Archive for ‘Income’

July 31, 2010

Cradle and all: Comprehensive supports for lone parent families and other poor people

Investing in Families seems like basic common sense, but it took academics like Gina Browne and her colleagues at McMaster University to build a solid case for supporting lone parents on social assistance.

When The Bough Breaks, their longitudinal 2001 study of single parents, showed that families move off social assistance more quickly when they are guided through the service maze than if they are left on their own.

Seven hundred and sixty-five families in the Hamilton and Halton region were randomly assigned to a different levels of support services:

  1. Home visits with a public health nurse to do health promotion,
  2. Employment (re-)training,
  3. Recreational & skills development programs for children, with parental involvement, or child care as appropriate
  4. Comprehensive services (all the above three), or
  5. No additional supports.

Families who had never accessed these services were now connected.

The families which did the best were the ones who received the whole suite of services (#4). The families who did the next best were the ones where the children had received the additional supports and programs (#3).

The ones who did the worse, the control group which mimics the current social assistance system, were the ones who were left on their own to negotiate their own move to independence (#5). It’s a learning which underscores recommendation is the current call for a review of social assistance in the province.

Ontario Works should be turned upside down. Today it is a program that provides financial assistance with some employment supports. The new program should be primarily focused on human capacity development, with financial assistance as just one of the tools available to assist low income Ontarians. – The Social Assistance Review Advisory Council (SARAC)

The City of Toronto took notice of these learnings, too. Its program, Investing in Families, was piloted in 2007 in the Jane Finch area has now been expanded to each of the city’s remaining Priority Neighbourhood Areas. Led by Toronto Employment and Social Services, the program brings together the services and resources from three other City divisions; Public Health, Children’s Services and Parks, Forestry and Recreation have each made commitments.

While burdensome for service-providers, working across silos, the model works for at least two good reasons.

First off, Browne noticed that their children were receiving direct program supports, parents were less likely to drop out of the study and more likely, in the end, to do better. Simply, parents with were motivated by active support for their children’s well-being.

Second is a lesson about the weight of poverty. In his book, The Persistence of Poverty, author Charles Karelis describes the “rational” reaction of a person stung by a bee. Salve would be found and applied. The metaphor describes how the middle class work to solve a problem when they meet one.

However, Karelis explained, poverty is more like being stung by a swarm of bees. Coming at you from all sides, this same “rational” person, with the same salve, would not even bother to make the attempt. Faced with more hurt than salve, the reasonable choice is to choose not to act. Why spend the energy on something that won’t stop the hurt? (Cf. The buzz about bee stings and the poor – thestar.com). The only solution is to ensure that all the bee stings are medicated.

So the anti-poverty programs that have been the most effective are the ones that wrap-around a vulnerable person, that give them a chance to catch their breath, and to take steps out of poverty.

And, win-win, Browne et. al. showed this saves the system money, too.

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July 14, 2010

Racialized poverty & academic performance: A tentative exploration of the latent effects of social capital on educational achievement

The power of a strong research report is the way it changes our civil discourse. In Toronto, Poverty by Postal Code, the Strong Neighbourhoods Taskforce Report, MISWAA, and University of Toronto/St. Christopher House research reports on neighbourhood change have all played a robust part in recent public policy discussions. Such reports re-frame the way we think about our city and each other.

So, when the TDSB’s Inner City Advisory Committee (ICAC) asked the board’s research staff to do a comparative analysis tracking students’ academic achievement patterns against the Neighbourhood Change CURA’s “Three Cities” report, it seemed like a good idea. The Three Cities report had splashed over the front pages of our daily newspapers and underscored the growing inequality and geographic separations within our city. ICAC expected the results would provide further insight into schools in low-income neighbourhoods.

On first analysis, however, the results were disappointing.

Several measures of educational achievement were tested, including:

  • EQAO Grade 3 Math scores
  • EQAO Grade 6 Math scores
  • Grade 9 science results
  • Grade 9-10 Academic program
  • Ontario Secondary School Literacy Test (OSSLT)
  • Access to Ontario post-secondary institute

Yet, the correlation between the “Three Cities” and students’ academic performance was weak — likely for two reasons: first, the Neighbourhood Change/Three Cities analysis used average incomes in its comparisons of neighbourhoods, a known, weaker predictor of academic performance; and, secondly, almost half of the TDSB’s highest-need schools are actually located outside the areas identified as the “third city” or lowest-income areas.

