Out of the business after 125 years: Ontario municipalities no longer sharing costs of public assistance to the poor


In 1793, no poor law was introduced into Upper Canada with the settlement of Muddy York. After all, it was supposed to be a Utopia.

Forty Four years later in 1836, two years after the reform of the British Poor Law, the first declaration of public responsibility for poverty was made, 2 years after the incorporation of Toronto as a city.

Toronto continued to pay for relief but only by subsidizing charities. The façade of Lachlan Lodge at 87 Elm Street (now the YWCA) records the date of the establishment of the first large Poor House in the City: 1837. In 1848, it was re-branded as a House of Industry or “Work House” also recorded on the façade.

Nineteen years later, Confederation clarified nothing for municipalities on the social welfare front. They continued to pay charities what they could.

In 1889, a prominent 20 year resident of the city, Goldwin Smith[1] addressed the combined conference of Toronto city charities and called for the City government to assume the role that charities had undertaken for almost 100 years. His loud voice was heard.

In 1893, the City of Toronto began to assume general ‘relief’ costs from private charities and began a 125 year period where the City of Toronto shared in the costs of allowances and benefits to the destitute. This era ends in 2018.

In the meantime, the Province of Ontario weighed in with its own programs to lift people from destitution. This was first accomplished in 1914 with the establishment of the Workmen’s Compensation Board and followed up with the establishment of the Soldiers’ Aid Commission in 1915 and Mother’s Allowance in 1921.

Ottawa first got in the game with the Old Age assistance legislation of 1927 and made several unemployment relief payments to provinces in the 1930’s.  Each of these institutions took pressure off the city to pay its bills. In the mid 1930’s,  Mitch Hepburn’s young Public Welfare Minister David Croll paid the first cash relief in municipalities bankrupted by the Depression and Ottawa followed by adopting federal unemployment insurance in 1940.

By 1941, however, the province of Ontario and the federal government largely ditched their support of the destitute and canceled their cost sharing agreements as the responsibilities of waging a major war took precedence. Post war wrangling resulted in the begrudging re-instatement of cost sharing at the 50% level by the early 1950’s; but not without a fight.

It was also during the post war reconstruction period that most US states and provinces in Canada had welfare costs uploaded to the provincial or state levels with no municipal participation. By the early 1970’s, only Ontario, Nova Scotia, the City of Winnipeg, the state of Delaware  and a scattering of small cities in Saskatchewan still contributed to the cost of  direct social assistance payments. Vancouver was uploaded in 1973.

In 1956, Ontario raised its cost sharing from 50% to 60 %; and by 1957, it was raised to 80%, a bedrock amount established in the General Welfare Assistance (GWA) legislation of 1958.

For the next 54 years, the municipal share of what is now called Ontario Works generally remained at 20%. Over this same time frame, all remaining municipal involvement in other jurisdictions came to an end.

But in 2011 as part of the Ontario Municipal Partnership Fund[2], the government of Ontario agreed to relieve municipalities of these costs over a period of six years, completing what is called the ‘upload’ in 2018 according to a yearly schedule[3]:

But unlike other financial deals between governments like the National Child Benefit (NCB) reinvestment fund – where Provinces were obligated to use the NCB clawback to fund programs for low income families with children – the Ontario government neither requested nor stipulated that municipalities should use their windfall savings to improve services or benefits in the area where the savings were made.

A lesson in lost opportunity, municipalities were simply allowed to pocket the money.

In Toronto in 2015, the Budget amount for Ontario Works allowances [4]was approximately $920M. The cost sharing savings for 2017 was 2.8 % of $920 million or $25.8Million

It will pocket another similar amount in 2018 when its funding responsibility shrinks to zero.

But this is no simple end to an era. Things will change.

For the first time in 125 years, Toronto politicians are newly free to advocate for higher payments to those suffering in destitution without muting the call to fund a portion of it from their own revenues. This is an extremely important change, so much unlike housing, that should result in strong municipal voices calling for improved supports to the poorest among us. Click over here now. After all, this is the level of government closest to the people which claims to know what the needs are, first hand.

But a word of caution is also called for. The City still pays for a determined cadre of workers who help low income people with disabilities run the gauntlet of access to programs in place for persons with disabilities like EI sickness, CPP disability, Workers compensation and provincial disability supports.

Local bean counters will soon get wise to the fact that their lack of involvement in welfare rates means that they no longer make any money on people they transfer to other programs. Toronto and other municipalities across Ontario must keep these workers in place. After all, they pocketed tens of millions in upload money for the last seven years. It’s the least they can do.

[1] https://qspace.library.queensu.ca/bitstream/handle/1974/10706/socialproblemsad00smit.pdf?sequence=1&isAllowed=y

[2] http://www.fin.gov.on.ca/en/budget/ompf/2011/

[3] http://www.mcss.gov.on.ca/documents/en/mcss/social/directives/ow/1103.pdf

[4] http://www.toronto.ca/legdocs/mmis/2015/ex/bgrd/backgroundfile-77441.pdf