R.L.council.london.ca/CouncilArchives/Agendas/Community and... · 2015. 6. 10. · August 29,2006 R.L. Fair General Manager of Community Services I hereby certify that the Municipal

August 29,2006

R.L. Fair General Manager of Community Services

I hereby certify that the Municipal Council, at its session held on August 28, 2006 resolved:

1. That, on the recommendation of the General Manager of Community Services, the following actions be taken with respect to social policy issues related to social assistance participants and low wage earners in London:

(a) the amended draft "Income Security Policy Paper" attached hereto as 'Appendix A BE ENDORSED in principle and;

the General Manager of Community Services BE INSTRUCTED to distribute the draft policy paper to key stakeholders for review and comment; it being noted that:

(b)

the Community and Protective Services Committee (CPSC) will hear delegations with comments on the draft policy paper at its meeting of October 16,2006, after which the Civic Administration will revise and submit the final policy paper for CPSC and Municipal Council approval; and

the City will forward the final policy paper to the Provincial Minister of Community and Social Services (MCSS), the Federal Minister of Human Resources and Social Development, the Ontario Municipal Social Services Association (OMSSA), the Association of Municipalities of Ontario (AMO), the Task Force on Modernizing Income Security for Working Age Adults (MISWAA), local Members of Parliament and local Members of the Legislative Assembly of Ontario. (2006-CO1-00) (1/14/CPSC)

%iJ Kevin Bain

City Clerk

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cc: J.A. Fielding, Chief Administrative Officer G.T. Hopcroft, Director, Intergovernmental and Community Liaison C. Howard, Acting Director, Community Programs and Strategies M. Jeng, Manager of Social Research and Planning E. White, Manager of Employment Supports S. Giustizia, Manager of Ontario Works R. Johnson, Manager of Community Supports C. Smith, Community Partnerships and Funding CPSC Deferred

The Corporation of the City of London Office: 519-661-2500 ext. 6479 Fax: 519-661-4892 www.iondon.ca

Agenda Item # Page #

SUBJECT

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CHAIR AND MEMBERS COMMUNITY AND PROTECTIVE SERVICES COMMITTEE

MEETING ON OCTOBER 30,2006 CITY OF LONDON SOCIAL POLICY FRAMEWORK:

INCOME SECURITY POLICY PAPER

II I ROSS L. FAIR GENERAL MANAGER OF COMMUNITY SERVICES

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RECOMMENDATION

That, on the recommendation of the General Manager of Community Services, this report BE RECEIVED as information; it being noted that the Community and Protective Services will be hearing delegations at its meeting of October 30th, 2006 and may wish to alter, amend, add or delete recommendations based on consideration of the delegations; it being further noted that it maywish to pass a recommendation authorizing the Civic Administration to prepare a final draft for Council approval based on delegate comments and further Committee deliberation.

II PREVIOUS REPORTS PERTINENT TO THIS MATTER

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Labour Market Development Agreement and Labour Market Partnership Agreement (September 11,2006) City of London Social Policy Framework - Income Security Policy Paper (August 21,2006); City of London Social Policy Framework- Income Security Policy Paper Update (May29,2006); Task Force on Modernizing Income Security for Working Age Adults (MISWAA) Report: Time for a Fair Deal (May 29,2006); City of London Social Policy Framework, Income Security Policy Paper Foundation Briefing (May 8, 2006); City of London Social Policy Framework (April 3, 2006); Supports for Ontario Works Participants Who Face Intensive Barriers (October 31, 2005); City of London Community Vitality Framework (December 14,2005). Report to BoardofControl. TD Economics Report on Welfare to Work in Ontario (October 17, 2005); Projected Financial Implications of the Provincial Review of Employment Assistance Programs in Ontario Works and the Ontario Disability Support Program (January 10, 2005); Federation of Canadian Municipalities Quality of Life Reporting System (April 24, 2004; November 8,2004: November 29,2004; February 14,2005; May 30,2005); Painting by Numbers Data Session: Overview and Next Steps for Community Planning (November 8, 2004); Alternative to the Local Area Council Model Recommended in the Parks and Recreation Strategic Master Plan (September 13, 2004); Social Assistance Rate Increases: Ontario Works and Ontario Disability Support Program (July 26,2004); Profile of Ontario Works Participants (March 8, 2004); Defining and Measuring Poverty in Canada: The New Market Basket Measure of Low-Income (March 8,2004); "Ontario Works Caseload Trends Monthly Report," (monthly to the CPSC); A series of reports related to the National Child Benefit, leading to "Impact of the National Child Benefit Supplement and Framework for the Development of a Reinvestment Strategy," (August 26, 1998) and subsequent reports related to investments made through the National Child Benefit Emergency Fund: and "Changes to Unemployment Insurance: The New Employment Insurance Act - Potential Impact on the General Welfare Caseload," (August 21, 1996).

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9 "Changes to Unemployment Insurance: The New Employment Insurance Act - Potential Impact on the General Welfare Caseload," (August 21, 1996).

BACKGROUND

City Council at its meeting of August 21,2006 endorsed, in principle, the Social Policy Framework: Income Security Policy Paper and instructed the Civic Administration to circulate the Paper for comment, and issue a notice of intent of the Community and Protective Services Committee to hear delegations on the matter at a Fall meeting. Your meeting of October 30, 2006 was targeted and notice has been distributed formally through normal city notification processes and directly to all stakeholders who have been involved in the preparation of the Paper.

The purpose of this report is to provide a brief summary of the key issues and recommendations contained in the draft Policy Paper. A full copy of the draft is attached as Appendix A for Committee's reference.

SUMMARY OF KEY ISSUES:

I. Reforms to the federal Employment Insurance (El) program in 1995 has meant that fewer unemployed Londoners and Canadians have been able to access this income support and federal training programs when work is lost. For many Londoners, this loss of entitlement has resulted in asset stripping and descent to dependence on the social welfare system as individuals attempt to support themselves and their families when not at work. While the Federal Government has amassed an accumulated surplus of $50 billion over the past ten years, the number of individuals needing to access social assistance due to ineligibilityfor El has increased, thereby, driving up the costs of social welfare, 20% of which accrues to city ratepayers.

2. In spite of recent, incremental increases, the current Social Assistance rates fall far short of costs of living in London as measured by the Market Basket Measure. Social assistance participants have great difficulty in accessing affordable housing (due to an insufficient supply) and must pay high market rents for their shelter. High rents and low income present formidable barriers to employment for Ontario Works (OW) participants. While efforts are undelway to increase the availability of affordable housing units, income remains an issue for social assistance recipients as they attempt to stabilize living arrangements and prepare for work.

3. Low income working people face a similar economic challenge as earnings of those at or near minimum wage also fall far below the cost of living as measured by the Market Basket Measure. This situation presents challenges to individuals' ability to stabilize living arrangements and maintain work.

4. The continuing practice of the provincial government to "claw back a portion of the National Child Care Benefit further diminishes the capacity of families on OW to stabilize living arrangements and move towards a life of independence.

SUMMARY OF KEY RECOMMENDATIONS:

The Policy Paper recommends a mix of provincial and federal government measures that, if implemented collectively, would increase the income of low income earners and subsequently lead to the decreased vulnerability of both individuals and families in London and the Province.

A. TO THE GOVERNMENT OF CANADA:

It is recommended that the following actions be taken by the Government of Canada:

1. Reforms to the Federal Employment Insurance program: a. decreasing work hours required to 360 hours b. increasing the length of time that benefits may be received to 18 months

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c. increasing the earnings replacement rate to 65% 2. implementation of taxation supports for low-wage earners which would include a Working

Income Supplement and a Refundable Tax Credit

NOTE:

During Council's consideration of the draft Policy Paper, several members expressed concern about the cost of these recommendations for El reform and that the 360 hour qualifying benchmark was too low. Staff has considered these points carefully. We remain convinced that reform to El is necessary and fair. From the context of one taxpayer we cannot reconcile a situation where the Federal government is over-collecting El premiums on the one hand and shifting the burden of income maintenance to the provinces (and in the case of Ontario the municipalities) resulting in increased pressure on income and property tax.

With regards to the 360 hour benchmark, the overriding concern of staff and those we heard from in the preparation of the paper was the plight of new immigrant, seasonal and part-time workers as a significant part of the work force. The current El regulations make it extraordinarily difficult for these workers to qualify for El and benefit from employment training programs that are provided to El recipients.

If committee wishes to reconsider this recommendation, based on the above discussion, it might consider holding to the 360 hour qualifying benchmark for new immigrant workers, seasonal and part-time workers while maintaining the current benchmark for full-time workers.

B.

The Federal Government and the Province of Ontario have negotiated a new Labour Market Development Agreement (LMDA) and a Labour Market Partnership Agreement (LMPA). Under the LMDA, responsibility for the organization and delivery of current El training programs will be transferred to the Province of Ontario, via the Ministry of Training, Colleges and University. To date, the new Federal government has chosen not to move forward with the LMPA, which would have seen $1.3686 in training dollars invested in Ontario over 5 years.

It is the view of staff and those we consulted with that there is one labour pool and that an integrated and coordinated labour market development strategy is preferred, hence, the following recommendations to Canada and Ontario:

1. Provide stand-alone training programs, and create a new mechanism for the delivery of supplementary and training benefits outside of the El program

2. That the Federal Government move forward on the planning and implementation of the Labour Market Partnership Agreement

3. That the Federal and Provincial Governments provide for a high level of local municipal involvement in the planning of employment programs and services through the Labour Market Partnership Agreement, and Labour Market Development Agreement and that service delivery approaches have the flexibility to meet local needs

4. Provide timely information to the community in order to support successful local planning and implementation of the Labour Market Agreements

In a similar vein, supports to families with children are delivered by federal, provincial and municipal governments. As we have seen with the claw back of the National Child Care Benefit, these different programs do not integrate and do not maximize benefit to vulnerable families. Further, we note that a key barrier to family leaders leaving OW for work is the loss of valuable child supports, including day care.

What is needed is a new child benefit platform that coordinates benefits to families in need across all programs in conjunction with ongoing supports for parents to obtain employment. The following recommendations were proposed in the draft Income Security Policy Paper to address that challenge:

TO THE GOVERNMENT OF CANADA AND THE PROVlNCE OF ONTARIO:

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PROVINCE

1. Province to develop a program that removes children from the social assistance system (i.e. pays benefits outside of the social assistance system) without negatively impacting the most vulnerable social assistance recipients

2. The Province eliminate the claw back of the National Child Benefit Supplement from social assistance recipients

MINIMUM WAGE

C. TO THE PROVINCE OF ONTARIO:

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Agenda item # Page #

Province/ Territory Alberta

Social assistance rates across the country are compared in the table below. These rates are updated from the rates included in the August 21, 2006 draft policy paper. For comparison purposes. these rates include both basic financial assistance and additional benefits.’ From this table, it can be seen that Ontario’s social assistance rates rank comparatively low, particularly for two-parent families with two children (eight other provinces have higher social assistance rates for this family type).

2005 Welfare Benefits ($) Single Person with a Single Parent, Couple, Two Employable Disability One Child Children 4,824 7,620 8,784 13,271

Saskatchewan

Yukon

Nova Scotia

6,348 8,540 9,072 12,723

12,145 14,395 15,734 21,992

’ National Council of Welfare. Welfare Incomes 2005. October 2006. Additional Benefits include additional welfare benefits paid automatically to welfare households for items such as transportation allowances, child care, drug benefits and non-insured medical services, supplementary allowances for persons with disabilities, back to school allowances, winter clothing allowances and additional benefits paid to cover high shelter costs.

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FROM:

SUBJECT:

APPENDIX A

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ROSS L. FAIR GENERAL MANAGER OF COMMUNITY SERVICES

MEETING ON AUGUST 21,2006 CITY OF LONDON SOCIAL POLICY FRAMEWORK:

II To: I CHAIR AND MEMBERS COMMUNITY AND PROTECTIVE SERVICES COMMITTEE

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1

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9

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9

1

1

Social Policy Framework - Income Security Policy Paper Update (May 29, 2006); Task Force on Modernizing Income Security for Working Age Adults (MISWAA) Report: Time for a Fair Deal (May 29,2006); City of London Social Policy Framework, Income Security Policy Paper Foundation Briefing (May 8, 2006): City of London Social Policy Framework (April 3, 2006); Supports for Ontario Works Participants Who Face Intensive Barriers (October 31, 2005); City of London Community Vitality Framework (December 14,2005). Repoftto Boardof Control. TD Economics Report on Welfare to Work in Ontario (October 17,2005); Projected Financial Implications of the Provincial Review of Employment Assistance Programs in Ontario Works and the Ontario Disability Support Program (January 10, 2005); Federation of Canadian Municipalities Quality of Life Reporting System (April 24, 2004; November 8,2004; November 29,2004; February 14,2005; May 30,2005); Painting by Numbers Data Session: Overview and Next Steps for Community Planning (November 8,2004); Alternative to the Local Area Council Model Recommended in the Parks and Recreation Strategic Master Plan (September 13, 2004); Social Assistance Rate Increases: Ontario Works and Ontario Disability Support Program (July 26,2004);

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1 Profile of Ontario Works Participants (March 8, 2004); Defining and Measuring Poverty in Canada: The New Market Basket Measure of Low-Income (March 8,2004); "Ontario Works Caseload Trends Monthly Report," (monthly to the CPSC); A series of reports related to the National Child Benefit, leading to "Impact of the National Child Benefit Supplement and Framework forthe Development of a Reinvestment Strategy," (August 26, 1998) and subsequent reports related to investments made through the National Child Benefit Emergency Fund; and "Changes to Unemployment Insurance: The New Employment Insurance Act - Potential Impact on the General Welfare Caseload," (August 21, 1996).

- I BACKGROUND I) A number of research, policy, and advocacy groups have released reports outlining necessary government policies to support vulnerable children, adults, and families. This includes participants of Ontario Works (OW) and the Ontario Disability Support Program (ODSP), and also low-wage earners, or the "working poor."

Nearly a third of Canada's workers do not earn enough to meet their costs of living. Many are likely to be working in unstable or insecure jobs. Many do not have employment benefits such as extended health care, dental plans, disability coverage and private pension plans. Many are ineligible for Employment Insurance. This vulnerable worker population is comprised largely by women, recent immigrants, youth and individuals with lower educations.

Policy changes in the mid-1990's have contributed significantly to the increasing inadequacy of income security programs. The impact of these changes, coupled with a changing labour force to include an increasing number of part-time, contract, self-employed, female and immigrant workers require policy reform to restore the availability and adequacy of support for individuals who become caught in poverty.

The Community and Protective Services Committee has also received a series of reports and verbal updates from the General Manager of Community Services regarding changes to the OW program, the increased needs of OW participants and the need forenhanced supports such as intensive case management.

At its meeting on October 24, 2005, Municipal Council resolved to advise the Province as to the following issues regarding Ontario Works and supports for the working poor in London:

The City of London continues to call on the Province of Ontario to assume 100% of Social Welfare and Social Housing costs, thereby eliminating the current 20% paid by cities out of their property tax revenue; The City of London asks that the Province of Ontario increase social assistance rates (Ontario Works and Ontario Disability Support Program); The City of London asks that the Province of Ontario increase the minimum wage; The City of London asks that the Province of Ontario and the Federal Government expedite the creation of more safe, affordable housing; and The City of London reminds the Province of Ontario that a number of years ago the City of London requested the Provincial Government end the provincial claw back of the National Child Benefit Supplement.

Prior to advising the Province on these matters, at its October24,2005 session, Council asked staff to report back at a future meeting of the CPSC with a draft submission to the Province for its review and consideration with respect to the above matters. This report and attached policy paper address all of the above noted issues that are related to income security.

Social Policy Framework

Income security has been identified as one of the key components of the City of London's social policy framework. This framework was developed to identifythe key issues impacting the well-being and quality of life of Londoners, and to define the municipal role in responding to these issues. While the interrelatedness of the components and issues are recognized, we believe that the safety net component is the core foundation for quality of life for all Londoners. This framework was endorsed by Municipal Council at its meeting on April 10, 2006 and is outlined on the next page:

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1

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1

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Income Security Policy Paper

According to the City of London's social policy framework, income security ensures that a household has adequate and consistent income to meet its basic needs. Income security can be achieved through one or more of the following income supports: employment earnings, social assistance, and income supplementation that can be unconditional or based on an income or needs test. The draft Income Security Policy Paper recommends a mix of these supports in order to enhance income securityfor low income Londoners.

Recommended Features of the Income Securitv Policv Mix

The recommended features of the income security policy mix are as follow:

3. The Province eliminate.the . . -.. poyqrly advocatas and research bodies are consistent in *.. , . claw back of the National. Chi!d Bene fit.Supplemen f ba,-k"&lj. $&,de families with children from socia/, assistance . . . . an additional.$100 per'montb per child reducing the gap recipients

; ,, . . ,;, qgv~cat$ ' ', . l:iYEl&&ip

ri if the claw back

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would,,save $3.4 million .~ annually (under current cost-sharing arrangement). These savings could be reinvested at the local level

.. .. 8. The Province of Ontario ., Stre,ngthens thEemploymept focus of the OW program and

' . , i.respohds'to caseload divers/ty investing in enhanced suppo*s for Onlado works ' ' ; Expected to result i6. .:more participants obtaining

emplayment. and fewer returning to social assistance after participants, including 'the introduction of initiatives leaving, with.. employment, thereby reducing social related to intensive case management and employment retenfion

.. . . ' . .

