Ontario’s Poverty Reduction Strategy
December marked the three-year anniversary of Ontario’s Poverty Reduction Strategy. While I believe there is much to celebrate, much remains to be done.
The Strategy surprised a lot of observers, especially in light of the fact that it was announced in December 2008, just as Ontario was entering a recession. Its focus was almost exclusively child poverty, and at full implementation (i.e. 2013), it will result in $300 million in new annual spending. This is equivalent to 0.3 percent of total provincial spending in Ontario, which is roughly $100 billion.
One stated goal of the Strategy is to reduce child poverty in Ontario by 25 percent over five years, based on StatsCan’s Low Income Measure. And a major feature of the Strategy is an increase in the Ontario Child Benefit (OCB).  The OCB, at full implementation, will be worth up to $1,310 per child per year . The Strategy also includes the implementation of “full-day learning for four- and five-year-olds.”
A Cabinet-level committee has been charged with implementing the Strategy. Every year since the Strategy’s announcement, the provincial government has issued a progress report, which is publicly available. The Strategy’s legislation stipulates that, every five years, there will be a new Strategy (very possibly with a different theme each time; in 2013, for instance, the theme/focus could be Aboriginal poverty, or social assistance, or housing).
Partly in response to advocacy by such people as Cheri DiNovo and PEF Blogger Jim Stanford, the McGuinty government has also increased the Ontario minimum wage from $6.85/hr. to $10.25/hr. Though not officially part of the Strategy, this marks an important move nonetheless.
There have been some important outcomes from the Strategy. For example, even though we have just come out a recession, Ontario’s Minister of Children and Youth Services recently reported the following:
The poverty rate for children in Ontario declined from 15.2 per cent in 2008 to 14.6 per cent in 2009…As well, the poverty rate for children living in deep poverty declined from 8.5 per cent in 2008 to 7.3 per cent in 2009…Poverty rates for children in single mom-led families dropped most dramatically, from 43.2 per cent in 2008 to 35.2 per cent in 2009. It is important to note that data from Statistics Canada lags by 18 months. This means statistics for our income-based indicators are available for only the first year of the strategy.
Let’s not kid ourselves though (pun intended): the Strategy has its shortcomings. First, 0.3 percent of total spending is a relatively modest spending boost when it comes to poverty. Because of the modest new spending made available for the Strategy by the McGuinty government, the Strategy didn’t even attempt to make inroads with respect to Ontario’s lack of affordable housing; that was left to a separate Strategy, which, now complete, did not announce any new social housing units, even though more than 150,000 Ontario households currently sit on housing wait lists. Nor did the Poverty Reduction Strategy attempt to increase social assistance benefit levels, even though single adults without dependents on welfare in Ontario currently receive less than $8,000 a year; rather, it announced the creation of the Commission for the Review of Social Assistance in Ontario.
I think the McGuinty government deserves praise for showing some leadership, most notably with respect to children’s anti-poverty initiatives and the minimum wage. I also think Deb Matthews (the Minister who oversaw and tabled the Strategy in 2008), her staff and advocates in the 25 in 5 Network (which played a watchdog role) deserve praise for making the most of an important opportunity. But I think there are two essential ingredients required if Ontario is to aspire to someday eliminate poverty.
First, the role of the federal government in poverty reduction is crucial, especially with respect to job creation, affordable housing and income assistance.  Gilles Séguin has done an excellent job of keeping tabs on the Harper government’s non-interest in this here.Â
Second, provincial tax rates—both personal and corporate—have come down a great deal in Ontario since the mid-1990s. When the McGuinty government came to power in 2003, tax reductions by the Harris-Eves government had reduced Ontario’s fiscal capacity by roughly $18 billion a year. The McGuinty government has not made a serious attempt to restore this lost fiscal capacity; in fact, Mr. McGuinty signed an agreement with the Canadian Taxpayers Federation in 2003, effectively stating that he wouldn’t. Over the long term, any Ontario government that claims to be serious about poverty reduction should seek to restore at least some of the province’s lost fiscal capacity.
Hats off to Nick Falvo for continuing to monitor poverty reduction efforts in Ontario. Although he over-looked one positive outcome, he concluded on the right note.
One of the best outcomes of the Liberal’s efforts was the political education of the anti-poverty community.
More or less a million people who live in poverty in this province had their expectations raised when the Liberals announced a Poverty Reduction Strategy. Clearly most of them have been disappointed at the results, and their numbers are growing as neo-liberalism continues to wreak havoc on the Ontario economy.
As the Occupiers showed this fall, we are seeing the anti-poverty movement morph into a more politicized, more radical movement against inequality — one bent on mobilizing the 99% against the 1%.
