How Mike Harris got Ontarians off welfare and back to work

Article content

In a new book, Sean Speer and Taylor Jackson detail how the government of former Ontario premier Mike Harris reduced social-assistance costs and gave welfare recipients their dignity back.

Enriched benefits, rising costs amid a deep recession and more than 1.3-million Ontarians on welfare. Those were the realities for the Progressive Conservatives when they were elected in 1995.

Article content

Article content

So the Harris government marched forward with significant changes to Ontario’s costly social assistance system. In his manifesto, the “Common Sense Revolution,” Mike Harris promised to cut benefits, which were high relative to other Canadian provinces, to bring in work or work-training requirements for welfare recipients and to enhance welfare verification.

Doing what he said he would do

In 1997, the government launched a transformation, creating new programs to help people get back to work. These restored the principle of social assistance as a temporary stopgap rather than a long-term income substitution.

This structure is still mostly in place nearly 25 years later, including benefit levels that have not shifted materially since. At the time, much of the attention was paid to the budgetary impetus. Ontario was running large deficits, and social assistance spending represented more than 10 per cent of total expenditures. Yet the Progressive Conservatives were not merely motivated by fiscal considerations. They saw a connection between work and dignity.

Article content

The changes were significant: benefits were cut by over 20 per cent, although rates still remained higher than other provinces. By 2003, the number of welfare beneficiaries had fallen by 600,000, and annual spending on social assistance was down by $2 billion.

While many supported the spirit of the reforms, detractors cast the government as callous and cruel. Welfare reform was a major accomplishment for Harris as a well as a major source of antipathy toward his party that persists to this day. What has been missing is a critical evaluation of the government’s intentions, how they were manifested in welfare reforms and the economic and social outcomes.

Four key trends

The impetus for these changes cannot be assessed without understanding four trends that began in the decade prior to 1995. These arguably demonstrated the need for a new direction on social assistance:

1. an expansion of eligibility criteria and benefits by the previous Liberal and NDP governments that contributed to swelling welfare rolls;
2. a deep recession that massively expanded demand for benefits;
3. a deteriorating fiscal situation and changes to federal cost sharing programs; and
4. a shift in the debate regarding the purpose of social assistance programs in Canada, the United States and elsewhere.

Article content

Article content

The 1980s saw a reorientation in the character of Ontario’s welfare programs. If previous iterations had a narrow focus on “deservingness” to determine who ought to receive support, the ’80s saw a shift toward a focus on “employability.” Social assistance would become a safety net, available to those out of work. It was supposed to be a temporary stopgap, but, due to a combination of poor policy choices and deteriorating economic conditions, welfare indeed became a long-term substitute for paid work.

The recession

By 1990, Canada had entered a deep recession that dramatically increased the welfare rolls. In addition to the spike in unemployment, this was caused by the expansion of eligibility and the enrichment of benefits. The result was that the number of social assistance beneficiaries in Ontario more than doubled from 1989 to 1994. In five years, the number of welfare beneficiaries increased from under 575,000 to over 1.3 million.

This massive expansion led to significant growth in its cost at a time when revenues were depressed. The combination of the expanded welfare rolls and their rising fiscal costs would support the government’s push to reform the province’s social assistance programs.

Article content

When the recession began to wane in 1994, the province was spending $6.7 billion in social assistance and had been running annual deficits of over $10 billion for the previous four years. The federal government dealt Ontario another blow with the introduction of its 1995 budget: Ottawa undertook a wide-ranging program review that resulted in ending the Canada Assistance Plan (CAP) and the Established Programs Financing program, which would be replaced with the new Canada Health and Social Transfer grant. The impact would be a reduction in transfers to the provinces. It all added to Ontario’s fiscal pressures and made ballooning social assistance unsustainable. However, the accompanying removal of CAP’s restrictions on “workfare” would enable the new government to make social assistance changes without jeopardizing federal funding.

The dignity of a job

Conservative sentiments about the value of work were not just a veneer for kicking undeserving recipients off welfare. Many, including 1988 U.S. presidential candidate Jack Kemp, were genuinely committed to helping those in need get a leg up. But their key insight was that the best means were not through expansive government support programs that discouraged work, but through targeted efforts to connect individuals directly to new jobs.

Article content

Conservative thinking in Canada on social assistance had shifted toward a greater focus on workfare, concerns about state dependency and the rising share of the working age population on welfare extended across other parts of the political spectrum. Even the Bob Rae NDP government recognized the need to strengthen the link between welfare recipients and the labour market.

Social assistance reform thus became a major part of the Progressive Conservatives’ platform, focused on reducing taxes, creating jobs and cutting government spending, of which social assistance reform figured prominently. Key measures included “workfare” and “learnfare” programs, requiring able-bodied recipients (excluding single parents of young children) to either work or participate in retraining as a condition of receiving benefits. While Harris did not claim that this would produce immediate cost-savings, he argued that work-based conditions would reduce recidivism and cut costs down the road.

