Ontario Provincial Politics Ontario, Canada\'s

Ontario Provincial Politics

Ontario, Canada's largest province by population has been facing great economic obstacles since the early 90s, after the severe fallout of that time. Although social policies have been directed towards accomplishing some degree of economic improvement, there are still many reforms to be made in order for Ontario and the whole of Canada to achieve a greater degree of economic development.

The social and economic situation of Ontario today has its roots in the early 90s period, when Canada faced a very difficult economic recession. Ontario has also faced severe economic problems for five consecutive years (1990-95), when the total excess of deficits reached $10 billion and the overall increase in government debt reached $60 billion. By 1995, Ontario was in a very difficult economic situation.

The economic situation had the greatest effect on the low income citizens that were facing social and economic difficulties. Since 1995, Ontario undertook significant steps towards a social reform that would benefit all social categories. The results of the reconfiguration of the welfare of Ontario can be noticeable and shall be analyzed in depth in this paper.

One can not look at Canada as a whole and identify the problems of its provinces because the subnational level of government has responsibility for social programs and welfare. This is why it is important when analyzing Ontario to focus solely on the policies adopted by the government of Ontario, considering that it is directly responsible for the social and economic development of the province. Although there might be resemblances between different Canadian provinces, Ontario's policies must be viewed and discussed separately.

Considering the fact that Canadian provinces have the power to determine their own social and welfare policies, the Canadian case is unique. "Given the relatively high degree of interprovincial variation in social assistance provision, it is not surprising that welfare reform is being launched from the bottom up."

The Canada Assistance Plan (CAP) was created in 1966 and represented an important step towards creating national welfare standards. CAP was an agreement of cost-sharing between the provinces of Canada and Ottawa by which the federal government agreed to provide 50% of the costs for social assistance and services. Through CAP, Canada's welfare was facing a high degree of standardization. Considering that the provinces were receiving funds for social policies, they were bound to agree to several policies: to provide social assistance, not to implement residence requirements as criteria of eligibility, to establish a social assistance appeal procedure, and so on. Those were all regulations at a national level and all provinces had to implement them because they received funds for these policies. "But most importantly about CAP was that it introduced needes-based social assistance on a nationwide scale and that it prohibited the provinces from imposing work obligation on welfare recipients. From a comparative standpoint, the CAP agreement might seem like a rather weak form of a nationally institutionalized welfare arrangement. However, it significantly strengthened (and centralized) welfare discourse at the national level."

CAP generated great debate among economic analysts, as some consider that such a great involvement from the national government is affecting the independence of the provinces and is placing a too great burden on the national government. Starting in 1986, federally induced fiscal austerity limited the indexation of federal transfers to the provinces, thus aiming to decrease the real value of transfers over time. The slow retreat of the federal government from the provinces was permanently decided in the early 90s, when Canada faced a great budget deficit that forced the federal government to decide upon ending the CAP for the three richest provinces, including Ontario. Federal transfers towards provinces were limited to 5% per year, a great decrease from 50% as it was under the CAP. The loss of the federal support for Ontario meant an estimated $18 billion less revenue for the province for the subsequent budget year.

CAP was completely ended in 1996 and the Canada Health and Social Transfer (CHST) was created, marking the fundamental break with needs-based, means-tested social welfare in Canada. Most analysts believe that the end of CAP marked the end of a relatively harmonious period of policy making and that the period that follows it is condemned to great sacrifices and less advantages for the low income social categories. However, the federal government presented the CHST as a model of fairness and transparency. "The CHST reduced transfer payments to the provinces by 23.6%." Considering this, it is hard to understand how a reduced transfer can represent a greater degree of fairness and an improvement in social services. The interest of the federal government was to deal with the budget deficit and ending CAP was the solution.

Moskovitch correctly states that: "Block funding means never having to take financial responsibility for the poor...In this respect, in the name of deficit, debt, and provincial rights, the welfare state has been returned to the pre-1956 period when the level of government with primary responsibility for economic policy had no corresponding responsibility for Canada's poor. This constitutes a fundamental change in the nature of Canadian federalism undertaken in the name of expenditure reduction...The shift to a block grant insulates the federal government from the effects of a policy favouring the reduction of inflation over the reduction of unemployment."

The creation of the laissez-faire federalism granted more power to provincial leaders, but fewer funds, and did little to improve the living standards of the poor population. In fact, it was particularly the low income people that were affected by the change in social policies, because they were the ones facing inequality and unemployment. The national standardization of social assistance during the CAP represented a guarantee of welfare homogenization.

The welfare reform started in Ontarion in the late 80s as the lieral government established the Social Assistance Review Committee (SARC). The first comprehensive review of the welfare reform in Ontario was made in 1988 and it was a report entitled Transitions. The recommendations included in the report were translated into legislation and the results were soon visible. The system of social assistance and allowances was improved, thus having a great impact on the low income social category. But more important, people were stimulated towards trading welfare for workforce. This was one of the most important measures as welfare and social assistance were traded for integration into workforce.

