A new study Welfare Reform in Ontario: A Report Card
released today by The Fraser Institute, gives Ontario praise for its previous welfare reforms but warns that these policies may be under threat.
"Ontario has been a leader in Canadian welfare reform by focusing
on employment and diverting potential welfare recipients to
alternatives," said Sylvia LeRoy, policy analyst at the Institute
and co-author of the study.
"However, last week, the Ontario Government received a report by
Liberal MPP Deb Matthews which recommended abandoning many of
those reforms and returning to policies that were in place
pre-1995. Such policies had disastrous effects, including the
doubling of welfare use between 1985 and 1995, increasing from
5.2 percent of the population in 1985 to 12.4 percent in 1995 and
a substantial increase in welfare spending," she continued.
The Fraser Institute study estimates that some 680,000 Ontarians
have left the welfare rolls since reforms were introduced in
1995, reducing social assistance expenditures by over 42 percent.
More importantly, the incidence of low income, especially among
single mothers and children, has also been reduced.
These economic and social gains could be jeopardized if the
Ontario government rolls back the post-1995 reforms and
eliminates diversionary policies and sanctions, abandons
technological gains, and extends new income supports to
employable adults, as suggested in the government report.
The Fraser Institute study examined welfare policies in Ontario
beginning in 1985 and specifically evaluated the 1995 welfare
reforms against reform principles proven to play a role in
reducing dependency, increasing employment and earnings, and
lowering poverty rates in other Canadian provinces and US states.
The 1995 Ontario reforms received an overall grade of B-, with
particular areas of strength including: diversion policies (B+),
work requirements and sanctions for non-compliance (B), and
reducing the costs of entering the workforce (B). The study also
noted areas of deficiency, including the continuing entitlement
status of welfare (D) and a lack of competition for service
Overall, the reforms enacted in 1995 were positive in that they
focused on diversion and transition back to the labour force.
The recommendations of the Matthews report, if implemented, will
most likely have the unintended consequence of trapping a new
generation of Ontarians in welfare and poverty. Despite progress
in the 1990s, the province's welfare rate is still roughly double
the level of the most successful jurisdictions in North America.
"The province should build on the relative success of a decade of
reforms, rather than reverting to the failed policies of the past
that kept one in eight people on welfare," concluded