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The presentation highlighted the fact that even as Ontario’s economy steamed ahead and prosperity soared, poverty retained its stubborn hold on more than 350,000 children. Campaign 2000 is calling for a package of measures that would restore public services and advance policies in areas that are key to addressing child and family poverty, including: employment oriented policies, early childhood education and care, affordable housing, child benefits and improvements to social assistance.
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Excerpts from presentation by Colin Hughes, Gerald Vandezande and Pedro Barata

It is time to learn from the lessons of the past. The legacy of across the board tax cuts has left us with a persistent fiscal and human deficit in Ontario. Relying on economic growth alone to address family income security will not be enough to pull us out of this deficit. A different course is needed. Now is the time, as Premier McGuinty once said, to “choose people over tax cuts”.

Choosing people over tax cuts will require doing more than ending further tax cuts. The development of public policies and services that invest in people must proceed with rebuilding the province’s fiscal capacity. Tax cuts have manufactured a crisis in public revenue. The cost of tax cuts is staggering: a $14 billion loss in annual provincial revenue, a current budgetary deficit of some $5.6 billion, public services in disarray, and public policy paralysis.

For many years now Campaign 2000 has pointed out that general tax cuts are not an effective anti-poverty strategy because they often deliver little or no benefit to low income families, tend to benefit upper income families disproportionately, and deplete public revenues available for other types of social investment. And social investments, not economic growth alone, are really what is needed to tackle the human deficit.

Relying on economic growth alone has only taken us so far. As our brief shows, child poverty persists despite strong economic growth. There is not a trade off between economic growth and social investments. Indeed, social investments that extend the ladders of opportunity to all children are a key to their future success as adults, and to the future success of our economy.

Public policy must play an active role in ensuring that all our citizens are included and share in our collective prosperity. It is clear that the people of Ontario understand this. In pre-election polling, about 80% of Ontarians indicated that action on child poverty should be a priority for the Ontario government over the next five years.

They have voted for a package of measures that would restore public services and advance policies in areas that are key to addressing child and family poverty, and include: employment oriented policies, early childhood education and care, education, housing, child benefits and improvements to social assistance.

Campaign 2000 has long urged for a comprehensive approach in these areas to tackle child poverty. We urge that the province take the necessary steps to ensure that the fiscal capacity of the province, so badly depleted through previous tax cuts, is restored to meet these commitments.

Public policy in Ontario has assumed that economic growth alone will deal with one of our province’s biggest human deficits: child and family poverty. While Ontario’s impressive economic growth over the past few years has contributed to a cyclical decline in the overall rate of child poverty in the province, it has failed to invest in the social supports that families rely on in their communities. The results for families are distressing; the persistence of deep poverty among more than 350,000 children in Ontario is a clear signal that economic growth will only take us so far in reducing poverty. To successfully guarantee the well-being of all children, governments must do their part and invest in people.

Even as Ontario’s economy steamed ahead and prosperity soared, many families continued to be left behind. In 2001, the latest year for which poverty figures are available, poverty retained its stubborn hold on more than 350,000 children. Among those who remain in poverty, the severity of the economic insecurity amidst such prosperity should be a cause for deep concern. Circumstances for low-income lone parents have stagnated while the conditions of low-income two parent families have actually deteriorated. Low-income lone parent families remain, on average, $9,000 below the poverty line. Among low-income two-parent families, the average gap between income and the poverty line actually grew between 1999 and 2001 to almost $12,000.

Strong economic growth is a factor in reducing rates of child and family poverty. However, the economy, by itself, is not likely to accomplish substantial poverty reduction. While the recent downward trend in child poverty seems encouraging, the rate of 13% for 2000 is still higher than the 11.4% figure achieved during the peak of the last economic boom in 1989.

There are two main conclusions that can be drawn from the past 2 decades of economic cycles:

1) First, the overall level of child poverty ratcheted up to levels that were higher overall through the 1990s than in the 1980s in Ontario.

2) Second, while it is evident that economic booms and busts can bring the poverty rate noticeably down and up, over the past 20 years we see that the very best the economy can do on its own is leave more than 1 child in 10 poor.

Economic growth has likely accomplished all it can in reducing poverty. To go any lower, governments need to act. Investments in both income support and community services are desperately needed.

Summary of Recommendations

Ontarians said loud and clear: action on child poverty should be a top priority. Investments in children cannot wait for brighter days especially when inequality in Ontario continues to grow amidst prosperous times. We have heard much about Ontario’s fiscal deficit. But the social deficit affecting too many of our families is something that we hear very little about. We have a responsibility to step up and pay for what is needed – this has to be part of Ontario’s debate.

Campaign 2000 calls on the Provincial government to make social investments in comprehensive policies to tackle child poverty its priority, and, concurrently, to ensure that the fiscal capacity of the province is restored to meet these commitments.

Key Recommendations for a Poverty Agenda:

 Minimum Wage: Campaign 2000 applauds the recent increase in the minimum wage. But Ontario should set a higher target than $8.00 an hour, it should aim to reach it sooner and it should consider indexing the minimum wage to inflation. The province should also move quickly on commitments to develop labour market policies that invest in people to enable them to achieve their full potential.

 Social Assistance Supports: The Ontario government should implement its election commitments to provide families on social assistance with quality skills training, child care, and housing to help parents find sustaining employment and climb out of poverty permanently. We urge that the government re-orient the system of social assistance to facilitate opportunity planning, including access to post-secondary education as a welfare-to-work training option.

 Social Assistance Adequacy: In addition to implementing the Liberal commitment to adjust social assistance to inflations, the shelter allowance portion of Ontario Works and Ontario Disability Support Program benefits should also be raised to average rent levels in Ontario communities and the basic needs portion of these benefits should be increased to account for family needs.

 National Child Benefit Clawback: The province should address anti-poverty and equity policy goals by rescinding the claw back of the NCBS from social assistance recipients as promised. It should also ensure that community programs funded through welfare savings arising from the clawback are preserved.

 Quality Child Care: The first step is for the Ontario government to restore regulated child care funding to 1995 levels immediately – estimated at $160 million loss. It should additionally review how federal ECDI funds are spent in Ontario with a view to developing a comprehensive system and is linked to the education system. Ontario should also work with the federal government to substantially enhance investments under the Multilateral Framework on Early Learning and Child Care.

 Housing: While the government’s commitments on affordable housing fall short of the need they represent a first step towards reestablishing a provincial role in this crucial area of income security. Given the urgency of the housing crisis, the province should move quickly on its commitments to match federal housing funds and reinstating rent controls.

Use the link below to view the full brief in pdf format.

Related site: Link to the full brief in pdf format.