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Ontario's Culture of Defeat

02/17/2014 11:50 EST | Updated 04/19/2014 05:59 EDT

Though they profess to disagree profoundly when it comes to economics, right- and left-wing politicians remain united in one core belief -- what government does matters.

When an election is finally called in Ontario, chances are the Progressive Conservatives will play to type and pitch a package of vaguely pro-growth policies that are vaguely pro-market, while the Liberals and NDP counter with egalitarian ideas that are marginally more statist. Yet all three will stand united in common consensus that whether government needs to do more or do less, the province will only have a brighter economic tomorrow so long as the government does something.

A fascinating new study released by the University of Calgary last week, however, suggests the economic doldrums of Canada's largest province may actually be rooted in deep-set public pathologies that have very little to do with government one way or another.

Entitled The Rise and Fall of Social Assistance Use in Canada, 1969-2012, the report authored by professors Ronald Kneebone and Katherine White observes that welfare participation rates have fallen substantially over the last 45 years in every Canadian province... except Ontario. While only four per cent of Ontarians were on welfare in 1969, today 7.6 per cent are.

This contrasts most dramatically with Newfoundland, which saw its welfare rates halved during the same period, but all provincial data tells basically the same story. Quebec's gone down from nine per cent to seven, British Columbia from six to four, Alberta from five to three.

What makes the Ontario exception so striking is there's no real political explanation for it. Ontario does not possess a more generous welfare state than anywhere else -- it's just used more.

While it's true that under Bob Rae's spend-happy NDP government, Ontario's monthly welfare handouts were hiked to record highs, such gains were dramatically reversed by the Conservative Harris administration that followed. A mopey column published in the Toronto Star last year by the Metcalf Foundation's John Stapleton claimed it would now "take a 56-per-cent rate increase" to bring Ontario's welfare cheques back to where they were in 1993, the apex of the Rae years.

But this decline wasn't particularly unique either. The 1990s were also the years in which the Chretien administration in Ottawa dramatically cut social assistance transfers to the provinces as part of finance minister Martin's aggressive deficit-busting strategy, which forced premiers all over the place to cut welfare spending. Kneebone and White provide many striking charts showing just how severe the slumps were in most provinces, while Ontario's downward slide had a decidedly softer landing. To be sure, the province's post-slump welfare participation rate of seven per cent is better than 1995's embarrassing high of 15 per cent (when critics snidely, but accurately, dubbed Ontario the "welfare capital of Canada"), but it's still no lower than the rate in 1990, the pre-Rae peak year.

All could be forgiven, perhaps, if Ontario were a uniquely economically troubled region of the country, but again, the data simply don't back that conclusion. Though the province's rate of growth might not be where anyone wants it, the Ontario GDP has still risen an average of one to three per cent in every year of the last decade except recession-plagued 2008-2009, and Ontario's GDP per capita still exceeds that of many other provinces, including British Columbia, Quebec and Manitoba. Unemployment remains high, at 7.5 per cent, but the three Maritime provinces all have worse unemployment rates yet somehow maintain lower welfare participation. Ontario is by no means a poor province. At the very least, it's certainly much richer than it was in 1969.

So what's the explanation?

It may help to contrast Ontario with Alberta, the province with the lowest rate of welfare usage. As many progressives in that province often point out, Alberta is home to the country's highest rate of working poor, with nearly 60 per cent of all children in poor families having at least one parent who works full-time. In Ontario, by contrast, the rate is closer to 40 percent.

Now, these are unhappy statistics to be sure, but also ones that highlight a sharp cultural cleavage. When saddled with poverty, Albertans seem considerably more inclined than Ontarians to look for work rather than head to the welfare office, despite the fact that both provinces have social assistance programs that are basically equally generous.

If this is the case, it's not really the sort of thing any government can do much about. If Ontarians simply inhabit a culture where there's no great stigma associated with collecting welfare -- even welfare that's not that great in an economy that's not that bad -- and experience no contrary cultural force pushing the virtues of work, productivity and entrepreneurship, that's a problem of people, not policy.

Stats like these highlight the very real danger that modern Ontario possesses what a young Stephen Harper once controversially spotted in Canada's (then) dysfunctional Atlantic provinces -- a "culture of defeat." In this case, a culture not only embodied by welfare and non-working poor, but also various cherished myths of inescapable economic victimhood involving fashionable pseudo-academic theories about the (overrated) decline of Eastern Canadian manufacturing and "Dutch disease," all justifying passive resignation to a permanent fate of economic malaise. Ontario, once the great economic engine of Canada, has no second act, nor do its citizens seem particularly interested in organizing one.

The Ontario legislature can easily be dissolved, and a new government can easily be elected. But as Bertolt Brecht once mused in a much different context, there sadly is no provision for electing a new public.

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