The end of CAP represented for Ontario a dire fiscal situation and accelerated the political pressure for cost containment and more radical welfare retrenchment in the province. The policies of welfare state restructuring in Canada and Ontario included represented a great injustice for the disadvantaged categories. The fundamental change in the provision of social assistance was the abandonment of CAP and the introduction of CHST in 1996. Together with the end of CAP, provincial social policies were less and less efficient in providing social security and assistance for those in need. This represented a moment for the introduction of full-fledged welfare-to-work initiatives on the provincial level.

The creation of the CHST represented a great change in the practice of welfare in Canada, creating the space for provincial workfare experiments. For Ontario, the most noticeable workfare program is Ontario Works (OW), which is generally described as a success. The program is a form of social assistance or welfare that was created as a form of support for those that are unable to find work or that are temporarily unable to work. OW has two main components: Financial Assistance and Employment Assistance. Financial Assistance is the part of the program that supports those people that have no other means for obtaining money for food, shelter, clothing and other household items. The other part of the program, Employment Assistance, provides help for people to find work or become job ready.

However, social reform in Ontario is the result of a number of complex elements rather than the result of a single social program designed to integrate people into the workforce. There is an ongoing welfare-workfare transition that is affecting the lives of the low-income population.

It was presented above how social policies evolved in Ontario and in Canada over the past decades. Now, Ontario, like many other Western economies, is facing a radical transition of welfare. Traditional welfare settlements are viewed now as unwise and unnecessary and they are being reformed. Those that support the reform of the welfare argue that instead of being a solution for poverty, welfare is in fact a bearer of dependency. The solution is to re-cast welfare, in a different form and with a different function, as workfare. The transition towards workfare means significant changes that directly affect those that represent the most disadvantaged social category.

There are certain functions of workfare that have the capability to transfer at least a part of the beneficiaries of welfare into workforce. Workfare is created towards reducing eligibility, cutting caseloads and directing recipients away from welfare and into any available work. This type of welfare was first designed by the U.S. And was soon adopted by a number of other countries, including Canada. Local government plays a decisive role in applying the social reform in Ontario. However, national government continues to be crucial in shaping the parameters for reform.

One of the most important steps for the reform of Ontario's welfare was made in 1995, when the Progressive Conservative (PC) party was elected after promising to transform welfare through a "Common Sense Revolution." The hart of the reform was represented by the welfare replacement program, Ontario Works. The program focuses on finding a job for every participant in the program, thus driving participants away from welfare and into workfare. The focus of OW is on supporting as few people as possible through welfare and providing participants with training and jobs that would allow them to support themselves.

Despite the success that was presented to be OW, data confirms that Ontario's government does not have sufficient proof to state that the program actually improved dramatically the lives of the poor in the region of Ontario. In fact, welfare contraction began before OW was adopted because despite the focus on supply-side activation, reform outcomes remain dependent upon local demand for jobs. Ontario's government presented OW as a great success, stating that more than 500,000 people found work and left welfare. The truth is that the figures are exaggerated, as they show only those that have left welfare, failing to present the right number of people that got a job, instead of moving and so on.

Even more important than the number of people leaving welfare for workfare is the actual experience of those that obtain a job. These people often find themselves in the situation of earning very few money and having increasingly insecure jobs. A new social category was created formed of the "working poor," namely the people that have a low income job and that are increasingly poor as their period of low earnings gets longer. These people are underpaid and often have to settle for whatever job. Many of the jobs they take are not fulltime, year-round, meaning fewer earnings. The government is no longer obliged to cover welfare, but these people can not support themselves only through their jobs and fall deeper into poverty.

Those that still remain on welfare are facing similar difficulties as their income can only offer them little support considering the huge differences between the prices of house rents and every day spending and the money received on welfare. "Disturbingly, the removal of support services is putting increasing numbers of women at risk, with over two thirds of Ontario's emergency shelters and transitional houses reporting battered women returning to abusive relationships because they could not survive independently on welfare."

Social reconfiguration in Ontario has focused on two areas: reducing welfare services and tightening eligibility. There is indeed a caseload reduction, but it is not clear how much of it is because of the OW program. Welfare services were greatly reduced, the recipients having to live on benefits that buy less than they did prior to the OW program. There were other parts as well of the reconfiguration program that were placing an even greater burden on the poor: ending a great deal of community support programs, decreasing the funding for community services, canceling the construction of housing units. "Eligibility for welfare has been tightened. The provincial government has simply disqualified people, changing the rules relating to 16 and 17-year-olds, post-secondary students and common-law spousal relationships. Under this socalled 'spouse-in-the-house' legislation, women in common-law relationships are prohibited from receiving welfare in their own right. Other measures have increased the complexity and reduced the scope of the appeals procedure, drastically cut asset limits, and greatly increased the type of information needed to sustain a claim."

Considering the new criteria for eligibility, more and more people find themselves with no support from the state and are bound to increase their poverty level because they have low paid jobs. The eligibility issue represents a real problem because many people find themselves in the impossibility of applying for welfare although their income is low. The social reconfiguration in Ontario is affecting mostly those that have low incomes because they are the ones that are facing tighter eligibility norms, that are bounded to live on a low welfare, that are forced to accept temporary low paid jobs. For these people, poverty is becoming more and more a reality that they can not escape from.