Poverty reduction key to fairer, more prosperous Ontario

By: Sarah Blackstock Greg deGroot-Maggetti, Published on Wed Dec 04 20

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Five years ago this week, the Ontario government embarked on a bold and historic challenge to reduce child and family poverty across our province by 25 per cent by 2013. While it appears Ontario will fall short of its “25 in 5” target, the province has made some progress and laid three critical building blocks that should provide the foundation for its next five-year strategy, expected in early 2014.

The first building block was forged in understanding the connection between fairness and economic prosperity. Ontario should take a page from the response to the most recent economic downturn, where a rising consensus emerged – including World Bank economists and finance ministers of all political stripes – that fighting poverty is required to grow our economy.

Ontario’s 2008 maxim that “we need all hands on deck” to drive our province’s recovery rings as true today as it did then. In an increasingly competitive global economy, it is crucial that we maximize the potential of every Ontarian to both participate in and benefit from economic activity. In a time of fiscal challenges, governments must invest in pathways to opportunity or be saddled with rising costs in health care and social services borne of persistent poverty.

Ontario’s second building block against poverty comes from knowing that good intentions alone cannot sustain a long-term commitment to poverty. Clear goals backed up with a comprehensive strategy must be part of the roadmap to progress.

The government’s willingness to set a clear “25 in 5” target in 2008 came with political risk and took courage. While Ontario’s performance was far from perfect, it has led to tangible gains. Ontario’s child poverty rate of 13.8 per cent in 2011, the latest year for which Statistics Canada figures are available, was down from 15.2 per cent in 2008. This means 41,000 fewer children were living in poverty, a reduction of just over 9 per cent in three, economically challenging years.

Different choices would have undoubtedly led to better outcomes, especially for households without children. But substantial early investments in policies like the new Ontario Child Benefit, refundable tax credits for low income people, and minimum wage hikes show that smart social policy works. Or at least as much as you are willing to invest in it.

The next plan must raise the bar. It should seek to cut poverty among all Ontarians in half by 2018, achieving a reduction in the overall poverty rate in Ontario to below 6 per cent and the child poverty rate to below 7.5 per cent.

The third building block for Ontario’s next poverty reduction strategy is building momentum by starting strong.

Five years ago, Ontario did not flinch in the face of a recession. The government immediately accelerated investments in the Ontario Child Benefit. It increased minimum wages when workers needed them most. It moved quickly to entrench poverty reduction into legislation. It invested in community services in priority neighbourhoods. And it revised legislation on worker protections and predatory lending practices within the first year of the plan.

These down payments were critical in achieving initial gains against poverty. They also put real money in the hands of real people to spend in their communities, providing stimulus to a battered economy.

But Ontario has not always carried through with as much vigour as the challenge of poverty requires. Case in point was the 2012 decision to eliminate the Community Start-Up and Maintenance Benefit (CSUMB), a modest fund intended to provide a life-line to Ontarians at risk of homelessness.

As the next five-year blueprint is set to be unveiled early in 2014, it is time for Ontario to raise the bar on poverty reduction, starting with a substantial down payment as a building block for success.

Such a down payment should increase social assistance, the Ontario Child Benefit and the minimum wage, to build on gains from the initial strategy.

Addressing the need for affordable housing is key. As municipalities struggle with the repercussions of the CSUMB cut, Ontario should shore up its commitment to the most vulnerable by making transitional housing and homelessness funding permanent. And the government should also match federal housing funding commitments.

Action to resolve the growing precariousness of jobs is another urgent step to take to achieve fairness while helping to drive the economy.

But so much more needs to be done. The 2008 Poverty Reduction Strategy opened the door for substantive action. It’s now time to act boldly toward eradicating poverty in our province by investing in a prosperity agenda that benefits us all.

Sarah Blackstock of YWCA-Toronto and Greg deGroot-Maggetti of Mennonite Central Committee Ontario represent the 25 in 5 Network for Poverty Reduction.

Hydro rates goes up by 3%

By:  Business reporter, Published on Thu Oct 17 2013

Ontario consumers will face higher hydro bills starting Nov. 1 — with the sharpest percentage increase coming during off-peak hours.

Time of use electricity rates, which are now paid by most consumers and small businesses, are due to rise by 0.5 cents a kilowatt hour for all time periods, the Ontario Energy Board announced Thursday.

The increase affects only the energy portion of the bill; consumers pay additional charges for delivery and debt retirement, plus a fixed monthly amount.

Those who pay time-of-use rates will pay about 3 per cent more for electricity on their total bill — or $4 a month on a monthly hydro bill of 800 kilowatt hours, according to the energy board.

Consumers who buy power from energy retailers at a fixed price won’t be affected by the new prices, which will be in effect for six months.

The new price for peak power will be 12.9 cents a kilowatt hour; for mid-peak, 10.9 cents a kilowatt hour; and for off-peak, 7.2 cents a kilowatt hour.

In percentage terms, the off-peak power price jumps 7.5 per cent, while the peak price rises only 4 per cent, and mid-peak 4.8 per cent.

The board said the new prices are being driven by “more generation from sources including renewables, along with a higher market price for natural gas.”

Gas and renewables are set to play a bigger role in Ontario’s power market, as the last coal plants shut down. The province has decided not to build new nuclear reactors.

The new rates continue to shrink the gap between peak and off-peak prices.

Five years ago, the peak price was more than three times the off-peak price; today, it’s less than twice the off-peak price.

Peter Tabuns, energy critic for the New Democratic Party, said the new prices reduce the incentive for people to consume less during the peak.

“That seems to be contrary to everything they’ve been saying in the past,” he said in an interview.

“So everyone who’s switched to doing their laundry in the middle of the night is going to be paying more than they would have.

