OPRN/RRPO brief for provincial Standing Committee on Economic Affairs and Finance December 2008

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1 The Ottawa Poverty Reduction Network / le Réseau pour le Réduction de Pauvreté d Ottawa has structured our brief to follow the five questions put forward by the Minister of Finance. We have attached a chart with the recommendations to the provincial and municipal governments from the cross-sectoral consultation we held last June. Top Priority The top priority of the government needs to be ensuring the survival, growth and development of the economy and the residents of Ontario. We hope for a new consumerism that is responsible and sustainable both for individuals and governments. This means you do not spend what you do not have, you only borrow when you have a reasonable expectation of repaying the loan in a manageable way and you do not borrow long-term for consumable goods. We need equality of opportunity for all Ontarians. We believe that all government policy, but particularly economic policy, must contribute to levelling the playing field. All levels of government and the community need to develop a common vision and combat the individualism in society. This needs to be the issue where we come together and build a better community where we all work together. We need political leadership at both the provincial and municipal level to take the vision and develop it into concrete and measurable actions which will reduce poverty according to established targets over the next three, five and ten years. We recognize and applaud the investments which have been made in the last year in areas such as social housing, child care, social assistance rates, and the rent bank among others. We also appreciate that you have started to follow through on your commitment to develop and implement a provincial poverty reduction strategy. We particularly acknowledge the work of Deb Matthews and the cabinet committee in this area. The Poverty Reduction Strategy has to be based not on income but on the right of the individual to have medicine, food, education, clothes, housing, recreation, etc. It must recognize that poverty is a reality and that we can do something about it. As a community, we have hope that we can change things. In order for a Poverty Reduction Strategy to be successful, it has to involve not just government but the community as well. Since poverty costs every segment of society, the whole spectrum must be implicated in its solution at all points, i.e. not the 'usual suspects'. This means that people have to be involved in the design and implementation of the Strategy and not just in a superficial way. This dialogue has to continue at the provincial, municipal and community level and involve people from as many sectors as possible. Page 1

2 The Strategy has to provide hope to children & youth so they can see a way out of poverty. It has to provide tangible supports to help them achieve an education, including adequate food and shelter, and to provide supports to their parents and community so they can help them achieve their potential. While there will be initial costs associated with implementing a Poverty Reduction Strategy, there will be accompanying savings, some of which will begin to be realized very soon. For example, families that are properly housed and fed will have less need to access the health system and their children will have better success in school. Accessible recreation programs will similarly reduce immediate and long-term health costs. Supporting the integration of foreign-trained professionals, particularly in the health field, into the labour market will provide better access to medical care and other professional services for all Ontarians, improving the economic and physical health of the province. As long as some parts of society benefit from poverty, there will always be poverty. We need to re-order society so that we can provide enough to allow those in poverty to live a life of dignity with self-esteem. The Ottawa Poverty Reduction Network is in the process of developing a response to Breaking the Cycle, the recently-released provincial Poverty Reduction Strategy, and will send it to this Committee when it is complete. It will incorporate the input from our cross-sectoral consultation as well as the other local consultations we participated in this year. The AMO/Ontario/Toronto accord signed earlier this year aims to achieve a vision that the Province and Ontario municipalities share: an economically strong and competitive Ontario that offers a high quality of life to all of its residents. We share that vision but recognize that for all residents of Ontario to have equal access to a good quality of life, our society must invest heavily in improving the lives of those who are furthest from participating fully in the opportunities Ontario offers. To re-balance investments, we need the 2009 provincial budget to include the following elements: 1. Develop long term strategies to invest in housing. Our three super-priorities are housing, housing and housing. We have attached a diagram that shows the interconnection between housing and other parts of life. Because housing is such a primordial element of people s ability to function and to participate in all the other facets of life, it has to be seen by the government as THE basic building block. Without safe, adequate and genuinely-affordable housing, it becomes very difficult to carry on with a normal life. For this reason, it should be the first element of any government budget and the predominant element in any economic Page 2

3 stimulus package or infrastructure program. This must be done whether or not the federal government comes to the table with their share. 2. Redefine the affordable in affordable housing. Currently, affordable in Ontario means a house costing $150,000 in small communities and $350,000 in central Toronto. It needs to be defined based on the price a person with a low or modest income can afford, not the low end of the current housing market. If affordability is going to be measured relatively, then people, not other houses, should be the point of comparison. Amendments should be made to provincial legislation so that every housing development in Ontario is required to have a mix of housing, including some units for moderate and low income families. In addition to building more solid communities, it would allow families whose economic situations change to remain in their homes. 3. Introduce, as part of an economic stimulus package in the budget, a three year infrastructure program that would invest $8 billion in Ontario s communities, $3.5B of which would be allocated to social housing. This is in addition to existing programs and would require an application from the municipality that would demonstrate its long-term sustainability and how it fits both the municipality s needs and those of Ontario. It would also require a municipal contribution, either financial or in-kind, of at least 10% of the total cost. All funding would be allocated on a 50/50 basis to support new development and repairs/renovations to existing infrastructure. Each application would have to contain both elements. For example, if $120M were allocated to the city of Ottawa for housing, $60M would go to constructing new social housing and $60M to repairing existing social housing. The same process would be followed for roads, waterworks, community facilities, etc. The only exception would be for transit projects but they would have to demonstrate an environmental sustainability component such as the use of hybrid buses. 4. Re-arrange the uploading of social programs in the accord so that Ontario Works is taken off the property taxes and returned to the province over the next three years, i.e. by December In return for this acceleration, the municipalities would have to agree to re-invest the savings in local human services, which could be either municipally- or community-operated, for a minimum of ten years. 5. Invest in non-profit child care with the addition of 50,000 new subsidized spaces over three years to support opportunities for children and enable low-income parents to access employment and training opportunities so they can be part of Ontario s vision. Page 3

