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INTRODUCTION

ONTARIO’S POVERTY REDUCTION STRATEGY

Breaking the cycle of poverty matters to every Ontarian. That’s why we announced a long-term poverty reduction plan in 2008 that focuses first on giving children and families the support and tools they need to succeed. This bold new direction for Ontario is based on our vision of a province where all children have opportunities to succeed in life, and in which Ontarians facing challenges have greater opportunities to reach their potential as contributors to our society and our shared economic future.

The First Year

In presenting the first Annual Report on Ontario’s Poverty Reduction Strategy, we acknowledge and thank the many poverty experts, organizations, communities, and people living in poverty across the province who have contributed to, and continue to support, this critically important initiative that requires the commitment of all governments, all communities and all Ontarians.

During the first year, action was swift and purposeful. The achievements described in this report have contributed to our progress, and although we have in this short time moved forward in many areas, we remain aware of the challenges ahead. Achieving our goals will require the partnership of the federal government and a strengthened economy.

The global economic recession and financial crisis have had a serious impact on Ontario. There has been a steep rise in the number of unemployed Ontarians, increasing the province’s unemployment rate from 6.5 per cent in 2008 to over nine per cent in 2009. We have enjoyed reduced poverty rates in recent years, but today’s economic weakness will affect incomes and possibly push more people into poverty in the short term. One response might be to give up on our poverty reduction effort in light of the global recession. This is not our response: in our view the Ontario Poverty Reduction Strategy is all the more critical today to help support low-income families during these challenging times.

Ontario’s strategy for poverty reduction is a long-term plan, and a realistic one. We are well aware that the economic downturn of 2008-09 in Ontario and around the world presents serious challenges to moving our key poverty indicators forward. The Ontario economy remains vulnerable to a number of risks, including: weaker U.S. economic growth, a stronger Canadian dollar, higher oil prices and rising interest rates. We will also face new fiscal constraints, which our government is determined to address. Despite these challenges, we remain committed to making progress toward Ontario’s vision for poverty reduction.

This annual report provides an important marker of our progress to date, and highlights many of the new initiatives that will contribute to the success of Ontario’s Poverty Reduction Strategy as it enters its second year.

The Target: 25 in 5

For the first time in Ontario’s history, the Poverty Reduction Strategy identifies clear goals for poverty reduction in the province. It focuses first on Ontario’s children and youth, with the target of reducing the number of children living in poverty by 25 per cent over five years. Reaching that target, and lifting some 90,000 children out of poverty, also means taking important steps during these first five years to help low-income families build brighter futures for themselves and their children.

Laying the Foundation

The cycle of poverty will be broken only through a long-term commitment that builds on our successes over time. In 2009, this commitment was brought into law, through the introduction and passage of the Poverty Reduction Act. This new legislation requires the government to conduct regular consultations on the Poverty Reduction Strategy, to measure the success of the strategy at least every five years, and to report annually on its progress. Most important, it makes poverty reduction a priority in Ontario for generations to come.

Measuring our Progress

Measuring progress and communicating our results to Ontarians is a critically important part of our mission. The year 2008 will be the baseline from which we will measure progress on all of the poverty reduction indicators. Data for the income-based indicators, from Statistics Canada, may lag by as much as 18 to 24 months. In this first annual report, and the report for year two, we will be providing the latest information we have available as well as describing identifiable trends. When our baseline data are complete, likely in 2010, we will be in a position to more accurately report on our progress toward reaching the 25 in 5 target, as well as our progress on the eight indicators described further in this report.

The Child and Youth Opportunity Wheel

In future years, the Child and Youth Opportunity Wheel will provide a visual summary of improvements in each of the eight indicators over time, and will be updated with each annual report as data becomes available for our 2008 baseline year.

Poverty Reduction Strategy 2009 Highlights

This past year has been all about putting in place the structural changes that will enable us to break the cycle of poverty over the long term. Below are three key foundational initiatives we are moving forward on.

Accelerating the Ontario Child Benefit

The Ontario Child Benefit (OCB) gives low-income families the financial support they need to provide essentials like food and shelter for their children. It also helps build a stronger economy by making it easier for parents to leave social assistance for work.

The government has accelerated the phase-in of the OCB by two years, giving low-income families up to $1,100 annually per child as of July 2009. That’s almost double the previous maximum benefit.

The 2009 Budget also confirmed the Poverty Reduction Strategy commitment from 2008 to increase the OCB up to a maximum of $1,310 annually per child within five years.

An equivalent to the OCB is providing children and youth in the care of children’s aid societies with access to more educational, recreational, cultural and social opportunities, such as tutoring or music lessons, and a savings program for older youth in care.

Moving Forward with Full-Day Learning for Four- and Five-year-olds

There may be no better poverty reduction strategy than a strong, publicly funded education system. The government has announced that it will start phasing in full-day learning for four- and five-year-olds next fall as part of its ongoing plan to strengthen education that began with smaller class sizes, higher test scores, and improved graduation rates.

Up to 35,000 kindergarten students across Ontario will be enrolled in full-day learning in September, 2010. The goal is to have the program for four- and five-year-olds fully implemented in all schools by 2015-16.

Parents may also enroll their children for extended hours, for a reasonable fee, before and after regular school hours. This will make it easier for parents to get to and from work and will ensure their children have an integrated learning program for the whole day. Subsidies will be available for some families, based on financial need, to help with the cost of extended day programming before and after school hours.

Full-day learning for four- and five-year olds offers children an enriched learning environment designed to help them develop the foundational social, emotional, academic and physical skills necessary to succeed in school and in life. It’s also about building the skills and education of Ontario’s workforce, and creating a stronger economy.

Tax Fairness for Low-Income Families

The tax reform proposed in the 2009 Budget, which includes the transition to a Harmonized Sales Tax (HST) on July 1, 2010, is the single most important thing the government can do to make the province a more attractive place for businesses to invest, meaning more jobs and prosperity for families.

But the HST is only one piece of a comprehensive package of tax reforms that also means Ontarians with modest incomes would pay the lowest provincial income tax rate in Canada. The package includes:

• a permanent cut to Ontario’s lowest personal income tax bracket rate from 6.05 per cent to 5.05 per cent – that’s a decrease of 17 per cent.
• an increase in the amount of ongoing property and sales tax relief, for individuals and families with low to middle incomes, of more than $1 billion a year through:
  • a new sales tax credit of up to $260 per adult and child per year for approximately 2.9 million low- to- middleincome individuals and families
  • an additional $270 million in annual property tax relief for low- to middle- income homeowners and tenants.

Tax fairness for low-income Ontarians is all about creating the conditions for financial security over the long term.

For example, as shown in the charts below, a single mother with two children receiving Ontario Works benefits of $11,532, paying $620 in monthly rent, with no day care costs, would have an estimated net saving of $555 in year three of implementation of the proposed tax changes. A single individual earning $30,000 a year, and paying rent of $600 a month would save an estimated $220 in year three. (Note: Ministry of Finance estimates. The impact on individual households may vary depending on factors such as spending patterns, level of savings, and tax credits and deductions claimed.)

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Breaking the Cycle: The First Year

• Minister's Message
• Introduction: Ontario's Poverty Reduction Strategy
• The First Year: Achievements and Success Indicators
• Moving Forward: Continuing Our Progress

Download full report (PDF).