Cancelling the Transition Child Benefit in Ontario is bad policy
[Revised on September 24, 2019]
A little over a year ago, the Government of Ontario announced that it had set itself an “accelerated 100 day deadline to develop and announce a sustainable Social Assistance program.” And despite forecasting a $600 million reduction in social assistance spending in 2019/20 as part of this reworked program, few details have emerged on how this will be reached. One of the decisions that have been announced, however, is the cancellation of the Transition Child Benefit (TCB). This is a decision that will have devastating long-term consequences for many families in Ontario and undermine the government’s own stated goal of transforming social assistance.
The TCB was introduced in 2007 when the province created the Ontario Child Benefit (OCB). The OCB moved some child benefits provided through social assistance to a tax credit available to all low-income families (whether they receive social assistance or not), and, as a result, Ontario significantly reduced child poverty rates. Today, over one million children in over 500,000 families receive the OCB.
However, as with any large-scale policy transformation, the replacement of an old benefit with a new one meant that some adjustments were required to accommodate the change. Child benefits (other than amounts provided for shelter) had been moved out of social assistance to the OCB, but at any given time some families would not be receiving the OCB. This included families with newborns awaiting their provincial/federal child benefits, families who had recently moved to Ontario, families who didn’t file their taxes, and refugee claimants.
This is why the TCB was created. It provided these “missing” child benefits to families on social assistance who were not getting the OCB. Since then, the TCB has become an important part of the province’s child benefits fabric. Today, 32,000 children receive the TCB. According to our estimates, this is about 14 per cent of all children receiving social assistance.
In short, the TCB has provided support for children who are among the most vulnerable in our society at a time when their families are most in need. According to our calculations, for a single parent with one child receiving Ontario Works, the elimination of the TCB would amount to a 20 per cent decrease in income. Imagine the potential consequences for any family experiencing a 20 per cent cut in their income, regardless of whether they live in poverty.
This prompts us to ask – what’s the logic behind cutting this crucial benefit?
Is it about cost? It’s hard to see the merits of that argument. The total annual cost of the TCB is $67 million. According to our estimates, this makes up 0.7 per cent of the total cost of social assistance in Ontario. That means the TCB is among the best targeted spending in the provincial budget: it goes to about 14 per cent of children receiving social assistance, at less than one per cent of total social assistance program costs.
Is it about the continued argument between the province and the federal government about who should be responsible for refugee claimants? It shouldn’t be. Sixty-five per cent of families who receive TCB are not refugee claimants, and half of the actual cost of the benefit goes to children in families not seeking asylum. In addition, the Ontario government has in the past accepted the principle that ordinary people should not be held hostage in federal-provincial disputes.
The elimination of the TCB will undeniably have downstream impacts not only on social assistance, but on other services, like housing, education, and health care. As the long-term costs will outweigh the short-term savings, it is difficult to see how this will help create a sustainable approach to public services.
A sustainable social assistance system cannot be predicated on the idea that an array of small cuts will not be deeply felt by people — it will. In the case of the TCB, the elimination of the benefit will be felt deeply and, on balance, will yield few results for the government’s own goals.
Ensuring that a transformed system prioritizes the dignities of people receiving social assistance, while balancing fiscal sustainability and accountability, requires thoughtful consultation and policy development. Without these elements, the government is, and will be, undermining its own plan for transformation.
Note: This article was revised on September 24, 2019 due to the publication of new data. The figures in the article were originally based on Hansard, which reported that there were 16,000 recipients of TCB. An FOI requested by the Income Security Advocacy Centre from MCCSS shows that 31,696 children receive TCB (the 16,000 figure referred to the number of families receiving TCB). The numbers in this article have been revised accordingly.