Nevertheless, the school board’s researcher charged with the task, Dr. Rob Brown, persevered in his analysis.

The “three cities,” described by Dr. Hulchanski et. al., break down into further categories. For instance, high income areas are comprised of Elite neighbourhoods which were rich and have remained rich and Gentrifying neighbourhoods which have become high-income in recent decades.

Poor areas of the city break out into four main areas:

  • Youngest suburbs (Lower density, homeowners, larger families, white-collar jobs, high visible minority population, higher Chinese population)
  • Older suburbs (Lower density, more seniors, lower education levels, higher White population)
  • Renters (Immigrant reception areas, highest density, apartment towers, high levels of education, low incomes, more South Asian)
  • Lowest incomes (Highrise rental and social housing, low incomes, lower education, manual labour jobs, higher Black population, more single parents)

So, when Brown looked to see whether academic achievement tracked with these categories, the patterns were more interesting. What he found gives new insight into some of the debates at the school board around race and poverty.

Predictably, the highest performing students were almost consistently the students who lived in the Elite neighbourhoods. However, in two instances they were beaten, in Grade 3 Math and Grade 9 Science — both times by students, in the “third city,” from the Youngest Suburbs. In fact, in all but two of the measures, students in the Youngest Suburbs also out-performed the Gentrifying group of students in “city one”: Taking academic program in Grade 9-10, and the OSSLT.

University admissions tracked a similar path. 53% of Elite students confirmed attendance at an Ontario university, followed by 49% of students in the Youngest Suburbs. These two groups were also the most likely to have applied to post-secondary education. Students in every other neighbourhood type lagged behind in the 33% – 36% range, except for high school students in the Lowest-income neighbourhoods, where only 25% confirmed university attendance (and where 57% did not apply to any level of higher education).

In comparison, students from the other parts of the “third city,” Older Suburbs and Renters, were often within a few percentage points of each other and approaching, or occasionally surpassing, the performance of middle-income students in “city two.” The lowest academic performers were the Lowest Income, except in the case of Grade 3 math, where they beat the Gentrifying neighbourhoods.

So, the analysis shows that while income, or the lack there-of, can be an important predictor of students’ academic performance, it is not a determinant. While Brown himself doesn’t speculate, the interesting part of this work is to imagine what protective factors might be helping some low-income students to compete.

A perfunctory analysis might note that the distinguishing factors between the different “cities” are the racial and ethnic compositions of them. Buttressing the weight of this is the first release of the TDSB’s Student Census which made headlines when it was published because of the analysis which how students of various ethno-cultural backgrounds were performing in school. But that initial report stopped there at these correlations, ipso facto, not looking to control other factors, such as poverty, lone parent status, low education levels and other risk factors found in each of these neighbourhoods.

I would argue a deeper, more nuanced picture emerges from Brown’s ICAC study, one which outlines the structuralist nature of educational achievement. Because the neighbourhood categories were more homogenous, it was possible to examine some of the complex interplays of income and race and, more importantly, the social capital students were able to access.

Within the context of the City of Toronto, these factors play out along a racial dimension, in other places, they may play out along other lines of identity, of accent or class or another form of “othering.” We need to think though the root cause of the barriers. For instance, racism, rather than race, per se, may be a barrier, but so is limited access to social and economic capital or access to strong, supportive social networks. Race, ethnicity and culture are the shorthand for a much more complex picture, which encapsulates access to resources and opportunities, individual and systemic racism, community expectations and a wide range of other social determinants.

So, for instance, students in the Youngest Suburbs were part of a cultural heritage that holds scholarship in esteem, where white-collar jobs were more common, and where family structures were wider. In contrast, students in the Lowest Income neighbourhoods were more likely to live in low-quality (rental, crowded) housing, with poorer job prospects, fewer family supports, and fewer role models who had attended higher education. Students in the Youngest Suburbs and the Renters have also more likely been exposed to a second language, which can improve learning.

