The average rent on a one-bedroom apartment in Toronto is $2,300, which puts housing out of reach for many on welfare. Google Street View

For-profit welfare scheme draws concerns

  • February 15, 2020

The idea of a welfare system in Ontario run by multinational, for-profit corporations strikes Dr. Gary Bloch as a bit odd.

“Where I get worried about it, is thinking around, really, what are the goals? What are the incentive structures put in place and who will be administering this?” asked the researcher and family physician with St. Michael’s Hospital’s City Health Associates. “We know there will be private companies bidding to help administer this system. That, to me, is extremely concerning.”

Last month, the Ontario government quietly launched a three-year pilot program in for-profit welfare, in particular how employment and training supports are delivered in Hamilton-Niagara, Peel and Muskoka-Kawartha.

These three regions will be the forerunners of a province-wide system the government has already mapped out. Eventually, Ontario will be carved into 15 regions. In each region, municipalities, non-profits and for-profit corporations will be invited to bid through a “Request for Proposals” process to manage the caseload of clients on Ontario Works (OW) and the Ontario Disability Support Program (ODSP) in each region.

The government’s latest experiment with welfare reform has been tried before in Australia and the United Kingdom. The results were bad, said Maytree Foundation director of policy and research Garima Talwar Kapoor. 

In both countries, privatized welfare systems blew up because the contractors running them, whether they were for-profit companies or non-profit organizations, were being rewarded for moving clients quickly from welfare to work — whether the clients were ready or not. Contractors were penalized if clients stayed on public assistance.

It was in the contractor’s interest to deal only with clients who could easily be streamed into a job, said Kapoor. Many people who show up at Church-run food banks and shelters aren’t easily employable. “There are certainly people who have so many issues that they need to work through that it will be a long time before they actually are able to participate in any type of social engagement, let alone labour-market engagement,” Kapoor said. 

It’s unclear what will happen to people far from the labour market under the new system, she said. In England many ended up off welfare with no work, entirely dependent on charity, sleeping in bus shelters.

The British Conservatives cancelled the experiment after six years. The Australians have been walking back significant aspects of their system.

“I certainly think Church groups should be paying attention and be aware of what’s going on,” said Sr. Sue Wilson, who runs the Office for Systemic Justice for the Sisters of St. Joseph in London, Ont. “In principle, there’s nothing wrong with working to change the system, because it’s not working well. However, the government has made clear that their main goal is to pull money out of the system.”

As the safety net below the safety net, Church charities bear a heavy load whenever the system breaks and people fall through the cracks, she said.

“The best way to help people out of poverty is something called a job,” Premier Doug Ford has repeated on several occasions since the reform program was first announced in November of 2018.

“Social assistance in Ontario today is an ineffective, disjointed patchwork of supports that traps people in a broken system,” said Lisa MacLeod, who was Minister of Children, Community and Social Services Minister at the time (the job was turned over to Todd Smith last June). “Our plan is about a more effective, sustainable approach to helping people find and keep jobs and achieve better outcomes.”

Bloch, who for over a year participated in an expert panel reviewing Ontario’s welfare system with its 240 different income support rates and complex web of over 800 rules governing every aspect of life on OW and ODSP, doesn’t disagree with MacLeod’s assessment of the system.

“There’s been a sort of a hodgepodge of services without any sort of uniformity of goals or approach across the province. It’s been done very differently in different jurisdictions,” he said. “So I think these are really good moves forward, potentially.”

However, if the case worker’s only goal is to get the client a job, any job, as quickly as possible, many of those people will still be reliant on food banks, sleeping at Out of the Cold church basements and showing up in hospital emergency rooms, he said.

The idea that a job solves poverty sounds good, but it doesn’t line up with the facts, Wilson said. 

Ontario’s Financial Accountability Office reports that the province added 210,000 net new jobs in 2019, the largest increase in the level of employment on record. 

At the same time Feed Ontario, representing Ontario’s volunteer food banks, has documented a 27-per-cent increase over the last three years in food bank users who have a job. “It’s moving people from one kind of poverty — accessing social assistance — to another kind of poverty — the working poor,” she said.

Using the Market Basket Measure of poverty, 12 per cent of the population can’t afford a healthy diet, clothing, shoes, a place to live, heat, water and transportation.

That group certainly includes those on OW or ODSP. Depending on where in Ontario you live, the province’s two main welfare programs fall 23- to 60-per-cent short of the poverty line. An individual in Toronto on Ontario Works receives $733 a month, $1,079 less than Toronto’s $1,812 poverty line.

The province is dooming its welfare system to failure by investing too little, said Wilson.

“In my view, the Ontario government is missing the point,” she said. “What happens far too often is the rates of social assistance are so punitively low that many people accessing social assistance are pushed completely out of the labour market as their mental and physical health erodes. Then they end up accessing ODSP because their health gets so bad.”

(Note: This story was modified to clear up Dr. Bloch's role in the expert panel and the scope of the pilot project.)

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