2012 Budget punishes low income Ontarians



Low income Ontarians are among the biggest losers in the Ontario Budget 2012 announced on Tuesday March 27. The Budget delivers a number of austerity measures spread across the public service sector, healthcare, education and other areas but finds its savings on the backs of the most disadvantaged Ontarians. Immigrants and racialized Ontarians are over-represented in this population. While only one of the proposed measures deals with an immigrant-focused service and will therefore have an impact on current and future users, immigrants in general will feel the impact of the changes such as cuts to public services.

Employment Programs and Services

The Budget will integrate the different employment and training services provided through several government Ministries, through Employment Ontario (EO) under Ministry of Training, Colleges and Universities (MTCU), as recommended in the Drummond Report. The proposal will include employment programs currently available to people on social assistance, one of the options presented in the recent paper released by the Social Assistance Review Commission.

During the community consultations on Social Assistance Review organized by OCASI, several participants had noted that people on assistance would require specialized support as well as sensitivity to their circumstances to enter or re-enter the labour market. Integration of all services has the potential to improve access and improve consistency and equity across all employment services. OCASI expects that EO would be sufficiently resourced to address existing needs as well as the specialized needs of those on assistance.

Service integration proposed in the Budget would also include immigrant-focused employment services currently housed in the Ministry of Citizenship and Immigration (MCI), primarily the Ontario Bridge Training (OBT) program and Global Experience Ontario (GEO). OCASI understands the government's imperative to move towards integration of employment programs as way to achieve better coordination and cut operational costs. However the Council firmly believes that immigrant employment programs and services are specialized and must be housed in a Ministry that is focused on immigrant labour market integration, and supported with adequate and sustainable resources.

The OBT is a successful MCI initiative. Being located in MCI means the program is grounded in newcomer issues, which has contributed significantly to its success. OBT and GEO currently work well together. By shifting these services to EO we risk having them disappear or result in drastic change to delivery models and levels of funding. It may mean the loss of innovative service delivery models with proven effective results
It could also result in the fracturing of relationships and synergies that have developed over the years between the federal Department of Citizenship and Immigration (CIC) and MCI, the immigrant serving sector and employers. Instead, OCASI suggests that the government should explore ways to more effectively share good practices between MCI and MTCU, while allowing the former to retain jurisdiction and responsibility for immigrant-focused programs.

Other Impacts on immigrant services

We do not yet know if the broad cost-saving measures targeted for MCI and Ministry of Education would result in cuts to the Newcomer Settlement Program (NSP) and to English as a Second Language (ESL) programs. NSP is a smaller funding envelope for immigrant settlement and integration services, compared to federal funding provided through CIC. It is also a small part of the overall Ontario Budget. Nevertheless NSP plays an important role in addressing service gaps created by CIC eligibility requirements, such as services for those who are not yet permanent residents, and those who are citizens but are still dealing with major settlement issues.

OCASI is concerned about other cuts to the Education budget, such as the potential loss of funding for community use of schools included in ‘low impact' grants. This cut will have a disproportionate impact on disadvantaged communities, which are most in need of affordable options for community events and other initiatives that can build community capacity. We await more details on the government proposal to mitigate impacts through related programs and initiatives, as promised in the Budget.

Social Assistance

Immigrants are under-represented among people on social assistance in Ontario and over-represented among the working poor. Changes to social assistance would have a disproportionate impact on the minority of immigrants who are on assistance, given their disadvantage in labour market access and access to other income support programs.

OCASI is deeply disturbed by the decisions affecting social assistance recipients and low-income families with children. The Budget will freeze social assistance rates, which in reality represents a cut when cost of living increases are factored in. It will eliminate the Community Start-Up and Maintenance Benefit (CSUMB). The benefit is an important resource for many people on assistance, and typically helps to pay for costs such as deposits for rent and utilities, to buy or replace furniture and other similar expenses. The Budget will also eliminate the Home Repairs Benefit, a financial resource for people on assistance to pay for emergency shelter repairs when they have no other source of funds.

OCASI is encouraged that the Budget will cap social services spending at 2.7% a year, rather than the 0.5% annual cap recommended in the Report of the Commission to Reform Public Services (Drummond Report). Yet it is not clear how this Budget would allow the government to reduce child poverty by 25% by 2013, as promised in the 2008 Ontario Poverty Reduction Strategy. We are specifically concerned that the government has reneged on the promise to raise the Ontario Child Benefit (OCB) to $1,310 per child by 2013. Instead the Budget will increase the OCB from the present $1,100 by $100 in 2013 and 2014.


New Canadians and racialized Ontarians were the hardest hit in the recession, and are taking the longest to recover. Documented racial disparities (for both Aboriginal Peoples as well as peoples of colour) persist in life chances – in levels of low income, in health status, in services, in civic participation, in learning outcomes and in the labour market.

A recent report by Sheila Block and Grace-Edward Galabuzi, “Canada's Colour Coded Labour Market: the gap for racialized workers” (Wellesley Institute and Canadian Centre for Policy Alternatives, 2011), confirms a "colour code" is keeping “visible minorities” out of good jobs in the Canadian labour market. The report found that racialized Canadian workers earned 81.4 cents for every dollar paid to their Caucasian counterparts. Racialized immigrants are at a double disadvantage when it comes to labour market participation.

The cumulative effects of these measures can serve to delay the settlement and integration of immigrants, and will diminish life chances for racialized Ontarians.

The Ontario Budget 2012 offers little relief for low income Ontarians. It includes major cuts to public services in healthcare, education, and elsewhere which will have a significant impact on the most disadvantaged residents. The Budget attempts to appear fair by including a salary freeze for doctors and hospital CEOs, along with a freeze in social assistance rates. But there is a vast difference in impact for poor Ontarians on assistance who receive on average $599 per month. This budget reminds us that in a period of government austerity measures, we have to maintain pressure on government to keep the commitments made to Ontario's vulnerable populations

Useful Links:

Ontario Budget, Budget Speech and Backgrounders

Wellesley Institute Budget analysis

Income Security Advocacy Centre (ISAC) comments

Ontario Health Coalition media release

People for Education comments

Behind the Numbers (Canadian Centre for Policy Alternatives blog)

South Asian Women's Rights Organization

Ontario Coalition for Better Childcare comments