These apparent racial divisions are the evidence of deeper divides within the city. They represent the unequal division and distribution of resources among us. These racial divides allow the easy concentration of resources within family, kinship, and friendship networks, encasing the economic and social capital that families and neighbourhoods bring to bear on its own young. The result is that those with the fewest resources are least likely to apply to university, whereas those who still have a strong sense of aspiration, positive supports, and role models are more likely to have better outcomes.

This peer effect is underscored by the work of David Harding at the University of Michigan. He found that “disadvantaged neighborhoods exhibit greater heterogeneity in college goals and that adolescents in more heterogeneous neighborhoods are more likely to change educational goals over time and are less likely to act in concert.” Essentially, more kids in richer neighbourhoods attend university because they are expected to do so.

What Brown’s research underscores is that poverty is about more than income. It’s about the inoculative supports which many lack.

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June 11, 2010

Choosing between the good, the bad and the poor schools

Many years ago, when my daughter was ready to begin school, we looked to the neighbourhood school. We attended a fun fair. I chatted with the school principal. I talked to other parents in the area. And if there had been provincial EQAO testing scores on the then-budding internet, we would have looked those up. It’s a good thing we didn’t.

The school, it turned out, was a great school, and we hit it during its heyday, when the principals valued social equity, the teachers were committed, and parents were welcomed inside.

Yet, if we had only judged this school on its provincial EQAO scores, we may never have gone.

No, it’s not that it was a bad school, but it was a poor school — a school with a large number of students from low-income families. And everyone from the C. D. Howe Institute to the Ontario Institute in Education has shown that poor kids don’t do well in standardized tests such as the EQAO.

The reality is that the richest schools have the best academic outcomes, and lock-step down the income ladder, except through feats of teaching heroics, test scores and other markers of academic success drop.

Excellence in test-taking predicts….excellence in test-taking. It has much weaker correlations with overall course grades, graduation, or later success in life. This is why tests like the SAT (Standardized Aptitude Tests) are slagged even by university admission officers as a lousy way to find academic excellence, yet it is one of the only one consistent measures available.

But, still, when new parents move into the neighbourhood, they want to know (as I did), “Is it a good school?”

It’s a fair question.

Every year, the provincial tests administered to Ontario students by the EQAO attract a ton of media coverage. We all want to know how our school do.

With the installation of provincial EQAO tests, a wealth of other websites have emerged, happy to advise the worried parents of wee ones.

The EQAO scores at my family’s local public school have improved over the past decade, so much so, that when the Premier (the “Education Premier”) visited last year, the first comment he made publicly was how well test scores had improved at the school.

And yes, teachers have tried harder, new programs have been introduced, and scores have risen. What McGuinty didn’t say, but was just as important, was that the average income in the neighbourhood has also been steadily rising. And so predictably, our scores have risen.

Parents who are hunting for the best school might as well ignore the scores. A lot more than what can be captured in a provincial test goes into an effective schools.

In my more mischievous moments, when people ask me what makes a good school, I want to advise them to ask how students were suspended (data that is hard to find again) or, in high school, how many students committed suicide in the past year (never published, of course).

Instead, go see how many parents show up to help for the pizza lunch, see how many school clubs are run, and see how the principal welcomes parents. Think about the value of knowing other families in the local community.

Most of us are happy with our schools. It’s why such a high proportion of Canadians still send their children to publicly-funded schools.

And this is not to say that there are not bad schools in the system, places where principals suspend inordinate numbers of their students or impose bans on parents entering playgrounds when faced with their sharp criticism, places where the physical plant has deteriorated to embarrassing levels.

But the value of a neighbourhood school is best known by those closest to it. As  the OISE Survey of Public Attitudes towards Education in Ontario continues to find, those who are closest to the school system are the happiest with it.

The research bodes well for any worried parent.

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May 30, 2010

An agreed-upon description of poverty

When older women on the Isle of Mann were polled as to whether dressing gowns are a basic life necessity, their agreement was nearly unanimous. If someone who couldn’t afford a housecoat, they were poor. However when young men were asked the same question, their response unsurprisingly was almost the mirror opposite. À chaque son goût?

Defining poverty is a difficult task for government statisticians and policy wonks, never mind the rest of us.

Two of the best thinkers on the topic, Richard Shillington and John Stapleton, recently published a Metcalf Foundation-funded paper, Cutting through the Fog: Why is it so hard to make sense of poverty measures? In clear language, they explain how some basic assumptions shape how poverty is defined in Canada. Therefore, because each definition of poverty leads to different policy resolutions, the authors conclude that, without an agreed upon definition of poverty line, Canadians will continue to be stymied in our actions to solve poverty.

