The domino effect

The gap between existing income support rates and the average cost of living has been widening for the past few decades; but with rapid increases in inflation and a potential recession on the horizon, the impacts of these public policy failures have become more apparent than ever. 

The widening gap between income supports and cost of living is resulting in a domino effect of untenable demand for programs and services across the entire nonprofit sector, adding pressure to our tertiary systems. Organizations are feeling overwhelmed, struggling to tackle increased demand, and are at times unable to meet their clients’ needs. As more Ontarians fall through the social safety net, they face a system that seemingly fails to support them at every turn, leaving them stranded and never knowing who really is to blame. 

Nonprofits are not being adequately funded to pick up the pieces. Funding that reflects the true cost of service delivery and is indexed to inflation as well as population increases is needed. When one area of the sector is underfunded, organizations shoulder what they can and pass on those clients that fall through the cracks to the next logical provider. And when none of Ontario’s services can suffice, we see clients turning to encampments, sleeping in buses, and living in ravines, all alongside a rapid increase in public disdain for people experiencing homelessness and calls for increasingly violent responses to their presence.  

Domino 1: Housing

When Ontario Disability Support Program (ODSP) and Ontario Works (OW) income supports fail to keep up with the cost of living, our most vulnerable communities slide down the housing continuum, losing even the most deeply affordable housing. At the same time, social services that should traditionally work in tandem with income supports to help aid and prevent people from losing housing (i.e. the employment and training sector), have become less helpful post-transformation, especially for those with disabilities. 

Addictions and Mental Health Ontario reports that often recipients scaffold income supports with rent supplements to secure housing, but existing rent supplement rates have not kept pace with rising market rents. Many supportive housing programs have not received rent supplement rate increases in decades, while supportive housing clients who rely on ODSP and OW have seen minimal increases to their income. Though Ontario has announced they will exempt the Canada Disability Benefit as income, a gap still remains between the cost of living and available income supports.

For years, all types of shelters have been ringing the alarm that they are not able to meet the increasing demand in their communities, now functioning more as transitional housing than true shelters. Ultimately people using the shelter system become stuck in the cycle when there is no ability to transition out of these services (e.g. little to no affordable housing, insufficient employment programs, and no meaningful income supports). This stagnation leaves shelters unable to serve the growing population of people in need and having to piece together various funding sources for a single extra bed. 

Domino 2: Encampments 

When people can’t access shelter supports, they end up in encampments, which is why today the province has a growing encampment crisis. Encampments are tangible proof of our failure as a society to care for one another. 

An Association of Municipalities Ontario 2025 report found that at least 80,000 Ontarians were known to have experienced homelessness in 2024, an increase of 25 per cent since 2022. The incidence of chronic homelessness, characterized by prolonged or repeated episodes, has tripled over the same period, and now accounts for more than half of all cases of known homelessness.

One of the dominant yet problematic public policy solutions across provinces has been for legislators to attempt to criminalize and punish homelessness, like Bill 6 in Ontario which imposes fines of up to $10,000 and trespassing charges on those experiencing homelessness. We cannot criminalize  our way out of systemic poverty and a housing crisis; we only permanently clear encampments when government adequately invests in repairing and bolstering all of our social services collectively.  

Dominos 3, 4, 5, 6: Surges in demand for other social services

When income supports do not keep up, other social services also see an increase in demand.

Food banks face a rapid increase in usage that, like last year, can see upwards of one million Ontarians needing their services. Nonprofit addictions and recovery services can similarly face increased waitlists that see them struggle to meet the urgent needs of their clients. Child welfare services become overwhelmed not just with children experiencing abuse, but also children from homes that can’t connect them to the services they need. As funding remains stagnant, the homelessness crisis in Ontario deepens, and when 75 per cent of the homeless population in Ontario have, or have previously, experienced mental health concerns or addiction, we can expect that as the homeless population increases, so will the need for services to support their changing circumstances. 

Social services face an immense amount of stress that they otherwise wouldn’t face if community care services were properly funded from the start. In truth, we often forget that services like food banks strive to not exist at all, but are forced to serve millions of Ontarians when social services aren’t properly funded. 

Domino 7: Tertiary systems   

Underfunding income supports and social services impacts our tertiary – hospitals, libraries, justice – systems as well.  

Hospitals see a steady increase in patients who no longer need acute care being forced to stay for longer bouts due to lack of affordable housing options and supportive services. When hospitals are forced to shoulder the load of a community without adequate housing or shelter services, already long wait times and lack of beds become the norm. 

And even more worryingly, in response to perceived increases in crime (that often parallel increases in poverty and homelessness), the rapid surge in police funding seen over the last decade serves only to traumatize and criminalize poverty while providing no actual increase in safety. When the whole of the social services sector isn’t funded properly, the sector is forced to download those they can’t serve to less safe and secure spaces that work less to help people but more to simply  “deal” with them.

Domino 8: Public spaces

Public spaces also feel the pressure from lack of investment into income supports and social services. Libraries become spaces where people experiencing homelessness can stay warm, use computers to connect to family or to job hunt, and receive help connecting to other services. This unique use of the space has seen libraries enter the front-lines of this crisis, requiring its workers to become proficient in administering overdose-reversing naloxone and hiring social workers for branches across cities. 

In a similar vein, transit hubs have very clearly become another space where people experiencing homelessness can stay warm. Last January the Toronto Transit Commission (TTC) set aside a fleet of buses where people could stay as the city reached sub-zero temperatures. People hop from bus to subway to streetcar hoping only to keep warm and search for available shelter space. 

In its final form, lack of holistic funding and proper income supports looks like vital services falling into the hands of workers and community members without the adequate resources or skills necessary to care for their neighbours. 

Knitting together our efforts 

As funding for the sector is withheld, decreases, fails to keep pace with inflation, or is rerouted to more costly emergency services, we will continue to see social service infrastructure crumble and leave bigger holes in our social safety net. The only answer to this is a holistic funding approach that recognizes the interconnectedness of the sector and the breadth and depth of each organization and all that they do and are capable of doing as well. 

Continuing the practice of giving incremental funding increases and injections into some parts of the sector isn’t working and certainly will never fill the gaps left by underfunding ODSP and OW. There is no single influx of funding into the mental health and addictions sector that is going to outweigh the failure of transformation in employment and training services. There is no amount of building shelters that can outperform the failure to protect and increase the necessary amount of affordable housing stock in our province. 

As we begin the third mandate of the Ford government, and confront the very real threat of a recession, the sector must recognize its interconnectedness not just with other social services but with the public sector and municipalities as well. Collectively advocating for a holistic approach to funding across all of the social services sector as well as increasing the income support available to OW and ODSP recipients to meet a minimum income standard is the only way we begin to tackle these issues head on. Collectively we must remind the government that it has a responsibility to support those in need not just so they can survive, but so they can thrive and live with dignity.