2014 Ontario Economic Outlook and Fiscal Review
Chapter I: Building Opportunity, Securing Our Future

Section F: A Fair Society

Building Opportunity for All Ontarians

The Province’s future prosperity depends on every Ontarian being able to participate in its economy.

Ontario has a reputation for promoting greater fairness by investing in people; ensuring equal access to key public services such as health care and education; and supporting the needs of low‐income families and the most vulnerable. By providing enhanced protection, security and equal opportunity for Ontarians, the government provides individuals with a greater sense of dignity and independence.

The Province’s path to a balanced budget will help ensure that services and supports for the most vulnerable are protected and sustainable over the long term. These services and supports play a critical role in ensuring that every Ontarian has the opportunity to participate in employment and contribute to the prosperity of their province.

Moving Forward on the Poverty Reduction Strategy

In September, the government released a renewed Poverty Reduction Strategy – Realizing Our Potential – to expand its efforts to reach more vulnerable people. A sustained, flexible and results-driven approach to poverty reduction is needed to continue building opportunities for all Ontarians.

Ontario’s renewed Poverty Reduction Strategy focuses on four objectives:

  • Breaking the cycle of poverty for children and youth;
  • Moving towards greater employment and income security;
  • Investing in affordable housing and ending chronic homelessness; and
  • Using evidence to develop policy and measure success.  

As part of the renewed Poverty Reduction Strategy, the government is recommitting to its target to reduce child poverty by 25 per cent, and has set a new goal to end chronic homelessness.

Breaking the Cycle of Poverty for Children and Youth

From 2008 to 2011, the most recent years for which data are available, the Strategy has helped lift 47,000 children out of poverty. The children’s poverty rate has fallen from 15.2 per cent in 2008 to 13.6 per cent in 2011. Without the efforts of the Strategy, the child poverty rate would have been 15.9 per cent in 2011.

This progress in reducing poverty is all the more important because it happened during a global economic recession and ensuing slow recovery.

The Ontario Child Benefit (OCB) has made a direct and lasting impact by helping lift children out of poverty.

  • In July, the maximum annual benefit increased by $100 to $1,310 per child, enhancing the incomes of over half a million families.
  • Beginning in July 2015, the OCB’s maximum benefit, and the income threshold at which the OCB starts to be reduced, will be indexed to annual increases in the Ontario Consumer Price Index, safeguarding the purchasing power of the OCB from erosion due to inflation.

The government will build on the first Poverty Reduction Strategy by expanding access to health benefits for children in low-income families, including prescription drugs, assistive devices, vision care and mental health services. These benefits will help ensure that no parent has to choose between work and social assistance to improve health outcomes for their child or children.

The government will also expand Ontario’s Student Nutrition Program so that children and youth in more low-income neighbourhoods and on First Nation reserves have access to nutritious breakfasts, snacks and lunches. During the 2012–13 school year, the program served nearly 700,000 school-aged children and youth; the expansion of this program will serve an estimated 56,000 more children and youth in higher-needs communities. An initial investment of $32 million over the next three years will establish 340 new breakfast programs in elementary and secondary schools and enhance some existing student nutrition programs.

Moving towards Greater Employment and Income Security

While government supports play a role in reducing poverty, employment remains key to further gains.

As of 2011, in households where no one is employed, the poverty rate is 60 per cent. With one full-time worker, working all year, the poverty rate drops to about 10 per cent. With two or more full-time workers, working all year, the poverty rate falls to about one per cent.

The renewed Poverty Reduction Strategy aims to support and encourage people to find meaningful employment at a fair wage, and continues to focus on providing opportunities for youth and vulnerable populations so that they develop the skills and experience needed to enter the labour market.

To help low-wage workers who struggle to make ends meet, the government has raised the minimum wage to $11 per hour, the highest among the provinces. The government has also passed legislation to index the minimum wage to the Consumer Price Index so it keeps pace with the cost of living.

The Ontario Youth Apprenticeship Program gives youth the skills, training and experience that enable them to graduate with a high school diploma and partial completion of a qualification in a trade. In 2013–14, 21,603 students in Grades 11 and 12 were participating in the program.

As well, Ontario is improving on employment and training services to better assist the most vulnerable, including those receiving social assistance, persons with disabilities, the long-term unemployed, Aboriginal peoples, newcomers and at-risk youth.