Over the course of the past two years, taking a leaf from the British and European work on social exclusion, Toronto’s Daily Bread Food Bank took a stab at improving our income-based definitions of poverty. Together with Caledon Institute for Social Policy, they built an Ontario Deprivation Index, and then, piloted it with Statistics Canada through the Labour Force Survey.

The new index developed a common list of ten items which are most likely to distinguish the poor from the non-poor. The work now stands as a key part of the Ontario government’s Poverty Reduction Strategy. The first provincial report was released last December and found that one in eight children live in a deprived situation. By its own reports, the government is committed to lowering this number.

The Ontario Deprivation Index will let us know if we have made a difference.

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May 11, 2010

Stealing our lunch money from poor kids

I write this cautiously because it is not my preference to call people out on their actions or the values they hold. Still this is an election year, and candidates must be prepared stand on their record.

But I hope to find common ground here, as well.

This week, the Toronto public school board trustees on the Program and School Services Committee had a chance to do the right thing. They didn’t.

Asked by the Inner City Advisory Committee (ICAC) to commit more resources to the poorest students, they balked.

The motion from ICAC, a formal body of the Board, calls for a higher proportion of the provincial Learning Opportunity Grant (LOG) to be committed to the poorest students and the poorest schools in the Board.

The ask was small, compared to what is transferred from the province through the LOG. ICAC’s motion sought a commitment that 22% of the LOG (just over one out of every $5 of the grant) actually be spent on our most vulnerable students. The range of targeted programs extends for several paragraphs in the motion.

Among two of the lead objectors, Trustees Josh Matlow and Micheal Coteau asked, what would happen to all the other students, those who weren’t poor if these funds were so committed? Indeed, Trustee Chris Bolton had made similar seemingly petty objections when the Learning Opportunity Index was revised, after it turned out that schools within his own ward would not receive as many additional resources because they were no longer identified as among the neediest. It reminds me of the old snackfood ad where one hunter asks another for a potato chip. The happy muncher huffs, “If I give one to you I will have to give one to everyone,”  waving his hand over the tundra. It’s a liberal logic I struggle to understand.

To be fair, Trustee Campbell also chose to vote against the ICAC/LOG motion, citing, instead, worries about the three-year financial commitment, and even Trustee Dandy questioned how the needs of poor students in middle class schools would be addressed (but she voted for the motion after all).

And the motion failed. (While a few friends gave me a long list of reasons for the political nuances among the trustees, it’s hard not to notice that the issue split along gender lines: Cathy and Maria (and Sheila who couldn’t vote) ranged against Michael, Josh, John and Chris (who also couldn’t vote). )

But if I work it through, Trustees Matlow, Coteau, and Bolton were reacting eminently reasonably, within a ward-based election system. And, it is too easy an answer to dismiss their views as the short-sighted or parochial actions of small-time politicians.

For, in at least two previous years (2007, 2009), the full Board has voted to protect funding to students in its poorest schools. This is a fight that parents and activists have fought in every budget round since the early 1990s, alongside their trustees.

The ICAC motion was felled because, in its current state, the LOG has a terrible shortcoming. (See More below for a description of the LOG.) The LOG is “unsweatered,” that is it may be spent as the Board chooses. So, in actuality, only a small undetermined percentage of the funds reach the students for whom it is targeted. It is an exact parallel to the situation Social Planning Toronto found in its 2005 report when it looked at how ESL funds were spent (or not) on English as a second language learners. Instead, the Board uses these funding streams to cover other financial gaps, such as the rising costs of heating and teachers’ salaries.

In sum, school trustees across the province are left with the narrow choice of funding the vulnerable or balancing the budget – something they are required to do by law. Another set of TDSB trustees will face this same hard dilemma again this week when the ICAC motion is likely to be raised at the Board’s budget and AFA committee meetings.

So, agreed, there is no malfeasance in the actions of Trustees Matlow, Coteau and the others. They are striving valiantly to meet their legal obligations.

But the school board’s trustees have gotten snookered by the provincial Ministry.