. . assistancecase costs

2

Agenda Item # Page # .

FINANCIAL IMPLICATIONS

The financial implications of the recommended policies related to income security and the social safety net are outlined in the attached policy paper. We are recommending that any increased costs associated with the recommended policy changes to social assistance and the National Child Benefit Supplement be 100% Provincially funded as the municipal property tax base is an inappropriate funding mechanism for social assistance programs. This position also recognizes the current provincial-municipal funding inequities. Under the current 80-20% cost-sharing arrangement, a 2% increase in OW and ODSP rates would cost the City of London $640,000 annually.

While we are unable to quantify the broaderfinancial impact of the recommended policy changes to minimum wage, income supplements, taxation policies for low-wage households, and reforms to El, we believe that these changes will combine to result in a reduction in social assistance caseload costs.

We can also anticipate that increased supports to the most vulnerable in our community would have a positive impact on the well-being of not only the households themselves, but also on the community. The literature has linked clearfypoverty reduction with improved community-level quality of life outcomes including crime rates, healthy child development, and employment. As such, these quality of life indicators are important in positioning London among the top rank of Canadian municipalities.

C 0 N C L U S IO N

Beyond income security, the City of London's social policy framework highlights the need to consider related safety net issues including the continuum of affordable and safe housing, and food security. Future policy papers will continue to outline the necessary role of senior levels of government, the City of London, and partnerships with local community stakeholders, in best supporting OW participants and low wage earners in our community.

The options and recommendations addressed in this report point to the roles of both the Federal and Provincial governments in establishing responsive social and economic policies that promote the income security of all members of our community. The City of London has a key advocacy role to work with senior levels of government in this area. Another important role for the City of London identified in the social policy framework is to work with local service providers and advocates to help document the impact of these policies at the local level and to engage with stakeholders in ways to respond to these issues in our community.

Further consultations to discuss the recommendations will be held with the community as required.

PREPARED BY:

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Momodou Jeng, Manager Social Research and Planning Department of Community Services

SUBMITTED BY:

Community Programs and Strategies

RECOMMENDED BY:

Ross L. Fair General Manager Department of Community Services

Prepared by: Gerda Zonruiter, Community Planning and Research Associate

cc: Elisabeth White, Manager, Employment Supports Steve Giustizia, Manager, Ontario Works Rosita Johnson, Manager, Community Supports Cheryl Smith, Manager, Community Partnerships and Funding Louise Stevens, Director, Housing

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Grant Hopcroft, Director, Intergovernmental and Community Liaison Sally Bennett, Middlesex County Maggie Kelly, Ministry of Community and Social Service Advocates Committee Partners in Employment Employment Sector Council Steering Committee Agencies with Purchase of Service agreements with the Community Services

Sheila Simpson, Trillium Foundation Ruth Young, United Way Catherine Joyes, London Community Foundation Bruce Stuart, Human Resources Service Development Canada Cheryl Faber, Ministry of Citizenship and Immigration Margaret MacPherson, Attorney General's Office, Victim Services Division Mimi Lo, Canadian Heritage Foundation Gil Warren, London Coalition for Social Justice Jeny Wallace, London Economic Development Corporation Gerry Macartney, London Chamber of Commerce

Department

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Appendix A

INCOME SECURITY DRAFT POLICY PAPER

Prepared by: City of London, Department of Communitv Services, Social Research and Plannina I/ -

August, 2006

Executive Summary

With the recommendations of the London Coalition for Social Justice and its meeting of October 24,2005, Municipal Council requested that City of London staff develop a report for submission to the province, advising the province on increasing social assistance rates, increasing minimum wage, and eliminating the claw back of the National Child Benefit Supplement from social assistance benefits. In the course of researching and developing this report, City of London staff identified the need fora policy framework to guide the response. In Spring, 2006, Municipal Council endorsed the Social Policy Framework. In this framework, concerns tied to social assistance rates, minimum wages and the National Child Benefit Supplement fall within the broader social issue of income security. It was also identified that concerns with employment insurance are also tied to income security problems.

Interest in the issue of income security is not limited to London. Nearly a third of Canada's workers do not earn enough to meet their costs of living. Many are likely to be working in unstable or insecure jobs. Many do not have employment benefits such as extended health care, dental plans, disability coverage and private pension plans. Many are ineligible for Employment Insurance. Vulnerable workers are often women, recent immigrants, youth and individuals with lower educations.

Policy changes in the mid-I 990s have contributed significantly to the increasing inadequacy of income security programs. The impact of these changes, coupled with a changing labour force to include an increasing number of part-time, contract, self-employed, female and immigrant workers require policy reform to restore the availability and adequacy of support for individuals who become caught in poverty. These policy changes include: . A series of program and policy changes to the Federal Unemployment Insurance (UI) program (re-

introduced in 1996 as the Employment Insurance (El) program) in the 1990's contributed to a reduction in coverage of unemployed workers from 80% in 1990 to 40% in 2004. In Ontario, 27% of unemployed workers received benefits in 2004.

Reduced coverage has contributed significantly to an El surplus of approximately $50 billion (as of March 31, 2006), and has cost implications for employers and employees who have made contributions but who have not benefited from the program.

After disposing of their assets and savings, unemployed workers ineligible for Employment Insurance are only able to turn to social assistance for financial and employment support.

1 At the same time that the El program became more restrictive, Ontario's social assistance program became more restrictive. When the General Welfare Assistance program became the Ontario Works program, social assistance rates were cut as much as 21.6%. Sole support families moved from the Provincially-administered Family Benefits Allowance program to the municipally administered Ontario Works program. Program restrictions, combined with the improving economy have resulted in fewer people receiving social assistance benefits.

The impact of these changes, coupled with a changing labour force' require policy reforms to restore the availability and adequacy of support for individuals struggling to provide for the basic necessities required to participate fully in society.

'The changing labour force includes increasing numbers of part-time, contract, self-employed, female and immigrant workers. 1


History and Work Done Elsewhere on income Security

A large volume of work has been done on the issue of income security nationally and provincially. Some of the more prominent organizations that have recently or are currently researching and recommending on various aspects of income security policies include: the Canadian Policy Research Network, the Caledon Institute of Social Policy, Campaign 2000, the Task Force for Modernizing Income Support for Working Age Adults, the Province of Ontario through its support of Deb Matthews’ review of employment assistance in Ontario Works and the Ontario Disability Support Program, the National Council on Welfare, and the Canadian Chamber of Commerce.

The research on income security has focused on the Employment Insurance program, social assistance income support and employment programs, supports for low-income workers, and child benefits.

While the perspectives and recommendations of these and other organizations vary, there is consistency in the message that there is a need for reform to income security programs in order to adjust to the changing labour force, to prepare for the labour market needs of the future, and to ensure communities are inclusive and cohesive.

The London Perspective of Income Security

Social Policv Framework

The City of London’s Income Security Policy Paper builds on the City’s social policy framework. This framework recognizes the complexity and interrelatedness of the issues that affect the quality of life and welfare of individuals. In seeking to protect and promote the well-being of individuals, families, or groups, our attention is not onlyfocused on social issues, but numerous economic considerations are also embedded in the policy paper.

The social issues contained in the social policy framework are complex and require further discussions of local issues, responses and opportunities for action. Apart from income Security, a series of policy papers will be subsequently developed on other components of the framework including:

9 The continuum of safe and affordable housing;

9 Social inclusion.

The last component of the social policy framework, Community and Neighbourhood Capacity Building is guided by the Community Development Framework, endorsed by Municipal Council in Fall, 2004.

The social policy framework recognizes that income security is not a stand alone solution to ending poverty. We also recognize the intricate interplay between the issues and have attempted to ensure that the interrelatedness is accounted in the policy options and actions being recommended.

What is Income Security?

Income security ensures that a household has adequate and consistent income to meet its basic needs. Income security can be achieved through one or more of the following income supports: employment earnings, social assistance, and income supplementation that can be unconditional or based on an income or needs test.

Whv London Should Address the lssue of Income Security

At a time of local (and national) economic strength, many Londoners are living without income security:

Food security; and

= In 2000, one out of six individuals in London did not have income security (as measured by the Statistics Canada Low Income Cut Off). This is more than the Province-wide estimate of one in seven individuals living with income below the Low Income Cut Off:

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Agenda Item # Page # . The gap between high and low family incomes increased from 1991 to 2001 with the typical (median) family income declining by 2.6% to $38,232 while the average family income increased by 2.3% to $47,705; and

The London community has invested, roughly and very conservatively, $64 million3 in programs that are aimed at sustaining low-income Londoners. In effect, the Federal and Provincial governments have downloaded some of the costs of income security programs to municipalities. In the event of an economic downturn, future local investments in these programs are at risk.

There is both an economic and social equity reason for investing in income security programs that will reduce the poverty rate and narrow the income gap:

From an economic perspective, a high quality of life (as measured by a city's economic, environmental and social health) is an important factor in attracting businesses and skilled employees. Relatively high levels of poverty and the growing income gap has a negative impact on social health as it marginalizes a large segment of our community, making London less attractive to new employers and workers. . From a social equity perspective, London's social policy framework states that all Londoners deserve to have meaningful opportunities to participate and contribute to our community.

'Poverty limits the participation of people . . . in community life by restricting their ability to volunteer, attend cultural events, participate in sports and recreation, join community organizations, and more. This not only affects health and well being, but increases social isolation by making i t difficult to establish and maintain social networks."

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Development of the Income Securitv Policv Paper

The City of London's Income Security Policy Paper is the product of an extensive literature review and a series of consultations conducted by the Community Services Department over the past two months with a broad range of key stakeholders, including:

9 Consultations with 40 community agencies through existing forums, including the Advocates' Group, Employment Sector Council Steering Committee, and agencies with Purchase of Service arrangements with London's Ontario Works program;

1 Discussions with funding and government agencies including the United Way, Human Resources and Social Development Canada, Trillium Foundation, London Community Foundation, and Victim Services Secretariat;

1 Discussions with City staff in Ontario Works and the Corporate Management Team; and

= Meetings with representatives from the business community and anti-poverty advocates including the London Economic Development Corporation, the London Chamber of Commerce, and the London Coalition for Social Justice.

Scope and Limitations of the Income Securitv Policv Paper

The income security policy paper primarilyfocuses on income securityfor working age adults and children. It proposes actions for Employment Insurance, the National Child Benefit Supplement, Income Supports for the Working Poor, and Social Assistance. The Social Assistance discussion in this paper focuses on benefit rates as well as case management and employment support needs. Since the proposed actions focus on

Data compiled by the United Way, August, 2006. This figure includes investments that have gone towards food banks, homeless shelters, and heat and warmth programs that help to prevent homelessness. The figure is only a rough estimate due to many data limitations including inavailability of data for all years, exclusion of general administrative costs, and exclusion of programs such as breakfast, lunch and supper programs, and shelters for women who have been abused. Also excluded, due to lack of availability, are significant investments for the London and Area Foodbank, and the Salvation Army. Further, this figure should be treated cautiously as there may be inconsistency in reporting investments due to individual agency financial tracking practices.

Partners in Employment London-Middlesex. The Time to Act is Now. Including People with Disabilities in Employment and Community Life. 2005 3


broader program and policy changes, the proposals have not been fully costed. Financial implications will be identified in partnership with relevant government orders as part of developing the implementation strategy. The policy paper does not establish policy positions nor does it make recommendations with respect to food security or affordable housing as these will be the subjects of subsequent policy papers. While high level recommendations regarding additional policy and program changes are referred to, it is beyond the scope of this paper to provide a comprehensive review of specific policy and service delivery changes within Ontario Works and the Ontario Disability Support Program. The policy paper does not establish policy positions nor does it make recommendations with respect to child care and children's services. The policy paper does not discuss or establish policy positions for the Canadian Pension Plan, Old Age Security, Workplace Safetyand Insurance Benefits, or the Guaranteed Income Supplement programs.

During the course of the consultations, we heard the issue of income security for seniors. While this paper does not address programs aimed at ensuring the income security of seniors, it is possible that committees formed to respond to priority action areas identified in "Community Action Plan: Working Together to Support London's Seniors" (2005)5 may provide a forum for this discussion.

Issues and Solutions

Emplovment Insurance

Issue: The Employment Insurance (El) program currently provides benefits to approximately one out of four unemployed workers in London and Ontario. The remaining three out of four are not only ineligible for income replacement, they are also ineligible for employment programs offered through El. Social assistance (Ontario Works and the Ontario Disability Support Program) becomes the only option far some of these unemployed workers. Funds that employees and employers contribute are not reinvested but are diverted to supplementary programs and other budget areas.

Solution: Reforming El to increase the coverage rate of both the income replacement and employment services programs to accommodate the changing labour market and to ensure that all unemployed workers are able to access employment training and skills development programs. Specifically, Employment Insurance funds should be used to reform El as follows:

. Change eligibility restrictions by decreasing the number of hours of work required to 360, increase the maximum duration that benefits may be received to 18 months and increase the earning replacement rate to 65%; and

Provide stand-alone training programs to better reflect the changing labour force by serving individuals who are not eligible for direct employment insurance, and streamlining the intent of Employment Insurance by creating a new mechanism for the delivery of supplementary and training benefits. The Labour Market Development Agreement provides an opportunity for this.

National Child Benefit Supplement Claw Back

Issue: The claw back of the National Child Benefit Supplement from social assistance benefits further deepens the poverty experienced by children living in families in receipt of social assistance. In 1998, the City of London went on record to the Province seeking to reinstate the monies deducted.

Solution: Complete the National Child Benefit Initiative as it was originally intended in order to reduce the child poverty rate. Specifically, the Province of Ontario should invest in increasing income securityforfamilies with children by:

1 Eliminating the claw back of the National Child Benefit Supplement from social assistance cheques: and

1 Removing children from social assistance budgets, creating a separate child benefit program, and providing adult benefits that recognize the diverse employment and support needs of vulnerable adults.

The Community Action Plan: Working Together to Support London's Seniors was the result of a collaborative community effort involving a wide range of stakeholders, including seniors and service providers. It is intended to serve as a tool for community planning and collaboration in the City of London.

4


Supports for Low-Income Workers

Issue: Income levels of low-income workers (who are predominantly women and youth) are not sufficient to meet the cost of living and may not be sufficient to maintain their economic self-sufficiency.

Solution: Investments targeted at increasing the income of low-wage workers will remove some of the financial barriers to moving from social assistance to employment. Specifically, the Province of Ontario and the Government of Canada should invest in:

Slow and planned incremental increases to the minimum wage to reflect increases in the cost of living:

Implementing at-source targeted income supplements and tax credits that will enhance the incomes of low- income employed individuals;

1 Additional supports including child care supports, access to extended health coverage and affordable housing; and

Increased access to training opportunities that will provide low-income workers with the skills and knowledge needed to meet the needs of new and existing businesses.

Social Assistance Rates

Issue: Social assistance rates are too low to meet even the most basic costs of living (Le. shelter, food, clothing, and transportation), particularly for single individuals. The low rates have been identified as a barrier to employment and are reported to be one of the factors preventing women from leaving violent marital or common-law relationships.

Solution: Increasing social assistance rates will reduce the need for local investments in programs aimed at sustaining individuals and families (such as food banks), and investing in additional supports will support individuals and families transitioning to employment. Specifically, the Province of Ontario should invest in:

= Slow and planned incremental increases to social assistance rates to reflect the cost of living increases;

1 Additional supports including child care supports, access to extended health coverage and affordable

Enhanced Employment and Case Manaaement Supports for Social Assistance Participants

Issue: Ontario Works participants have increasingly complex needs that require their participation in more intensive services in order that they are able to obtain and maintain employment. Once participants obtain work, employment retention supports are needed to reduce the potential for a return to social assistance.

Solution: Investments in intensive case management supports and employment transition programs would increase the number of social assistance recipients obtaining employment and would reduce recidivism. Specifically, the Province of Ontario should increase current investments in innovative and locally-developed employment support programs for individuals with multiple barriers by:

1 Providing 100% funding for Intensive Case Management and Employment Retention Support projects: and - Continuing to consider policy and program changes that consider the needs of individuals transitioning from

and

housing.

social assistance to employment.

Conclusion

Acting on the income security issues of low-income Londoners through Federal and Provincial policy and program reforms and investments and through local community monitoring and action addresses one of the primary determinants of the health of our community and the individuals that live within our community. We believe that by first reforming the policy and program issues that contribute to individual difficulty in providing for their basic needs, these individuals will have increased opportunities to participate in community life, making our whole community socially and economically healthier and stronger.