Because of the importance of employment to poverty reduction, the government will monitor and report on three new indicators:

  • Youth not in employment, education or training;
  • Adults in long-term unemployment; and
  • A vulnerable-persons poverty rate.

Investing in Affordable Housing and Ending Chronic Homelessness

The government’s commitment on ending homelessness will require a multi-faceted approach that includes investing in effective programs and services today and developing strategies to help end chronic homelessness over the long term. The Province’s approach includes a particular focus on affordable housing and homelessness prevention.

Ontario’s Long-Term Affordable Housing Strategy continues to be the basis for a more efficient and effective local approach to investment decision-making in affordable housing and supports.  As part of the Strategy, the government is ensuring that vulnerable Ontarians remain appropriately housed by investing in homelessness prevention, expanding access to supportive housing, and investing in more affordable housing.

The government is updating its Long-Term Affordable Housing Strategy by 2015–16 so that housing and homelessness-related policies and programs are relevant to current realities and reflect new research and a best-practice approach to poverty reduction.

One example of this approach is the Community Homelessness Prevention Initiative (CHPI). Established in 2013, CHPI allows local governments to use flexible funding approaches, tailored to community needs, to develop programs and supports for those who are homeless or at risk of becoming homeless. An increase of $42 million for CHPI was announced in the 2014 Budget, bringing total investment in this program to $294 million annually. This was rolled out in October 2014.  This investment will further improve access to adequate, suitable and affordable housing for those in need.

At the same time, in August 2014, the government signed a renewed Investment in Affordable Housing cost-matching agreement with the federal government.  This agreement is expected to provide a total of more than $801 million in new funding for affordable housing across Ontario over the next five years and provide flexibility to local governments to meet local needs and priorities, such as the creation and repair of affordable housing, down-payment assistance for homeownership and rental assistance to households in need.  The program also provides dedicated funding assistance tailored to the needs of the off-reserve Aboriginal community as well as remote areas in northern Ontario.

Using Evidence to Develop Policy and Measure Success

The government’s renewed Poverty Reduction Strategy highlights the importance of measuring the impact of programs on people’s lives and using evidence to develop programs and services. To ensure the best allocation of government resources, investments in poverty reduction programs and interventions should be based on evidence, lessons learned and best practices.

Poverty is a complex issue, and establishing the right measures to assess programs requires careful planning. The government will work with its partners among community organizations, service providers and academia to develop approaches that are comprehensive and results-focused.

As initial steps, the government will undertake initiatives to enhance its ability to collect and use evidence. 

  • In the 2014 Budget, the government announced that it would be investing more than $50 million over five years to create a new Local Poverty Reduction Fund. This fund will support, among other things, the development of strategies for collecting evidence to identify poverty reduction initiatives that work.
  • The government will also be seeking expert advice, including from those with lived experience of homelessness, to help define the problem, understand how to measure it, and set a target related to ending chronic homelessness.

Supporting Ontarians with Developmental Disabilities

In the 2014 Budget, the government committed to investing an additional $810 million over three years to improve supports for adults with developmental disabilities — and their families — to help these adults live as independently as possible and fully integrate into society.

As of October 2014, the government has made progress implementing these initiatives, including:

  • Expanding direct funding to more than 6,000 children and their families through the Special Services at Home program and nearly 1,900 adults through the Passport program;
  • Expanding residential supports to 350 additional adults, including vulnerable young adults who are transitioning from children’s services;
  • Creating a Developmental Services Employment and Modernization Fund to modernize service delivery and increase employment opportunities for people with developmental disabilities; and
  • Forming a Housing Task Force, consisting of key stakeholders in the developmental services and housing sectors, to recommend innovative housing solutions for adults with developmental disabilities.

Increased Legal Aid Eligibility

All Ontarians, regardless of income level or ability, should have access to an effective and fair justice system. Ontario is committed to ensuring low-income families and vulnerable groups have access to the legal supports they need.

The government is committed to expanding access to legal aid by raising the income eligibility threshold to qualify for legal aid assistance.  The income eligibility threshold has not increased since the 1990s.  As a result, more and more low-income Ontarians have been unable to afford legal representation in the court system.

As announced on October 30, 2014, the government is moving forward with a plan that, when fully phased in, will allow over one million more people to qualify for legal aid services. By increasing the eligibility threshold, more than double the number of low-income individuals will have access to legal aid services.  This initiative would result in approximately 75,000 additional certificates — which allow low-income Ontarians to be represented by a lawyer — to be issued by Legal Aid Ontario each year.

