Privatization, ‘disconnect’ and help from the Hill: the PC’s poverty strategy one year in

Andrea Hatala has tried working day-to-day office jobs, often in filing and data entry, only to be let go. She’s tried applying elsewhere, only to be turned away.

It’s not that she doesn’t want to work. But for thousands of Ontarians like her living with a disability, that’s easier said than done.

Hatala, who lives in Toronto, is a recipient of the Ontario Disability Support Program, which provides a monthly maximum of $1,169 in support — roughly $14,000 a year — to those with a doctor-verified “substantial mental or physical impairment” that limits one’s ability to work or care for themself.

It’s one of a pair of social assistance programs undergoing a “transformation” ordered by the PC government. (The other, Ontario Works, provides those unable to afford basic living expenses like food, clothing and housing with up to $733 a month.) In December 2020, the PCs unveiled their Poverty Reduction Strategy, a five-year plan with the primary target of getting ODSP and OW recipients “to move into meaningful employment and financial stability.”

By 2024, the government wants to be shifting 60,000 recipients per year from those programs into the workforce, up from 35,240 in 2019. But one year since the strategy’s launch, social assistance recipients like Hatala, along with advocates and policy analysts, worry that direction could leave vulnerable Ontarians behind.

“We are on ODSP because a doctor said that we cannot work,” says Hatala, decrying the notion “a job is the only way out of poverty.”

“I think that if people could work, it would be a different story. But for people that can’t work — and for a lot of reasons people won’t even hire us — how are we supposed to get jobs?”

Garima Talwar Kapoor, director of policy and research at the Maytree Foundation, an anti-poverty think tank, describes a “disconnect” between the strategy and reality.

“There’s been this theory that the way to get people into work is to lower benefits as much as you possibly can so that people feel incentivized to work,” she says. “The challenge is that we really deprive people of income supports that are necessary to live a life with dignity.”

One month after the strategy’s release, the government received a letter from Ena Chadha, then-chief commissioner of the Ontario Human Rights Commission, expressing concern its stated goal of moving Ontarians off of social assistance into jobs “does not take an explicit human rights-based approach to poverty reduction” and recommending the government convene “a lived experience table of constituents to inform and guide implementation.”

“We are concerned that the stated target to ‘get more social assistance recipients to move into meaningful employment and financial stability’ is too narrow and is not a direct and sufficient measure of poverty reduction,” Chadha wrote, adding there should be further recognition of “systemic barriers to employment” for women, racialized groups and people with disabilities.

“By focusing on this target alone, the Strategy does not address some of the more complex and intersecting reasons that lead people to need social assistance.”

A central component to the strategy then-community and social services minister Todd Smith unveiled last December 16 — a transformation of employment and training services delivery for OW and ODSP clients — has fostered uncertainty amongst many recipients, while experts are skeptical that it stands to actually make life easier for those in need.

Such services, which help clients seek employment, are being removed from the purview of municipalities in favour of an “integrated” model that sees them contracted out to “service system managers.” Private companies were invited to compete through a Request for Qualification process to “oversee the planning, design and delivery” of employment services in regions across the province.

Three prototype regions — Peel, Hamilton-Niagara and Muskoka-Kawarthas — kicked off the transformation in 2020. The model was expanded across the rest of Ontario in June, starting with nine more regions.

But Talwar Kapoor says it’s hard to tell if outcomes have improved in prototype regions since evaluations aren’t public. She describes Ontario’s direction as being “eerily similar” to a model tried and tested in Australia over the last two decades, which was ultimately found to be “failing those it is intended to serve,” according to an inquiry by the Australian Senate in 2019.

Like the Australia model, called Jobactive, Ontario social assistance recipients subject to the new system are streamed according to the types of support they need and risk of long-term unemployment. Provincial funding available to SSMs depends on each client’s assessed employability, with higher amounts provided for those furthest from the labour market, such as those with prohibitive disabilities.

In Australia, that funding model has resulted in many recipients being “mis-streamed,” forcing them into a workforce they’re simply not equipped to enter, says Talwar Kapoor, who analyzed Australia’s outcomes in a research paper last year.

The scathing Senate report concluded Jobactive often assessed clients as “job ready” despite “serious barriers to employment, such as homelessness and substance abuse,” and incentivized service providers “to churn people through short term work.”

“When defending jobactive’s performance, the government often states that the program has achieved more than 1.2 million job placements,” the report stated. “However, it is important to consider the kind of work that participants are doing — is it a job that will give people the opportunity to move off income support and into lasting employment, or is it a short-term placement that keeps a person in the revolving welfare system?”

Those in Hamilton, one of Ontario’s prototype regions where American company FedCap now oversees service delivery, says the model has already increased barriers. (FedCap did not respond to a media request from Queen’s Park Today.)

“Just trying to get answers from your worker has also been a challenge,” says Anthony Frisina of the Ontario Disability Coalition. “Whether or not you qualify for this, whether or not you can obtain that based on your situation. You can’t get a hold of your worker right away.”

Frisina accused the PC government of “passing the buck.”

“I think there needs to be more added value to those with lived experiences. The fact that we as members of a disability community are having to jump through hoops to get things done is only procrastinating the end game and our quality of life.”

In July, the province launched a third-party evaluation of the prototype phase, set to be conducted by Goss Gilroy Inc. in March 2023, to help the ministry assess whether the revamp is meeting its intended outcomes. But the government already seems to believe it is.