The second proposed reform was to address welfare fraud and over-payments. The PCs estimated that welfare fraud had cost the province $247 million since 1990. They promised that a “province-wide computer system, coupled with a strictly enforced program of photo-identification for all welfare recipients, will be at the centre of this effort.”

Article content

The third was to reduce welfare benefits. The PCs contended that Ontario had the most generous welfare benefits in North America and that this was partly to blame for the province’s burgeoning caseload. It proposed that welfare benefits be set at 10 per cent above the national average, with an estimated cost savings of $1 billion. In addition, while payments would be reduced, a Harris government would remove restrictions on the hours that a recipient could work without losing benefits.

A call to action

After being elected, Mike Harris wasted little time in enacting spending reductions, including initial reforms to social assistance. In July 1995, his finance minister delivered a statement on immediate spending cuts and deficit reduction. In line with its campaign promise, the new government announced a 21.6 per cent reduction in social assistance rates, with expected savings of $469 million in 1995/96 and $938 million in 1996/97, as well as new measures to tighten eligibility and combat fraud. Protests were immediate, and the cuts were even unsuccessfully challenged in court as a violation of the Charter of Rights and Freedoms. The criticism of the government was that it was financing its “revolution” on the backs of poor Ontarians. It was typical, for instance, for the media to report that the benefit cuts would mean that “people won’t be able to afford to live. They’ll have to go to food banks for food. And they’ll wind up in the worst possible housing, or they’ll be homeless altogether.” Some even went as far as to argue that Ontarians would die.

Article content

Despite this reaction, the government would not stray from its commitments, based in part on the view that the majority of Ontarians supported their reforms. To this end, the government introduced the Social Assistance Reform Act in 1997. The act redesigned Ontario’s social assistance system in a fashion that remains in place to this day. Principally, the government created two streams of social assistance: Ontario Works and the Ontario Disability Support Program (ODSP), both of which came into effect in 1998. The ODSP provided more generous benefits for disabled Ontarians and enabled the government to keep its promise of maintaining assistance for persons with disabilities. Under Ontario Works, there were pathways to encourage work, including referral to placement agencies, job training, involvement in community projects with non-profits and community groups, and support in starting their own businesses. If recipients failed to abide by these work requirements, their benefits could be stripped.

By the 1999 election, the number of welfare recipients had been significantly reduced, and spending on social assistance had fallen by more than $1.5 billion from its 1994/95 peak. By this point, the major changes to the social assistance system that the government would enact were largely complete. The measures in the 1999 platform were generally more marginal, with the exception of mandatory drug treatment for welfare beneficiaries, training for case workers, expanding workfare programs and introducing a zero-tolerance policy for welfare fraud that would result in a permanent ban from receiving support.

Article content

A lasting legacy

The Harris government’s reforms to Ontario’s social assistance system were profound: the number of beneficiaries and level of spending fell significantly. Yet while the former government claims credit for getting people off social assistance, there is a question about the extent to which the reduction in welfare caseloads was due to policy reforms, and how much was the result of broader improvements in economic conditions and other factors.

While it is difficult to estimate the effects of the Harris government’s social assistance, less than half of the decline in the province’s welfare caseload can likely be attributed to its policy reforms. Similarly, the cost-saving story is also more complicated. This serves as a check on both the Harris government’s legacy and its detractors’ overstated claims. The real story is straightforward: improved macroeconomic conditions following the deep and prolonged recession in the early ’90s did much of the heavy lifting of reducing the ranks of Ontario’s welfare recipients and lowering the province’s social assistance costs.

Article content

Notwithstanding these considerations, the reforms that the Harris government brought to Ontario’s social assistance system were indeed transformative. Faced with an unsustainable fiscal situation and more than one-in-10 Ontarians on social assistance, Premier Harris embraced ideas about the dignity of work and the deleterious effects of social assistance dependency.

Welfare reform may have been one of the government’s most controversial policy changes, but what Mike Harris has often described as “one of my proudest accomplishments as premier” was also one of his most profound and long-lasting initiatives.

Adapted from, “The Harris Legacy: Reflections on a Transformational Premier” (Sutherland House, 2023), which features a series of essays by leading policy experts in a range of fields central to the Harris government’s agenda. It is a must read for scholars and policy wonks alike, and is available for $36.99 at theharrislegacy.ca. Sean Speer is the editor-at-large of the Hub and a senior fellow at the Munk School of Global Affairs and the Public Policy Forum. Taylor Jackson is an experienced policy analyst and PhD student in political science at the University of Toronto.

Article content