5


PURPOSEANDBACKGROUND

About this Policy Paper

A number of research, policy, and advocacy groups have released reports outlining necessary government policies to support vulnerable children, adults, and families. This includes participants of Ontario Works (OW) and the Ontario Disability Support Program (ODSP), and also low-wage earners, or the "working poor." Municipal Council has received staff reports or delegations with respect to a number of these reports. For example:

. On October 17,2005, the Community and Protective Services Committee (CSPC) heard adelegation from the London Coalition for Social Justice. This delegation included recommendations from the "Ontario Needs a Raise" campaign;

At the same meeting, staff presented a report outlining the highlights of the MISWAA Task Force report by TD Economics on welfare to work in Ontario; and

In January, 2005, Council received a review of the recommendations of Member of Provincial Parliament (MPP) Deb Matthews' report, "Review of Employment Assistance Programs in Ontario Works and the Ontario Disability Support Program".

9

- The Community and Protective Services committee has also received a series of reports and verbal updates from the General Manager of Community Services regarding changes to the OW program, the increased needs of OW participants and the need for enhanced supports such as intensive case management.

At its meeting on October 24, 2005, Municipal Council resolved to advise the Province as to the following issues regarding Ontario Works and supports for the working poor in London:

The City of London continues to call on the Province of Ontario to assume 100% of Social Welfare and Social Housing costs, thereby eliminating the current 20% paid by cities out of their property tax revenue;

The City of London asks that the Province of Ontario increase social assistance rates (Ontario Works and Ontario Disability Support Program);

The City of London asks that the Province of Ontario increase the minimum wage;

The City of London asks that the Province of Ontario and the Federal Government expedite the creation of more safe, affordable housing; and

The City of London reminds the Province of Ontario that a number of years ago the City of London requested the Provincial Government end the provincial claw back of the National Child Benefit Supplement.

Priorto advising the Province on these matters, at its October24,2005 session, Council asked staff to report back at a future meeting of the CPSC with a draft submission to the Province for its review and consideration with respect to the above matters.

1

Agenda Item i t Page #

The Social Policy Framework and Income Security

As a first response to Council direction, a social policy framework (below) was developed and endorsed by Municipal Council at its meeting on April 10,2006. This framework identifies the key issues impacting the well-being and quality of life of Londoners, and guides the City's response to these issues.

This policy paper is the first in a series of papers as part of the City of London's social policy framework. It seeks to identify the key social policies that are currently central to ensuring income security for Londoners, and defines opportunities for the municipality and other stakeholders to respond to these issues. Income security is critical in meeting the basic needs of individuals and families and ensuring communitywell-being. As such, it is a logical place from which to start helping London to move forward on its strategic priorities of economic prosperity, enriched cultural identify, and community vitality.

As part of this policy paper, the key policy issues related to income security for Londoners are defined as: 9 Social assistance rates: . 1

9 Employment Insurance; and =

Minimum wage and taxation supports for low-wage earners; The National Child Benefit Supplement (NCBS);

Employment, income support, and case management supports for Ontario Works (OW) and Ontario Disability Support Program (ODSP) participants.

What is Income Security?

According to the City of London's social policy framework, income security ensures that a household has adequate and consistent income to meet its basic needs. Income security can be achieved through one or more of the following income supports: employment earnings, social assistance, and other forms of income that can be unconditional or based on an income or needs test.

Nearly a third of Canada's workers do not earn enough to meet their costs of living. Many are likely to be working in unstable or insecure jobs. Many do not have employment benefits such as extended health care, dental plans, disability coverage and private pension plans. Many are ineligible for Employment Insurance. Vulnerable workers are often women, youth, recent immigrants or individuals with lower educations.

In the rnid-l990's, there were significant income security program policy shifts at both the Federal and Provincial levels that drastically reduced and restricted the social safety net that is intended to support Ontario's individuals and families and provide them with protection from financial desperation. These policy

L


changes include:

A series of program and policy changes to the Federal Unemployment Insurance (UI) program (re- introduced in 1996 as the Employment Insurance (El) program) in the 1990’s contributed to a reduction in coverage of unemployed workers from 80% in 1990 to 40% in 2004. In Ontario, 27% of unemployed workers received benefits in 2004.

Reduced coverage has contributed significantly to an El surplus that has been reported to be in the area of $50 billion‘. and has cost implications for employers and employees who have made contributions butwho have not benefited from the program.

After disposing of their assets and savings, unemployed workers ineligible for Employment Insurance are only able to turn to social assistance for financial and employment support.

1 At the same time that the El program became more restrictive, Ontario’s social assistance program became more restrictive. When the General Welfare Assistance program became the Ontario Works program, social assistance rates were cut as much as 21.6%. Sole support families moved from the Provincially-administered Family Benefits Allowance program to the municipally administered Ontario Works program. Program restrictions, combined with the improving economy have resulted in fewer people receiving social assistance benefits.

Acting on the income security issues of low-income Londoners through Federal and Provincial policy and program reforms and investments and through local community monitoring and action addresses one of the primary determinants of the health of our community and the individuals that live within our community. We believe that by first reforming the policy and program issues that contribute to individual difficulty in providing for their basic needs, these individuals will have increased opportunities to participate in community life, making our whole community socially and economically healthier and stronger.

Income Security - Some London Reflections

Lack of income security contributes to homelessness, hunger, desperation and isolation in our community:

“I can’t afford where I am living. You know, I am borrowing from Peter to Paul to give to Sally to pay the rent and.. . it‘s not fair that we don’t have money to, like I mean, it is sad when you can’t buy a loaf of bread or a bag of milk for your kids when you’ve got to fork i t all on your rent. ”

“I am highly worried over the basic needs of my children such as education and clothing. I become obsessed of thinking about these issues repeatedly”.

“We are a family of three - two adults and an eight year old son. We are trying to survive on my part-time job. We can’t supply food to our home, pay our rent and our telephone. We have other bills we cannot afford to pay at this time.

My husband is diagnosed with multi-degenerated disc disease and nerve damage to his back and he cannot work as this could further damage his health. We are waiting for approval from Canada Disability and Ontario Disability. We have been told this could be at least one year and we are more than likely to be turned down the first time. We are at our wits end as Ontario Works says we make too much money to qualify for assistance. We have tried credit counselling to help with our bills but we don’t make enough money [to cover our bills].”

“In the past three weeks [as a case worker] I have heard some very disturbing stories, and I am beginning to understand what [Ontario Works clientslare feeling and what they face on a daily or hourly basis and it is frightening. They are isolated and terrified of what may happen to

’ Treasury Board of Canada Secretariat. RPP 2005-2006. Human Resources and Skills Development Canada Supplementary Information. Management Representation Statement. Employment Insurance Account. http://www.tbs-sct.ac.ca/est-~re/20052006/HRSDC-RHDCC/HRSDC-RHDCCr5605 e.aso Information updated March 24,2005.

3


them at the end of everyday.”

But income security can be difficult to achieve in today’s labour market:

“I did not get the chance to get off welfare. I am working continuously. Whenever the companies are not busy, they lay their workers off. I worked for two companies before they laid me off Now I am working in another company. ... If their work slowed down, they would get rid of the new workers. The job is not steady. This is the main reason for my sticking with welfare. Sometimes I get $900 and sometimes I get $100 from welfare. To tell you the truth if I get a steadyjob there is no reason for me to get welfare.. , I would like to leave welfare and have a full-time job.. . I’ve had three jobs in the last two years and you know it‘s frustrating.”

Scope and Limitations

The income security policy paper primarily focuses on income securityfor working age adults and children. It proposes actions for Employment Insurance, the National Child Benefit Supplement, Income Supports for the Working Poor, and Social Assistance. The Social Assistance discussion in this paper focuses on benefit rates as well as case management and employment support needs. Since the proposed actions focus on broader program and policy changes, the proposals have not been fully costed. Financial implications will be identified in partnership with relevant government orders as part of developing the implementation strategy.

The policy paper does not establish policy positions nor does it make recommendations with respect to food security or affordable housing as these will be the subjects of subsequent policy papers. While high level recommendations regarding additional policy and program changes are referred to, it is beyond the scope of this paper to provide a comprehensive review of specific policy and service delivery changes within Ontario Works and the Ontario Disability Support Program. The policy paper does not establish policy positions nor does it make recommendations with respect to child care and children’s services. The policy paper does not discuss or establish policy positions for the Canadian Pension Plan, Old Age Security, Workplace Safety and Insurance Benefits, or the Guaranteed Income Supplement programs.

During the course of the consultations, we heard the issue of income security for seniors. While this paper does not address programs aimed at ensuring the income security of seniors, it is possible that committees formed to respond to priority action areas identified in “Community Action Plan: Working Togetherto Support London’s Seniors” (2005)‘ may provide a forum for this discussion.

Methodology

The City of London’s Income Security Policy Paper is the product of an extensive literature review followed by a series of consultations conducted by the Community Services Department over the past two months with a broad range of key stakeholders, including:

1 Consultations with 40 community agencies through existing forums, including the Advocates’ Group, Employment Sector Council Steering Committee, and agencies with Purchase of Service arrangements with London’s Ontario Works program:

1 Discussions with funding and government agencies including the United Way, Human Resources and Social Development Canada, Trillium Foundation, London Community Foundation, and Victim Services Secretariat;

= Discussions with City staff in Ontario Works and the Corporate Management Team; and

1 Meetings with representatives from the business community and anti-poverty advocates including the London Economic Development Corporation, the London Chamber of Commerce, and the London Coalition for Social Justice.

Organization

The Community Action Pian: Working Together to Support London’s Seniors was the result of a collaborative community effort involving a wide range of stakeholders, including seniors and service providers. It is intended to serve as a tool for Community planning and collaboration in the City of London. 4

2


The paper begins with a report card of income security in London using Statistics Canada Census 2001 income data. The report card is followed by a detailed discussion of the issues, options for action and recommendations for:

9 Employment Insurance; 1 The National Child Benefit Supplement Clawback; - Income Supports for Low Income Workers; 9 Social Assistance Rates; and 9 Enhanced Employment and Case Management Supports for Social Assistance Recipients.

Contained in the Appendix E are Issue Briefs developed to provide as tools for discussion in the community consultations.

5


Data from municipalities across Canada shows that, in a time of overall prosperity, lack of income security is a persistent issue faced by a non-trivial number of individuals and families in London and Ontario. Although the proportion of London families receiving social assistance as their sole source of income dropped from 17.6% to 12% (1995 to ZOOO), the poverty rate only decreased from 19% to 17%. The Federation of Canadian Municipalities reports that the income gap between people with higher and lower incomes is widening and there is deepening poverty. Research indicates that the widening income gap has negative impacts on individual and community health, crime, education, political stability, and social cohesion.

Currently available census data for 2000 shows that the prevalence of low-income ranges from 11.6% for seniors to 52.3% forfemale lone parents with children age 12 and under. Figure 1 shows low-income figures for selected population groups.

Figure 1: Prevalence of Low-Income in London (2000) %of Group

Living in Low

chldren fanilies female singles seniors Aboriginals recent lone ihigrants

parents (with

children Groups age 12 and

under)

There are particular groups for whom income insecurity is more likely to be a persistent issue. These include lone parents (particularly female lone parents), recent immigrants, persons with work-limiting disabilities, Aboriginal people living off-reserve and unattached individuals between the ages of 45 and 64 years of age. Additionally, there is evidence that women are more at risk of poverty than men. While a comprehensive poverty profile is beyond the scope of this report, a brief description of the income security issuesfacing three of these groups (female lone parents, recent immigrants and persons with work-limiting disabilities) is presented below.

Female Lone Parents

In 2001, 16,125 lone parentfamilies lived in London. The majority(85.5%)are headed bywomen. Just over 50% of London's female lone parents with children under the age of 12 live with low-incomes. Regardless of marital status, women who are employed earn less than men. According to Statistics Canada, in 2003, women earned 71% of what men earned - a wage gap that has persisted for a decade.

Recent lmmigrants

Just over half of London's recent immigrants (those who arrived in Canada between 1996 and 2001) live with low incomes. Compared with London's total population, recent immigrants have a loweraverage total income ($1 8,610) compared with London's total population ($31,021). Recent immigrants with employment earn 35% less, on average, than the total employed population, earning $21,075 per year compared to $32,441. In 2001, recent immigrants were less present in the labour market than the total population (age 15 and over) with higher unemployment rates, and lower employment and labour force participation rates (Figure 2). 6


Figure 2: Employment

Adults Age 15+

Unenpioymnt tinployment Rate Participation Rate Rate

Employment Figures

Barriers to employment difficulty transferring foreign qualifications, lack of contacts, language barriers and lack of adaptation programs. Some recent immigrant women may face additional barriers, as their culture may constrain or restrict their ability to work outside of the home, or access education and training programs.

Persons with Work-Limiting Disabilities

One in eight Ontarians has a disability. Canadians with disabilities are more than twice as likely to live in poverty compared to others. Lower employment rates for persons with disabilities compared to other Canadians contributes to their higher poverty rate. In 2002, 53% of people with disabilities were employed compared to 76% of people without disabilities. Some of the factors contributing to this lower employment rate may include lack of access to assistive aids and devices necessary for independence. While just over half of adult Canadians with disabilities need assistive aids and devices, onlytwo-thirds of those have all their needs met. Lower education levels may also contribute to lower employment. Among working-age adults with disabilities (aged 15 to 64), more than a third never completed high school, compared to a quarter of those without disabilities.

Income security programs for persons with disabilities include Employment Insurance Sick Benefits (short- term), Canada Pension Disability Benefits for individuals who are totally disabled and unable to work at all, Workplace Safety and Insurance Benefits for persons with workplace injuries, the Ontario Disability Support Program for persons with severe disabilities, and Ontario Works for persons with disabilities who are deemed able to work.

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ISSUE

Changes to the federal government's Employment Insurance (El) program in the last decade has left low- income adults with fewer resources to access when they lose their jobs. A responsive El system is especially important to counter current and anticipated changes in the labour market.

Employers and employees are not benefiting from the contributions they make to the El program. While the El surplus grows, there is little reinvestment in the El program.

BACKGROUND

Effective July 1, 1996, the Federal government introduced Bill C-12. The Bill made significant amendments to the then Unemployment Insurance (UI) program, and re-introduced it as the "Employment Insurance" (El) program. This Bill was the fourth UI program amendment in the 1990's. The two key components of the El program were:

(a) Income Benefits, intended to provide workers with basic income protection coverage in the event of a job

(b) Employment Benefits, intended to provide direct assistance to unemployed persons, with back-to-work

loss; and

measures to help claimants find jobs.

The key changes introduced in 1996 saw:

A tightening in eligibility requirements for the program. With the new Bill, the program changed from a focus for eligibility on minimum weeks of work to a minimum number of hours. The needed hours to qualify more than doubled from a minimum of 15 hours a week to an average of 35 hours per week. (Note that the hours needed to qualify varies according to the type of benefit);

A reduction in the maximum duration of benefits. reduced to 45 weeks from 503;

Introduction ofa new "intensityrule." Claimants who had collected more than 20 weeks of benefits in the past five years would see reduced benefits, up to a maximum reduction of 50% of insurable earnings. This rule was repealed in 2001 by Bill C-2; and

An increasing diversion of the program's funds toward training and labour market development programs. Previously UI-funded training and labour adjustment programs for unemployed workers have been cut

and devolved to the provinces (for example, apprenticeship training and cooperative education programs were withdrawn over a three year period). The Federal government agreed to establish formal agreements with each province on the design and delivery of new employment benefits.

The maximum duration of the benefit period was

In 1994, prior to the 1996 changes, the earnings replacement rate was increased from 57% to 60% for claimants with low earnings and with dependents. For all other claimants, the replacement rate was dropped from 57% to 55%.

Participant Benefits

The average amount of El benefits received is $312 per week. The maximum benefit that can be received is $413 per week. This limit was set 10 years ago. Since then, the cost of living has increased

Noting that the actual number of weeks of benefits is calculated based on the number of hours a person has worked in the past year and the unemployment rate in their region. a


by 20.2%. Figure 3 compares the average monthly El benefit to the cost of living as measured by the Market Basket Measure for London in 2000.

Figure 3: Average EmPloyment Insurance Benefit ComDared to the 2000 Market Basket Measure (MBM)

$2,500

9 $2,000 3

$1,500

- $1,000 5 I $500

$0

h

C 0

Awage El Benefit MBM-Single MBM-Family of Four

Monthly El Benefits and MBM Cost of Living

IMPACT

Changes to the El system were criticized for making it harder for workers to qualify for benefits, and cut the length of time for which benefits can be collected.

In 2004,36% of all unemployed individuals in Ontario who applied for assistance were eligible to receive El benefits (Figure 4). A further 10.2% were ineligible due to not having enough hours of work to qualify and 6.7% are ineligible due to not having recent insurable employment, either because of being self-employed, casually employed or having temporary employment.