“Early results from this transformation show our new approach is more effective in serving the needs of social assistance clients compared to non-prototype areas, and indicate that the Service System Managers are meeting or exceeding their commitments to serve ODSP recipients, including people with disabilities, Francophone and Indigenous clients,” says the office of current Children, Community and Social Services Minister Merrilee Fullerton, who declined an interview request.

“These reforms will deliver employment services that surpass current system levels. Our government is moving forward with these system reforms because the current system is not doing enough to help people find good jobs, as only one per cent of people on Ontario Works leave the program with sustainable employment.”

But John Stapleton, who spent 28 years working for the province in the area of social assistance policy, says he worries about the impact of relying on private companies, rather than public entities, which have more to lose. He says municipalities bear the brunt of costs when outcomes are inadequate for the people they serve.

“People expect governments to get this stuff done,” he says. “Governments have skin in the game that private sector companies don’t. If they fail — and look at the amount of disruption that there would be in a place like Toronto if they get out of the game and then if it’s not successful in a couple of years — then what do you do? So you better be awfully, awfully sure the model that you’re getting is the right one.”

Talwar Kapoor echoes that sentiment.

“I’m probably one of the few people that also think that there are opportunities here,” she says. “I think integrated care is good for people and we don’t want people to have to navigate the silos of bureaucracy. But like all other public services, these decisions should also be rooted in evidence and less on ideology. I’m not sure that we’re making evidence-based decisions right now.”

Fullerton’s office admits the PC’s plan fell short of its lofty targets in the first year.

ODSP and OW caseloads dropped by 4,848 and 21,962 recipients, respectively, from December 2020 to September 2021, but analysts agree that’s not because the majority found work. Rather, they likely took advantage of temporary federal support programs necessitated by the COVID-19 pandemic, which offered higher benefits.

While the province doled out $8.3 billion in social assistance payments in 2020-21, Ontario’s Financial Accountability Office reported in November the PCs spent $369 million less on OW and $83 million less on ODSP than the year prior.

Fullerton’s office says the shift to federal supports explains the cost savings — and told Queen’s Park Today she recently met with her federal Liberal counterparts to press them to deliver on their campaign commitment to create a Canada Disability Benefit that would support ODSP recipients closer to the levels of CERB over the long-term.

But critics say provincial underspending is a symptom of a broader problem, namely that Queen’s Park has done little to actually make Ontario a more affordable place to live. They point to issues such as housing affordability, mental health and child care as examples of added roadblocks to leaving poverty behind.

Maytree’s annual analysis of welfare in Canada, released last week, found welfare incomes in Ontario were below Canada’s “deep poverty” line in 2020.

“Basic costs for food and shelter are going up and housing prices have always been an issue, but we’re going to see even more of a crisis in that area,” says Thomas Granofsky, founder of Radhus Consulting, who co-authored a 2019 paper arguing for a “reset” of social assistance reform in Ontario.

“We do know there’s a massive social housing waitlist, and we also know that Ontario’s expenditures on housing are really less than they need to be if we’re going to tackle that issue,” he says, citing a previous FAO report which found Ontario’s housing program spending from 2014-15 to 2018-19 amounted to less than $900 million a year — under 0.3 per cent of provincial expenditures.

A recent survey of nearly one thousand ODSP recipients by the ODSP Action Coalition found the average client paid around 66 per cent of their monthly income toward rent.

Granofsky also points to record-high food bank reliance in Ontario. Feed Ontario’s 2021 Hunger Report released November 30 found 592,308 people accessed emergency food support last year and visited food banks more than 3.6 million times, marking a 10 per cent rise over the previous year and the largest single-year increase since 2009.

The recently announced minimum wage bump to $15 an hour — set to kick in January 1 — is a start but doesn’t make up for the lack of focus on current social assistance rates, according to experts. Upon forming government in 2018, the PCs halved a three per cent increase to ODSP and OW rates planned by the previous Liberal government, and those monthly transfers have remained frozen ever since — despite the rising cost of living.

“We’re expecting people who are poor to dig themselves out. You can’t stabilize your life on $733 a month,” says Stapleton.

“When you say that you’re trying to get them into employment, well, how do you get somebody into employment … without any transportation, no money for clothes? If [an OW client] can find rent for $500 and food for $200, then you still can’t afford a transportation pass to actually go anywhere where you might find a job. It’s just too little money to stabilize your life.”

Ontario has the worst dependency rate on social assistance programs in the country, with nearly half of all Canadian social assistance recipients residing in its largest province, according to Parisa Mahboubi, a senior policy analyst at the C.D. Howe Institute.

A 2020 research paper co-authored by Mahboubi argues Ontario should trim “punitive” welfare clawbacks and hike earnings exemptions to improve its welfare system. (Under current rules, working ODSP and OW recipients can earn up to $200 per month without any deduction from their benefit payments, but for every $1 of earnings above those levels, they receive 50 cents less in benefits.)

Without a strategy to “reduce the cost of working” for those in poverty, “how can we expect people to leave social assistance programs?” she asks.

Experts and recipients believe the social services file remains low on the PC’s priority list, noting Fullerton has kept a low profile since taking up the portfolio in June. Her office says an annual update on the poverty strategy will be tabled by early next year.

Hatala, the ODSP recipient and co-chair of the ODSP Action Coalition, says a recent meeting with Fullerton didn’t seem to push the needle. She says she doesn’t feel heard by the PCs and fears what their direction will mean for vulnerable Ontarians like her.

“Disabilities are real. There’s a lot of ableism among the public and among the [PCs] in general. They don’t see that something’s different, but you’re not really going to be able to tell them otherwise,” she says.

“I think the result of this is that more people are going to be desperate, and more people are going to be in poverty.”