Update: Social Services Minister Helena Jaczek's office provided comment for this story, after deadline. This story has been updated to include that information. 
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As the government ramps up its basic income experiment, recently released data show a steady increase in the number of people receiving social assistance in the province — but swapping out one for the other might not be an effective cure-all, according to early economic and social services forecasts.
About 20 per cent more Ontarians are in receipt of social assistance payments today compared with the 2008-09 recession, according to <a href="https://www.ontario.ca/data/social-assistance-caseloads" target="_blank">data</a> from the Ministry of Community and Social Services detailing caseloads dating back to 1969.
For instance, in June, 2016 the number of households receiving social assistance in Ontario was 628,990. That compares with 514,912 cases in June 2009, when the stage for the economic recession was by then decidedly set — an increase of about 22 per cent.
Perhaps unsurprisingly, the data also show a steep decline beginning in the mid to late 1990s, when then-premier Mike Harris slashed welfare payments by 21.6 per cent (and even priced <a href="http://openpolicyontario.com/wp/wp-content/uploads/2015/10/Welfare-Diet.pdf" target="_blank">a monthly grocery list</a> to help justify the cut that spawned <a href="http://www.cbc.ca/archives/entry/1995-tsubouchi-diet-causes-uproar-in-ontario" target="_blank">a tiff over the elusive discounted dented can of tuna</a>). The number of cases ticks upward in 2003 after the Liberals took office, and begins to rise at the onset of the 2008 recession, but overall remains slightly higher from <a href="http://openpolicyontario.com/more-thoughts-on-ontario-social-assistance-caseloads/" target="_blank">postwar levels</a> with around 6.9 per cent of the population currently on welfare.
Released in early September, the data come a year before the government is expected to propose changes to the somewhat convoluted way it sets and pays out social assistance, as well as a pilot that will test the feasibility of a guaranteed annual income in at least one city, slated for April 2017. (Both have been lumped together under Minister Helena Jaczek's mandate letter, but the government has not said outright whether a universal income will replace OW or ODSP.) The government enlisted former senator Hugh Segal this summer to lead the pilot through his soon-to-be-released discussion paper, which will provide some guidance into how exactly the province intends to implement a program as economically staggering as it is socially appealing.
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But stakeholders have already begun to ask one key policy question: Will a basic income sound the death knell for Ontario Works and Ontario Disability Support Program?
In a <a href="https://www.policyalternatives.ca/sites/default/files/uploads/publications/National%20Office/2016/10/Policymakers_Guide_to_Basic_Income.pdf" target="_blank">report released last week</a> (coinciding with a basic income policy conference in Sudbury) the Canadian Centre for Policy Alternatives (CCPA) said doing away with the current "patchwork" of federal and provincial-mandated social assistance programs, of which there are 33 nationwide, would not only unfairly skew financial assistance away from certain groups like seniors, it would run up a hefty $108.7-billion invoice. Those funds could arguably be spent on implementing a universally guaranteed income, but offers little in the way of cost-savings to budget makers. In its own report, the University of Toronto also <a href="http://www.qpbriefing.com/2016/09/21/ontario-needs-a-basic-income-task-force-says-u-of-t-report/" target="_blank">recommended policymakers treat basic income as a standalone</a> benefit apart from OW and ODSP.
CCPA tests eight policy options and concludes that a $10,000 negative income tax, or "34th" program, would lift 876,000 Canadians out of poverty (from 11.7 per cent down to 9.3 per cent), at a cost of $14.5 billion. To compare, in Ontario there are more than 900,000 individuals currently in receipt of OW or ODSP.
The CCPA and like-minded economists have pointed to sales tax hikes as one method for governments to pay for a basic income — and the report estimates raising the GST from 5 per cent to 7 per cent would cover the cost. Economist Mike Moffatt has also put the provincial government on notice that any iteration without substantial financial backing from Ottawa will be unaffordable (and even <a href="http://www.qpbriefing.com/2016/09/30/economist-pokes-holes-in-ontarios-basic-income-plans/" target="_blank">designed a calculator</a> to show it.)
"Under this scenario, a family would receive a $10,000 basic income (per person, adjusted for family size and family income) or they would receive the present basic income package, whichever is higher. By design, there are no losers under this program," the CCPA report notes. In other words, those who are already entitled to get more than $10,000 through a combination of the already available 33 government support programs would forego the so-called 34th benefit.
