Nobody sat down at Queen’s Park in 1995 and decided that Ontario should spend the next thirty-one years progressively reducing the real value of welfare for its poorest residents.
Mike Harris’s decision was certainly deliberate. His government cut the rate for a single person by more than 21 per cent, from $663 to $520 a month. What happened afterward was different. The Harris government did not increase the rate again. Neither did Ernie Eves. Liberal governments gradually increased it from $520 to $733 between 2003 and 2018, but never restored what had been lost in real terms. Doug Ford has left the Ontario Works rate at $733 since taking office.
The remarkable part of this history is not simply the decline of 43-44% in the rates. It is that no government ever decided on the decline we eventually got – one that would now require a 79% rate increase to restore the purchasing power of 31 years ago.
Bill Davis, who left office in 1985, was the last Progressive Conservative premier to increase welfare rates now known as Ontario Works. Yet Progressive Conservative governments have repeatedly been elected since then, including three Ford majorities. Whatever political liability is created by allowing the poorest people in Ontario to become poorer, it has plainly not been large enough to prevent governments from winning elections.
Why?
The easy answer is that voters don’t care about poor people. I don’t think that is right. Ontarians contribute generously to charities and food banks. They support shelters, mental-health programs, disability services and emergency assistance. When confronted with an individual in genuine distress, people are often extraordinarily generous.
The public’s discomfort seems to be less with helping poor people than with welfare itself.
That distinction is crucial.
Welfare asks taxpayers to accept something that has always made some of them uneasy: government gives cash to someone who is not earning enough money themselves. Immediately the questions begin. Could they work? Could they train? Do they have other income? Are they living with someone? Are they reporting everything? Are they really eligible?
Some oversight is obviously legitimate. But Ontario found a politically powerful response to this anxiety. Rather than building a program people could trust because it was well designed, governments decided to demonstrate that recipients were being closely supervised.
Income is reported. Assets are verified. Living arrangements matter. Employment activity is monitored. Overpayments are established and recovered. Recipients have action plans. Questions are asked about absences from Ontario. Eligibility is continually revisited.
The political message is reassuring: Don’t worry. We are watching.
And this may explain something that otherwise seems puzzling.
Supervision and surveillance have become substitutes for good design.
If people worry that welfare discourages work, the best response would be to design earnings rules that make work pay. If they worry about long-term dependency, build smoother pathways from assistance to employment. If they worry about fraud, investigate credible risks. If they worry about people becoming trapped on assistance, eliminate the rules and benefit cliffs that trap them.
Instead, governments can achieve much the same political reassurance by just being tough. The truth is that being tough is considerably easier than redesigning a complicated system.
There is another reason this has been politically sustainable. After the Harris cuts, subsequent governments discovered that they did not actually have to announce further cuts. Inflation could do the work for them.
This is the peculiar genius of an unindexed benefit. A government does not have to reduce it to make it worth less. It simply leaves it alone.
The price of food rises. Rents rise. Transportation costs rise. The welfare rate stays put. There is no announcement, no angry headline about a welfare cut, no legislation reducing anybody’s cheque. Yet every year the payments purchase a little less.
That is how a dramatic political decision made in 1995 gradually became political inertia. Harris had to defend cutting welfare. His successors merely had to avoid restoring it.
The Liberal record illustrates the problem particularly well. Rates increased repeatedly between 2003 and 2018. A government could therefore quite truthfully say that it had increased social assistance. But a nominal increase and restoration of purchasing power are very different things. A rate can go up in dollars while remaining far below where recipients started in real terms.
This is how thirty-one years can pass without anyone voting for the outcome.
There is also an important political asymmetry. Raising welfare is visible. Allowing it to erode is almost invisible.
If a government announced a large increase in Ontario Works tomorrow, reporters would calculate the cost. Opposition parties would comment. Editorial writers would ask whether taxpayers could afford it. Someone would undoubtedly ask whether higher rates discourage employment.
But there is no comparable annual announcement of the amount by which inflation has reduced the purchasing power of $733. Nobody stands at Queen’s Park and announces: This year we have decided that Ontario Works recipients should be able to purchase two per cent less.
Yet economically that is what a freeze accomplishes.
This may help explain the extraordinary durability of the policy. The politics notice dollars; poverty experiences loss of purchasing power.
There is a final irony. Ontario has increasingly responded to public dissatisfaction with welfare by making the recipient more accountable, while asking remarkably little accountability of the program itself.
The recipient must explain income, assets, employment activity and changes in circumstances. But where is the equivalent requirement for government to demonstrate that $733 can perform the task assigned to it? Where is the annual test showing that the shelter allowance can actually purchase shelter, that the basic-needs allowance can purchase basic needs, or that the program’s employment rules genuinely improve movement into sustainable work?
We demand evidence that the recipient continues to qualify for the program. We rarely demand evidence that the program continues to qualify for its purpose.
That may be the deeper lesson of the last three decades.
Ontario did not consciously choose the welfare system it has today. One government made a dramatic cut. Later governments made partial increases or none at all. Inflation did the rest. Public unease was answered increasingly through supervision and surveillance, while the fundamental design remained largely intact.
Perhaps that is why the next serious reform of Ontario Works should begin somewhere different. Instead of asking how much more supervision will reassure the public, ask what kind of income-support program the public could reasonably trust.
Make work pay. Remove perverse incentives. Simplify the rules. Allow families to help more. Leave people’s bank accounts alone. Let people live together. Let them travel if they can afford it. Make the transition into employment easier rather than punitive. And index the benefit so that governments that want to reduce its real value have to actually make and defend that decision.
Because that is perhaps the strangest thing about the last three decades.
Ontario has conducted one of the longest experiments in welfare policy in its history without ever consciously deciding to conduct it.
And the people required to live on the result were the participants who could not climb out of the test tube. – js- Aug 19/26