The Ontario government gets a lot of mileage out of saying that is has dedicated increasing millions of dollars to poor and marginalized kids through the LOG and other poverty reduction strategies. The funds are handed over to other orders of government (municipal and schools boards) to be used for this great good. Fabulous P.R.

The Ontario government wants every student to have a quality education. Some students need additional help from their school in order to do their best.

The Learning Opportunities Grant provides funding to school boards to help students who may be at greater risk of not achieving their educational goals.

And so, then, school board and trustees are left to do the dirty work, to pinch the money from wherever they can, to make up for provincial funding shortfalls.

As Mel Hurtig’s book described the dilemma of poverty, should the Board “pay the rent or feed the children?” Should the Board run programs for poor kids or keep the lights on in the building?

But this is a discussion about some who have and some who don’t. It’s time we stopped stealing our lunch money from poor kids.

The evidence, the economics and the politics all line up behind the value of investing in poor kids. As I argued in earlier posts on the Learning Opportunity Index, doing so brings greater returns even than in students from middle or high-income families. And where there is concentrated poverty, a greater investment is required and greater learnings emerge.

A large body of research supports this. At the local level, TDSB’s recent evaluation of its own Inner City Model Schools show students’ being streamed out of special education classes and academic grades rising a full grade point, at even the worst school. The additional funds TDSB trustees provided proved the power of investing in kids.

So, yes, spending the LOG on the use for which it is given may well hurt other kids and the broader school system. Salaries do have to be paid, buildings heated. And, yes, higher income parents may pick up and move out their children of a divested public school system. These are real dangers that the trustees must consider.

But that is a vision with little faith in the Canadian ideal of fair play. I believe we are better than that, that we will agree to share the pain, to instead make other hard choices, to agree to do the right thing.

I believe we can demand a school system that doesn’t require we poach off the poorest among us. In this, our values must trump our accounting.

Declaration of conflicts of interest:

1) I am a former co-chair of the Inner City Advisory Committee from which the motion came.

2) I have agreed to act as Chief Finance Officer for the incumbent trustee in my ward, Cathy Dandy.

I based this post partly on my remarks to the Program and School Services Committee on the evening of Wednesday May, 2010.

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March 26, 2010

TDSB ARCs may push out the poor

Recommendations from the Toronto District School Board’s ten Area Review Committees (ARCs) are beginning to emerge, and some communities are looking at school closures.

When the TDSB set out to evaluate “which locations should be closed, consolidated or upgraded,” some wondered how equitably this would all play out in the course of these difficult conversations.

Were the schools in poor areas being singled out first?

Parents in some Toronto communities said so. Reporters poked at the story. Some trustees grumbled.

And, it turns out, they were right.

Twice as many schools under review are in the bottom half (the poorer half) of the school board’s Learning Opportunity Index (LOI) as compared to those in the top half. And, of the 16 schools being reviewed in the top half of the LOI, they are all less vulnerable to closure because they have higher enrollment and utilization rates.

The numbers don’t change much however you slice them, by quartiles or quintiles.

But, of course, it’s more complex than that.

The schools under review are grouped with others from across the range of need.

While four of the ARCs contain schools from only the bottom end of the LOI, five other ARCs have poor schools grouped with richer schools. (Only one ARC (at Yonge and Davisville) is reviewing schools from only the top half of the LOI. Perhaps, not surprisingly, because they had higher enrollments, they have recommended no closures.)

Schools which are able to mobilize their parents to attend numerous evening meetings have actively participated in the process, printing buttons and flyers. Other schools, where parents may work additional jobs or evening hours or not be able to afford child care, have not been not in the room, to describe their vision for the future.

By reports, the dynamics at many of the ARCs have not been not great.

What started as a democratic and inclusive process has turned into a long, drawn-out, and divisive process. Staff at one community agency reported to a recent Toronto Neighbourhood Centres meeting how committee members were told they could not speak at a public meeting. Trustees complain openly about each other where ARCs cross ward boundaries. Blogs have been set up. One ARC has moved from outright hostility to a sullen withdrawal from the process.

So, poorer schools have faced a double jeopardy: more poor schools are under review, and they are also far less likely to be participating in a process which requires a strong and active participant voice.

Before the ARC recommendations come up for adoption in May, someone should review the decisions, with an equity lens, to ensure that those with the fewest resources aren’t being cut again.