Doing away with assistance programs currently available would have a "devastating" impact, and potentially push more people even further below the poverty line, the report says. As such, "the more acceptable and feasible approach would be to set up a new basic income on top of the 33 transfers that already exist, thus creating only winners, though the main beneficiaries would be middle-aged Canadians." The $10,000-negative income tax would also not be much help to single senior women, who traditionally receive much more than that through various forms of income assistance. Rates for young Canadians (18-29) would also be disproportionately clawed back, as those they tend to have higher market incomes. The report suggests other strategies to address poverty among niche demographics.
"For instance, policies that help increase wages and lower unemployment for youth, as well as better financial support for seniors, will likely be more effective at conquering poverty for those groups than a basic income approach," the report explains. "Existing basic income programs, Employment Insurance, and social assistance...taper out at higher income levels, allowing more support to flow to lower-income families. That provides a better bang for the buck on poverty reduction."
According to Minister Jaczek's office, the ODSP caseload had been growing by about 5 per cent, year-over-year, between 2006-07 and 2012-13. "However, recent caseload trends indicate that the ODSP caseload growth has slowed down. The ODSP caseload grew by 3.7% in 2013-14, by 3.9% in 2014-15 and by 3.0% in 2015-16." As well, the overall caseload for Ontario Works has declined, by 0.4 per cent in 2012-13,  by 2.7 per cent in 2013-14, and 2.3 per cent in 2014-15. Then in 2015, the caseload increased by 1.5 per cent.
Ontario will spend about $11.3 billion this year to operate all adult services programs, according to the Treasury Board's estimates for fiscal 2016-17. In 2015-16, operating expenses came in at $11.2 billion, with capital expenses amounting to $64 million. The ministry budgeted $2.8 billion for Ontario Works and $4.8 billion for ODSP that year. For the previous fiscal year, the ministry's operating and capital expenses were $10.5 billion and $27.9 million, respectively.
"It is important to note that a number of factors can affect caseload dynamics in Ontario including: socio-economic conditions, demographic changes and social assistance policy changes. An increased uptake of benefits and the upload of municipal Ontario Works costs to the province has also contributed to the increase in social assistance costs," a spokesman for Minister Jaczek said in an email.
According to the recently tabled <a href="https://files.ontario.ca/web_2015-2016_annual_report_eng_0.pdf" target="_blank">public accounts</a>, the Ontario Disability Support Program is gradually overtaking other social assistance expenses. For children's and social services, that amounted to "$124 million higher than planned, due mainly to additional spending to address demand for the ODSP, and the cost of prescription drugs for social assistance recipients." Since fiscal 2011-12, the expense for children's and social services increased from $13.5 billion, to $15.6 billion in fiscal 2015-16, an average increase of 3.5 per cent each year, which the government said is owed to annual rate increases and a bigger caseload under ODSP, investments in developmental services, and the Ontario Child Benefit. Back in 2014, the government earmarked $810 million over three years to bolster services for adults with developmental disabilities.
"On the expense side, the fiscal plan includes contingency funds to help mitigate risks. In the 2015 Budget, these totaled $650 million: $550 million for operating risks and $100 million for capital. Funds were used to support initiatives such as emergency forest firefighting and supporting social assistance recipients," adds the latest financial statement.
It isn't yet clear how much it will cost the ministry to roll out the basic income test. The Income Security Reform Working Group is currently putting together policy recommendations that will overhaul social assistance in context of the province's larger poverty reduction strategy, public consultation for which is set for mid-2017. Combined, the pilot and working group will help to inform "the transformation of income-based and other benefit programs" in Ontario.
OW and ODSP rates went up by 1.5 per cent this fall. Under Ontario Works, effective Oct. 1, a single person will receive $706 per month (up from $681). Municipalities will have to cover their share of the Ontario Works expense starting Jan. 1, 2017.
Correction: This story has been corrected from its original version to clarify the timeline for changes to social assistance. The Income Security Reform Working Group's recommendations will go for public consultation in mid-2017, and the minister will propose a new plan based on that by winter 2017-18.
To contact the reporter on this story:  
<a href="mailto:snanji@qpbriefing.com">snanji@qpbriefing.com</a> 
416-212-5789

Social assistance on the up, but reports suggest basic income may not be the cure-all

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