Ontario Budget 2007: Backgrounder: EXPANDING OPPORTUNITIES FOR LOW-INCOME ONTARIANS

March 22, 2007

Expanding opportunity for all helps build a strong and prosperous Ontario. The McGuinty government recognizes that giving everyone a fair chance to succeed is the right thing to do – for society and for the economy.

In addition to the Ontario Child Benefit, the 2007 Budget proposes a number of initiatives to help the most vulnerable people in the province.

Social Assistance

The government proposes to increase support for Ontario’s most vulnerable families and individuals by raising Ontario Works and Ontario Disability Support Program rates by two per cent, effective November 2007. On a full-year basis, the proposed increase would provide an additional $83 million in benefits to more than 420,000 Ontario families with more than 196,000 children, as well as families receiving Assistance for Children with Severe Disabilities and Temporary Care Assistance. Municipalities would not be required to contribute to the proposed rate increase until January 2008.

Affordable Housing

The government recognizes that many low-income Ontarians need affordable housing. That is why, with the support of the federal government’s $392-million trust funds, the 2007 Budget proposes to:

• Provide $127 million to municipalities immediately for new affordable housing or to rehabilitate existing housing;
• Help low-income working families with children pay their rent by creating a new, $185 million housing allowance program that would begin in January 2008 and create more than 27,000 new housing allowances and provide up to $100 a month, for a maximum of five years; and
• Support off-reserve Aboriginal housing with an $80 million investment, allocated in partnership with Aboriginal communities, for up to 1,100 off-reserve housing units.

Seniors

The government is proposing to introduce a new life income fund (LIF) that would increase income for pensioners in retirement and permit up to 25 per cent of their locked-in funds to be unlocked. The new LIF, and other modifications to the rules governing locked-in accounts, would give pensioners who hold locked-in retirement savings transferred from employment pension plans more flexibility in managing their retirement income.

Other proposals to benefit seniors include:

• Enhancing the Ontario Property and Sales Tax Credits for seniors for the fourth time in four years; and
• Allowing individuals to split certain types of pension income for tax purposes with a spouse or common-law partner. This would provide Ontario income tax savings of about $170 million to Ontario couples with eligible pension income in 2007.

Developmental Services

The government is enhancing services and supports for people with developmental disabilities and their families in communities across Ontario. The government will invest more than $200 million in additional operating funding over four years to strengthen capacity in developmental service agencies, and $7 million in capital funding to provide needed repairs and maintenance to developmental service community agencies. With this new funding, the government will have invested more than $500 million in developmental services since 2003.

Other Budget proposals to support low-income working Ontarians include:

• Flowing through the proposed federal Working Income Tax Benefit to Ontarians receiving social assistance;
• Increasing the hourly minimum wage to $10.25 in 2010, with three annual increases of 75 cents starting on March 31, 2008;
• Enhancing Workplace Safety and Insurance benefits for about 155,000 injured workers by 2.5 per cent on July 1, 2007 and January 1 in each of 2008 and 2009, along with other improvements;
• Providing an additional $51 million over three years, starting in 2007-08, to Legal Aid Ontario; and
• Announcing $48 million to improve social infrastructure, including:
  • $10 million for hospices;
  • $5 million for community citizenship projects;
  • $15 million for community recreation centres; and
  • $18 million for vulnerable populations, including developmental services.

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Contact:
Scott Blodgett
Ministry of Finance
416-325-0324