Figure 4: Eligibility of Applicants to Access El Benefits

auit work

never w orked 9%

ineligible due to no recent insurable

empbymnt 7%

ineugible due to not working in past 12

rmnths 21%

insufficient w ork hours 10%

9


While 36% who applied were eligible to receive benefits (see Figure 4), the proportion of unemployed workers actually receiving benefits was lower in 2004, with only27% receiving El income replacement each month. This figure indicates that many unemployed individuals exhausted their benefits. Nationally, El coverage declined from roughly 80% in 1990 to just over 40% in 2004.

Youth, women, recent immigrants and individuals with disabilities are those who are most negatively impacted by the current El program.

Labour Market Chanaes

The fact that the overall unemployment rate has been resting around 7% does not mean that stable and secure jobs are easy to find, particularly for young people, recent immigrants, and women. The TD Economics Report suggests that one of the key flaws of the current El program is its failure to respond to changes in the composition of the labourforce in the past 10-1 5 years. Today's labour market is increasingly characterized by "non-standard workers, that is, those who are part-time, temporary, casual, or self employed. At the same time, we continue to experience an increase in the number of recent immigrants who have no prior Canadian work experience. These labour market challenges are only expected to continue: within the next 10 years, the aging population will generate more skill shortages and tighter labour markets.

ImDact on the Social Assistance Svstern

The current El program is not designed to respond to these labour market shifts. The growing proportions of Canadians who are self-employed orwho do contract work are disqualified from El. The increasing numbers of immigrants, particularly recent immigrants without Canadian work experience are ineligible for El. These trends along with the tightening of El eligibilitycriteria have combined to increase the numberof unemployed individuals who are not eligible for El. Individuals ineligible for El can only turn to social assistance systems for income and employment assistance for income security after exhausting any savings and other assets they may have accumulated.

The TD Economics Report suggests that the Ontario government responded to El's tightening of eligibility criteria by imposing entry barriers to welfare so high that they risk denying access to people who are legitimate candidates for social assistance. The report identifies the earnings exemption disqualification period prevents workers who are earning incomes below social assistance rates from receiving Ontario Works assistance. Consider two families with similar low employment earnings. Both families have earnings that are just above the maximum monthly benefit. Both families are living in difficult financial situations. The family who is not on OW is ineligible for OW as the earnings exemption policy cannot be applied, so their earned income exceeds the maximum benefit level. The individual who is involved with OW has 50% of their earnings exempted as income which means they continue to be eligible for a portion of the maximum OW benefit amount as well as being eligible for employment assistance and drug, dental and child care benefits. As a result of the disqualification period, two households with similar financial profiles can end up in very different economic circumstances because one has access to the supports of OW and the other doesn't.

Any increases to the OW caseioad as a result of El policy have a financial impact on municipalities, who are required to 20% cost-share social assistance with the Province.

OPTIONS

Critics suggest that El has become a program which fails to reflect the needs of most workers in a changing job market. Reforms to El may include the following:

Liberalization of benefits by(1) increasing El program eligibilityand (2) enhancing El program delivery of benefits;

Increasing eligibility for training and employment services;

Developing a complementary set of programs including training; and

Streamlining the intent of El.

9

.

. 1

I O


El Proqram Eliaibility

The Canadian Labour Congress (CLC) has called for a uniform El entrance requirement that guarantees coverage after 360 hours of work, no matter what type of benefits are needed. They argue that all unemployed workers are unemployed workers who need temporary income support.

At the same time, current eligibility requirements that base benefits on the hours worked fail to recognize that there may be different employment paths depending on one's life situation. For example, older workers and new mothers may have shorter or disrupted employment histories. As a result, the CLC calls forreforms that recognize more than just the hours worked in the months before a job stops.

El Proqram Deliverv of Benefits

In order for the El program to better respond to individual needs, the CLC also recommends extending benefits over a longer period (up to 18 months). They point out that this would be especially beneficial for workers over 45 years of age, who often have the hardest time getting a new job after job loss.

Further, the CLC recommends the need to lock El benefits in at a minimum of two-thirds ofa worker's best 12 weeks of earnings. They argue that this flexibility is important in order to recognize individual differences and contextual situations that may impact an individual's ability to collect the full benefits they would normally be entitled to receive.

There may be a risk attached to broadening benefits to protect almost all of the labour force, easing work requirements, increasing the levels of earnings replacement and increasing the duration and range of benefits. Economists estimated that liberalization of benefits in the 1970's increased the unemployment rate by between one and two percentage points by providing individuals with the opportunity to wait longer before taking a job and by increasing the labour force participation rate as more people were counted as looking for work.

Traininq Benefits

At a time when there are growing skill requirements for good jobs, eligibility for training benefits is limited. With the exception of apprenticeship programs, training under the El program is directed to current and recent El claimants only. Individuals who wish to temporarily leave employment to pursue education or training programs do not have access to El benefits.

In order to ensure that individuals who are not eligible for direct unemployment insurance do not lose out on related supports like skills development and training, advocates recommend the need to offer training insurance benefits to everyone in the workforce, both employed and unemployed, for skills training. Underthe same eligibility requirements for El benefits, it is recommended that paid leaves financed through El benefits be based on prior attachment to the labour force.

In addition, the CLC recommends the introduction of employer incentives to provide more structured workplace training and more educational leaves. These should be modeled on the El premium reduction now available to employers and their employees when an employer provides paid leave for maternity, parental, and sickness leave that is equal to or greater than leave under El.

Potential Opportunity: Labour Market Development and Partnership Aqreements

The Canada-Ontario Labour Market Development Agreement (LMDA) and Canada-Ontario Labour Market Partnership Agreement (LMPA) signed in late 2005 will form the basis for the funding and delivery of workplace training initiatives. Under the LMDA, investments by the Government of Canada will rise from its current level of $525 million annually to $839 million by2009-10 in Ontario. Beginning January 1,2007, the LMDA transfers responsibility for the design and delivery of these El-funded programs and services to the Government of Ontario.

This transfer presents a significant unknown dimension to the El discussion. At this time, it is not clear how the Province (through the Ministry of Training, Colleges and Universities) will implement and administer these services. This transfer may provide an opportunity for Ontario to broaden the delivery of employment

11


assistance services. There is local concern that this transfer has the potential to divert funding away from employment assistance programs and services that fall outside of the postsecondary education system to postsecondary education programs. This could have the effect of reducing the availability of training and skill development program options for individuals who are unable to access or are unsuitable for postsecondary education as it is currently delivered.

Under the LMPA, the Government of Canada will invest an additional $1.368 billion in Ontario over the next six years. The investment is intended to fill key gaps in labour market programming, by assisting individuals who are not eligible for El programming, such as new immigrants. Specifically, the Canada-Ontario LMPAwill support action in six areas:

1

1

9 Literacy and essential skills:

9

Expansion and enhancement of apprenticeship:

Labour market integration of recent immigrants;

Workplace skills development (for instance, incentives to upgrade skills of existing workers):

Assistance for Aboriginal Canadians; and

Assistance for people facing labour market barriers (such as older workers, displaced workers and persons with disabilities).

Streamlining the Intent of Emalovment Insurance

When the federal employment insurance program was originally introduced in 1940, its intentwas to maintain the income of workers who experienced short-term periods of unemployment because of cyclical fluctuations. Over time (particularly in the past three decades), supplementary benefits including items such as sickness,

retirement, earnings supplements, family-related benefits, and training grants to provinces have grown in importance and been incorporated within the El program. For example, the El system is being used to achieve federal social policy objectives, such as improving early childhood development through the parental benefits program, and the introduction of a compassionate family care leave benefit.

Advocates from the private sector, including the Canadian Chamber of Commerce, argue that the additional items contained within the El system divert from the original goal of El and should be funded elsewhere. Policyadvocates, such as the CPRN, agree that while these additional components are extremely important, it may be more appropriate to create a new federal mechanism to deliver these supplementary benefits.

PRIORITY ACTIONS

1. The City of London advocate to the Federal government to introduce the following reforms to the federal Employment Insurance program:

Enhancing program eligibility by decreasing the number of hours worked requirement to 360 hours, regardless of benefit type required;

Enhance the deliveryof benefits by increasing the maximum length of time that benefits may be received to 18 months and increasing the earnings replacement rate to 65%:

Provision of stand-alone training programs to better reflect the changing labour force by serving individuals who are not eligible for direct employment insurance; and

Streamlining the intent of Employment Insurance by creating a new mechanism for the delivery of supplementary and training benefits.

1

1

9

12


It being noted that:

Continued federal and provincial commitment to the recently signed LMDA and LMPA should provide a key tool for enhancing the supports available to individuals in the local labour force:

There is a significant, accumulated El program surplus in federal funds that should be used to fund program eligibility, benefit delivery and training program reforms: 4and

Ensuring that the El system responds to the income support and training needs of a changing labour force will work to divert individuals who unnecessarily come to rely on the social assistance system.

2. The City of London advocate to the Province and the Ministry of Training, Colleges and Universities to ensure that the transfer of Employment Insurance Employment Assistance programs and services from Federal jurisdiction to the Province does not reduce the availability of employment support services for those individuals who are unable to access postsecondary education programs as they are currently delivered,

=

9

1

The Canadian Labour Congress estimates that the three reforms would be less than $2 billion (about the amount Of 4

annual interest on the $50 billion El surplus).

13


Second Child Third and Each Additional Child

ISSUE

$104.58 $143.32 $247.92 $1 11.92 $136.41 $248.33

The policy of the Province of Ontario is to "claw back" the National Child Benefit Supplement (NCBS) portion of the Canada Child Tax Benefit from the social assistance cheques of OW and ODSP participants. A Provincial policy change to eliminate the claw back would increase the income available to OW and ODSP participants.

BACKGROUND

Parents with children under age 18 years are eligible to receive the Canada Child Tax Benefit (CCTB). The Canada Child Tax Benefit (CCTB) is made up of two parts: (1) the Canada Tax Benefit (CTB); and (2) the National Child Benefit Supplement (NCBS). Ontario Works participants keep 100% of the CTB.

Until July, 2004, the NCBS component was deducted dollar for dollar from the monthly social assistance benefit cheque. However, the July 2004,2005 and 2006 increases to the NCBS are not deducted from the monthly benefit cheque. Effective July, 2006, the CCTB amounts are noted in Table 1.

Table 1: July 2006 Eligible Monthly Amounts for the Canada Child Tax Benefit

IMPACT

In London, NCBS savings are allocated to social assistance recipients through the NCB Emergency Fund, which is administered by the Boys' and Girls' Club of London. From its inception in November, 1999 to September 30, 2005, close to $10.3 million has been allocated to 29,029 families and 53,789 children.

Currently, OW and ODSP participants do not fully benefit from the CCTB. Figure 5 shows the amount of the total monthly benefit per child that is clawed back and the amount that parents retain.

14

Agenda Item # Page#

Figure 5: CCTB Retained ComDared to Claw Back

First chiid Second child lhird and each

additional child

Over the course of a year, a family with two children would have had $2,724 clawed back and would be eligible to recoup a maximum of $400 through London's National Child Benefit Emergency Fund (based on current eligibility criteria). Elimination of the claw back would provide a family with two children with an additional $227 per month. As demonstrated earlier in this paper, this additional income is necessary to help families who are on social assistance pay for food, shelter and transportation.

In 1998, the City of London went on record to the Province seeking to reinstate the monies deducted from the cheques of OW participants.

OPTIONS

Two options to ensure that families with children have adequate income to meet their basic needs are the elimination of the NCBS claw back, and the introduction of an Ontario Child Supplement.

1. Provincial policv chanae to eliminate the NCBS claw back

The TD Economics Report suggests that the NCBS could serve as the platform fordeveloping an integrated, income-tested benefit for Canadian children that would eventually replace the welfare-based child benefit. The elimination of the claw back is considered to be the action needed to "complete the NCB initiative."

&l&

The decision to eliminate the NCBS claw backwould result in increased income for families with children, but would reduce emergency supports available in the community for these same families:

Families in receipt of Ontario Works would be able to keep the full NCBS portion of the CCTB. The savings to families will vary depending on family size and age of the children. For example, a familywith two children would have an additional $227.00 per month, or $2,724 per year.

The money that is currently reinvested by the municipality to the NCB Emergency Fund would no longer be available. While there are other community-based emergency supports available to OW participants, the loss of the NCB reinvestment would be approximately $1.8 million (based on 2004 investment), and would reduce access to emergency supports for over 8,000 children annually, however, $9.0 million annually would go directly to families that have the NCBS deducted.

$162,500 in NCBS reinvestment funds are currently redirected to the City of London's Children's Services Fund (CSF). The CSF is intended to support the provision of programs for families and children in our community. Elimination of the NCBS claw back would cut the funding available to the community in half, leaving only $162,500 in the CSF. Alternatively, this funding could be added to the municipal budget.

If the City of London would wish to replace funds for either the Emergency Fund or the gap in CSF, a Council- 15

=

-


approved municipal budget investment would be required.

2. Ontario Child SuDplement

In 2003, the Association of Municipalities of Ontario (AMO) endorsed a proposal by its Communityand Social Services Task Force, calling for the Province to introduce an Ontario Child Supplement (OCS). The Task Force for Modernizing Income Security and the Caledon Institute for Social Policy also propose the removal of children from social assistance in their recently released reports.

The initial phase of the proposal involves removing children from social assistance, where the Province would assume the financial responsibility of providing benefits to children;

The child portion of the OW budget would be replaced by the OCS;

The NCBS would not be deducted from OW participants with children and the adult portion of the OW budget would remain the same; and

In the long term, the OCS would be phased out as the NCBS increases.

With the removal of children from social assistance, OW could evolve into a Labour Market Adjustment Program that would support movement into employment. There would be no advantage to being in receipt of assistance compared to the entry level of the labour market.

Estimates suggest that the total family income from NCBS, OCS and OW would be greater by IO-15% than current total family income from NCBS and OW alone, thereby significantly reducing child poverty and helping families to achieve a higher quality of life.

There is concern that this option could negatively impact the most vulnerable individuals, that is, those who are unable to enter the labour market, either temporarily or permanently. This may include women who provide unpaid caregiving work to children, older people and people with disabilities, and individuals with significant disabilities.

Financial Impact

Total new Provincial investments required would be $86 million to fund the OCS and $200 million to fund the NCBS. Because children would be removed from OW, the municipal OW budget would decrease. It is estimated that, across Ontario, municipalities would realize approximately $90 million annually in savings. According to AMO, these savings could be reinvested in local labour market development, or in supports related to areas such as child care or homelessness prevention.

In London, we may expect to see cost savings of up to $3.4 million annually

PRIORITY ACTIONS

1. The City of London continue to advocate to the Province of Ontario to eliminate the claw back of the National Child Benefit Supplement from the OW and ODSP monthly social assistance benefit cheque, noting that the City of London has gone on record in 1998 seeking to reinstate the monies deducted from the cheques of OW participants.

2. The City of London advocate to the Province of Ontario to work with the Association of Municipalities of Ontario (AMO) and the Ontario Municipal Social Services Association (OMSSA) to pursue the implementation of an Ontario Child Supplement at no cost to municipalities, noting that the removal of children from social assistance budgets should not have a negative impact on vulnerable individuals who are not likely to be able to work (for example, women in caregiving roles and individuals with significant disabilities).

16



The NCBS has been shown to successfully increase the disposable incomes available to families with children across Canada;

OW and ODSP participants should have the discretion to use these dollars to best meet the needs of their family;

There would be no net financial impact on the municipality. However, the Province will need to workwith municipalities to address the need for additional community supports for children and families thatwill be lost as a result of the NCBS reinvestment strategies; and

The Deb Matthews review recommends that the Ministry of Communityand Social Services (MCSS) work with the Ministry of Children and Youth Services to continue movement toward the elimination of the claw back of the NCBS in order to improve the standard of living for children of parents living on social assistance; and that the MCSS consider the implications of the AM0 recommendation to move toward a child benefit.

17


ISSUE

Many working families in London are living below Statistics Canada's Low Income Cut Offs (LICOs) and have difficulty meeting the cost of living as defined by the Market Basket Measure (MBM)'. Low wages and other aspects of low-wage employment can make it financially difficult to move from social assistance to employment.

Workers with low wages often are self-employed, contract or part-time workers. Low wage workers often have: a higher risk of unemployment; no occupations pensions or supplementary health ordisability benefits; no job ladder or career path; and no formal or on-the-job training. Self-employed, temporary and part-time workers are not fully protected by labour standards legislation (minimum wages, overtime pay, vacations, maternity and paternity leave, notice of termination).

BACKGROUND

Being employed does not guarantee that an individual orfamily has enough income to meet their needs. In London, 12.6% (1 1,561) of London households had income below the LlCOs in 2001'. Youth and women are most likely to be working in minimum or low-wage employment. Many minimum wage workers have multiple jobs to supplement their earnings (CCSD, 2005).

Today's labour market is increasingly characterized by part-time, temporary, and contract work. Now more than ever, the market is not designed to ensure that families have enough income to meet their basic needs. According to the London Economic Development Corporation's Workforce Development Strategies (2005), the economic growth and sustainability of our community will depend on our having more workers - and increasingly high skilled workers -to meet the changing and growing technical demands of existing employers and to meet the needs of new businesses coming to London. Economic and social policies related to minimum wage and taxation supports for low-wage earners can contribute to a growing and robusteconomy.

