The Poverty Agenda

The Ontario government poverty reduction process is a year old, headed by Deb Matthews, minister for child and youth services and chair of a cabinet committee on poverty reduction that includes all of the heavyweight ministers in the McGuinty government. Over the course of the last year, Matthews and her colleagues have heard a wide range of voices and interests. They are due to report by the end of the year.

Many groups have submitted long lists of things the government should do. Almost all of the recommendations have had merit. Many of them have been more aspirational than practicable, but many have been both “policy- ready” and programmatic.

The problem is that the process has run into an economic buzz-saw. The world economic meltdown has had a severe impact on the Ontario economy, so that revenues from business and personal income tax has shrunk, and will continue to do so. So what is a government to do?

To their credit, the McGuinty government has determined to proceed with the poverty reduction agenda, but fiscal realities mean that many will be disappointed by the scope and scale of their recommendations. Inevitably, less will be proposed in the government announcements than has been recommended by the advocates, and the time frames for implementation will be longer than anyone would like.

To have the biggest bang for the buck, there are several things that the government can do. The first, and most important, is to increase the Ontario Child Benefit. The provincial expression of the Canada Child Tax Benefit, the OCB is the most powerful tool we have for poverty reduction. The federal measure was implemented by the Chretien government, when then-finance minister Paul Martin adopted a proposal by Ken Battle of The Caledon Institute. It is an income-tested benefit for children, paid to their parents. As incomes rise, the amount of the payment reduces in a graduated way. The benefit is currently at over 60% of what it should be for greatest effectiveness, and increasing the amount would be an important poverty reduction action.

There are a set of things the government can do to strengthen existing instruments to help reduce poverty. Hundreds of millions of dollars of unpaid wages are owing to employees each year in Ontario. Some employers decide to stiff employees they are laying off, or workers at the end of temporary employment, or at the time of plant closures. They calculate that the employees won’t pursue them and that government labour enforcement officers will never get to them. As well, a variety of government benefits go uncollected because people who qualify don’t know about them. Bolstering the ability of government to have employers and others follow the law and its regulations, and sharpening the “client focus” of government officials can go a long way to helping Ontarians access what is owed or available to them.

A recession is a very good time for governments to invest in infrastructure, and a focus could be on the types of infrastructure that help poor people have greater success in getting and keeping jobs. Stable housing and the ability to get to work are two such things, so investments in low income housing and transit are key elements of an infrastructure strategy. The McGuinty government has already announced an impressive $11 billion investment in transit. A similar strong commitment to housing would also be an important part of a poverty reduction strategy. Canada is unique among developed countries for not having a significant national or other government policy and commitment to housing and transit. Principal beneficiaries of both would be lower income people. But they are also important to employers, who benefit enormously from a workforce which does not have to change residence regularly based on shifting patterns of affordability, and which can rely on public transit to get to and from work. Housing and transit are also key elements of social cohesion, giving people stable tenure in neighbourhoods which allow them to build a strong network of relationships in which to live and raise their families.

A final key element of a provincial poverty reduction strategy is a community collaboration strategy which enables communities across the province to bring together a broad cross-section of people to identify issues and solutions. This is a tremendously important element of a strategy, because it says that poverty reduction is not just a responsibility of government, but of the entire community. It is the responsibility of employers, labour unions, community agencies, local governments and the federal government offices in the area, business groups, and citizens generally. Across Canada, such collaborations are being formed by such organizations as the Vibrant Communities project of The Tamarack Institute, by United Ways and Community Foundations, by health and education institutions, and by sectoral groups who have come together in such signal projects as The Great Bear Rainforest in British Columbia’s central coast. Poverty reduction is on everyone’s agenda, and we will only be effective when we all embrace our responsibility. The time is well past when we can just wait for government to do its part.

There will be some understanding if the announcements at the end of the year are less ambitious and more elongated than would be possible if a severe recession was not looming. But the McGuinty government must be committed to shortening those time frames and strengthening its measures when the recovery comes. It has shown a commitment to repairing the damage to Ontario done in the Harris years, with real progress in education, healthcare, environment, and municipal affairs. All of those central portfolios are critical to a rising tide of prosperity, and provide the critical platform to speed the recovery from recession. For low income Ontarians, education and healthcare in particular are the long term way to break out of poverty. The McGuinty government has shown it understands the key underlying dynamics in these areas, and has mostly pulled the most effective levers. Now is the time to do the same in poverty reduction.