Ontario budget 2009: Battered social infrastructure gets little relief

Ontario’s critically important social infrastructure is taking a battering in the current recession, but the 2009 provincial budget offers almost no relief. Community-based health, social services and housing providers are on the front lines in delivering the practical and basic supports that people who are suffering the most in the current recession desperately need. Community health and service providers are facing the double-whammy of increased demand for services while funding continues to deteriorate.

While non-profit organizations contribute a bigger share to the province’s GDP than the auto sector, they have been virtually ignored. In contrast, the government targeted dollars at initiatives in tourism, committing to spend $40 million, which employs only 4% of the Ontario workforce. The third sector, including community organizations, rivals the retail sector as an economic driver and is critical to repairing the significant tear in the social safety net.

Last fall, Ontario finance minister Dwight Duncan put on hold plans for a modest $20 million docial innovation fund that would have offered practical support to non-profit groups (compared to the UK’s massive investment in Britain’s third sector). In December, the province’s poverty reduction strategy promised that the fund would be revived, but the 2009 budget has failed to release those critically important funds. The $20 million promised remains locked up, while the financial crisis deepens and the needs of Ontarians grow. Recent Wellesley Institute research, including December 2008’s Poverty is Making Us Sick demonstrates that a $1,000 investment in social benefits creates a fourfold reduction in social service expenditures.

“The current credit squeeze is depleting social entrepreneurs of opportunities to invest in communities,” says Rick Blickstead, CEO of the Wellesley Institute. “It is at this time that the social venture fund is most needed. The Ontario government promised a $20 million social venture fund when it announced its poverty reduction plan in December. We recommend an additional $10 million to support local initiatives and complement the community opportunities announced with the poverty reduction plan.”

The current credit squeeze is depleting the capacity of social entrepreneurs to invest in communities. The 2009 budget was an opportunity for the government to deliver on its promise and invest in human capital for tomorrow’s generations.  The Social Innovation fund could have been tangible proof of the Ontario government’s commitment to poverty reduction, equity, and to people on the front lines of our communities.  The question that begs to be asked is:  what are we waiting for?

In December, the province announced that it wanted to create preferential policies to allow community-based enterprises to compete for government contracts. This would be a practical boost to local initiatives. The “OntarioBuys” plan, an expansion of government procurement strategies set out in the 2009 budget, is silent on the December promises. Ministry officials in the budget lock-up said that they hope to launch a consultation in the spring to create plans to include community-based enterprises in government plans.