The 2006 Federal Budget announcements have both positive and negative impacts for low-income workers. The introduction of a Canada Employment Credit ($500 effective July 1,2006 and rising to $1,000 in January, 2007) for employees' work expenses may benefit low-wage earners, except the self-employed. The government also announced willingness to work with Provinces to identify potential measures to improve incentives to work, including through an earned income tax credit. Finally, the increase in the basic personal amount that can be claimed will reduce their taxable income. These positives, however, are offset by a tax rate increase from 15% to 15.5% on the first $36,378. The GST rate reduction from 7% to 6% can be expected to reduce the GST credit that low-income workers receive more than the benefit they will receive from a reduction in taxes on purchased items.7

The MBM is based on estimated costs of food, clothing and footwear, shelter, transportation, and other goods and 5

services related to local costs of living. Appendix B outlines how London compares to the MBM in comparable urban centres across Canada.

More local statistics and information on how London compares to other urban centres can be found in the Federation of Canadian Municipalities' Quality of Life Reporting System, Thematic Report 1, "Income, Shelter, and Necessities," (2004); This and other reports are available on the City of London's Research and Community Building Launchpad at w.london.ca/launchoad.

6

The 1 percentage point reduction is insignificant for everyday expenses. 7

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OPTIONS

The London Coalition for Social Justice and the TD Economics Report (as part of the Modernizing Income Security for Working Age Adults (MISWAA) Task Force), among others, suggest the following as being options to better support low-wage earners:

1. Increasing the minimum wage; 2. Introducing a working income supplement: and 3. Introducing a refundable tax credit.

These options may be undertaken individually, but would have the optimal impact when implemented in combination.

1. Increasing the Minimum Wage

The current minimum wage in Ontario increased to $7.75 on February 1, 2006'.

The Ontario minimum wage rate had been frozen at $6.85 per hour from 1995 to February 2004. Effective February 1,2004, the minimum wage increased to $7.15 (a 4.4% increase), and will reach $8.00 by 2007. According to the Ontario Coalition for Social Justice (OCSJ), an individual with one child would need to work more than 56 hours per week at the current minimum wage to move beyond the poverty line.

There are mixed theories about the economic impact of minimum wage increases. For example:

* According to the TD Economics Report, any substantial hike to the minimum wage over and above the increases already planned will risk labour market repercussions, including pricing unproductive workers out of the economy (making these workers reliant on government support): and

The Canadian Centre for Policy Alternatives and the Canadian Policy Research Network indicate that the negative employment impacts of minimum wage are small. They point to historic data showing both employment gains and losses following large increases in minimum wages.

Advocates to further increase the minimum wage (including the London Coalition for Social Justice) propose increases of up to $10 an hour. Another approach to increasing the minimum wage involves ensuring that the minimum wage rate allows individuals and families to earn income that is comparable with the Market Basket Measure (MBM).

By way of illustration, analysis of the impact that various minimum wage rates could have for Londoners earning minimum wage was completed. This analysis uses various before tax hourly wages to calculate how many full time days must be worked in order for a single, minimum wage earner to receive an annual income that is (a) equal to the after tax low income cut off and (b) the market basket measureg. Note that there are 251 working days (less weekends and statutory holidays) available in a year. It is evident from this table that minimum wage earners, for the most part will need to work full-time or nearly full-time to have sufficient income as measured by the low-income cut off and the Market Basket Measure. In the case of a family of four with a single income earner, even a minimum wage of $1 0 per hour would not be sufficient.

-

'Appendix C outlines how Ontario's minimum wage compares to those from other provinces across the country.

Statistics Canada has not released updated Market Basket Measures at this time. 9

19


hourly waae rate

Current February, 2007 Advocated

Minimum Wage Minimum Wage Minimum Wage

97.75 $8.00 $9.00 $10.00

I single I 268 I 260 I 231 I 208 I family of 2 327 316 281 253

1 family of 4 I 508 I 492 I 437 I 393 I

family of 2

I single I 226 I 219 I 195 I 175 I 31 7 307 273 245

family of 4

lmpact

Any additional increases to the minimum wage would not have a direct impact on the municipal budget, as earnings are paid by employers. However, there may be social assistance savings related to an increase in the amount earned by participants. Raising the minimum wage to $10 could increase by $200 the average monthly earnings of individuals and families participating in OW or ODSP (based on December, 2005 employment and earnings figures). In order to determine the savings that these increased earnings could have for the social assistance budget, including the potential number of individuals and families that could exit social assistance, additional details including actual earnings, maximum allowable benefits, earnings exemptions and child care exemptions are needed. These details are not available at this time.

Advocates argue that increases to the minimum wage and other supports to low wage earners work to make employment a realistic option to social assistance. Working on the assumption that it is more financially feasible to work, and on the assumption that adequate employment is available in the local labour market, any reductions in the number of Londoners who would be receiving social assistance would benefit the municipality (which is responsible for 20% cost-sharing of the delivery of OW with the Province). However, any specific financial impact would be speculative.

Women and youth are two of the groups that will benefit from increases to minimum wage as they are most likely to be working in minimum wage occupations. Providing women and youth with higher wages may support them in leaving family situations that are unsafe or unhealthy.

452 438 390 351

2. (a) Workina Income Supplement

Rather than creating pressure on businesses to pay a "living wage," the TD Economics Report suggests that a working income supplement (WIS) would be a better solution than further hikes in the minimum wage. A WIS is intended to support individuals whose wages are too low or hours of work are insufficient to generate an adequate income. The supplement increases with earnings up to a certain point (Le., average number of hours worked by minimum wage workers) and tapers off thereafter. It is suggested that, by enhancing earned income, a WIS would strengthen the incentive to work at levels of income where individuals might otherwise be tempted to substitute social assistance for employment because they can't make ends meet on theirwork earnings alone.

However, there are some considerations for ensuring the WIS is effective at providing needed income. A WIS that is based on previous year's earnings may not reflect the current financial needs of low-income workers. There may be delays (of up to 18 months) before an increase in earnings translates to increased benefits. Finally, any delay in issuing this benefit may be a barrier to exiting social assistance.

In its 2005 Economic and Fiscal Update, the Federal Liberal government had proposed a Working Income Tax Benefit as a cash supplement to bolster the wage of low-income earners. Details were to be worked out

20


with the provinces. In its 2006 budget, the new Federal Conservative government promised to "push this idea forward" in consultation with the provinces and territories.

2. (bl Refundable Tax Credit

The introduction of a refundable tax credit (RTC), styled on existing property or sales tax credits, would benefit working and non-working adults alike. The goal would be to deliver net gains in income at the lower end of the spectrum, with the gains designed to peak at the point where individuals are working enough that they are likely to have formed a permanent attachment to the labour force.

As with the Working Income Supplement, if the payment is delayed for any reason, including receiving a credit following the submission of an income tax return, the tax credit may not provide the required financial support at the time that it is needed.

Impact of Taxation SUDDO~~ Initiatives

Because both the WIS and RTC are income tested, they would be anonymous, rules-based programs that are free of the stigma and administrative oversight that go along with programs like social assistance.

According to both the TD Economics Report and the Canadian Centre for Policy Alternatives, if properly designed, these measures could provide a "non-trivial" income boost to working poorfamilies thatwould help take some of the pressure off social assistance to shore up the financial security of low-income adults. The Canadian Centre for Policy Alternatives also notes that individuals who are limited to working part-time or part-year (for example, persons with disabilities, single parents with young children) may particularly benefit.

Despite these benefits, there are other considerations. There is concern that, if the taxation-based supports are family-income based, women with spouses and youth living at home will not benefit. Additionally, taxation-based supports can be seen as a potential subsidy to low-wage employers, which may effectively prevent employers from taking the responsibility for paying fair wages.

Any of these options would not fall within the municipal jurisdiction. There would be a net cost to whichever level of government provides the benefit. According to the Canadian Centre for Policy Alternatives, taxation support initiatives such as the wage supplement would be expensive to implement.

The TD Economics Report suggests that the federal government is the "obvious candidate" to deliver one or both of the proposed new benefits, pointing to recentfederal budget surpluses as available fiscal resources to do so.

PRIORITY ACTIONS 1. The Province of Ontario develop a strategy to implement slow and incremental increases to the minimum

wage to reflect increases in the cost of living:

2. The Federal government should explore opportunities to introduce a Working Income Supplement and a Refundable Tax Credit that will enhance the incomes of employed individuals;


1 Deb Matthews' review of employment programs in social assistance notes that people want to work and be economically independent:

According to a City of Toronto OW exit study (2004), OW participants may be more likely to be employed in low - or minimum wage jobs;

While there is not expected to be a direct cost impact to the municipality, increased supports to low- and minimum-wage earners are likely to have a positive economic impact for our community. For example:

1

21


9 Increasing the minimum wage is more likely to reduce turnover in those employed in minimum wage jobs, encouraging workforce stability at a time when labour market shortages are anticipated; and

Those working for modest wages are more likely to spend their money close to home, positively impacting our local economy.

It is essential that increases to the minimum wage be introduced in conjunction with other economic and social policies that support the needs of low-wage earners. We believe this should include: - Increased access to training opportunities that will increase the number of skilled workers to meet the

changing and growing technical demands of existing employers and to meet the needs of new businesses coming to London;

Consideration of taxation supports for low wage earners, including a Working Income Supplement and/or a Refundable Tax Credit. Such policies would work to promote employment as an alternative to social assistance;

Other social policies that support low wage earners, including affordable housing and child care supports; and access to extended health coverage including drug, vision and health benefits.

1

-

1

9

22

Agenda Item # Page#

ISSUE

Social assistance includes both Ontario Works (OW) and the Ontario Disability Support Program (ODSP). Current social assistance rates established by the Province fall significantly below the cost of living as measured by the Market Basket Measure (MBM).

BACKGROUND

Social assistance is cost-shared 80%-20% between the Province and municipalities. In 2006, the net City of London budget for social assistance is $42 million for basic financial assistance, and other financial benefits including drug benefits, OW child care, and discretionary benefits.

In 1995, the Province reduced OW rates by 21.6%. ODSP participants were not impacted by these cuts. Social assistance participants did not see an increase in rates until March, 2005, when the Province introduced a 3% rate increase". The rates will increase another 2% in December, 2006. These rates are outlined in Figure 6". Figure 1 also compares current social assistance rates to the MBM''. Note that the OW and ODSP rates exclude additional government transfers including additional benefits for families and children such as the National Child Benefit Supplement (NCBS), additional OW and ODSP benefits, Federal Child Tax Benefits, the Federal GST tax credit and Provincial tax credits available to all individuals and families with low incomes. These additional benefits total approximately $600 annually for single individuals and $4,000 to $7,000 for the families identified in Figure 6.13

As the first rate increase in eleven years, the 3% rate increase in 2005 was welcomed. However, as can be seen in Figure 6, current social assistance rates, even with the 2% increase in 2006, remain well below the 1995 pre-cut rates. When December, 2006 social assistance rates are compared to what the social assistance rates prior to the rate reduction in 1995 would be worth today, there is a 68% difference for OW participants and a 32% difference for ODSP participants.

Figure 6: Current Social Assistance Rates Compared to Cost of Living (2000 MBM)

$2.500

$2.000

$1,500

$1,000

*assumes that children are under 13

**maximum rates effective March 2005 to November 2006

***maximum rates effective December 2006

couplewdh twochildren' single sols suppoTt parenr

Family Type

6l Market Basket II Current OW*' 0 Current ODSP" New OW"' R New ODSP"*'

lo In Ontario, social assistance is comprised of (a) the shelter allowance; and (b) the basic needs allowance. Rates are adjusted according to the household composition.

Appendix A outlines how Ontario's social assistance rates compare across other provinces. 11

Source: Federation of Canadian Municipalities' Quality of Life Reporting System, based on Statistics Canada 12

(2001)

Source: National Council of Welfare, Welfare Incomes 2004 (Spring, 2005) 13

23


Advocates maintain that further increases are necessary. Women’s advocates report that low social assistance rates force women to return to or prevent women from leaving an abusive relationship. Child poverty, hunger, mental health, parenting capacity, and domestic violence are all linked to households with inadequate income to meet the needs of their families. At the same time as social assistance recipients have become increasingly unable to meet their own needs, community service providers have identified significant increases in demand for emergency programs including food banks, emergency shelters, and heat and hydro assistance programs. In many cases, municipalities have made increased investments in response to these needs14.

Cost of Livincl in London - Scenarios

Figure 7 shows the cost of purchasing food and paying rent in London for three different family types. Food costs are based on the 2005 Nutritious Food Basket (released by the Middlesex London Health Unit). Rental costs are based on the Canadian Mortgage and Housing Corporation’s Rental Report, Annual Survey(2005). These basic monthly expenses range from $723 for a single adult male to $1,666 foratwo parent family with two children under the age of 12.

Figure 7: Monthly Expenses For Various Family Types

$1,600

$1,400

$1,200

$1,000

$800

$600

$400

$200

$0 Single adult Single adult Couple with Couple w ith Sole support Sole support

male. Cost of male. OW two 8 year two 8 year parent of an 8 parent of an 8 Living old girls, Cost old girls, OW year old girl, year old girl,

I tl Rent 0 Food 1 of Living Cost of Living OW

OPTIONS

There are a number of approaches to increasing social assistance rates. These include increasing rates to reflect market basket measures for each geographic area; to return to previous rates (pre-I995 cuts), and then adjust for inflation; and to increase municipal social assistance budgets by a set amount each year15.

Potential Impact of Social Assistance Rate Increase Options

Table 3 highlights the financial impact to both the participant and the municipal budget for each of the three options to increase social assistance rates. The least impact to both the participant and the municipal budget is incremental rate increases, while the greatest impact would be seen by returning social assistance rates to where they were prior to the 1995 cuts, and adjusting for inflation.

For example, significant City of London investments have been made through the introduction of community 14

initiatives including The Heat and Warmth (THAW) program, and a Rent Bank.

15For these options, the increased rates could apply to: (i) increase the shelter allowance only; (ii) increase the basic needs allowance only; or (iii) increase both shelter and basic needs portions.

24


Table 3: Impact of Three Scenarios to Increase Social Assistance Rates

Increases to Market Basket rates

Return rates to pre-1995 cuts (adjusted for inflation)

Incremental rate increases

A single individual on OW would receive an additional $486 per month (a 90% increase), and a couple with two children would receive an additional $830 per month (a 68% increase).

This would represent an increase of 68% ($370 to $840 per month) for OW participants and 32% ($670 to $1,270 per month) for ODSP participants.

Each 1 YO increase to current social assistance rates has a nominal impact on the participant (i.e., $5 to $10 per month for a single, and $12 to $18 per month for a couple with two children less than 12 years of age).

There would be an additional impact on the municipality of up to $13 million annually.

There would be an additional impact on the municipality of up to $17 million annually.

Each 1% increase to social assistance rates would represent an increased annual net cost to the municipal budget of $318,688 (based on current caseload size).

Regardless of the scenario used to increase social assistance rates, increasing the rates may have the impact of increasing caseload sizes as more individuals and families will be eligible. American research suggests that a 10% increase in social assistance benefits can result in a caseload increase of 2.6% to 2.7% by the end of the year. However, the Ontario Works caseload did not increase in 2005, nor did the caseload dynamics (people moving on and off Ontario Works) change following the 3% increase in benefit levels. There are many possible reasons to explain why the expected increase did not occur, including the increase to minimum wage rates (February, 2005) and the strength of the local economy. This suggests that, in the current strong economic climate, an increase in social assistance rates is not likely that caseload sizes would increase to any great extent. If, however, economic strength declines, the rate increase may play a greater role in increasing the number of individuals and families who may be eligible for social assistance. Any increases to caseload size will increase the municipal budget.

PRIORITY ACTIONS

1. The City of London advocate to the Province to increase Social Assistance rates incrementally, at a rate of 1 % to 2% per year to match Ontario forecasted inflation rate for 2006 and that this increase be funded 100% by the Province.

2. The City of London advocate that the cost of social assistance benefits be funded 100% by the Province as municipal property taxes are an inappropriate mechanism to fund income redistribution programs.


1 At the time that the Local Services Realignment was introduced in 1998, the City of London had identified significant increased costs to the municipal budget due to cost-sharing in services such as social assistance:

While Deb Matthews' 2004 review of employment programs in OW and ODSP did not specifically examine social assistance rates, the report recognizes that low social assistance rates are a barrier to employment and contributes to "deep and sustained poverty;"

1

25


9 Other government transfers including the Federal Child Tax Benefit, Federal GST Credit, and ProvinciaVTerritorial Tax Credits are known to supplement social assistance benefits. In 2005, the National Council of Welfare determined that these supplemental transfers ranged from $600 per year for singles to $1,200 per year for a couple with two children; and

Increasing social assistance rates is not the only route to increasing the financial supports for OW and ODSP participants. The Province should also be encouraged to actively consider additional programs and policies that can reduce the financial hardship experienced by individuals and families. One example is to encourage the Ministry of Health and Long Term Care to consider assuming the responsibility for provision of drug benefits to social assistance recipients and enhancing the Trillium Drug Benefit program for low-income families to streamline the transition from OWlODSP to employment. Other examples include pressing for changes to the social assistance asset limit policies and other program innovations.

