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Poorest families could tip over edge

London Free Press - March 12, 2005
by Helen Connell

News on Wednesday that the London Hydro Commission had temporarily suspended its policy on security deposits is less a reprieve for London's poor and more a stay of execution.

That is not to suggest that people at London Hydro are intentionally out to get the poor. It's pointed out to me regularly that London Hydro has a business to run. They have to buy the electricity at set prices and they charge their customers accordingly. Bad debts caused by people not paying their bills don't simply disappear, but must be passed on and that's not fair to customers who do stay on top of their bills.

So in a very business-like fashion, London Hydro reviewed all its accounts to separate out the people who pay their bills on time from those who don't. People with a good record for the past year received rebates and those whose record was viewed as shoddy received bills assessing them a security deposit of 2.5 times their monthly bill.

If this was a product where consumers had the option to buy or not, the policy around security deposits wouldn't really matter that much. But in Canada, access to electricity is a health and safety issue. Homes have to be heated and food refrigerated.

Consider these facts:

  • 17 per cent of London children live in poverty, slightly higher than the national average.

  • The poorest individuals in London saw their real incomes decline by almost 10 per cent between 1990 and 2000.

  • 44 per cent of aboriginals have incomes below the poverty line.

  • Half the immigrants who came here between 1996 and 2000 are living in poverty.

  • A single mom trying to raise one child on social assistance receives 80 per cent of what she needs to provide the basics of life for herself and her child as set out in the federal Market Basket Measure.

Poor people don't have much choice where they live, and often the only housing they can afford is electrically heated.

It takes very little to tip these families over the edge. If you lose your job, you have no means to support your family until you either find work or you qualify for unemployment. Spousal support payments that a single mom is owed are either late or don't turn up at all. A prescription has to be filled but you're working poor and don't have access to a drug plan.

Suddenly these families are forced to choose between paying rent or utility bills or buying food. Little wonder that when some of these parents opened up their latest utility bills and found that a security deposit of 2.5 times their monthly rate had been added, so many panicked, calling social agencies pleading for help.

A security deposit of 2.5 times their monthly bill might be fitting as a wake-up call to people who earn a good income and just don't bother paying their bills on time. But it doesn't make business sense adding the deposit to the bill of someone who is struggling to make ends meet, if all it accomplishes is that the family defaults and sees no hope of catching up. Nor should it be forgotten that London Hydro customers are also taxpayers. The lights may go out on families when utilities are cut but the people don't go away -- and neither do their problems.

Paying a utility bill is cheap compared with what it costs us all to provide temporary housing for a family that is homeless or paying to keep children in the state's care because parents are so overwhelmed by financial pressures they can no longer cope.

London Hydro isn't about to ditch the idea of security deposits, but the commission needs to reconsider how it determines when someone is such a bad risk. The size of the deposit has to be geared to what the lowest-income Londoners can reasonably afford to pay. There will need to be a much longer time period to pay down any instalments and no interest should be applied to any remaining deposit. In some cases, they will need to waive the security deposit entirely.

If London Hydro considers itself a business, it needs to appreciate that with the right to make profit comes the moral obligation to also be a good corporate citizen.

Helen Connell is executive director of the United Way of London and Middlesex.

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