Social Policy in Ontario

Welfare raise leaves cheque at 1988 levels

Posted on November 1, 2008 in Governance Debates, Inclusion Debates, Social Security Debates

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TheStar.com – GTA – Welfare raise leaves cheque at 1988 levels
November 01, 2008. Laurie Monsebraaten, Social Justice Reporter

When Phill Hozer opens his December welfare cheque, he’ll get an extra $5 to spend on basic needs including food, clothing, phone and transportation.

The extra $7 he’ll get for shelter will go directly toward his subsidized apartment in Parkdale.

Twenty years after a provincial task force recommended major increases to welfare, Ontario’s most destitute residents are finally seeing the money, or at least some of it.

A promised 2 per cent welfare rate increase that kicks in Dec. 1 – bringing the monthly rate for a single person like Hozer to $572 – will boost welfare payments to levels recommended in 1988 by David Peterson’s Liberal government.

But when you factor in inflation, next month’s increase would have to be at least $350 higher to equal the spirit of that 20-year-old recommendation.

The meagre payout comes as Queen’s Park prepares to upload welfare costs from municipalities, something cash-strapped cities have been lobbying for ever since former premier Mike Harris downloaded an array of social service costs a decade ago.

That’s the good news for welfare activists. The worry however is that, just as another Liberal government at Queen’s Park prepares to launch a new effort to fight poverty, the province is in the midst of an economic slowdown.

Back in 1988, the Peterson Liberals were seized with the goal of propelling people out of poverty at a time of plenty and had crafted a blueprint to make it happen.

Their ambitious Transitions report, released in September 1988 just after the stock market crash of 1987 and before the recession of the early 1990s, recommended an immediate welfare hike of between 10.1 per cent and 22.5 per cent. The recommended rate for a single person on welfare was $572 a month, or about $920 in today’s dollars.

With Dalton McGuinty’s government about to release its long-awaited poverty reduction strategy next month after a decade of economic growth and a looming recession, the irony of the new welfare rate isn’t lost on Hozer.

“They spend untold millions on research and reports,” says the university graduate who managed a clothing store for 15 years before his marriage and middle-class life was washed away by mental health problems and alcohol addiction.

“But if they just spent that money implementing the reports they write, we’d all be better off.”

Welfare rates did increase after the Transitions report and reached a high of $663 for a single person in 1993 under Bob Rae’s NDP government. But with the stroke of a pen, Mike Harris’s Conservatives cut them back to $520 where they stayed for a decade until the Liberals under McGuinty began small annual increases in 2005.

“It’s a pretty mean way to live,” says Hozer, who has been sober for five years and volunteers as a peer counsellor helping others overcome their addictions.

“Just surviving is a full-time job,” he says. After paying $109 for a TTC pass and $50 for his cellphone – necessities when you are looking for work – he has just $52 left from his $112 basic needs allowance on welfare. (Since Hozer lives in subsidized housing and is, as he says, “luckier than most,” his rent is only $115 a month. As a result, he doesn’t receive welfare’s full $349 shelter allowance.)

Single mothers will also see their cheques rise. A woman with one child under 13 will receive $970 per month including the $50 monthly Ontario Child Benefit which began for all low-income families in July.

With the benefit of hindsight, social policy expert John Stapleton, a former provincial bureaucrat and senior adviser for Transitions, now thinks the province should have put the money it spent increasing welfare rates into restructuring the system.

He hopes the McGuinty government makes that the focus of his poverty-fighting strategy. “If we knew then what we know now – the idea that the whole welfare system would fall into disrepute under Mr. Harris – we might have moved quicker on retooling,” he says.

Bolstering a system like welfare, that is so reviled by the public, only leaves it open to attack, he says, adding that even those receiving it hate it. It’s far better to build supports for the poor outside welfare that are available to a broader range of people, Stapleton adds, pointing to the Ontario Child Benefit, the National Child Benefit and the GST and PST credits that are available to all low-income individuals and families through the tax system.

Mary Marrone, of the Income Advocacy Support Centre, which advocates on behalf of low-income people in Ontario, agrees the province has to think more broadly about programs to help the poor. But she doesn’t want it to be at the expense of people on welfare.

“Federal tax-delivered programs provide stability if your life is stable,” she says. “But if your life isn’t stable, you need a program that responds to crisis and responds to an immediate loss of income.”

Tax-delivered programs often exclude people on welfare, she notes. For example, the national child benefit supplement was clawed back. And Ontario’s child benefit is lower for families on welfare.

“Welfare is designed to support an extremely vulnerable population,” Marrone says. “I worry if you let it whither on the vine, then for the next five or 10 years it will get even worse for people who rely on the program.”

Both Marrone and Stapleton agree that legislating a poverty reduction strategy with measurable goals and timetables, as recommended by activists this week, may be one way to protect reforms the McGuinty Liberals may make.

“There’s nothing stopping a future government from bringing in new legislation,” Stapleton acknowledges. “But it would require a full public debate in the legislature.”

This entry was posted on Saturday, November 1st, 2008 at 8:41 pm and is filed under Governance Debates, Inclusion Debates, Social Security Debates. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.