9

26


ISSUE

Because of the increasingly complex needs of our local OW participants, more intensive services and flexibility in local service delivery is needed. Intensive case management supports and increased employment retention supports result in successful outcomes for OW participants.

BACKGROUND

In his report to the CPSC on August 22, 2005 regarding the implications of new Ontario Works employment incentives policies, the General Manager of Community Services identified the following barriers to employment for our participants: 1

1 Skills match: Language; 1 Transportation; 1 Knowledge of workplace culture; and = Lack of benefits in market place; 9 Personal issues.

The Province notes that while Provincial social assistance caseloads are declining, time on assistance is increasing. The Province attributes the increase in time on assistance to the fact that the caseload is becoming increasingly harder to serve. According to the Ministry (2001), the harder to serve caseload is more likely to have:

Availability of jobs in the market place; . Start up costs associated with new job;

1 Multiple barriers;

1

1

9

9

A history of long-term receipt of assistance;

Poor reading or math skills;

Mental health or behavioral problems; and/or

Addiction to alcohol or drugs.

Based on the experience of our front-line staff and employment purchase of service partners in the community, we know that these factors are significant barriers to employment for our participants. Caseload indicators that suggest that more participants on London’s Ontario Works caseload may have more difficulty obtaining employment than in the past include:

1

9

An increasing proportion of individuals age 51 and older (12% in 2005);

An increase in the average length of time on assistance (23.3 months in 2005 compared to 21.6 months in 2002); and

Lower attachment to the labour force, with a decreasing proportion of the caseload having income from earnings (14.8% in 2004 compared to 15.9% in 2002) and lower average earnings ($470.59 in 2004 compared to $537.63 in 2002).

=

For OW participants with more intensive needs, a range of flexible and intensive case management and employment supports have been shown to increase their successful movement to self-sufficiency. Some OW participants who find employment are not successful in maintaining this work. As a result, these individuals return to the OW caseload, with a negative impact on participants, families and caseload costs. Some of the contributing factors related to employment retention include:

27


9

1 - Lack successful working role models;

Lack of knowledge of workplace expectations;

Instability in personal situations combined with the need to enhance problem-solving and coping skills;

Workplace expectations are based on middle class values, while some OW participants are from generational poverty where those values are not present;

Labour market shifts to contract, seasonal and part-time employment; and

More employers outsource Human Resources functions, using services of temporary employment agencies.

1

9

OPTIONS

There are two key opportunities for the Province to direct increased resources to municipalities to provide intensive supports for OW participants: (1) enhancing intensive case management; and (2) employment retention supports.

Intensive Case Manaaement

A City of London intensive case management pilot project, "Team B," introduced in October 2003, has demonstrated success in supporting OW participants who have intensive barriers to sustainable employment. The Team B model uses four caseworkers each supporting 50 OW participants. Participants receive twice monthly contact. Because of the smaller caseload, participants are able to receive highly individualized supports, including increased contact with their caseworker, and benefit from a coordinated approach to case management between OW and other community service providers.

In the first two years of the pilot project, Team B has seen successful outcomes including:

9

8

9

82 participants employed and off OW;

119 participants employed and on OW;

20 participants moved to more appropriate income source;

15 participants stabilized and returned to regular caseload; and

43% of all participants served found employment.

On November 8,2005, Council directed the Mayor to send an expression of interest from the City of London to the Minister of Community and Social Services to engage in a one year pilot project with the Province, aimed at doubling the number of participants served with an intensive case management approach.

Emplovment Retention Supports

Post-placement supports can reduce the recidivism rate for OW participants who are not able to sustain permanent work. Research and pilot projects show that job retention rates increase with:

1

Enhanced human resource supports;

. Employer partnerships;

=

1

Strong preparation and support programs;

Strong case management from entry and for at least 18 months after becoming employed: and

A "do whatever is necessary" approach.

28


London Ontario Works currently contracts with four Employment Placement providers to provide placement and monthly follow up for six months. Since 1999, there has been a slow and steady increase in the percentage of participants employed at 3 and 6 months. For example, 71 .I% of OW participants who find employment are employed at 3 months, while 58.5% of participants who find employment are employed at 6 months.

The development of a one year pilot project to provide employment retention supports for our OW participants would aim to double the number of participants served with an intensive case management approach. The project would build on local experience, the local labour market, community partnerships with employment service providers, and known success factors in enhancing employment retention. Key features of the project would include:

9 Developing a partnership with one or two employers in the manufacturing sector;

1 Hiring a human resources specialist to work with the employer and participants: - Developing graduated orientation to employment supports;

1 Intensive case management throughout the process (particularly focusing on retention support needs once the person is employed); and

Providing sector-specific skill training and access to a mentor. 1

Financial Impact

An employment retention program will have resource costs that may be mitigated by the following savings: - Reduction in case costs due to reduced recidivism; and

1 Savings to the employers due to reduced staff turnover.

In 2003, a two year pilot employment retention program proposed for London was projected to cost $169,260 per year. This program would serve 300 participants and, based on the experiences of other jurisdictions, including Ottawa, would result in increased employment retention rates, in the general area of 78% at both 3 and 6 months.

PRIORITY ACTIONS 1. The City of London continue to advocate to the Ministry of Community and Social Services to provide

100% Provincial funding for two pilot projects:

9 Intensive Case Management

9 Employment Retention Supports


1 The success of the London Team B pilot project for intensive case management for OW participants suggests that this model should be extended and expanded, with the introduction of a formal evaluation process that would assist in measuring success; and

Consideration of the extension of employment incentives initiative should include post-placement support for up to 18 months.

- Deb Matthews' review of employment programs in OW and ODSP identified that: - Individuals may need supports beyond simply financial and employment needs before they can

transition to suitable employment; and

Sustained employment is a process, not an event. 9

29


CONCLUSION

The inadequacies of current income security programs and policies including Employment Insurance, social assistance and minimum wage rates contribute to deepening poverty. The proportion of families living with low incomes remains at 15 - 16% despite strong economic growth, and those with low-incomes are living far below the low income cut off levels. Minimum wage rates have increased at a slower rate than inflation. The number of people served by Employment Insurance programs has declined due to tightening of eligibility criteria, increases in the number of recent immigrants who are most impacted by these changes and high numbers of self-employed and non-standard workers in today's labour market. Social assistance rates are far below low income cut off levels and social assistance policies

We have a social obligation to address these inadequacies. Research has shown that income security plays a significant role in the health of individuals and communities. Lower income levels are associated with poorer individual health and more days absent from work due to illness ordisability. Disparities in the social and economic status of groups within a community have a negative impact on the health status of the whole population.

There is an economic reason for addressing these inadequacies. As stated by David Pecaut, Chair of Toronto City Summit Alliance, "Our economy needs the participation of all working age adults, a need that will grow significantly due to the aging population ... Moreover, changes in the last decade in income security policies put municipal governments hugely at risk in the event of an economic downturn. It is critical we tackle these issues while the economy is still performing strongly."

While the policy areas have been presented as separate issues, the recommendations must work together as a package. The existing lack of coordination between programs and levels of government helps to prevent people, particularly families with children, from financially benefiting from working at entry level jobs which are typically the ones for which social assistance recipients are hired.

A sole support parent on social assistance who extends her work hours until she is taking home $1,500 a month could experience: a dollar-for-dollar reduction in her social assistance; increased child care costs; loss of basic dental coverage for her child; loss ofprescription drug coverage; loss ofback to school benefits and winter clothing allowance; and also become ineligible for any special diet allowances. In addition, federal tax will kick-in at the $1,600 a month net income level and her Ontario tax credits could be reduced.

As can be seen from the example above, increasing social assistance benefits without addressing the Employment Insurance issues and the minimum wage issues will result in increasing the disparity between those who are eligible for assistance and those who are not and may have the impact of increasing social assistance caseloads. To ensure an effective policy mix, this dilemma must be removed through policy and program changes aimed at supporting low income workers.

Income security is one of the core foundations, along with Food Security and Affordable Housing for London's broader social policy framework. We believe that a community that ensures the basic needs of Londoners can be met is a community that will provide more opportunities for individuals to be involved in activities such as employment, skill development, volunteering, recreation, and culture. We believe that the sense of belonging that results from this involvement will result in a healthy community that has the capacity to increase their quality of life.

Defining the Most Appropriate lncorne Security Policy Mix

As identified in this report and in the City of London's "Social Policy Framework" report(Spring, 2006), various organizations, advocacy groups and research units have presented diverse income security policy mix recommendations. Appendix D contains a summary of the various recommendations. It appears that the necessary elements of an efficient mix to improve income security are a combination of:

1 Reform of the National Child Benefit Supplement program primarily including elimination of the claw back of the NCBS, as well as creating a separate child benefit program and increasing the amount of the NCBS per child to $4,900;

30


9 Enhanced supports for low-wage earners (such as income supplements, refundable tax-credits, a public health benefit program); and . Reforms to the Employment Insurance program to accommodate the changing labour force (including improving access to benefits and employment programs for non-standard workers and recent immigrants).

Further to this, there is some support for increasing minimum wage (in the area of $9 to $10 per hour) and increasing social assistance rates at least high enough to cover today’s shelter and basic needs costs. There is a risk with increasing social assistance rates, however, as increases may not make it financially feasible for individuals to leave social assistance for employment. Further, the cost to increase social assistance rates to these levels is significant, and not likely to be supported by the public.

Economic Impact of the Income Security Policy Mix

It is very difficult to determine what the economic impact of these policy changes may be, however, the research is consistent in identifying that the impact will be positive as individuals will, in the long term, be able to be more self-sufficient, decreasing the need for government support. For example, as a result of these complementary changes, pressure on social assistance programs is expected to be reduced. With this reduced pressure, the social assistance programs will have more capacity to provide enhanced assistance including enhancing the provision of employment and case management supports that will help individuals move into employment.

Achieving the Mix

As stated in the Social Policy Framework report, all three levels of government, the private sector, and the voluntary sector must work together to increase the income security levels of individuals and families. The Federal government plays a key role in the reform of the Employment Insurance program and enhanced supports for low-wage earners. The Provincial government plays a key role in eliminating the claw back of the NCBS, creating a separate child benefit program, enhancing supports to low-wage earners and increasing social assistance rates. The private sector plays a key role in providing all workers with adequate wages and access to employee health benefits, regardless of their employment status. For example, a campaign in Waterloo is focusing on engaging small business owners to voluntarily increase low wages. The City of London plays a key role in advocating for these changes, working with community partners in the voluntary and private sectors, and monitoring the progress of the community.

Financial Impact on the Municipality

The municipal tax base is an inappropriate funding source for income security programs and measures. Costs associated with eliminating the NCBS claw back, increasing NCBS, creating a separate child benefit program and increasing social assistance rates are most appropriately funded at the Provincial level. The Federal government should be responsible for costs associated with reforming the Employment Insurance program. Both the Federal and Provincial governments must take financial responsibility for enhancing supports for low-wage workers.

SUMMARY OF ISSUES AND PRIORITY ACTIONS

Income security issues for low-income working age adults individuals encompass a broad range of policy issues, including Employment Insurance, the National Child Benefit Supplement, Supports for Low-Income Workers and Social Assistance. Too few people are eligible for Employment Insurance. As a result many are only able to turn to social assistance. Social assistance rates are inadequate to provide for food, shelter, clothing and other items needed to support employment and involvement in the community. Minimum wage employment also does not provide sufficient income to provide forthe costs of living and workers in minimum wage employment often have additional costs as it is likely they do not have access to supports such as medical and dental benefits, and child care subsidies. This presents a real financial hurdle when moving from social assistance to employment. As the issues are interrelated, the priority actions must be implemented in the same manner. The table on the next page summarizes the priority actions, anticipated outcomes and estimated municipal financial impact of the actions as they are outlined in the report.

31

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REFERENCES

Battle, K. (January, 2003). "Minimum wages in Canada: A Statistical Portrait with Policy Implications." Caledon Institute of Social Policy,

Battle, K., and Mendelson, M. (November, 2005). "A Working Income Tax Benefit That Works," Caledon Institute of Social Policy.

Battle, K., Mendelson, M., and Torjman, S. (June, 2006). "Towards a New Architecture for Canada's Adult Benefits"

Black, J., and Shillington, R., (October 6,2005). "Ontarians Can No Longer Count on Employment Insurance to Provide Temporary Income Between Jobs". Prepared for the Task Force for Modernizing Income Security for Working Age Adults.

Campaign 2000 (March, 2006). 2005 Report Card on Child Povertv in Ontario.

Canadian Chamber of Commerce (November 17,2004). "The Employment Insurance Program: In Need of Reform." Submission to the Subcommittee on the Employment Insurance Funds.

Canadian Labour Congress (2005). "Backgrounder: Unemployment Insurance," Labour Issues Campaign 2005.

City of London (November, 2004). "Looking at our Quality of Life in London: Incomes, Shelter, and Necessities," Federation of Canadian Municipalities' Quality of Life Reporting System.

City of London (December, 2005). "Increasing Success for Ontario Works Participants." Presentation to Deputy Minister Kevin Costante.

Federation of Canadian Municipalities, (2005). "Qualityof Live in Canadian Communities. Incomes, Shelter and Necessities. Theme Report #I".

Freiler, C., Rothman, L., and Barata, P., (May, 2004). "Pathways to Progress: Structural Solutions to Address Child Poverty," Campaign 2000.

Goar, C. (February 15,2006). "A mess Harper could easily fix." Toronto Star.

Government of Canada (November, 2005). The National Child Benefit Progress Report: 2004.

Hayes, K., (September, 2004). "Making the Case for a 360 Hour Employment Insurance Qualifying Requirement." Canadian Labour Congress.

Interfaith Social Assistance Reform Coalition (2004). Lives in the Balance: Ontario's Social Audit. Pandora Press.

Jackson, A., (June, 2006). "Are Wage Supplements the Answer to the Problems of the Working Poor?". Canadian Centre for Policy Alternatives.

Leads Employment Services London Inc. (January, 2003). "Job Retention Service." Application for Funding for 2003-2005 submitted to the City of London.

London Coalition for Social Justice (October 17,2005). Delegation to the Community and Protective Services Committee, written submission.

London Economic Development Corporation (June, 2005). Workforce Development Strateqies.

Make Poverty History (2005), "Platform."

Matthews, D. MPP, Parliamentary Assistant to the Minister of Community and Social Services, (December, 2004). "Review of Employment Assistance Programs in Ontario Works and the Ontario Disability Support Program," Report to the Minister of Community and Social Services.

Maxwell, J., (May 1 I, 2004). "Beyond El." Canadian Policy Research Networks, Presentation to the House of Commons Human Resources Committee.

35


National Council of Welfare (2005). Welfare Incomes 2004.

Ontario Municipal Social Services Association (2005). Investing in Economic Security Makes Sense for Building Healthy Communities.

Partners in Employment London-Middlesex (2005). The Time to Act is Now. Including People with Disabilities in Employment and Community Life.

Payne, R., DeVol, P., and Smith, T.D. (2001). Bridaes Out of Poverty: Strateaies for Professionals and Communities. Aha Process, Inc.

Pecaut, D, as quoted in an Atkinson Charitable Foundation News Release. (February, 2005). "High-powered Task Force Aims to Reform Income Security"

Pomeroy, S. (2006). "Minimum housing wage: A new way to think about rental housing affordability."

Public Health Agency of Canada (2003). "The Social Determinants of Health: An Overview of the Implications for Policy and the Role of the Health Sector". Series of Presentations made at York University, 2002.

Raphael, D. (Ed)., (2004). Social Determinants of Health: Canadian Perspectives. Canadian Scholars' Press, Ltd.

Saunders, R., (May, 2005). "Does a Rising Tide Lift All Boats? Low-paid Workers in Canada," Canadian Policy Research Network, Vulnerable Workers Series.

Saunders, R., (June, 2005). "Lifting the Boats: Policies to Make Work Pay," Canadian Policy Research Network, Vulnerable Workers Series.

Saunders, R., (November, 2005). "Commentary: Making Work Pay," Canadian Policy Research Network.

Sceviour, R., & Finnie, R. (August, 2004). "Social assistance use: Trends in incidence, entry, and exit rates," Canadian Economic Observer, Statistics Canada, no. 11.

Scrivener, L. (Januaty 8, 2006). "Mike Harris's children? Yes. And Paul Martin's." Toronto Star.

Analytical Studies Branch. Statistics Canada (September, 1998). "Employment Insurance in Canada: Recent Trends and Policy Changes," Research Paper Series, No. 125.

