report called Transitions on September 6, 1988. It was groundbreaking as it devised other programs that would replace the role of welfare.

That only partially came to pass with child benefits and the small Working Income Tax Benefit.

In the years from 1988 and 2012, there were five other significant reports to provincial governments concerning social assistance reform concentrating on the 40% of the poor living on social assistance:

  • Back on Track: 1991
  • Time for Action: 1992
  • Turning Point: 1993
  • Deb Matthews Report: 2004
  • Brighter Prospects: 2012

On November 2, 2017, the Income Security Reform Working Group released its 188 page report named A Roadmap for Income Security Reform.

We propose social assistance rate increases that will exceed 23% in the next 3 years and cost over $3 billion dollars but we are also offering profound recommendations to transform welfare into a set of programs that offer hope rather than continued despair. We also see a generally available Housing Benefit as an important next step in a reform agenda.

Some will see a new beginning and I hope they are right.

Others will say “Here we go again” and I hope that their cynicism is misplaced.

But a significant portion of Ontario’s population may worry that the Roadmap for Reform that we tabled on November 2, 2017 goes too far. They are wrong.

Our Roadmap must be understood in the context of how far we have fallen behind, especially in the period from 1994 to 2005. That’s when we fell off a cliff. We tend to forget about those times.

The 21.6% Harris cuts of 1995 were never restored.

And over the 11 years from 1994 to 2005, there were no social assistance increases even though  inflation over that period was 26.2%.

We have treaded water since 2005.

Many do not realize   that had the single social assistance rate been increased with inflation from 1993, the rate would now be $1,012 a month. It is now $721.  And our suggested early increases over the next three years only get it to $894 per month.

In 1973, Premier Bill Davis announced the GAINS program for people with disabilities and seniors.  At that time, low income seniors and people with disabilities received the same levels of income, guaranteed by the Province of Ontario.  Fast forward to 2017 and the poorest senior (who is a long terms resident of Ontario) now receives at least $1,525 a month.

If ODSP had been increased with inflation since 1993, it would now stand at $1,419, not the $1,151 where it currently stands, almost $400 a month behind what our poorest seniors receive.

Our Roadmap recommends that people with disabilities receive 3 five percent increases over the next three years. That will get their allowances to $1,332 a month.  If implemented, low income people with disabilities will continue to receive $200 less a month than our poorest seniors.

Would Bill Davis say that our recommendations are still too modest?

We should all understand how measured and sober our first three years of recommendations really are.
To those who don’t believe that our stages of reform move fast enough, I would point them to the second half of the ten year plan which moves programs much closer to true adequacy. By almost any set of metrics, our approach is measured. It needs to be attractive to governments of any stripe to take it seriously.

And finally to those who worry that we are creating disincentives, I would note that minimum wage employment will remain colossally more attractive than social assistance.

Bob Rae raised minimum wages to $6.85 an hour in 1995 and had the minimum wage been increased with inflation since 1995 (when he raised them from $5.85), minimum wages would now stand at $10.20 an hour.  They now stand at $11.60 and will go to $15.00 an hour in 2019.

Even now, the single OW rate stands at 38.2% of the minimum wage. This percentage will actually drop as higher minimum wages kick in, even after our proposed increases to social assistance.

In the early 1990’s, when the incentives debate was a real one and was at its apex, the social assistance single rate stood at approximately 70% of the minimum wage. We are now in a very different world where disincentives are low and incentives to leave social assistance are much higher than they were decades ago.

In 1935, the first cash welfare payments were brought in under by then Liberal Public Welfare Minister David Croll in the Depression era government of Premier Mitch Hepburn. Eighty two years later, we still have welfare as we know it. Let’s hope we are not saying that in 2035.

 

 

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