Peterborough's draft budget for 2021 recommends two service cuts in the social services division: the elimination of the recreation benefit for social assistance recipients and a 50 percent cut to various poverty reduction initiatives. (Photo: Will Pearson)
A detailed look at the draft budget’s proposed changes for social services
Will Pearson  - 
November 20, 2020

At about $85 million, the operating budget for the City of Peterborough’s social services division far outstrips any other division in the City. The division includes three main program areas: social assistance, children’s services, and housing and homelessness.

Division manager Ellen Armstrong calls 2021 “a really tough budget year” for her portfolio, pointing in particular to reductions in provincial funding and increasing budget demands in the homelessness system. In the draft budget, city staff are recommending making two key service cuts to keep the division’s overall costs from rising too high. 

City council’s finance committee will consider the draft budget next week, and city council is scheduled to give it final approval on December 14.


Prefer to listen rather than read? Will Pearson and Ayesha Barmania discussed the proposed changes to social services on the most recent episode of the Budget Week podcast. Press play below.

Diving into the proposed changes to social services in the 2021 municipal budget

 
 
00:00 / 00:19:06
 
1X

Provincial funding reductions

Armstrong points to two provincial funding changes that are putting pressure on the City’s social services budget this year.

First, the funding the City receives to administer Ontario Works and employment services was cut by 22 percent, or about $1.6 million. That’s because Peterborough is in one of three prototype regions where the province is testing out its new model for delivering employment services to social assistance recipients. 

Under the new model, Fleming College will deliver the employment services component of Ontario Works instead of the City. Fleming takes over the program on January 1, 2021, and the City of Peterborough is having its funding cut as a result. This is in addition to a province-wide freeze on Ontario Works administration funding at 2018 levels.

The City will recover most of these losses by laying off staff, including those who previously delivered the employment services program, but Armstrong says the layoffs alone won’t make up for the full reduction. The draft budget estimates Ontario Works administration will cost the City about $100,000 more in 2021 compared to 2020.

Secondly, the provincial government is changing how it funds administration costs for children’s services. Whereas the province previously funded 100 percent of administration costs, starting in 2021 it will require municipalities to cover 50 percent. 

Again, the City is mitigating this cut by laying off staff — one children’s services case manager will be laid off, Armstrong says. Also, the County of Peterborough is upping its funding of children’s services administration. Still, the City expects to have to cover about $100,000 in additional expenses due to the new cost share arrangement with the province.

Recreation benefit facing elimination

In 2019, the auditing firm KPMG concluded that Peterborough could save as much as $700,000 per year by reducing the amount of discretionary benefits it provides to social assistance recipients. 

Social assistance benefits come in two forms — mandatory and discretionary. Mandatory benefits are those which municipalities are required to provide. They include the shelter allowance and basic living allowance, and they also cover certain medical expenses like eye exams and prescription drug coverage. Mandatory benefits are 100 percent provincially-funded, so they don’t impact the municipal budget. 

Discretionary benefits are benefits that municipalities can provide on a case-by-case basis. Among other things, they can pay for dental work, eyeglasses and funeral expenses. The province does help pay for discretionary benefits — but it caps its contribution at an average of $10 per case per month. Anything above that, a municipality has to pay for. 

According to KPMG, Peterborough currently averages about $15 per case per month. Bringing that number down to the provincial cap of $10 is how the City could save $700,000 a year.

The 2021 draft budget recommends eliminating one particular discretionary benefit: the recreation benefit. The recreation benefit provides families with up to $200 per year per child for expenses related to recreation and social activities. Armstrong says about 1,450 children benefited from it in 2019. 

According to Armstrong, the City is planning to mitigate the impact of this cut by making a different set of subsidies — those offered by the City’s own recreation division — available to social assistance recipients. And according to manager of recreation Rob Anderson, his division is increasing the budget for subsidies by $75,000 to anticipate this new demand.

But assuming families have been using the full $200 value of the benefit, the recreation division’s budget increase is not enough to fully replace the value of the benefit being eliminated.

Prioritizing health benefits

According to Armstrong, cutting the recreation benefit isn’t just about saving money. It’s also part of a broader plan to reallocate discretionary benefits towards healthcare. 

Armstrong says discretionary benefits such as dental care, dentures, hearing aids and orthotics are the biggest priority for the City.

As an example, she points to dental benefits. The City’s benefit rates for dental care were set about ten years ago, she says, and recently that has meant that “a lot of our clients would go to a dentist, but because we were covering such a low amount, a lot of dentists were not able to serve, not willing to serve our clients.”

So while some of the money saved by eliminating the recreation benefit is being used to lower costs, some of it is being redirected towards other benefits that are more directly related to health, including dental benefits. “We are hoping that that will help our clients have better access to dental work,” Armstrong says.

“[S]taff continue to examine options to prioritize health needs within the discretionary benefits,” states the 2021 draft budget.

Armstrong estimates the changes to discretionary benefits will bring the City’s spending down from an average of $15 per case per month to $13.82 per case per month, saving the City about $100,000.

Poverty reduction initiatives could see 50 percent cut

The second cut recommended in the City’s draft budget is directed at “Poverty Reduction Initiatives,” a budget line that covers a few different activities. 

Last year’s budget for the initiatives was $141,686, which included a contribution from the County of Peterborough. That money was used to:

  • Provide baby supplies like car seats and cribs to low-income families
  • Provide emergency assistance for purchasing items such as food, over the counter medication and taxi fares 
  • Seed-fund local initiatives that have a mission of social inclusion or poverty reduction (previously funded projects included the One City downtown cleaning team pilot, the rural transportation plan and the low-income dental clinic at the health unit)

“It was really handy to have that money to seed other programs with,” says Armstrong.

The proposed cut to the Poverty Reduction Initiatives budget line is $71,686 — almost exactly half of the fund’s previous budget. The cut will lower both the City’s and County’s contributions to the fund.

NOTE: While housing and homelessness is also a part of the social services division, Peterborough Currents will cover the housing implications of the 2021 budget in a subsequent article.

Filed under: Budget Week 2021
shares