Presentation to the Ontario Minister of Finance

Presentation to Ontario Finance Minister, Charles Sousa, by the Hamilton Roundtable for Poverty Reduction’s Social Assistance Reform Work Group Co-Chair, Laura Cattari: April 2nd, 2013

“My name is Laura Cattari. I am Co-Chair of the Social Assistance Reform Work Group for the Hamilton Roundtable for Poverty Reduction. I am leading the sub-group on Social Assistance Reform implementation.

I am here to say all budget funding to social assistance must reflect the reality that there is nothing left to take away from recipients.

The Commissioner’s recommendations in Brighter Prospects calls for an immediate increase of a $100 for single Ontario Works recipients, we say without eliminating the Special Diet Allowance before new basic rates being established. The effect of it’s elimination would mean higher health care costs for the province.

We ask you allow recipients retention of the first 200 dollars of earnings monthly and increases in their asset limits. This allows for a greater level of personal solvency, making the transition from poverty to prosperity smoother and more sustainable.

We call for the immediate reinstatement of Community Start-Up and Maintenance Benefits and Discretionary Benefits. The regressive move in last year’s budget is in direct opposition to the Commissioner’s recommendation of more universal supports. Homelessness costs you far more than providing these benefits. Lost productivity costs us far more than fixing teeth.

The dialogue birthed from the Commissioner’s process should not end there. We call on this budget to include the creation of an office of oversight for reforms and poverty reduction: an arms-length body, inclusive of the community, employers and those of lived experience with the system. Better still, a rates board composed of the same, to determine evidence based rates that reflect an adequate standard of living, as proposed in Bill 235, presented in 2007 by the Honourable Minister Ted McMeekin.

There is an investment cost to this. The reality of creating this vision needs to be founded in a larger context; encompassing policy and spending far beyond the scope of a single ministry. The costing of social assistance and sought after savings, must include costs to other ministries that occur while keeping individuals in sustained poverty.

Investing in recipients sees greater returns than infrastructure spending. This is totally measurable. Dr Kubursi, of Econometrics Research Limited found in Hamilton alone the stimulus effects of social assistance payments averaged 2.33 for every dollar spent, 39% of this is recovered in taxes. In comparison, infrastructure spending is pegged at an average 1.8 stimulus.

Yes, I am speaking of stimulus spending. An IMF report released last January cites global austerity measures as an error in judgement. Every dollar in austerity cuts costs us a $1.50 in GDP.

We cannot slash our way to better health; physically, socially or economically. It is our hope you consider this in your budget deliberations.”

1. Bill 235, Ontario Social Assistance Rates Act, 2007
2. Dr. Kubursi’s report, The Economic Impact of Social Assistance in Hamilton
3. Quote from the Wall Street Journal blog entry on January 3rd, 2013 entitled, IMF Details Errors in Calling for Austerity

“The International Monetary Fund is revising its metrics on how fast governments should cut their budgets, with the IMF’s top economist making the case that Europe’s fiscal diets were too severe.

In a new paper published Thursday, IMF Economic Counsellor Olivier Blanchard and research-department economist Daniel Leigh show the IMF recommended slashing budgets too fast early in the euro crisis, starving many economies of much-needed growth.

In “Growth Forecast Errors and Fiscal Multipliers,” Messrs. Blanchard and Leigh calculate IMF and European economists underestimated the euro-for-euro effect of cutting government budgets. While economists expected that cutting a euro from the budget would cost around 50 cents in lost growth, the actual impact was more like 1.50 per euro.”

Link the the actual IMF Working Paper.