Tory cuts ensure "basic needs" hard to meet for Ontario's most vulnerable

May 28, 2003

TORONTO--Eight years after the Harris-Eves government cuts to Ontario's welfare system, Ontario's poorest are finding it nearly impossible to meet basic needs such as food and secure shelter, according to Targeting the most vulnerable: A decade of desperation for Ontario's welfare recipients, a new study by the Canadian Centre for Policy Alternatives which comes on the heels of HRDC's release of the new Market Measure of Poverty.

Ontario's current government was elected in 1995 with a focus on tax cuts and large public expenditure reductions and it targeted the so-called "Cadillac" of social assistance rates, with no regard for the cost of living in Canada's second most expensive province. Welfare rates were cut by 21.6%; since 1995, inflation has increased by 15.8%, making the real value of that cut now over 37%.

According to authors Oliphant and Slosser, "ironically, in 1993 Conservative MPP Cam Jackson criticized then-NDP Minister of Social Services Marion Boyd for 'not knowing what she was doing' for increasing welfare rates by only 1%. But now, in 2003, the tenth anniversary of the last time welfare rates were raised in Ontario, current welfare incomes are far below the Sarlo-Fraser Institute's poverty line--the most conservative poverty line in Canada."

With inflation eating into stagnant welfare rates, the real value of welfare recipients' money is in sharp decline. In Ontario, the average rent for a two-bedroom apartment has increased by 24% over that period while in Toronto the cost of food has increased by 13% since 1999.

Ontario's shelter gap--the difference between a shelter allowance and the average rent--is also increasing. But even if the current shelter allowance covered rents, the total amount received for basic needs fails to cover all non-rent living costs. In Ottawa and Thunder Bay, the basic needs allowance a single welfare recipient receives does not even cover the monthly cost of nutritious food.

Higher rental prices have been devastating, especially in the two largest urban centres: the GTA and Ottawa. As a result of the increasing shelter gap, the average family of four in Toronto diverts $244.25 from the food budget (basic needs allowance) to meet the cost of rent; in Peel $298; in Windsor $141, in Ottawa $158; and in London $157. The Daily Bread Food Bank in Toronto reports that the average family on welfare in the GTA spends 70% of income on rent.

"Eight years after welfare rates were slashed by over 21%, significant reinvestment is now required to halt and reverse the erosion of welfare incomes under the Harris-Eves government. We propose that the basic needs allowance be returned to its pre-1994 level, and that the cost of inflation be added. Furthermore, the flat shelter allowance should be replaced with a rate that is variable by location and tied to the prevailing average rents in each city," conclude the authors.