When the newly elected Progressive Conservative government of Doug Ford cancelled Ontario’s basic-income pilot in 2018, only months after winning a majority in the legislature, it likely imagined it was on solid legal ground. If elections mean anything, it’s that a change in the party governing the province is likely to mean substantial, even dramatic, changes in policy, and courts have long recognized that governments have wide latitude to make policy decisions.
However, earlier this month, an Ontario court certified a class-action lawsuit against the province for the way the basic-income pilot was cancelled. It’s not a final decision in favour of the plaintiffs, but it is a rejection of the government’s arguments that the case should have been dismissed on the merits. The court also, incidentally, awarded the plaintiffs $320,000 in legal costs (so far) that the government will have to pay.
The argument from members of the class-action lawsuit is relatively straightforward: they signed up for the basic-income pilot in good faith and had commitments from the government that the payments they were receiving would be maintained for a period of three years. This wasn’t just a novel social program — it was also a research trial: the government was hoping to determine whether people on a basic income saw better outcomes than people on the province’s current assortment of social-welfare programs like Ontario Works and the Ontario Disability Support Payment. Those commitments from the government allowed people to start making plans for their lives beyond living cheque to cheque.
When the program was abruptly cancelled, the personal consequences for the participants were serious and substantial.
“I was exhausted from working constantly yet still finding myself barely able to afford the cost of living,” former participant Jessie Golem told reporters at Queen’s Park on Monday morning. “Being on the pilot enabled me to drop down the number of jobs I was working and focus on building a business.”
“To this day, I’m still struggling to start my business because I can’t afford to take the risk and put the time into it,” Golem said.
In their class-action, pilot participants argue that they had a contractual relationship with the government of Ontario and that, while the province can change policies, it still owed consideration to parties in a contract.
“Through the 2018 election, Premier Ford stated numerous times he would not cancel the pilot, yet it was one of the first cuts he made,” said lawyer Stephen Moreau, also on Monday. “Premier Ford and the government of Ontario must be held accountable for the blatant disregard of a contractual agreement.”
The Ford government did not make a minister available to speak with TVO Today directly about the case. An emailed statement from Minister of Children, Community and Social Services Michael Parsa highlighted the government’s increases to ODSP and OW funding, its decision to increase the amount of earned-income that recipients can keep before facing a clawback, and other measures — while otherwise declining to speak about a matter that is before the courts.
If they eventually prevail in court, the basic-income participants may be able to draw on an unusual but recent precedent: the 2020 decision in Seelster Farms et al v. Her Majesty the Queen, which involved a dispute over Ontario’s relationship with horseracing.
In 2012, with the province in a deep fiscal deficit, the then-Liberal government under Dalton McGuinty scoured the public accounts looking for any way to pare down expenses and increase revenues. One of the pots of money it found was the Slots at Racetracks Program, which shared revenues from slot machines at racetracks with the racetracks themselves via agreements signed with Ontario Lottery and Gaming (the provincial agency that regulated gambling in Ontario). Cabinet directed OLG to cancel its agreements with racetracks, meaning the revenue from slot machines would instead flow to the government’s coffers.
The financial effect on the province’s racetracks was devastating, and several racetracks ceased operations entirely. The evidence presented during the eventual trial suggested that the political staff at Queen’s Park had a remarkably cavalier attitude toward the sector. It’s arguable that the decision didn’t even substantially increase provincial revenues in the end after all. But, in this context, the noteworthy point is that it wasn’t racetracks that sued the government and won — it was standardbred horse breeders who owned farms and had invested substantially in their operations, with the reasonable expectation (as determined by the court) that a long-standing provincial program would be maintained, not least because many agreements had been renewed as recently as 2010.
Notably, the court found that the government had breached its contractual obligations with horse breeders, despite the fact that the provincial government and the horse breeders had never signed an actual piece of paper.
Moreau, the lawyer representing basic-income participants, told TVO Today that, if anything, his clients have a substantially greater claim to a breach of contract than the horse breeders did, as pilot participants had to sign substantial documents laying out financial terms and their participation in research about the pilot.
He called on the government to stop spending public dollars contesting the lawsuit.
“Why are they taking so long?” he said. “I have that question in my mind every day — more so since we’ve been successful entirely up to this point.”
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