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January 27, 2013

Hudak's welfare fairy tale

Reuel S. Amdur

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Perhaps you haven't been holding your breath in anticipation of the Ontario Tory welfare policy announcement. Well, in any case it has arrived. Not surprisingly, it is full of holes.

The idea that has garnered the most attention is the proposal to reduce benefits to people who are long-term welfare recipients.  To be fair, this is a proposal that in a somewhat different form made its appearance during Bob Rae’s unmourned stint as premier.  The theory is that it is too comfortable being on welfare, that if we make it less advantageous, then people will work instead.  People choose between work and welfare, it is thought, on the basis of an economic analysis.  Unfortunately for the theory, economic deprivation can lead to depression, so that this punitive approach can in fact lead to less job-oriented activity.  Then there was the study for the Social Assistance Review Committee by economist Ernie Lightman, who found that single mothers were leaving provincial assistance for jobs that left them less well off.  The Tory stance also fails to consider the impact on children of families who are subjected to this tough love.

There is another angle from which to look at long-term welfare recipients.  Ontario’s current system of determining disability is seriously flawed.  The high rate at which decisions on disability are overturned by the Social Benefits Tribunal and the great disparity in the rate of findings of disability from one Tribunal member to another and on the initial adjudication from one Disability Adjudicator to another gives us one reason that some people remain on Ontario Works, which is supposedly just for temporary relief.  Many of these people are in fact disabled.  They are not happily living off the meager pittance provided by the province.

Everything in this Tory scheme is geared toward getting recipients to work.  A noble goal.  And to make work more remunerative than welfare.  There are some difficulties, however.  One obvious one is the unemployment rate.  If recipients get jobs, will they simply replace other low-income workers who are then forced to go on welfare?  And if we want work to be more remunerative than welfare, why has Tory leader Tim Hudak promised not to increase the minimum wage?  In any case, not everyone is employable in any economic sense.  To give a couple extreme examples, consider a quadriplegic high school dropout or a person living with active paranoid schizophrenia. 

In a real howler, Tim Hudak and company propose to get both Ontario Works recipients and those on the Ontario Disability Support Program to work with “a smaller, leaner social service agency staff complement,” “the inevitable result of reducing the cost of programs, cutting red tape and achieving greater value for money.”  While there would be some savings in combining Ontario Works and the Ontario Disability Support Program (ODSP), which they favor, the costs entailed in a full-scale program of individual casework geared to employment would be staggering.  The current Ontario Works caseloads stand between 150 and 200, on ODSP from 230 to 380.  Any counseling program with the slightest chance of meaningful impact would involve cutting caseload size to 50 at most.  There is not the slightest chance that Hudak is prepared to move in that direction.  The cheapest approach to social assistance is simply to send out checks, or even better, direct deposits into bank accounts.  Any services offered beyond that necessarily add to cost.  Intensive services add intensively.  A focus on casework, education, and training will cost big bucks.

Hudak is also concerned that recipients are spending their benefits inappropriately.  When I was working in the field of social assistance, I saw that problem up close.  A serious problem—for a small minority of clients.  In anti-welfare overkill, Hudak wants to give all recipients a debit card usable only for food.  That card creates its own problems.  Welfare rates are so low that the amount provided for accommodations frequently does not cover the actual cost of rent.  Since the welfare recipient must often take money from the food allowance to help pay the rent, what happens if he gets a debit card usable only for food?  In any case, the budgetary need for food determined by the local health department is well in excess of what is provided in the welfare check.  All of this suggests that the big problem is not that welfare recipients are spending money inappropriately: it is that the Ontario government is not spending its tax revenues appropriately in meeting the needs of the most vulnerable. 

Tory M.P.P. Tony Barrett, in his introduction to the policy paper, says that Ontarians are “over-taxed.”  On the contrary, they are under-taxed.  There are serious unmet needs in the province, and the income distribution is heavily tilted toward the top.  Don’t expect that to change under a Tim Hudak government.

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