“The other thing that struck me is that the increase in the cost of electricity is an awful lot more than the rate of inflation,” he added, saying the government should do more to promote conservation.

Time of use pricing is meant to discourage short, sharp peaks in demand. To supply those peaks, the power system has to build expensive plants that operate only a few hours a day, and only during part of the year.

Conservative critic Lisa MacLeod linked the latest price increase with the cost of moving unpopular gas-fired plants out of Oakville and Mississauga, estimated by the provincial auditor-general to be $1.1 billion.

“The way this government’s mismanaged energy, someone’s got to pay for it and unfortunately they’re going to have the say: It’s the ratepayer,” she said. “There’s no way to recover this money from the Liberal Party of Ontario.”

Energy minister Bob Chiarelli avoided any direct comment when asked about the new prices.

“Since 2003, the Ontario government has made smart, strategic investments in both transmission and generation infrastructure to bring us into a healthy supply situation in order to power our homes, farms and businesses,” he said in a statement.

An official in his office said prices are tracking lower than those predicted by the Liberals’ long-term energy plan released in 2010.

Julie Girvan of the Consumers Council of Canada said in an interview she’d like to see more clarity from the energy board about the impact that time of use pricing has had on consumer behaviour and on hydro bills.

Energy board spokesman Alan Findlay said that the board has been gathering data about the impact, and will be releasing a report by the end of the year.

In setting rates, “the approach is to match the costs of supply with the appropriate time period they’re used,” he said.

The energy board says most consumers use 64 per cent of their power during off-peak hours. During the winter months, off-peak hours are all day on weekends and holidays, and on weekdays from 7 p.m. to 7 a.m.

Peak periods are weekdays from 7 to 11 a.m., and 5 to 7 p.m.

Ontario to review its Payday Loans Act in response to new technologies

September 12, 2013 Canadian Press

TORONTO – The provincial government says it will launch a review of the Payday Loans Act, adopted in 2008 to better protect customers.

The review is in response to technological changes in the payday loan industry.

They include the growth of online transactions, smartphone-enabled loan approvals and new forms of high-cost, short-term loans.

The review will also explore ways to track payday loans and ensure companies are compliant with existing regulations.

It will also study stronger protections for consumers against multiple loans and roll-over loans and review the maximum total cost of borrowing.

That cost is currently capped at a $21 fee for every $100 borrowed

There are more than 750 payday loan storefronts in Ontario where consumers take out an average payday loan of $300 and pay up to $63 in fees.

Could You Live Off a Minimum Wage Job?

National President, Unifor Founding Convention

Posted: 09/19/2013 11:41 am

Minimum wage jobs are not only for the after-school crowd of kids looking for spending money, but also an entry into the workforce for immigrants, recent graduates and many others who can only find part-time work and need to hold down two or three jobs to survive.

The most recent Statistics Canada job market figures say 70 per cent of the province’s 44,000 new jobs created in August are part-time and mostly filled by older workers. It’s also a safe bet they are mostly paid at minimum wage.

Across Canada, minimum wage ranges from $9 an hour in Alberta to $11 in Nunavut, while in most provinces it is set at $10. Unifor’s recent submission to Ontario’s Minimum Wage Panel Review should be required reading for all of them.

Consider that:
• Minimum wages in Ontario have been frozen for three-and-a-half years at $10.25 per hour, while consumer prices have increased by over 7 percent (measured by Statistics Canada’s all-items CPI for Ontario). The resulting decline in real incomes for low-wage workers is very unfair, and has undermined household finances and consumer spending in the province.

• Relative to average wages, and average hourly productivity, minimum wages in Ontario are significantly lower today than they were even in the 1970s.

• Even working full-time year-round, the existing minimum wage would leave a single worker in Ontario (with no dependents) well below low-income cut-off for a single resident (the low-income cut-off is a measure of relative poverty).

Clearly, the existing minimum wage in Ontario doesn’t give working people a chance to provide for themselves and their dependents at a decent standard of living.

The proposal now being considered by the Ontario government to raise the minimum wage to $14 an hour won’t lift the burden of poverty that weighs on low-end wage earners. But it will lighten the load somewhat.

Unifor supports the proposal as a first step of a broader strategy to ensure all workers can enjoy decent living standards.

Our position is that it should be combined, though, with other measures such as employer-specific policies, training and placement initiatives, and other policy tools aimed at lifting wages to what could genuinely be considered a “living wage.” Studies have estimated a living wage to be around $18 per hour for Ontario — an amount sufficient to allow a family of four, with two wage-earners, to pay for the basic necessities of family life.

Some economists argue that higher minimum wages will lead to higher unemployment, but a good body of evidence exists showing little connection between minimum wage levels and employment.

On the other hand, by boosting purchasing power and consumer spending, and helping lower-income families reduce their debt loads, a higher minimum wage could actually have a net positive impact on jobs and on quality of life for everyone.

Unlike the often-failed trickle-down theory of wealth accumulation, when minimum wages are raised, there is a demonstrable trickle-up benefit for the entire working community. In addition to the psychological and social benefits of being able to support oneself, stronger family incomes lead to increased demand for products and services, financially viable businesses, and a generally more vibrant community.

Of course the opposite is true when young people can’t afford to move out of their parents’ basement, families rely on food banks to feed their children, or stressed-out, single parents juggle part-time jobs to stay out of poverty.

The Ontario government can and should do better for its lowest paid workers. Giving them a chance at a decent standard of living raises the bar for everyone.

Jerry Dias is the national president of Unifor, Canada’s largest union in the private sector. Created on August 31, with the coming together of the former Canadian Auto Workers union and the Communications, Energy and Paperworkers Union, Unifor represents more than 300,000 members working in at least 20 sectors of the economy (including all stages of the economic value chain, from resources to manufacturing to transportation to private and public services).