O.D.S.P. ACTION COALITION

C/O PARKDALE COMMUNITY LEGAL SERVICES, 1266 Queen St W, TorontoONM6K 1L3

The Case for Adequacy in a Time of Austerity

The deep cuts announced in the government’s 2012 budget will disproportionately affect those least able to afford them. Promised increases to the Ontario Child Benefit have been delayed, OW and ODSP rates have been frozen and funding for benefits like the Community Start-Up and Maintenance Benefit have been cut in half at the same time as eligibility is being extended to all low-income people.

People on social assistanceare being asked to do their part in paying down the deficit and to pay for extending benefits to low-wage workers. This isn’t a fair and balanced approach to Ontario’s economic situation. It’s putting the burden on the backs of those least able to pay.

The ODSP Action Coalition calls for the support of the Ontario Government and Opposition Parties to:

Immediately index OW and ODSP rates to inflation so people don’t slide deeper into poverty this year. Establish an independent board, which would include people on social assistance, to set rates in future. Social assistance rates need to be raised to reflect average rents, utility costs, food, transportation and other basic needs, including the additional costs of having a disability.

People on social assistance understand the pain of economic instability and the need to make tough choices. Poverty for people on Ontario Works (OW) and the Ontario Disability Support Program (ODSP) has persisted over the past 15 years, despite small rate increases since 2005 and new programs like the Ontario Child Benefit. The huge income gap created when OW rates were slashed and ODSP rates were frozen in 1996 has actually widenedtoday.Increases haven’t kept pace with inflation and rates are once again being frozen.

It’s not getting any easier. People on social assistance are further behind today than they were in 1996. A single person on OW receives just $599. A single person on ODSP receives $1,064. And a single mom trying to raise two kids only gets $1,165 from OW[1]. While there are other income sources that people on OW and ODSP can get – like tax credits and child benefits – the total incomes of the majority of people on OW and ODSP are still well below accepted poverty lines.

At the same time, costs continue to rise sharply. Housing costs grow every year, especially in major urban centres like Toronto where most OW and ODSP recipients live. The government has set the 2012 rent increase guideline at 3.1%, meaning that even more of a person’s OW or ODSP income will have to be spent on housing – rather than food, clothes or other expenses.

Statistics Canada’s most recent report on the Consumer Price Index, issued March 23, shows that utility costs continue to skyrocket – by 7.1% since last February. Meanwhile, no level of government is adequately investing in building more affordable housing, despite waitlists that stretch for years.

Transportation costs in Ontario have also gone up by 4.1% and the cost of food has risen by 4.6% since last February. Staple foods saw some of the highest increases – meat went up by 6.9%, fresh vegetables by 6.6% and bread by 6.9%.

This is an important time to talk about inequality. To talk about who is hurting from economic turmoil in Ontario – the declining middle class – and who is hurting most: those already living in poverty, including people on OW and ODSP and low-wage workers.

And who is not hurting at all. Corporations and the wealthy continue to enjoy government handouts while the declining middle class and the poorest among us contend with rising costs, job losses, reduced benefits and increasing insecurity. In an effort to create growth, governments have delivered tax cuts to the most well-off, including corporations, in the belief that the money saved will be invested in creating jobs – and jobs will be the answer to ending poverty.

That strategy simply isn’t working. As the Secretary-General of the Organization for Economic Cooperation and Development (the OECD) said of its recent study on income inequality, “this study dispels the assumptions that the benefits of economic growth will automatically trickle down to the disadvantaged and that greater inequality fosters greater social mobility.”

In Canada, corporations are sitting on half a trillion dollars – much of which came from tax cuts – instead of investing in their businesses and creating new jobs.

Trickle-down economic policies – like giving tax breaks to the most well-off in hopes it will benefit the least well-off – just don’t work.The funds given away in corporate tax breaks could have been used to tackle inequality, boost people’s incomes, fund needed community supports and services, and increase the quality of life of all Ontarians.

Austerity isn’t the only option. As a society, we cannot continue to ignore inequality, including the poverty that people on OW and ODSP live with every day, while the most well-off benefit. Delaying further corporate tax cuts is not enough. Corporations need to pay a fairer share of revenues.

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[1]See for more detail on the 1% increase