Kathleen Wynne’s first budget provides concrete progress on social assistance reforms; but there are also missed opportunities to address increasing inequality in Ontario.
The budget delivered best on social assistance reforms. In contrast to the cutbacks to Community Start-Up and Maintenance Benefits in last year’s budget, this year’s budget showed concrete progress in three areas. First, it moved forward in eliminating a number of “stupid rules” that were punitive and made life for people living on social assistance difficult and unaffordable. Second, it increased social assistance rates and acknowledged the desperate situation for single people living on Ontario Works by providing them with a larger increase (however, rates still remain so low that they continue to endanger health; people will still have to choose between rent and food). Last, it outlined next steps in the development of the poverty reduction strategy, including consultation with affected communities.
As we all know, people who are living in poverty are working for low pay as well as receiving social assistance. Therefore, the Budget’s action on the minimum wage is very disappointing. The only commitment is to an advisory panel to report back to government within 6 months. The role of the labour market in increased income inequality calls for more concrete action. An immediate increase to the minimum wage would make life more affordable for low-income individuals and families. While the budget made progress on addressing labour market inequality by increased funding for enforcement of employment standards by $3 million per year, it still falls short of meeting the government’s commitment.
A truly missed opportunity to reduce inequality is the Budget’s commitment to continued reductions in real, per-capita program expenditures. The government’s deficit reduction targets could be met through tax increases that would support its economic and social policy goals. Balancing the budget by increasing taxes is much less harmful to growth than by restraining spending. Recent work by the CCPA showed a number of alternatives for Ontario to rebuild its fiscal capacity to reduce the deficit and enhance public services. A gradual increase in taxes would be sounder economic policy than the announced reduction in real, per capita spending. And, rather than increasing inequality, it would reduce it.
In this minority legislature, Andrea Horwath has the chance to improve this budget in a way that will make life more fair and affordable for Ontario families.