4 6. Integrate the employment programs currently offered under Ontario Works, ODSP and Employment Ontario by mid-2010 with service delivery at the municipal level. Balanced budget vs. Deficit The situation in Ontario has changed drastically even since the Economic Statement in October. We need to maintain a long term view while finding short term solutions. It may be necessary to enter into a deficit in the short term in order to invest in the long term stability of the economy and of Ontarians. In the Economic Statement, the Minister talks about building confidence. In this section, he rejects the notion of spending our way out of tough times. We believe that investments in our communities in tough times will both help weather the storm AND build the Ontario we want to see. Peter Hume, president of the Association of Municipalities of Ontario, responding earlier this month on behalf of AMO to the province s Poverty Reduction Strategy, said In light of these uncertain economic times, it is more important than ever to have supports in place for our most vulnerable citizens.... As we know, investments are the cornerstone of economic recovery. What government programs to delay We can t tell you which programs, if any, to delay because we don t have an understanding of every program the government provides. However, we can tell you which programs should be introduced, kept and/or augmented. 1. Why is the Ontario Child Benefit being implemented so slowly? Children are hungry now they can t wait until 2012 to have lunch. Is this how Ontario offers a high quality of life to all of its residents? The full amount of the OCB should be paid in 2009 and it should be indexed in subsequent years. The changes to the social assistance rates made in July 2008 should be revisited to ensure that all low income families in Ontario see their incomes increase by the full amount of the OCB. The full Benefit should be paid to social assistance recipients without any deduction from the family income. In addition the entire National Child Benefit Supplement should be retained in its entirety without any reduction in family income. 2. The minimum wage is scheduled to increase by $0.75 per hour on March 31, 2009 and by the same amount on March 31, 2010 to bring it to $ This schedule needs to be accelerated by adding another $0.75 increase on September 30, 2009 to achieve Page 4

5 an $11.00 rate by March 31, This is approximately a 25% increase spread over two years. In subsequent years, it should be raised annually by the amount necessary to bring it to the level of the LICO s. 3. Social assistance basic needs rates should be increased by 10% per year until they reach the LICO level. This is a startling example of inequality in government funding. There was a 2% increase to social assistance rates in the same year as MPP s received a much higher increase both as a percentage of income and a monetary amount. Once they reach the LICO level, they should be increased annually by the same percentage as the average Ontario civil service salary. 4. Shelter allowances for social assistance recipients should reflect the actual cost of housing in the recipient s community. CMHC already prepares lists of rental costs for different communities across Ontario which could be used as the basis for the allowance. 5. For the first three months of employment, do not deduct anything from earnings of OW/ODSP recipients. This exemption should be available once every two years. In addition to mandatory deductions and childcare expenses, allow an exemption of $100 plus $25 per additional family member per month. Starting in January 2009, increase OW/ODSP retained earnings amounts by 20% per year until the combination of net earned income and social assistance benefits reaches the LICO levels. 6. The province should amend the Education Act to outlaw all fees and charges in public elementary and secondary schools. Children should never be dependent on charity and/or excluded from components of the education system. In this budget, funds should be provided to schools to equalize programs and services so that the same education is offered regardless of where in Ontario the child lives or the socio-economic status of the school neighbourhood. 7. We need to support people, particularly seniors and the disabled, to stay in their homes whenever possible instead of being institutionalized. This lets them keep their autonomy and independence while at the same time reducing costs since it is cheaper to provide supports within the home. The province needs to, over three years, triple the funding for aging-in-place programs and increase the funding of community services providing other support services to seniors in their homes. The increased property tax credit for seniors is a huge step in the right direction and we congratulate you on its introduction. This will allow some seniors to remain in their homes and increase the disposable income of those who are eligible for it. Again, its Page 5

