As Canada’s most populated province, Ontario is responsible for a significant portion of Canadian poverty. Unfortunately, government actions over the last number of years have been insufficient in fighting poverty and have made matters worse in some cases. Ontario has a large working-class population struggling with poverty. Moreover, the housing crisis and challenges faced by those living with a disability are major issues in poverty reduction.

Housing and the Cost of Living

The most often discussed drivers for poverty in Ontario are housing affordability and the high costs of living. Home ownership costs in Ontario are the nation’s second highest. More importantly, as 70% of food bank users are renters, the cost of rent provides a better indication of those who struggle with affordability.

On average, one-bedroom rentals in the province are the highest in the country at almost $2,200 a month. Three-bedroom units are second highest at roughly $3,000 a month. Altogether, 1 in 4 people living in the province have difficulties finding affordable housing and nearly 2 in 5 are paying more than 30% of their income on housing.

In terms of the cost of living in Ontario, many low-income individuals are spending well above half their income on fixed costs outside of housing. Far more people in Ontario are reporting that they cannot access necessary healthcare due to affordability issues. The issue of affordability seems to be worsening as 43% of Ontarians say they’re financially worse off than one year ago.

Solutions to Social Security

Better employment opportunities and policies to promote decent work would help to ease the difficulties of people living in Ontario. Unfortunately, people who receive social assistance and are looking to re-enter the workforce are effectively punished because their benefits are clawed back aggressively for each dollar earned. In addition, Ontario has some of the lowest social assistance rates in the country: 34% of the poverty line for single working-age adults. In other words, while individuals are legislated to poverty under the province’s social assistance plan, the challenge of finding adequate work is made more difficult than it already is.

Sociodemographic Considerations

Ontario is one of the three provinces with a large enough sample size to report on racialized communities in our survey.

Racialized people in Ontario face many challenges that the rest of the province does not. Data from our survey suggests there are two particular areas where this group experiences increased challenges: work and housing.

Low wages are affecting 37% of those within racialized communities from making ends meet, compared to 30% across the province. Making the issue worse is that 39% of racialized Ontarians also have difficulty accessing stable employment in their community, which is a full 10% higher than the provincial average. Beyond these challenges in the job market, 41% of racialized respondents also stated that their mental health is affecting their ability to find work, work effectively, or maintain finances.

With these challenges, it’s not surprising to discover that those within racialized communities are far more likely to struggle with housing related issues. Overall, 34% of respondents in this group agreed that it is hard to find adequate housing, which is almost 10% more than the provincial average. For those who find housing, 41% agree that it is hard for them to keep up with rising rents (+7 percentage points from provincial average).  As such, 30% of them are spending 30% to 50% of their income on housing, which is 7 percentage points higher than the provincial average.

• • Affordable housing;

• • The presence of deep poverty in the province, and;

• • The lack of knowledge about tax information and benefits available to residents.

Moreover, experts maintain that policymakers must prioritize vulnerable groups such as young people and the working poor.

The 2023 budget from Ontario failed to address poverty reduction and the soaring cost of living across the province. Despite being among the most expensive provinces to live in, the budget does little to help individuals and families struggling to make ends meet. Some minor commitments worth noting are investments in the Homelessness Prevention Program and Indigenous Supportive Housing Program. While an investment to support community-based mental health and addiction services is included in the budget it is limited to service providers funded by the Ministry of Health.

In 2023, Ontario will need to continue helping low-income workers through more robust programing. This approach matches the government’s general direction so far and directly addresses those who have expressed concerns with decent work. Beyond this, the government must take steps to show that they are taking the housing affordability crisis seriously, and beyond that, the poverty crisis.

Accountability

1. Establish a clear poverty reduction target

We recommend the province formally adopt a set of poverty reduction targets in line with Canada’s poverty reduction strategy, which would entail a 50% reduction in poverty by 2030, compared to 2015 levels. Given how close the province came to achieving this goal during the pandemic, in the short term leaders should prioritize actions that improve income security, build affordable housing, and promote decent work to ensure that recent progress is not significantly reversed.

Decent Work that Pays

2. Double the Low-Income Individuals and Families Tax (LIFT) Credit for Ontarians earning less than $50,000 and seek to harmonize the Canada Workers Benefit (CWB) with it

To bolster the incentives of LIFT, the Province should reinvest recent fiscal windfalls from the post–COVID-19 labour market recovery in making good work pay. Building on the existing platform of LIFT, we recommend the province double LIFT to $1,700, targeting in particular workers earning less than $50,000, which is broadly consistent with the Market Basket Measure (MBM) poverty line for a worker living in Toronto.

To help improve the impact of the program for users, the Ontario government should also work with the federal government to harmonize the program design with the CWB. Efforts to harmonize the programs would ensure that a low-wage worker employed for 20 hours a week or less, earning $16/hour, would be able to benefit fully from nearly $3,300 in combined and unreduced support.

3. Make it easier for people in the Ontario Disability Support Program (ODSP) to work and earn

While the province has made welcome changes to increase the amount that a recipient of ODSP can keep should they find work (recently increased to $1,000 per month from $200), any earnings above this level are still clawed back at a rate of 75%. At a minimum, the province should reduce this claw-back provision to 50%, which would align with the current earnings exemption rule in Ontario. This would improve the ability of and incentive for ODSP recipients to seek and find work should they be able.

4. Modernization of Ontario Works and ODSP

In anticipation of the significant impact the forthcoming Canada Disability Benefit will have on Canada’s social safety net, the government of Ontario should undertake a similar review to enhance both the adequacy and the simplicity of benefits so that they provide livable support that encourages people who are able to work.

Affordable Housing

5. Establish a provincial housing accelerator fund with new tax and grant incentives to supercharge the construction of affordable, purpose-built rental housing

Ontario needs both more homes and also more homes that are affordable. While the province has taken some very modest steps to accelerate housing construction, virtually none of this policy effort has been focused on meeting the housing affordability needs of lower-income and working-poor populations. Private market developers are struggling to keep up with rising demand in light of a significant tightening of financial conditions, as interest rates have surged over the past year. While developers have played a role in the worsening housing market, they will still be needed as Ontario works toward finding a solution.

We recommend the Province establish a provincial housing accelerator fund focused on a mix of tax and grant incentives for developers. This could include establishing a time-limited, enhanced capital cost allowance class for purpose-built rental units so that developers can recoup their capital investments faster. In exchange, Ontario would set strong conditions to increase the mix of affordable and below-market units, which would increase the number of affordable units and offer greater choice. The fund could also be paired with further grant investments to assist with land acquisition.

6. Establish an Ontario housing protection and acquisition fund

If Ontarians are to have affordable housing, and if Ontario’s non-profit and co-operative housing providers are to keep up with the demand for housing, there is a critical need for non-profit and co-operative housing providers to be able to acquire land and property for development cheaply and quickly, as this is often the most important cost in development. The province’s More Homes Built Faster strategy has taken initial steps in this direction by proposing to exempt affordable housing projects from development charges. This initiative urgently needs to be matched with available provincial funding and land so that projects can proceed. We recommend that an acquisition and development stream of at least $400 million be dedicated to affordable housing providers.