Nick concludes with a call for tax reform. He echoes the gathering momentum behind Canadians for Tax Fairness, the new organization that’s planning a major Tax Summit in Ottawa on March 28 and 29. They hope to inspire Canadians with a vision of fairness and equality, of caring and sharing.
Meanwhile, the Ontario Liberals and the Federal Conservatives continue to deliver corporate tax cuts to benefit the 1%. We’ve seen how corporate tax cuts brought the Irish economy to its knees. It is important to remember that the Ontario Liberal’s Poverty Reduction Strategy was inspired by Ireland’s use of targets and timelines to reduce poverty — which quickly becomes a paper exercise without tax revenues.
On the other hand, the countries of Northern Europe show how capitalism can flourish in a high tax environment. Germany and the Nordic countries are enjoying high rates of productivity and competitiveness, with better employment and growth than many low-tax jurisdictions.
What remains to be seen is if the Ontario NDP will champion the interests of the 99% rather than try to bribe them with more tax cuts.
Thanks Nick for your balanced summary of the Liberal’s anti-poverty initiatives.
Beyond David’s comments above, I would only add that we need to apply new tools to the fight against poverty in Ontario. For example, while virtually no affordable housing has been built in this province in the past 14 years, urban centres like Toronto have seen an enormous boom in the construction of high-rise condominiums. In the recent election, many Green Party of Ontario candidates (including myself) argued for legislation that would compel all condo developers to provide 30% of all units in each new building for affordable and accessible housing. (My definition of a healthy society involves having rich and poor on the same elevator.)
Another example and interestingly, the most popular issue I took to the doorstep was my proposal for junk food taxes. I argued that all of the considerable revenues from such taxes be used to pay for (free) school food programs, the low income fruit and vegetable supplement, and other anti-poverty measures. You can probably still view the my 2 minute video at http://www.votetimgrant.ca, if interested in more details.
In an era of fiscal restraint and rising public debt loads, most provincial and federal governments claim they cannot afford to do more than they are doing to fight poverty. The above two proposals readily demonstrate that even cash-strapped governments have considerable opportunities to reduce growing inequalities. What they really lack is the political will.
Letter in G&M
http://www.theglobeandmail.com/news/opinions/letters-to-the-editor/jan-6-letters-to-the-editor/article2292997/print/
Cheering? 🙁
At a time when Canadian corporations are sitting on billions in cash, when CEOs are earning 189 times the average worker’s salary, and when the U.S. corporation Caterpillar is demanding a 50-per-cent cut in salaries and benefits at a locomotive plant in London, Ont., a U.S. business magazine has commended Canada for reforming its tax structure so we have the lowest corporate rate in the G7 (Why Canada’s Corporate Tax Cuts Rate A Collective Cheer – Report on Business, Jan. 4). Canadians may be facing higher costs, more unemployment, and social service cuts, but there is ample solace knowing that Forbes magazine is happy we’re a low-tax jurisdiction for the benefit of big business.
Larry Kazdan, Vancouver
The new Ontario Cabinet has a number of very strong Ministers in portfolios where I doubt they will want to sit on their hands for four years and do nothing. Kathleen Wynne: Housing; Milloy:MCSS; Hoskins: MCYS and Poverty reduction; Matthews:Health. All appear to want to do more than submit to the ‘law of the instrument’.
That’s the law that poses that if a small boy has a hammer, all he will see are nails. The same law says that if you give politicians scissors, all they will see are things to cut.
The problem with poverty reduction unfortunately is that it is hard to make an investment in one Ministry that will reap benefits within the same Ministry. This is the straitjacket that the Westminster model of government has placed on attempts to alleviate poverty. Like the admonition to gamblers, Ministers are admonished to ‘know your limit – spend within it’.
Sorry – but this does not work for poverty reduction. Build secure housing and the Ministry of Community Safety saves. Invest in kids lunches and the Ministry of Health saves. Invest in temporary care benefits in MCSS and MCYS saves. And on it goes….
If we truly believe that poverty costs us all, then we are obliged – especially in a post Drummond world – to look across government boldly and make the investments that we know will save elsewhere. Mr. McGuinty’s Liberals have not really tried this approach yet he has a fine group of experienced Ministers that have every incentive to break the logjam and set a whole new balance sheet in motion.
The best poverty reduction strategy is a good job…
This means zero since Ontario has had our manufacturing job base hollowed out because of the high petro dollar
As long as the economy is being run for the benefit of oil industry only….our unemployment will continue to sky rocket…and mass misery and poverty will NOT be solved…
We need a national and or provincial job creation strategy aimed at creating good paying middle class jobs…..
The Ontario Budget cuts should be opposed…they would drop tons of people into poverty….