Statistics Canada (September, 2005). "Fact sheet on minimum wage," Perspectives on Labour and Income.

Toronto Dominion Bank Financial Group (September, 2005). "From Welfare to Work in Ontario: Still the Road Less Travelled," TD Economics Special Report, member, Task Force on Modernizing Income Security for Working Age Adults.

Toronto Dominion Bank Financial Group (October, 2005). "Canada's Productivity Challenge," Topic Paper.

Selected Reports and Presentations to the Communitv and Protective Services Committee

1 "Changes to Unemployment Insurance: The New Employment Insurance Act - Potential Impact on the General Welfare Caseload," (August 21, 1996);

A series of reports related to the National Child Benefit, leading to "Impact of the National Child Benefit Supplement and Framework for the Development of a Reinvestment Strategy," (August 26, 1998) and subsequent reports related to investments made through the National Child Benefit Emergency Fund;

Social Assistance Rate Increases: Ontario Works and Ontario Disability Support Program (July 26,2004);

Profile of Ontario Works Participants (March 8, 2004);

9

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1

36


1 Defining and Measuring Poverty in Canada: The New Market Basket Measure of Low-Income (March 8 , 2004);

Federation of Canadian Municipalities Quality of Life Reporting System: Income, Shelter, and Necessities (November 29,2004);

"Ontario Works Caseload Trends Monthly Report," (monthly to the CPSC);

Projected Financial Implications of the Provincial Review of Employment Assistance Programs in Ontario Works and the Ontario Disability Support Program (January 10, 2005);

TD Economics Report on Welfare to Work in Ontario (October 17,2005).

Supports for Ontario Works Participants Who Face Intensive Barriers (October 31, 2005).

1

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9

37


Quebec

Appendix A

PROVINCIAL AND TERRITORIAL SOCIAL ASSISTANCE BENEFITS ACROSS CANADA

6,669 9,645 10,910 12,738

Saskatchewan

Yukon

5,955 8,714 9,068 12,941

12,145 13,645 16,526 22,901

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Appendix C

PROVINCIAL MINIMUM WAGE RATES ACROSS CANADA

PROVINCE MINIMUM WAGE

Alberta $7.00

BC Manitoba

New Brunswick

Newfoundland

NWT

Nova Scotia

Nunavut

PEI Quebec

Saskatchewan

Yukon

$8.00 $7.25 $6.50 $6.50 $8.25 $6.80 $8.50

$6.80 $7.60 $7.05 $7.20

40

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Appendix E

ISSUE

Too few unemployed workers are eligible for Employment Insurance. As a result, low-income adults have fewer financial and employment support resources to access when they lose their jobs. While social assistance is an option for some of these unemployed workers, others may not be eligible and have no access to temporary assistance.

Many people are ineligible for El due to: 1 Increases in the number of hours required and a reduction in the maximum duration that benefits can be received; and

Current rules that exclude a growing proportion of the labour force that includes an increasing number of part-time, temporary, casual, and self employed workers and increasing numbers of recent immigrants.

Despite the inadequacies of the existing El program, there appears to be no active review of El policies by the Federal government.

LOCAL IMPACT

Statistics Canada data for Ontario shows that 36% of applicants were ineligible for El in 2004. Local figures are not available. Several reasons are attributed to ineligibility, but the most significant for 2004 is associated with unemployment in the last 12 months (see Figure 1).

Figure 1: Reasons for El Ineligibility (Ontario, 2004) mebibk due to

insuffcient w ark hours

I recant insurable 1 I m Y m t

11%

Further, Statistics Canada data for London identified that 25% of unemployed workers received El benefits in 2004, suggesting that El benefits were exhausted for a number of previously eligible claimants or beneficiaries. In 2005 (Janualy to June) there were an average of 7,196 El beneficiaries in London each month.21 From this, it is calculated that approximately 10,000 to 12,000 unemployed workers were not receiving El each month.

A small proportion (in the area of 5 to 7%) of the Ontario Works caseload has identified being ineligible for El or needing OW to supplement El benefits as the reason for requiring social assistance.

Service Canada data provided by local Service Canada office. July, 2005. 21

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ISSUE

The Canada Child Tax Benefit (CCTB) (including the National Child Benefit Supplement - NCBS) is a federal policy initiative. Under Federal government direction, provinces and territories have discretion over the use of funds provided for the NCBS. The result has been an uneven application of the model across the country.

The policy of the Province of Ontario is to "claw back" the National Child Benefit Supplement (NCBS) portion of the Canada Child Tax Benefit (CCTB) from the social assistance cheques of OW and ODSP participants, resulting in what is known as NCBS "savings". NCBS savings are directed in two ways: 9 The Ontario Child Care Supplement for Working Families (OCCS). This initiative serves low-income families

with children under age 7 years; and Muncipal NCBS "savings" are to be reinvested by each Consolidated Municipal Service Manager (CMSM) into community initiatives that support the goals of promoting self-sufficiency and reducing child poverty.

Figure 2 shows the amount of the total monthly benefit per child that is clawed back and the amount that parents retain.

Figure 2: Amount of CCTB Retained and Amount of Claw Back

First child Second child Tnird and each

additional child

LOCAL IMPACT

An average of 3,847 social assistance families had NCBS deductions each month in 2005. In London, the money that is deducted from social assistance monthly benefits is reinvested in the National Child Benefit Emergency Fund (NCBEF) in order that social assistance participants who contribute to the Emergency Fund as a result of the monthly deductions may directly benefit from the reinvestment strategy.

The NCBEF may be accessed for items such as: shelter, food, furniture, telephone, transportation, school or job search activities, clothing or personal care items after all other available funds have been accessed; and

From its inception in November, 1999 to September30,2005, close to $10.3 million has been allocated to 29,029 families and 53,789 children.

City of London. Department of Community Services May, 2006

47

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ISSUE Many working families in London are living below Statistics Canada's Low Income Cut Offs (LICOs) and have difficulty meeting the cost of living as defined by the Market Basket Measure (MBM)? This is due, in part, to low wages

In Canada, 30% of low-wage23workers, who are not full-time students and who work mainly full-time, live with low-incomes (Canadian Policy Research Network). Groups most likely to be in low-wage employment and living with low-incomes include: individuals with no high school diploma, recent immigrants, unattached individuals and female lone-parents (Statistics Canada).

The Ontario minimum wage rate had been frozen at $6.85 per hour since 1995. Effective February 1,2004, the minimum wage increased to $7.15 (a 4.4% increase), and will have reached $8.00 by February 1,2007 through a series of further incremental changes in 2005,2006 and 2007.

Figure 3 shows household incomes for a single, minimum wage eamer working 7 hours per day for 251 days at various minimum wage rates and compares these annual earnings to MBMs. From this, we can see that, for single individuals, the current minimum wage exceeds the cost of living as identified by the 2001 MBM. It also shows that increasing minimum wage to $10 per hour will still not result in annual incomes that are sufficient to meet the cost of living for a four person family with a single, minimum wage earner.

Fisure 3: Annual Incomes at Various Hourly Waae Rates Comared to 2000 Market Basket Measures

mrrent Legislated Increase ihcrea~e Mark~t Market Mnirmm Mnirmm Mnirmm Mnimm Basket- Basket- Wage Wage a1 Wage lo $91 Wage 10 Slngle Fanily of ($7.751 2007 ($8.001 hour $101 hour Four hour) hour)

Wage Rates and Market Basket Costs

LOCAL IMPACT Average Hourly Wages Earned by Londoners24

The average hourly wage in London in 2005 was $19.26. Table 1 shows the average hourly wage ofworkers in the London CMA (April, 2006).

22 The MBM is based on estimated costs of food, clothing and footwear, shelter, transportation, and other goods and services related to local costs of living. 23 Low-wage employment is defined as less than $10 per hour. 24 Statistics Canada. Average hourly wages of employees by selected characteristics and profession. April, 2006

sted Data. London CMA. Catalogue Number A050608. May 16,2006. City of London - Department of Community Services 50

May, 2006

Agenda Item I+ Page #

Minimum Wage Workers in London25

In 2005, there were 9,900 employees earning minimum wage or less in the London CMA. This represents approximately 4.1% of the total number of employed individuals and is lower than the Provincial average of 5.3% in 2004. More specifically, for London:

a 71.7% of minimum wage workers were between the ages of 15 and 24; 1 The majority (67.6%) of minimum wage workers were women; and 1 Occupations with the highest numbers of minimum wage workers included: retail salespersons, clerks and

cashiers (3,200); other sales and service occupations including travel and accommodation (2,600); and chefs, cooks, and food and beverage workers (1,800).

Minimum Wage Rate Increases and London's Employment Rate

Table 2 shows that London's employment figures do not appear to have been adversely affected by recent increases to minimum wage as employment rates in 2004 and 2005 were higher than in 2003, unemployment rates lower, and participation rates higher, however, these increases were implemented during a period of economic strength locally, provincially and nationally. It is difficult to speculate what may occur should the economy take a downturn.

25Sfat i~ t ic~ Canada. Minimum wages or less for London CMA by Occupations, 2005 Annual Averages. Data provided by Labour and Household Surveys Analysis Division, May 15,2006.

City of London - Department of Community Services May, 2006

I ~.


ISSUES

Social assistance includes both Ontario Works (OW) and the Ontario Disability Support Program (ODSP). Current social assistance rates established by the Province fall significantly below the cost of living as measured by the Market Basket Measure (MBM). Deb Matthews' 2004 report reviewing employment programs in OW and ODSP recognizes that low social assistance rates are a barrier to employment and contributes to "deep and sustained poverty". Advocates report that the low rates prevent women from leaving abusive domestic situations.

In 1995, the Province reduced OW rates by 21.6%. ODSP participants were not impacted by these cuts. Social assistance participants did not see an increase in rates until March, 2005, when the Province introduced a 3% rate increasez. The rates will increase another 2% in December, 2006.

Related issues include: = Asset limits that are too low. At present, OW applicants and participants are permitted to have savings equivalent to

one to two months' worth of their monthly social assistance cheque. The position of the financial community (as noted in the TD Economics Report, 2005) is that assets play a critical role in cushioning families through temporary disruptions in income and in promoting incentives to work for OW participants; . Program innovations such as intensive case management, employment retention supports and addiction services are needed to respond to an increasing proportion of the caseload that may have multiple barriers to employment. London has received Provincial funding to implement Addiction Services for OW participants in 2006 and 2007; Removing children from OW and the ODSP in order to reduce child poverty and transition OW to a Labour Force Development Program (2005). This program is designed to have an employment focus and be responsive to local labour markets. This was discussed in the NCB Issue Brief; and Supports from other Ministries such as the Ministry of Health and Long Term Care assuming the responsibility for provision of drug benefits to social assistance recipients and enhancing the Trillium Drug Benefit program for low- income families would streamline the transition from OW to employment. Recent Provincial policy changes provide extended health benefits to individuals exiting social assistance for employment for a period of 6 to 12 months or until they receive health benefits through their employer.

9

LOCAL IMPACT Local Budget

Social assistance is cost-shared 80%-20% between the Province and municipalities. In 2006, the net City of London budget for social assistance is $31,868,850 for basic financial assistance, and another $10,718,833 for other financial benefits including drug benefits, OW child care, and discretionary benefits.

The 2006 rate increases are anticipated to have a net impact of $620,000 on the 2007 budget, assuming that the OW caseload does not increase and the ODSP caseload increases by 3%.

Cost of Living in London

Figure 4 shows the cost of living in a city the size of London according to the Market Basket Measure compared to December, 2006 OW and ODSP rates for single individuals, and families with children age 12 and under.

z In Ontario, social assistance is comprised of (a) the shelter allowance; and (b) the basic needs allowance. Rates are adjusted according to the household composition.

53

Figure 4: 2001 Market Basket Levels Compared to December, 2006 Social Assistance Rates

Number of Social Assistance Recipients

In 2005, there were an average of 7,765 Ontario Works (OW) participants and 7,444 Ontario Disability Support Program (ODSP) recipients monthly. Since then, the number of OW participants has decreased to 7,594 (April) and the number of ODSP recipients has increased to 7,634.

Due to current OW rates, individuals in low wage occupations may not be eligible for social assistance although their incomes may be inadequate to meet the cost of living. The low rates also are reported to be a contributing factor preventing women from leaving abusive relationships.

City of London - Department of Community Services June, 2006

54.

Agenda Item # Page # 1

RATE INCREASE OPTIONS

)ption icrementai {ate icreases

ncrease 7ates to Aarket 3asket vleasure

increase to 1995 Pre- Cut Levels and Adjust for Inflation

:went 4 rate increase of 2% viil be effective lecember, 2006. Even Nith these rate ncreases, social mistance rates will be ower than the cost of iving.

Zurrent rates are set sased on family type and size and take into account the ages of the :hildren. Rates are standard across the Province

Market Basket Measures were developed by Service Canada (2003). The rates are not standard across the province as they reflect the cost of living in various communities and they vary by family size. December, 2006 social assistance rates are compared to what the social assistance rates prior to the rate reduction in 1995 would be worth today, there is a 68% difference for OW participants and a 32% difference for ODSP participants.

bportunities 'hased implementation nsures that municipalities an plan for and absorb rate icreases. Each 1% increase I social assistance rates {ould represent an increased ,nnual net cost to the iunicipal budget of $318,688.

'hased implementation that iteracts with phased icreases to the minimum ,age ensure that social mistance levels are not a iarrier to employment. {eflect the true costs of living 3r all geographic locations.

Yill provide individuals and amilies with sufficient income or social inclusion (Le. able to :over basic expenses and )articipate in activities such as ducation, training, mployment, and recreation).

qo legislation changes are equired.

social assistance rates would neet and exceed Market 3asket Measures, ensuring [he income security needed tc support full the palticipation 0' social assistance recipients in society.

lisks .imiting the increases to acceptable municipal iudget increases may still not provide social issistance recipients with sufficient income to ve. A 1% increase would increase social issistance benefits in the range of $5 to $18 per nonth.

taising social assistance rates without policy :hangs in other areas such as minimum wage nay have the unintended impact of making it nore difficult for individuals to leave social issistance with employment.

Significant increase in benefit rates (for ?xample, using London data, a single individual would be eligible for almost double current evels). This would result in a cost of $12.5 nillion annually to the municipality.

The calculation could be quite complicated as it ieeds to be updated regularly, and would need .o account for other government transfers in the :alcuiation (e.g. GST credits, CCTB). qaising rates to these levels without policy :hanges in other areas such as minimum wage nay have the unintended impact of making it more difficult for individuals to leave social mistance with employment.

Does not account for other government transfers in the calculation (e.g. GST credits, CCTB), estimated by the National Council of Welfare to range from $600 per year for singles to $1,200 per year for a couple with two children.

Cost of $17 million annually to the municipality.

Raising rates to these levels without policy changes in other areas such as minimum wage may have the unintended impact of making it more difficult for individuals to leave social assistance with employment.

City of London - Department of Community Services June, 2006

1

NEIGHBOURHOOD LEGAL SEKVICES

(LONDON 6r MIDDLESEX) INC.

September 22,2004

Chair & Members Conimuniry & Protective Services Committee London City Council

Dear Councillors,

Comments on Draft lncome Securitv Policv Paper Prepared bv Citv of London - Staff

We have reviewed the draft "Income Security PolicyPaper" which the Community and Social Services Committee is presently considering. By and large we support the paper and applaud this initiative.

There are, however, two significant concerns which arise fiom the Paper. They are both rooted in the central thesis ofthe paper -- which i s that the Ontarians who most desperately need help at present are not the poorest Ontarians (who have suffered a reduction in food and shelter allowances, according to the Paper, of 60% over the past decade), but instead are poor working Ontarians -- who have seen far less reduction in their income over the same period.

The first eonrern is that there is repeated reference in the paper, such as that contained as "Priority Actions" number 2 at page 16 to the effect that "the removal of children from social assistance budgets should not have a negative impact on vulnerable to individuals who are not likely IO be able to work for example, women in caregiving roles and individuals with sign$cant disabilities)". The clear implication fiom these statements is that it is intended that the proposed changes will have a negative impact on individuals who are able to work. In other words, although real welfare rates are, according to the report, 60% lower than they were 11 years ago, the report endorses the concept o f driving them lower still.

The insjdious fallacy 'upon which the theory that reducing welfare rates will reduce the number of people on welfare is based upon the assumption that there are jobs available in Ontario for anyone who wants one. Thus, the theory goes, the only

69 King Streel. London, ON NBA 1C1 519-438.2680 x 25. fax 518-43&3145. cell: 510-673=1568. sch/ernmj@/ao.On.ce

Jeff Schlernrnsr. LLW. Executive Director Mike Laliberte. SA., E. Ed., LL.8. Gordon Wainman. LL.E

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B ~ c e Wright, M.A., LL.6. Kristina Pagniallo. M.A.. U .B.

