Rising Poverty In Canada: Who Pays For The Crisis?

The Liberal Government of Ontario's decision in the spring Budget to eliminate the ‘Special Diet’ will remove the one means by which a major section of people on social assistance had been able to compensate partly for the huge loss of real income that has taken place over the last decade and a half. It is important to understand how this attack is linked to the overall drive to solve the current financial crisis of capitalism at the expense of the working class. The scandalous poverty that people on social assistance experience is frequently viewed, even on the Left, as simply a matter for humanitarian concern. The issue that is often missed, however, is the degree to which an assault on income support systems strengthens the hand of those seeking to weaken unions and increase the employer's ability of exploit workers.

 

Before taking up this question, it is necessary to make clear the scale of the cut that Premier Dalton McGuinty and his ‘poverty reduction’ regime have imposed on poor people. In 2005, the Ontario Coalition Against Poverty (OCAP) became aware of the Special Diet. It was a program under which, recipients of social assistance could obtain, on the recommendation of a medical provider, up to an additional $250 for food costs. At that time, it was relatively obscure and provided only some $6-million of benefits in Ontario. Based on the efforts of many organizations, the support of progressive health professionals and the incredible determination of poor communities to demand and defend this benefit, the Special Diet became a $200-million program that made a difference in peoples' lives. At the time of the cut, one person in five on welfare and disability was receiving the food allowance and, thereby, having some prospect of paying the rent while enjoying a reasonably healthy diet.

The millions obtained under the Special Diet were a partial compensation for what had been previously taken from the poor. In 1995, the Conservative Government of Mike Harris reduced social assistance rates by a massive 21.6%, with no increases provided for the rest of their time in office. McGuinty, up until the last provincial Budget, had given small increases totalling 9% during his years in power. Those increases, of course, did not keep up with inflation, so the depth of poverty on social assistance had continued to increase even before his Finance Minister rose in the Legislature last month to impose an outright cut. So great was the combined attack of Harris and McGuinty that welfare rates had lost, as of this year, 55% of their spending power. A single person on Ontario Works, receiving the maximum of $585 a month would need a $300 increase just to go back to where he or she would have been in 1993. It should also be noted that, after allowing the real value of welfare rates to continue falling and, having allowed modest increases in the minimum wage, the Liberals have now created an unprecedented gap between the two. A single person on Ontario Works today receives only 36% of what they would get working for the sub-poverty minimum wage. At no time since the introduction of the Canada Assistance Plan in the 1960s has the gap been as great (a story of the falling behind of welfare rates that can be told across Canada). In 1990, that same recipient would have had an income that stood at 68% of the minimum wage.

The cut that has now been imposed on the poor by the Liberal Government removes the last shred of credibility around their claims to be seeking solutions to poverty in Ontario. At the same time as they announced the elimination of the $200-million Special Diet provision, they budgeted $57-million for an insulting 1% increase in the general assistance rates. This means an almost 3% cut in social assistance at a time when the impact of the economic crisis is still generating a growing need for income support in communities throughout Ontario. It is worth noting that this is only the third time in Ontario's history that a government has actually reduced the income of people on assistance: Mitchell Hepburn did it in 1938; Mike Harris in 1995; and, now, McGuinty takes the same course in 2010.

 

The move against the Special Diet was pursued with cold deliberation. The Government faced increased access to the benefit and a Human Rights ruling that the list of medical conditions covered by the application form were inadequate. The Liberals realized with shock that poor people weren't talking about ‘poverty reduction’ but were actually reducing their poverty. Faced with something so serious, they resolved to act and settled on a three pronged attack. First, the medical provider who was at the forefront of enabling people to obtain the Special Diet, Dr. Roland Wong, was hit with charges by the College of Physicians and Surgeons that his assistance to the poor constituted ‘misconduct.’ Memos were then sent to social assistance offices by the Ministry of Community and Social Services telling staff that they could take it upon themselves to assess the medical diagnoses provided in Special Diet applications and (without medical training or qualifications) simply reject those they disagreed with. The purpose of this egregious violation of the most basic standards of administrative fairness was to massively reduce new applications for the benefit during the period leading up to its complete elimination. Then (Minister of Finance) Dwight Duncan's Budget delivered the final blow. Within a few months, the intention is to cut off the last people still receiving the benefit. It will be replaced by a new system, run by the Ministry of Health, which will cover a few of the most serious medical conditions. It will be enormously hard to access and may very well offer only prescribed food supplements. This massive cut will play out in terms of homelessness, lack of access to proper food, ill health and shortened lives.