The 2014 Budget included an initial investment of $95.7 million to increase the income eligibility threshold by six per cent in each of the first three years of the plan. The first increase took place on November 1, 2014.

Protecting Ontario Consumers

The government’s role in building opportunities for all Ontarians includes taking measures that protect consumers and their hard-earned money. Protecting consumers strengthens Ontario’s economy by helping them keep their daily expenses affordable.

Taking Steps to Keep Auto Insurance Affordable

Government reforms aimed at fighting fraud and abuse are making auto insurance more affordable for Ontarians. As a result of the government’s Auto Insurance Cost and Rate Reduction Strategy, rates declined by more than six per cent on average from August 2013 to August 2014.

To date, the government has taken action to address over half of the recommendations made by the Auto Insurance Anti-Fraud Task Force, including key proposals to enhance the Financial Services Commission of Ontario’s (FSCO) investigation and enforcement authority and make it easier for individuals to report suspected auto insurance fraud. Licensing of health service providers in the auto insurance system, a key Task Force proposal, will become fully effective on December 1, 2014.

The government is also committed to establishing a Serious Fraud Unit, whose initial mandate would include addressing auto insurance fraud. Establishing such a dedicated investigation and prosecution unit would be consistent with the Task Force’s conclusion that cases of suspected auto insurance fraud should be vigorously pursued and prosecuted where evidence warrants.

Bill 15, the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014, continues the government’s efforts to protect consumers and combat fraud as part of the Auto Insurance Cost and Rate Reduction Strategy. If passed, Bill 15 would:

  • Transform Ontario’s auto insurance dispute resolution system to help injured drivers settle disputed claims faster;
  • Regulate the towing and vehicle storage industries through measures that tackle questionable practices; and
  • Give the government authority to change the current 60-day period that a vehicle can be stored after an accident, accruing charges, without notice to the owner.

Rates are directly linked to claims costs, and further action to reduce costs and uncertainty in the auto insurance system is needed to achieve the government’s 15 per cent average rate reduction target. The government will continue to review additional possible reforms, but it is also important for the insurance industry to help keep auto insurance affordable. Insurance companies have a responsibility to manage claims fairly while operating efficiently and investing in new processes and tools, such as data analytics technology, to help crack down on fraud and abuse.

Transparency and Accountability

In the 2013 Budget, the government committed to creating annual independent expert reviews of the impact of auto insurance reforms to date. In late 2013, the Province retained an independent third party to deliver these reviews in the form of annual Automobile Insurance Transparency and Accountability Expert Reports. In addition to these annual reports, an Interim Report was requested and released in April 2014. In November 2014, the first annual report was delivered to the Minister of Finance.

The 2014 Annual Report confirmed that the September 2010 auto insurance reforms reduced claims costs, stabilized premiums and prevented further rate increases. The report also noted that while the government’s current strategy has resulted in an average rate reduction of over six per cent since August 2013, there are still other sources of considerable uncertainty that are preventing rates from being reduced further. Additional actions will be required to reach the average rate reduction target.

The 2014 Annual Report also included specific recommendations targeted at reducing costs, as well as more general recommendations aimed at improving the auto insurance system as a whole. These include improving consumer representation; and enhancing sharing and monitoring of information, such as insurer claims practices, the impact of legal costs, and other measures to improve transparency. The recommendations and observations in the report clearly demonstrate that all stakeholders have a role in creating a more sustainable, affordable and fair system.

Electricity Rate Mitigation for Low-Income Ontarians

The government recognizes that Ontario’s low-income households typically spend a proportionately higher percentage of disposable income on electricity compared to high-earning households.

The Minister of Energy has asked the Ontario Energy Board to develop options and provide a report by December 1, 2014, on a sustainable, long-term electricity support program, the Ontario Electricity Support Program (OESP), specifically designed for low-income Ontarians, to be in place by January 1, 2016. The OESP would replace the Ontario Clean Energy Benefit (OCEB) once it ends December 31, 2015.

The government is also moving forward with removing the Debt Retirement Charge (DRC) cost from residential users’ electricity bills after December 31, 2015. This will save a typical residential ratepayer about $70 per year. Implementation details will be set out in a draft regulation, expected in early 2015.