It’s early 1985 and Premier Bill Davis is on his way to retirement. He has been Premier since 1971 and his party has been in power for 42 consecutive years ever since Liberal Mitch Hepburn lost to the PC’s in 1943.
Davis called for a youth movement but the party leadership was won by Frank Miller, a man who was 2 years older than Davis. Miller assumed the mantle on July 2, 1985 and lost the next election a little more than 4 months later on November 22, 1985. A coalition of Liberals and NDP members formed government under David Peterson.
No one in Ontario had experienced anything other than progressive conservative governments since World War II when George Drew narrowly defeated an upstart CCF, the forerunner of today’s NDP.
But in the waning days of Progressive Conservative (PC) government in 1985, the Davis government passed regulations to do what no PC government has done since. His government announced and implemented a social assistance rate increase. The amount was 6%.
Social assistance rates are not indexed to inflation
Social assistance is comprised of what we normally call welfare benefits and disability payments to the 1 in 16 Ontarians who are poor and require assistance to meet their basic needs. Social assistance in Ontario is not indexed to inflation like child benefits, Old Age Security, CPP or other income security benefits. A single Ontario Works (welfare) recipient can now receive a maximum benefit of $733 a month.
Without indexation, rates can and do erode over the years.
Thirty six years later, few would guess that the 1985 increase would be the last social assistance rate increase that a PC government would undertake for many decades.
Indeed, Mike Harris formed government in 1995 and reduced most social assistance rates by 21.6% to set rates 10% above the simple average received in the other 9 provinces.
But in the 8 years he and his successor Ernie Eves remained in power, they did not raise social assistance rates even once though inflation rose 18% during their tenure.
Now ‘Fast Forward’ through 15 years of 4 Liberal administrations where none tied social assistance rates to inflationary increases.
Current rates
In 2018, the Progressive Conservatives once again took power and inherited the Wynne government’s Roadmap for Income Security Reform. The Roadmap had recommended rate increases and the outgoing government passed a 3% social assistance increase into law before the Liberals were shown the door by the PC’s.
The new government’s reaction – in addition to canceling a basic income pilot – was to cut the social assistance increases on the books ‘in half’ leaving a 1.5% increase for all social assistance recipients in 2018.
In the next 3 years, inflation increased by 5% but social assistance rates have increased by not a single penny. Rates now don’t even meet the Harris benchmark of being set at 10% higher than the average of the other 9 provinces. Rates in Ontario are now just 4% higher.
Lower income Old Age Security recipients now receive increases that amount to $44 a month higher over the same 3 year time period. That’s how indexation works.
With the provincial Budget of March 2021, we are now clear that there will be no social assistance increases until at least 2022. As we continue to endure the pandemic, rents will increase while food prices continue to race ahead of inflation. The purchasing power of social assistance continues to erode mightily.
Now is the time to raise social assistance rates
When Ernie Eves announced the Harris 21.6% welfare cut on July 22, 1995, social assistance caseloads comprised over 10% of Ontario’s population.
In April 2021, social assistance caseloads represent 6.2% of Ontario’s population and those caseloads are falling. The provincial budget for social services – when increases for federal transfers are taken into account – is declining.
The reality is that the Province is experiencing welfare savings and declining caseloads that they had never thought possible.
They have plenty of spare cash to raise rates – but like any of us who haven’t done something for 36 years – they have forgotten how.