R e c e i v e d T i m e S e p . 2 2 . 4 : 5 9 P M

reason any able-bodied person is unemployed is because they are financially better off on welfare. The theory is popularly known as the "welfare wall", and was the cornerstone of the neoconservative philosophy of the government of Premier Mike Harris. The problem with this theory, of course, is that according to Statistics Canada there are, in fact, always far fewer jobs available than there are employable people who are seeking jobs. If we cut welfare rates to zero there will still be far fewer jobs available than there are employable people who could take those jobs - and they would remain unemployed.

(It has, of course, been many decades since a Canadian federal or provincial government has publicly endorsed full employment as a government policy objective. Part of the reason for this has been the'Won-Accelerating Interest Rate of Unemployment", or "NAIRU", economic theories popularized by, among others, Milton Friedman. This theory posits that full employment i s bad for an economy because it causes inflation. This is because employees can demand increases in wages if employers are unable to replace those employees easily. Professor Friedman argues that it is important to ensure that at least 4 or 5% of employable persons remained unemployed at all times in order to prevent this inflationary pressure. This rate is popularly known as the "Natural Rate of Unemployment".)

The fallacy of the "welfare wall" may be easily demonstrated by the fact that there has been very little pressure on minimum wage employers over the last decade to increase wages -- because these employers have had no difficulty finding a surplus pool of workers willing to work for minimum wage. If, as the "welfare wall" advocates suggest, there are plenty o f minimum wage jobs which employers are unable to fill, because these workers are economically better off on welfare, then conventional economic theory suggests that minimum wage employers would be forced to increase the wages offered in order to attract workers to these unfilled jobs. (lt is a shortage of management professionals which i s invariably given as the reason for the immense increase in Chief Executive Officer compensation by corporations over the past decade.) That has, of course, not happened -- and as a result the provincial government has ordered a small increase to the minimum wage.

It would be regrettable and regressive should the City of London endorse the "welfare wall" fallacy. Welfare recipients in Ontario are scraping by on far less food and shelter allowance and they were 11 years ago. In that time virtually no social housing has been built and many social programs have been dramatically proscribed. Life for these "poorest of the poor" Ontarians is far more grim than it was until 1 1 years ago -- in spite of our enjoying a decade of substantial economic prosperity -- -- as evidenced by the record construction of homes in the city during that period, and continuing.

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Advocates of the "welfare wall" point to evidence that afamily with several children may be more economically advantaged on Ontario Works than they would be if a parent works at a minimum wage job. This is untrue, however, for any family with fewer than several children, and is untrue, of course, for individuals. The reason that families with several children may do better on "Ontario Works" is because we collectively have a soft spot for children. Thus, the more children in a family, the more Ontario Works benefits (and related benefits such as dental, drug and clotbing benefits). The labourer working at aminimum wage job does not receive more pay, of course, if he or she has more children.

The proposal to create a separate child benefit would be of the greatest benefit to large families of working poor. The greatest losers would be smaller families where the "head of the household" is on welfare. And they lose more than the former gain. While the working poor have not benefited from the economic prosperity ofthe last 10 years, they have also not seen the substantialreductions in income which families who receive welfare have. Further, in the vast majority of cases, the working poor do have more assets and income then do families who receive welfare.

The Harris government recognized that it was politically popular to separate the poor into the "deserving poor" and the "undeserving poor". (This has the added benefit of pitting the poor, and their advocates, against each other.) Families who have been fortunate enough to find work are considered "deserving", while families who have not been so fortunate are considered to be the "undeservingpoor". Thus, ironically, it is politically unpopular to suggest that the very poorest of Ontarians need help -- which is the clear implication in the draft Policy Paper: that it would be okay to negatively impact employable welfare recipients and their families in the changes proposed in the Paper.

The City of London should avoid the temptation to further stigmatize, and financially punish, the "poorest of the poor" Londoners. They have suffered greatly with the massive ongoing cuts of the Harris government. To propose to further worsen their lives in the name of the neoconservative "welfare wall" theory, which has been thoroughly discredited, beyond the level of misery that even Premier Harris was willing to stop at is simply cruel -- particularly given our economic prosperity of this past decade.

The second concern relates to the same language, namely, "that the removal of children from social ussistance budgets should not have a negative impact on vulnerable individuals who are not likely to be able to work flor example, women in caregiving roles und individuals with signifcant disabilities)." Again, it is evident that the Policy Paper is content to leave vulnerable individuals living in the same level o f poverty that Premier Harris dragged them down to. It is unclear why a

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major income security policy initiative, proposedin times where Ontarians generally have seen great prosperity for a decade, should fail to do anything to help the most vulnerable Ontarians to recover from the deep cuts in food and shelter allowances and social programs which they have had to endure over this past decade.

Surely we can do something to help our most vulnerable neighbours, friends, and family beyond simply increasing the Harris-level welfare rates by the rate of inflation.

Advocating for employment supports is, frankly, the easy route. It will always be politically popular. But unless there are jobs available for all of these unemployed people than all o f the employment supports in the world will not result in the rate of unemployment being reduced by one single job, A courageous and intellectually honest government will lead by telling the public that the poor are not responsible for their poverty. It will emphasize that there are simply not enough jobs to go around, and that some people will therefore beunemployed despite their best efforts.

If, as economists tell us, it is necessary that at least 5% ofus remain unemployed, in order to prevent inflation for the good of us all, the question is: how deeply into poverty do we want those 5% to live, that is, how much do those of us who benefit from their unemployment want to punish them?

If it is the position of the City of London that the present Policy Paper is intended only to address the challenges faced by the working poor, then it is a fine and admirable document --which hopefully will lead to progressive improvements in the lives of the working poor. In that case we look forward to a similar policy paper which addresses the desperate circumstances in which the poorest Londoners live. Some might argue that those desperate circumstances constitute a greater emergency than would improving the lives of the relatively less desperate working poor, and that as such a policy initiative to address the plight of the poorest of the poor should have taken priority.

But if it is the position of the City of London that it is appropriate to "negatively impact" the poorest of the poor -- namely employable persons in receipt of Ontario Works welfare benefits, in order to lower the mythical "welfare wall" and entice them into taking one of the many jobs which employers are simply unable to fill, then this would be advocating policy based upon ideological myth and will only make life even more desperate for our poorest citizens.

There is no question that the poorest Londoners are now much more poor after a decade of the "tough love" cuts of the Harris government, and that substantial policy reform is needed to undo this harm. Again, we applaud your initiative to that end,

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We urge, however, that you remember that the "poorest of the poor" suffered the most greatly, and continue to do so. This i s not because they have been made lazy by generous social p r o m -- this is because there are too few jobs for them.

We must not lose our focus and be distracted by the apparently more politically safe route of appealing to popular prejudice by taking the route of helping the "deserving poor" working poor. They clearly need help, but not so urgently and desperately as do the poorest Londoners - social assistance recipients.

Please come to their rescue first.

bww7ly9- - J ff Schlemmer

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Submission to The City of London Community & Protective Services Committee

Unit e d m y of London & Middlesex

United Way of London & Middlesex

October 2006

United Way of London 8 Middlesex 1 Income Matters: Response to City of London Draft Income Security Policy, October 2006

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Income Matters.. . United Way of London & Middlesex works with donors, volunteers, service providers, and others to improve the quality of life in our community. We want to encourage opportunities for individuals to build on their strengths and increase the capacity of families, groups, neighbourhoods, and communities to cope successfully in the face of adversity or risk. We try to cultivate a community climate of compassion, respect, dignity, and hope for all citizens.

We are responding to the draft policy paper of the City of London on income security. The paper provides a concise description of the rate and reality of poverty. Poverty rates for children in aboriginal, visible minority, and immigrant families are much higher than the average rate. There is a persistent and disquieting correlation between poverty and immigration and poverty and race.

Poverty is indeed a serious economic and social problem. Living in poverty has many ramifications for the individual, family, and our community. Certainly when you are worried about where your next meal will come from, if you are going to be evicted, if your child has a warm coat to wear in the snow, if you will have enough money for the bus, it is almost impossible to learn new skills or explore job possibilities. If violence is present, the threat to physical security makes it difficult to focus on anything beyond daily survival. For the community, food bank use continues to rise each year and nationally has doubled since 1989 (Campaign 2000, 2005). We concur that a strong economy and a vibrant city are difficult to achieve unless poverty is add ressed.

It is heartening to read the substantial and thoughtFul City of London policy paper. Indeed, income security must be addressed to reduce poverty. However, as is acknowledged in the policy, it is only one piece of the puzzle. A continuum of affordable housing, safe quality childcare, food security, and social inclusion are just a few of the other pieces identified by numerous reports and studies on

United Way of London & Middlesex 2 Income Matters: Response to City of London Draft Income Security Policy, October 2006

poverty. We look forward to the work of the City on policy development in the other areas noted.

What follows is our feedback on the specific areas of recommendation made in the Draft City of London Policy on Income Security.

Employment Insurance (EI)

As the policy described, changes in eligibility criteria for El have resulted in fewer people qualifying for assistance even though they may have contributed to the insurance program. For the three out of every four workers not covered for income replacement, they are also ineligible for the employment programs that El offers. Efforts suggested by the City to encourage the federal government to change the El criteria are both timely and important. By ensuring that all unemployed people (not just those on El income benefits) can have access to employment and skill development programs, there is greater possibility of an expedient return to the workforce. By the time a person reaches Ontario Works for assistance they are often in a different state psychologically, economically, and socially. At this point, a return to the workforce becomes a harder proposition with more obstacles. Ultimately, the challenge of that return will cost more than early intervention and assistance.

National Child Benefit Supplement (NCBS) Claw Back

A s the policy asserts, ending the claw back of the NCBS from families on social assistance would provide an average of $120 more per child each month. This would mean that the money intended by the original NCBS plan to help those most in need of financial assistance would reach its target population directly. The increase in revenue would provide tangible resources for families to utilize to meet their unique needs.

The practical impact of the policy's support of the removal of children from social assistance budgets is more difficult to gauge. It is a complex issue. Does this recommendation recognize clearly that children are part of their families? Will parents be further restrained in spending decisions for their families? Will it do more than the current arrangement to reduce the depth of child and family poverty? It would be helpful to describe what positive effects for families would be achieved by this policy recommendation. If this cost were assumed by another level of government, what would the municipality do with the savings it would net from the child benefit cost being removed from their expenses?


Supports for Low Income Workers

There is a lot of dignity that accompanies having a decent paying job that allows people to support themselves and their families. Though getting a job alone is not a panacea for poverty, unless it has a living wage. In Canada, 1 in 4 workers are low paid (earning less than 2/3rd of national median hourly wage which is under $1 1) (Battle et al., 2006). There are Londoners who work more than one job and are still earning below the poverty line. As the policy asserts, their income levels are not sufficient to neither meet the cost of living nor support their own economic self-sufficiency. Assisting low-income workers will help curb increases in numbers receiving social assistance and help the transition from assistance to employment. The policy seeks to encourage the provincial government to adopt a combination of minimum wage increases, income supplements, tax credits, affordable and safe child care supports, extended health care coverage, training opportunities, and affordable housing to assist the working poor. We concur that this will, as the policy suggests, help the transition from assistance to work and help prevent an increase in social assistance recipients.

Social Assistance Rates

After Ontario welfare eligibility requirements were tightened and benefits for those without disabilities were cut by 21.6% welfare caseloads did fall. However, the TD Canada Trust 2005 report observed that the main driver of decline was not exodus to the workforce but fewer people being able to get on welfare.

recipienfs must devote

basics. . .-_. This refders .rec&ien& ,vd/nerable'th ejicrion aild homelesmess, and incfeases.their reliance In 2004, social assistance rates were increased by a on food.banks and other. modest amount. The increase was welcome but it c h a n r a b l q s u p p o ~ . ~ ~ ; , , . did little to restore the purchasing power of recipients & , n g ~ w ~ h L + ~ ~ ~ ~ b t i q i ,

. .. &;pi,, ...::.~~;:;.~$..: ' . :: -: necessities. For example, rents for shelter - the single biggest household expense - have consistently out-paced inflation between 1997 and 2003 (United Ways of Ontario, 2005). Certainly, the average rent in 2001 of $632 in London exceeds allotment for shelter from social assistance benefits.

The policy asserts that an increase in social assistance rates is necessary. However, the increase proposed will provide little practical difference for clients. Because of rate cuts in 1995, rate freezes for eight years, and a recent modest

as they sought to cope with the cost increases for ! ~ ~ ~ ~ ~ ~ ~ ~ ~ ' ? ~ , , ~ ~ , ~ ~ ! j : ' I : ? " .


increase, people on social assistance have dropped into deep poverty well below the national poverty line. The incremental cost of living increases recommended will be unlikely to result in a noticeable dent in attainment of basic needs. A more substantial increase would put more money into the hands of clients and provide measurable differences in the quality of life for people on social assistance.

The additional supports the policy suggests including childcare, access to extended health coverage and affordable housing are welcomed notations. We look forward to further detail about those propositions.

Enhanced Employment and Case Management Supports for Social Assistance Participants

To obtain and maintain employment can be a challenge. Indeed to sustain employment is a process not an event (Matthews, 2004). It is a particular hurdle when trying to move from social assistance to employment. There are, as the policy asserts, individuals who face many barriers to employment.

“Working has been shown to be one of the surest

mystem, that brings more .&>king age’ddults into the workforce. where rhev can

Some of these barriers are attitudes held~by~others asserts a report by Deb Matthews M.P.P. (2004). These include stereotypes that social assistance clients do not want to work or lack the skills. The report asserts that the ‘individual blame’ argument creates a wall for clients to climb in the bid to be hired for employment opportunities. To help recipients overcome these and other barriers to enter the workforce the policy proposes intensive supports that should prove very helpful. This aspect of the case management relationship proposed would work with the client to set and achieve an employment plan. The current City initiative to locate some Ontario Works staff on-site at community centres may help facilitate easy, comfortable access to the services and may even help foster an environment conducive to offering more case management support.

Conclusion

Certainly, it is important that the municipal government encourage both provincial and federal governments to address income security. It is also necessary that the City of London act locally to address the effects of poverty that impact the well being of its citizens.


We encourage the City to work with others to establish a local plan and act to address the concerns noted as we continue to recognize the myriad of ways income matters and take steps to help our neighbours who are profoundly affected by poverty.

References

Battle, K., Mendelson M., & Torjman, S. (2006). Towards a New Architecture for Canada’s Adult Benefits. Caledon Institute of Social Policy: Ottawa, ON.

Campaign 2000. (2005). Puttina Children First: 2005 ReDort Card on Child Poverty in Ontario. Campaign 2000: Toronto, ON.

Drummond, D., & Manning, G. (2005). From Welfare to Work in Ontario: Still the Road Less Travelled. TD Bank Financial Group: Toronto, ON.

Matthews, D. (2004). Review of EmDlovment Assistance Proqrams in Ontario Works and Ontario Disabilitv Support Proaram. Queen’s Printer: Toronto, ON.

Pecaut, D. & Pigott, S. (2006). Time for a Fair Deal: ReDort of the Task Force on Modernizinq Income Securitv for Workinq-Age Adults. St. Christopher House & Toronto City Summit Alliance: Toronto, ON.

Romanow, R. (2004). The New Canada Social Transfer Impetus for a Renewed Era of Innovative Social Policv in Canada? Canadian Council on Social Development: Ottawa, ON.

United Ways of Ontario. (2005). Pre-Budaet Submission to The Honourable Greq Sorbara Minister of Finance. United Ways of Ontario: Toronto, ON.

United Way of London & Middlesex Income Matters: Response to City of London Draft Income Security Policy, October 2006

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Partners In Employment

October 11,2006

To: The Chair and Members, Community and Protective Services Committee

From: Partners in Employment

Re: City of London Income Security Policy Paper

Partners in Employment (PIE), is a coalition of agencies in London and Middlesex that provide employment services for people with disabilities. We share many of the same concerns and support most of the recommendations regarding income security as expressed in the Income Security Policy Paper. Indeed, many of the same issues are highlighted in the PIE report The Time to Act is Now: Including People with Disabilities in Employment & Community Life (attached).

In particular, we wish to emphasize the importance of ensuring that there are adequate resources in place to support your recommendations to build a community that is inclusive of people with disabilities. If we are to address this goal, we must concentrate our efforts to increase the currently inadequate social assistance rates for citizens in London, and continue to lobby for increases of the provincial minimum wage.

In addition, we wish to emphasize the urgency surrounding the unrolling of the Labour Market Agreement between the Government of Canada and the province of Ontario. This issue will require our attention over the next few months to ensure that our local network of employment services is enriched and not reduced.

We commend the efforts of the Community and Protective Services Committee for working with community based services in achieving our shared vision of an inclusive community.

Sincerely

Robert Collins Co-Chair PIE Goodwill Industries

Maril ynNeufeld Co-Chair PIE Hutton House

cc Ross Fair, General Manager, Community Services Elisabeth White, Manager, Employment Initiatives Gerda Zonruiter, Community Planning & Research Associate

Documents

R.L.council.london.ca/CouncilArchives/Agendas/Community and... · 2015. 6. 10. · August 29,2006 R.L. Fair General Manager of Community Services I hereby certify that the Municipal