6 implementation needs to be accelerated and consideration should be given to making it a percentage of total property tax paid rather than a fixed amount. It should also be expanded to cover renters as well as homeowners. In order to support people who require some more intensive supports to be able to live independently, the province should invest in the construction of supportive housing units over the next three years that would accommodate 4,000 individuals. Since one supportive housing unit usually houses two to four people, this means between 1,500 and 2,000 units. Provision of supportive housing can keep a resident out of the hospital, the shelter system and the judicial system and pays for itself very quickly. It costs about $1,500 a month to keep someone in supportive housing and $1,500 a day (or more) to keep them in hospital. 7. Energy rates have to be reduced and the Ontario Energy Board and its affiliates have to be enabled to create programs to provide differential rates for low income families. 8s. Recognition of the skills and training of immigrants should be a provincial priority. The Poverty Reduction Strategy proposes some measures that will help but the province should be doing more. Aside from the human cost to the individual and the family, the province is paying both in other program expenditures and in lost productivity and tax income for every day a skilled immigrant is not able to contribute at his or her full potential to the community and the province. This is an example of an investment with a quick return that will be repaid many times over. The province should provide $10M annually in new funding to programs like that offered by the Ottawa Community Loan Fund to help immigrants do what is necessary to be able to use their skills and training properly. Promote Economic Growth & Job Creation 1. Direct investments in low-income communities are spent locally and quickly and are therefore a more useful form of economic stimulus than investing in other sectors of society. The province should develop programs to fund small community economic development initiatives that would operate in low-income communities and offer employment and/or training to local residents. Wherever possible, the community should be involved in the planning and delivery of the initiatives. A portion of the funds (at least 60%) should be reserved for initiatives run by and for women, minorities, youth and aboriginal people. 2. Investments in Ontario municipalities for community and social infrastructure programs will normally be spent within Ontario with a resulting multiplier factor in local spending. Many of these programs could also provide training, apprenticeship and Page 6

7 education opportunities for youth and unemployed workers which would improve the province s long-term employment rates. Working More Effectively with Governments and Other Partners 1. The Ontario government must continue to seek fairness for Ontarians from the federal government in areas such as Employment Insurance, social housing, transit, health and social programs. It is wrong that Ontario workers pay the same premiums for EI but are denied access to the same level and duration of benefits as Canadians in other provinces. The federal government must become an active partner again in supporting social housing as a basic need for Ontario residents. In the same way, they must partner with the province and municipalities to develop environmentally sound transit initiatives across Ontario. The costs of health and social programs have to be more fairly shared between the province and the feds. 2. Just as you seek fairness from the federal government, you must treat the lower level and your community partners fairly. In many cases, you depend on them to deliver programs but do not provide adequate or stable funding to allow them to provide the services. They are often left in the position of subsidizing provincial programs out of funds which should be used for other purposes. In certain situations, it is the staff that actually subsidize the programs through their low wages. 3. Local service agencies are seeing huge increases in requests for service with no staff or resource increases. Partners needs to include front-line community agencies such as family service centres, food programs, drop-in centres, community and family resource centres, youth programs and child care centres. Funding should also be provided to social planning councils to allow them to support front-line agencies and community organizations. The budget should include a $3B investment in social infrastructure over the next three years to help these agencies support Ontarians through difficult times. 4. Like poverty, economic issues affect everyone in society and the solutions have to involve everyone. We need to increase the involvement of the community and encourage cross-sectoral cooperative approaches. In June, the OPRN held a very successful cross-sectoral community consultation on poverty reduction with the support of several community organizations, a group of city councillors and the mayor. We had over 65 participants representing 18 different sectors including business, education, faith communities, seniors, youth, rural, people living on low incomes, inner city, women, and community groups among others. For many of them, it was the first time they had talked about poverty issues within a diverse group. Many of them were surprised by what they heard and a number of them have committed to working with us over the long term. Page 7

8 The OPRN will continue to work with the municipality and the broader community to develop community priorities and solutions. We are also committed to supporting the low-income community to participate in these and other community building initiatives. The budget should include $600,000 to fund similar initiatives throughout the province to bring communities together to develop local solutions to our economic challenges. This initiative should be coordinated by the Social Planning Network of Ontario through the Social Planning Councils across the province. 5. In the fall Economic Statement, the Premier is quoted as saying While we can t do everything, we will do everything we can. One thing the province can do is challenge municipalities and your community partners to do what they can by setting up a Creativity Challenge Fund in the budget that they could apply to for funding to develop and implement their best ideas. Poverty Reduction Strategy We need to move our society from one that provides a patchwork of resources to people in need to a society that treats all its members with dignity and gives them real opportunities to participate in the best that Ontario has to offer. At the same time, we must continue to ensure that appropriate supports are provided to those that need them. The Poverty Reduction Strategy must be expanded to offer a comprehensive policy and programs that address the needs of all people living in poverty, not just children and their families. It should include plans and targets for the reduction and eventual elimination of poverty for all Ontarians with goals for the next three, five and ten years starting in January 2009 and longer term projections on a rolling five-year basis. It is unjust to say that the implementation of the provincial Strategy is dependent on federal and municipal participation and investment. It should move ahead regardless of what other levels of government do. If only your part gets done, progress will be made. And that is a positive achievement. To paraphrase the Premier, Even if they don t do anything, you can and should do everything you can. When 15% of Ontarians live in poverty, the government has a 100% obligation to act to create a society where everyone s needs are met regardless of their age, gender, abilities, race or socio-economic status. It is the morally and fiscally responsible thing to do. Page 8