August 3, 2010

Money that municipalities can reinvest to reduce poverty

Ontario municipalities will have $12 million that they can invest in reducing poverty in 2011.

As part of the Provincial-Municipal Fiscal and Service Delivery Review, the Provincial Government has committed to upload costs for a number of services over the next eight years. In fact, the process started in 2009, when the province assumed the full cost of Ontario Disability Support Program payments and Ontario Drug Benefits. In 2009 the province also began uploading the costs for Ontario Works payments. Over they next eight years the Province will completely upload Ontario Works payments, as well as court costs.

When all of the costs are uploaded, the Delivery Review reports that municipalities will realize savings of $1.5 billion a year. The savings from the upload of Ontario Work payments alone makes up $400 million of that $1.5 billion in annual savings.
The Province has agreed to fully fund Ontario Works benefits. These benefits are made up of income support and employment assistance to qualifying Ontario residents. At present, municipalities pay 20% of the cost of Ontario Works benefits, and the Province pays 80%. This upload will reduce municipal costs by more than $400 million annually by 2018.
The upload of Ontario Works costs is scheduled to be complete by 2018. Here is the schedule.

The question is what will municipalities do with the $12 million they will save in the coming year? These are funds that have been used to help reduce poverty. It is well worth reinvesting those savings in other ways that can help municipalities reduce poverty locally.

Especially in this year of municipal elections, communities should focus on how their municipality could best use those funds to help eliminate poverty.

  • Could that money be used to reduce bus fares for people on low income?
  • Or to expand public transit in communities where there is too little?
  • Could that money be used to expand affordable housing?
  • Or to increase services for people who need supportive housing?
  • What about increasing the affordability and accessibility of recreation programs?

Here is a thought.
Get together with folks in your community. Think about what kind of investments in poverty reduction would make most sense in your community. Ask candidates in the municipal election whether they will commit to reinvesting part or all of the savings from the upload of social assistance costs in municipal poverty reduction initiatives. Follow up with your municipal politicians after the election. Find out how much money your municipality will save in 2011 due to the province uploading costs and how much will be available in coming years. Put forward the ideas you have for how to reinvest those funds.

This year alone municipalities will have a total of $12 million dollars they can reinvest in poverty reduction. By 2018, they will have a total $400 million for annual investments in poverty reduction. It gives municipalities some real capacity to help eliminate poverty locally and help achieve the goal of a poverty-free Ontario.