December 2010 post-script: Schools which were announced to be closed from this round of ARCs are:

  • Brooks Road Public School
  • Heron Park Junior Public School
  • Peter Secor Junior Public School
  • McCowan Road Junior Public School
  • Pringdale Gardens Junior Public School
  • Silverthorn Junior Public School
  • Arlington Middle School
  • Kent Senior Public School-Alpha II

No schools in the Top quintile were closed; two in the Upper income quintile, one a middle school and one an alternative school; one school in the middle-income group; three in the lower-income quintile; and three in the Bottom (closing in the Jane-Finch neighbourhood have been postponed pending further review).

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February 3, 2010

Mixed-income neighbourhoods

Mixed income neighbourhoods carry some cachet. The idea of middle class and poor folk living in harmony together catches us.

However, when looked at more closely, these communities tend to get more mixed reviews.

Whether it’s Martine August’s doctoral work on Regent Park or Canada Research Chair David Ley description of social mix as a transitional stage, Canadian scholars are not giving mixed neighbourhoods the same rave reviews that housing developers are.

Joining the discussion, Christopher Leo, University of Winnipeg political science professor and blogger, has joined the discussion with a recent post on the topic: “Does Mixed Income Housing Ameliorate Poverty?”.

Leo summarizes the research from the Urban Affairs journal which shows the conflicting impacts of mixed income neighbourhoods. He also reminds us about the increasing segregation by housing form by income and punctures some of the positive mythology which surrounds the ideal of these communities. It is a refreshing critical look at what works and what doesn’t.

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January 14, 2010

Healthy People, Healthy Places: Stats Can update

This week, Statistics Canada and the Canadian Institute for Health Information have released a retrospective look in the latest issue of Healthy People, Healthy Places to mark the 10th anniversary of the Health Indicators project.

The retrospective look at a range of health determinants. Two quick highlights relevant to neighbourhoods:

  • Canadians’ sense of community belonging has grown over the past decade and now about two-thirds of us report a strong or very strong sense of community belonging. Teenagers reported the highest levels.
  • 13.7% of Canadians lack access to acceptable housing. This is defined mainly as affordability. The stats are broken down by
    • place of residence (by province – Ontario was second worst),
    • housing tenure (owners/renters – renters do the worse) and
    • demographic status (seniors, immigrants, single parents and individuals living alone all faced the most challenges).
November 1, 2009

Mixed picture on mixed income: Moving in on poor neighbourhoods

Early one morning this week, I drove a neighbour (and, of course, friend) to a downtown hospital for a medical test.

We were distracted from the quiet between us by the car radio. CBC’s Metro Morning was broadcasting from Regent Park, the downtown neighbourhood with a scope of need that is almost double any other part of the city. We zoomed right through it, along Shuter Street.

Metro Morning was exploring the community’s revitalization. The first stage was underway, and 1 Cole Place, the new condominiums, were opening. The morning’s interviews demonstrated the deep history and vitality of the neighbourhood and, also, the new interest that has been sparked in the community.

As I drove back home alone, I decided to stop the car and go watch the broadcast from Nelson Mandela Park school.

Host Andy Barrie was the efforts to create a mixed income neighbourhood in Regent Park. He was interviewing a young University of Toronto doctoral student and Trudeau scholarship winner, Martine August, and long-time resident and community organizer, Sandra Costain, about the impact of the looming arrival of higher income residents (and their homes).

It was a sobering interview, one which just whet my appetite. August cited studies from her literature review, and Costain concurred from experience, but they both painted a gloomy picture:

  • People segregate themselves according to their separate identities. In 14 studies August looked at, interactions between higher-income newcomers and lower-income residents show that interactions don’t occur.
  • Very often when people of higher incomes do move into a poorer neighbourhood and exercise their political muscle, it’s to push social services, which low income people need, out.
  • Community programs which were universal, free to local (low-income) residents begin to require documentation of need, fees introduced, and stigma grows.

What was left unsaid in the short interview is what might mitigate these colonizing forces.

For instance, in his work in school, Clyde Hertzman found that children from poor families did better when in a mixed income school. He attributed that to the “sharp elbows of the middle class,” which act to protect a full range of services.  By extension then, those who buy homes in a poor area need to see further than their property values, but to a common good.

