It’s been a depressing few months in the Ontario nonprofit sector, as we learn of cutback after cutback to government investments in communities – first in the Ontario budget, released April 11, and then the government’s May 9 expenditure estimates. According to our analysis at the Ontario Nonprofit Network, there is now less money available for the arts, employment and training programs, community legal clinics, social assistance, poverty reduction, women’s shelters, disability supports, child welfare, safe injection sites, Indigenous economic development, sport and recreation programs, and programs for newcomers. The five-year social enterprise strategy is gone, along with environmental programming established in 2017.
Every one of these cuts has meant reductions in services for communities, as well as job losses in the nonprofit sector. Far from “protecting what matters most,” Budget 2019 further frays the social safety net and reduces the quality of life of all Ontarians. Eventually, it will be left to the nonprofit sector to try and fill the gaps.
The Ford government has said it is cutting these investments in thriving communities in order to balance Ontario’s budget by 2023-24 and keep the province from becoming a “failed economic state.” The repeated talking point is that spending under the previous government was out of control, and only a program of restraint can set Ontario on the right path. However, these cuts were not inevitable. Many, if not all, could have been avoided if the Ontario government had simply kept the cap-and-trade system (which would have resulted in $615 million in revenue for 2019-20). Instead, the government cut corporate taxes (reducing revenue by $1.1 billion in 2019-20), and stopped a scheduled personal tax increase (which would have brought in $308 million from people with incomes over $220,000).
Budgets are about choices, and this government has chosen a path of austerity. According to the Financial Accountability Office of Ontario, the province’s per capita program spending is more than $2,000 below the average for the rest of Canada, a gap that has widened since 2011. As the Ontario Chamber of Commerce points out, “paying down the debt should not be at the risk of long-term economic growth or needed investments in infrastructure and services that will have a high return on taxpayer dollars.”
On top of the cuts, massive system changes are being rolled out at a rapid pace.
In the employment and training sector, the province is instituting a new model using service system managers, so government can manage fewer agreements. At the same time, contracts will now be open for bidding, meaning that for-profit companies will be eligible to compete with nonprofits to deliver employment and training services. This transformation is happening at the same time as a $54 million cut to employment and training funds, much of which was used by nonprofits for training and supporting Ontarians to find jobs.
In the health sector, the Local Health Integration Networks are being replaced by the mega-agency Ontario Health and local Ontario Health Teams. This will require community health organizations to formalize their partnerships with other health care providers, such as hospitals, with which they will share funding. This could mean a loss of community control of programs and organizations that serve specific populations, such as LGBTQ people, women, or youth. The restructuring is taking place because the provincial health budget will not cover the predicted 4.6 percent increase in health care costs (reflecting an ageing and growing population).
In the child care sector, the province has loosened rules for unlicensed care, enabled more public funding to support for-profit child care, and indicated that new spaces in schools may be operated on a for-profit basis.
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The media has been full of debates over the government’s new direct funding for autism. Families will now receive a cheque/voucher and purchase services with the funds provided, rather than accessing services like they do through the health care system. Direct funding (“passport funding”) has already been introduced as part of the services for people with disabilities, and we could see it elsewhere in the near future. While this model can offer more choice for individuals and families, the implementation of a voucher system, with no plan, could have unintended consequences.
Many service areas have yet to find out what the budget’s language of “modernization” and “efficiencies” will look like in their sector. Details are still to come in areas such as seniors programming, sport, and community housing. But the sheer pace of change is a major challenge for service providers, including nonprofits, as they work to maintain service continuity and quality.
Budget 2019 also contains the ideology that competition will drive costs down and create choice for Ontarians. Many of these restructuring exercises are based on enabling for-profit companies to enter areas that have traditionally been the purview of nonprofit service delivery. While competition might drive down costs in the short term, in the long term this investment approach will keep wages low and threaten the quality of community services.
Nonprofit organizations invest all of their resources in their missions, while the for-profit model focuses on generating a return on investment for shareholders. Nonprofits add value to the services they provide on behalf of government through donations and volunteer efforts. For-profit service delivery can come with unintended consequences. This includes enabling a company to load up a subsidiary with debt and make money from the financing using public funds, then sell the subsidiary and leave communities in the lurch. The bottom line is, we can’t afford the cost of profit in the vital care and support services that Ontarians depend on.
Many of us in the Ontario nonprofit sector and the communities we serve are concerned about the cumulative impact of the widespread cuts and program restructuring. Working directly with communities, we know these cuts will fall disproportionately on the shoulders of vulnerable people. And we know that it is to nonprofits people will turn, especially in times of crisis, as housing and food costs continue to rise, the minimum wage is flatlined, critical services are cut, and climate emergencies disrupt daily life. The role of nonprofits is to foster well-being and enhance our quality of life. That’s why the Ontario government needs to ensure the nonprofit sector is at the table as a partner in developing solutions to our biggest challenges, not left to pick up the pieces.
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