Ontario is dead last in Canada when it comes to growing poverty, increasing income inequality and financial support for public services, says a coalition of labour and community groups formed last spring to oppose the province’s austerity budget.

The report by the Ontario Common Front released at Queen’s Park Wednesday, aims to inform Ontarians about the social and economic issues at stake as the province begins drafting next spring’s budget, the group says.

It is a sobering backdrop to the ongoing dispute between the Liberals and the province’s teachers who are facing a legislated two-year wage freeze, they add.

“It is time for Ontarians — including our policy makers — to face the disturbing facts about inequality in our province,” says the report entitled, “Falling Behind: Ontario’s backslide into widening inequality, growing poverty and cuts to social programs.”

“The most recent budget announcements from the Ontario government — that Ontario is facing five years of ‘austerity’ budgets — will only widen the chasm if left unchecked,” it says.

The report, a compilation of more than a dozen recent studies and analyses, notes that Ontario had the largest change in income inequality in the country between 1981 and 2010, and the second largest increase in poverty after British Columbia. Ontario’s poverty rate in 2009 was 13.1 per cent, or almost 1.7 million people, the report notes.

In 2009, Ontario spent $64 per person on affordable housing compared to the provincial average of $115 per person, the report says quoting a Wellesley Institute study.

Ontario’s hospitals get the least public funding and have the fewest hospital beds per person, while the proportion of out-of-pocket health care costs are the highest in the country.

And according to Ontario’s finance ministry and 2012 budget, the province spends less than any other province on public programs and services.

Provincial budget advisor Don Drummond said this is a sign of fiscal prudence and good management. But the report argues Ontarians are paying for this through reduced services and the highest user fees in the country.

Last spring’s cuts to social assistance, school closures, cancelled hospital projects, delayed child benefits, eroded social housing budgets and public sector restructuring that will result in “thousands” of lost jobs, will only make matters worse, the group says.

“Another half-decade of cuts to services we all need and a government-created recession in the public sector are not the only answers — indeed they are not the answer at all,” the report says.

Instead, the province should fight its $15-billion deficit by restoring corporate tax cuts, introducing a new financial transaction tax and raising taxes on the wealthy.

Reports this week that Canadian businesses are sitting on more than $500 billion in cash, are proof that corporate tax cuts haven’t worked to spur job creation, innovation and economic growth, the group notes.

“These policy choices have helped turn surpluses into deficits at both the provincial and federal levels,” the report says. “Now, having deliberately emptied its cupboards, the Ontario government’s commitment to reduce child poverty by 25 per cent by 2013 is being swept aside.”

But Children and Youth Services Minister Eric Hoskins, who is also responsible for the Liberals’ poverty reduction efforts, said Ontario is “a leader” in supporting public services for families, workers and the vulnerable.

“For example, the single biggest increase in the latest budget was in children’s and social services — an increase of 2.7 per cent or $1.2 billion — followed by health and education,” he said in a statement.

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Ontario has introduced full-day kindergarten, hired 9,000 new nurses and is building 23 new hospitals, he said. It has raised social assistance eight times since 2003 and has the highest minimum wage in Canada. And the Ontario Child Benefit — which is going up to $1,210 next year and $1,210 the year after — is helping more than one million children

“Altogether, it means a single mom working full-time at minimum wage has seen her income go up more than 60 per cent, or $12,500, compared to 2003,” he said.

“There is always more work to do,” he acknowledged. “But our commitment to public services and reducing poverty for Ontario families remains strong.”