No bottom in sight?

Submitted by John Stapleton on June 10, 2014 - 8:42am
Ontario life through the lens of the single social assistance rate

In May 1993, single welfare recipients in Ontario were eligible for a maximum payment of $663 a month. It was not a lot of money then but it looks pretty good from the vantage point of 2014.

Twenty one years later, the single maximum welfare rate today is $626 a month. Without even thinking about inflation since 1993, the rate is $37 below where it was when Kim Campbell was Prime Minister of Canada.

Had the single rate been indexed like Old Age Security and CPP, it would now stand at $974 a month. But it would take a 55 per cent increase to provide the same level of assistance that Ontario provided in 1993. And no one seriously believes that a 55 per cent increase would be contemplated by any political party.

So let’s look at some more modest metrics.

In October 1995, the Harris government lowered welfare rates by 21.6 per cent. In the ensuing 8 years, there was no increase resulting in an inflation adjusted rate decrease totalling 34.8 per cent.

The McGuinty government inherited a maximum single welfare rate of $520 a month. From 2003 to 2014, the single rate went from $520 to $626. Adjusted for inflation, the rate should have gone to $636 a month. The 2014 stillborn Ontario Budget would have taken it close to that.

Yet all in all, the Liberal Government upheld the PC cuts of 34.8 per cent as the rates are almost exactly that amount behind after the cost of living from 2003 to 2014 is taken into account.

But let’s not get on their case too much unless we think that another government-in-waiting would have done anything differently.

Running up to the provincial election June 12, the Progressive Conservatives note in their Backgrounder that they would make savings in Ministry of Community and Social Services of $1.5 billion. No matter how you cut the cards, that amounts to a rate cut of some amount. Would they cut persons with disabilities? Unlikely! Would they cut special services at home? Not likely. Would they cut administration? Yes but it is not enough to extract the necessary $1.5 billion.

The reality is that we are looking at another rate reduction under a PC government to single people receiving Ontario Works or what most of us call welfare.

It is instructive to note that had the Harris rate of $520 been indexed to the cost of living, the single rate would now be $744 a month and it would require a rate increase of more than $100 a month just to get to that amount. Imagine the PCs saying that they were going to uphold Mr. Harris’ cuts and put food in the budget.

We can dream.

The reality is that no party will increase welfare rates beyond the levels cut by 34.8 per cent by 2003. Not the NDP, not the Liberals, not the PCs and not the Greens.

What does this tells us?

It should tell us that the welfare model of benefits has come to an end. Its natural course is over.

The inconvenient problem is that real people are starving – they can’t make ends meet and that the cost of their poverty greatly exceeds the amounts we could easily spend to eradicate it.

How much do we collectively wish to pay to keep people in destitution? It’s an important question. And at what point do we stop cutting? Is there an end point to the erosion? We know that the end point to raising rates was May 1993 and we know that rates have stabilized for the last 10 years. But we don’t know if we have reached bottom.

At the end of June 2014, many people will be meeting in Montreal to talk about a basic income for all. Some call it a Guaranteed Annual Income. But can we seriously talk about basic guarantees when we relentlessly erode the income of the poorest one per cent of Ontario’s population, the 150,000+ souls who receive a maximum of $626 a month?

My opinion is that we can talk about it. But we can’t have a conversation about getting people off of welfare because that just leads to destitution. What we really need to do is abandon the welfare model entirely and reframe the discussion entirely. If we ask governments to raise the rates, it won’t happen. But if we all mobilize to change the system to one that enforces prosperity instead of destitution, we have a real chance to succeed.

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