Discussing this electronically with Brian Eng at the Wellesley Institute afterwards, he said that this tendency of mixed income neighbourhoods to push out poor people further underscores the importance of community development.

Eng gave the example of the co-ops around the St. Lawrence Market as a good example of a mixed income community that works. In fact, commentators on CBC’s website, gave the example of the Woodsworth Coop, in the same area, that has monthly business meetings to discuss community business, shared common task (such as cleaning) and regular celebrations with food.

Where opportunities for interactions are created and fostered, stronger communities emerge, a place with, as one American social justice organization called for Better Neighbourhoods, Same Neighbours.

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October 8, 2009

The Ontario HST: a counter-intuitive remedy?

The Ontario-based 25-in-5 Network for Poverty Reduction met in the basement of a community agency this week to hear some radical news. U of T’s Ernie Lightman and Andy Mitchell were at the front of the room. Economist Hugh Mackenzie had joined them. Policy wonk John Stapleton came in soon afterwards. Various funders, networks and advocacy groups sat around the room. Now Magazine’s Alice Klein sat at the side.

Lightman explained that this was a preliminary discussion rather than an off-the-record one.

We were there to discuss the Harmonized Sales Tax (HST). Despite the hue and cry against it, Mitchell and Lightman’s analysis was showing that it is a progressive tax.

When the HST was announced, Lightman, habituated by a long history watching the Department of Finance and Treasury Board, was an early critic. Soon after he was interviewed one morning on CBC radio, Finance Minister Dwight Duncan followed with his own rebuttal: university professors shouldn’t speak about things they didn’t know about, Duncan said.

Lightman, to his credit, took up Duncan’s challenge. He and Mitchell, a stats master, met with Treasury Board staff, gathered some data and began the number-crunching. The preliminary results have induced them to rethink their original position and to broaden the discussion to this audience.

Mitchell’s analysis looked at the announced changes to the HST, personal income tax and Ontario Tax Credits and their combined effect on economic families (which includes singles too). The calculations did not include the transitional “bribe”. Here’s what they found:

  • While the overall effect on families is a wash, the HST’s impact is progressive. On average, low income families will benefit from the changes; middle income earners will come out neutral; and, high earners, over $100,000, will see an increase in their total tax burden.
  • Single parents should, on average, do better under the HST, whatever income bracket they are.
  • Couples with children should also do better with the HST. (Families with children will likely do even better than projected because of point-of-sale exemptions on items such as books and children’s clothing.
  • Singles who earn under $50,000 – $60,000 should benefit from the changes.
  • Only seniors showed a more mixed result, probably because of a range of reasons.

Now, Mitchell and Lightman cautioned this was a projection using SPSM Stats Can data. It does not account for any changes in spending habits which may occur after the changes are brought in. So, for instance, if a consumer decides to a get a haircut less frequently because of the higher costs, then these numbers may shift.

As the gathered group began to thresh through what this meant, a few obvious advocacy positions emerged.

  1. If low income people are to face higher day-to-day costs through the HST, the tax credits will have to be paid more frequently throughout the year so that, as Voices from the Street Mike Creek, reminded us, they didn’t run out of money even earlier in the month. Small, regular payments are better than a few large lump sums paid months apart.
  2. Because more tax credits and income benefits will now be flowing through the tax system, community-based tax clinics will continue to be a vital means of ensuring low-income people are filing returns so that they can benefit from the credits they deserve. Community agencies will need additional resources to improve the take-up.
  3. As the changes are currently structured, young income-earners are more likely to come out better. The impact of these changes on seniors, particularly low-income ones, should be looked at more carefully to ensure they are not left behind.
  4. Ontario tax credits are now fully indexed and so are protected from inflationary erosion. They are however always be vulnerable to a government’s whim to move to partial or zero indexing. Full indexation is vital.

Hugh Mackenzie had the final part of the discussion, framing the importance of taxes because they boost “the robust fiscal capacity of government which allows government to drive services.” And, if services are boosted, as his work with Richard Shillington last spring in A Quiet Bargain showed, the poor were more likely to receive an equitable share. When it’s implemented, this “tax-grabbing” change introduced by the Ontario Liberal government may just raise enough millions and billions to do that.

The HST sounds like a good deal to anti-poverty activists, after all.

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