Social Policy in Ontario

Anti-poverty plan must focus on city

Posted on November 27, 2007 in Debates, Social Security Debates

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TheStar.com – comment/editorial – Anti-poverty plan must focus on city
November 27, 2007

Toronto is one of the richest cities in Canada. Paradoxically, it is also one of the poorest. In terms of both breadth and depth, poverty among families with children in Toronto is far greater than it is in the 905 suburbs, the rest of Ontario and in Canada as a whole.

Worse, while the poverty rate has been falling or remained steady in these other areas, it has continued to rise in Toronto to the point where nearly 30 per cent of families were living in poverty in 2005. For single-parent families, that figure has risen to more than 50 per cent.

These startling findings are part of a new study released yesterday by the United Way of Greater Toronto. Titled Loosing Ground: the Persistent Growth of Family Poverty in Canada’s Largest City, the report is a story of widespread deprivation and hardship that often seems invisible to many people in the city.

Evidence that poverty is rising in Toronto abounds.

Food bank use is increasing in Toronto while falling almost everywhere else. Applications for evictions because of nonpayment of rent rose 26 per cent between 1999 and 2006. Indebtedness caseloads are growing and insolvencies in Toronto are increasing faster than anywhere else in the country. Rents are among the highest in the country and as a result 67,000 families and individuals are on waiting lists for public housing. And payday loan outlets with their exorbitant fees and interest rates have risen from 39 in 1995 to 317 today.

There are many reasons for rising poverty in Toronto. Once a major manufacturing centre, the city now depends largely on the service sector for its strength. But unlike manufacturing with its high-paying jobs, the service sector has a mix of pay scales that range from huge salaries for top-level jobs to minimum wages in the bottom ranks. Added to that is the fact that the nature of work has changed radically, with full-time jobs giving way to more precarious employment in the form of part-time jobs, temporary work and contracting out.

As poorly paying as many of these jobs may be, there is no shortage of takers for them because Toronto is by far the nation’s largest magnet for new immigrants eager for work of any kind.

Policy changes by both the federal and provincial governments have also played a role in exacerbating Toronto’s poverty.

Changes in Employment Insurance in 1997 have made it very difficult for workers to qualify for benefits. Only 22 per cent of unemployed workers in Greater Toronto are eligible to collect EI benefits, compared to 44 per cent in St. John’s and 36 per cent in Montreal. Many workers are thus driven onto social assistance, which forces them deeper into poverty because of major cuts in welfare payments initiated in the late 1990s by former premier Mike Harris. Those cuts have not yet been fully redressed by the current Liberal government.

Because so many factors are behind the rise in Toronto’s poverty levels, United Way President Francis Lankin believes the city requires special consideration from the provincial and federal governments.

Premier Dalton McGuinty promised during the recent Ontario election to develop a province-wide anti-poverty strategy. But Lankin says that without a specific Toronto strategy, the provincial numbers will mask the depth of what is happening in this city.

Given both the role Toronto plays as a destination for new immigrants and its special big-city needs, the city clearly should get a disproportionate share of the funds McGuinty spends on programs such as subsidized housing, child care and job training. In an encouraging sign, McGuinty said yesterday that it makes sense to target efforts to help Toronto’s poor. “I’m not averse to targeting solutions where the need is actually to be found,” he added.

In some cases, though, it may be hard to design an anti-poverty plan for Toronto that differs markedly from an overall provincial or national strategy. For example, both governments should improve child benefits as part of a comprehensive anti-poverty plan, but it might be impossible to have different child benefits just for Toronto

But Toronto should serve as a benchmark in both the design and assessment of government anti-poverty policies. For instance, increases in child benefits should be examined from the perspective of what they would do to poverty rates in this city, as well as further afield.

Toronto’s unique circumstances and the depth of its poverty do highlight what an effective anti-poverty strategy must involve.

Critically, it must be a true partnership between Ottawa and Queen’s Park. The province lacks the money to create as much affordable housing as Toronto and other cities need. Nor does it have the fiscal capacity to boost child benefits, earnings supplements for low-wage workers or spending on child care to levels that can significant reduce poverty in the city. And while Ontario should raise welfare benefits, Ottawa must ease EI rules so more workers can qualify for benefits.

Most important, though, what the United Way study does is explode the myth that Toronto is just a “fat-cat” city, and points out that if nothing is done soon, poverty will drag even more families down.

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