TORONTO -- Ontario has the largest increase in income inequality, the worst record on affordable housing and the poorest funding of public services among all provinces, a coalition of labour and community groups said Wednesday.

The report by the Ontario Common Front puts the province at the bottom of the pack when it comes to funding and access to public programs and services ranging from health care to education and justice to disability benefits.

"Falling Behind: Ontario's Backslide into Widening Inequality, Growing Poverty and Cuts to Social Programs" draws on numerous select studies and government statistics from different time periods to come to its conclusions.

The report says the austerity budget brought in this year by Premier Dalton McGuinty to fight a $15-billion deficit will worsen the province's record in spite of the Liberal government's promise to eliminate poverty.

John Milloy, Minister of Community and Social Services, said he had not had a chance to read the report but defended the government's efforts to combat poverty.

"We realize that the system needs fixing. I'm the first to admit that there are some huge problems with it," Milloy said.

"I think now we've increased the rate of social assistance by 14 per cent. We've also invested hundreds and hundreds of thousands of dollars in affordable housing ... we're also looking to reform social assistance."

Over the last generation, from 1981 to 2010, Ontario experienced the largest change in income inequality of any province in Canada, the report says.

During the same period, it says Ontario had the country's second highest increase in the poverty rate. The document cites Statistics Canada data showing the percentage of Ontarians living below the low income threshold rising from 9.4 per cent in 1981, to 13.1 per cent in 2009.

"The fact is that if you were born after 1981, you have lived every year of your life in a society that is becoming more unequal," said Natalie Mehra, director of the Ontario Health Coalition and principal author of the report.

Ontario also has the worst record on affordable housing, with 152,077 Ontario households on wait lists in January 2011, the report says. In 2009, Ontario spent $64 per person on affordable housing compared to the provincial average of $115 per person.

Sid Ryan, president of the Ontario Federation of Labour, which is a member of the coalition, said the conclusions of the report were not surprising, but prove the province made what he calls erroneous policy choices.

"The government has refused to reduce corporate tax cuts or even consider revenue-generating measures to improve the economy," Ryan said.

"Instead it has enrolled a five-year plan of devastating cuts to jobs and social programs that will cut the legs out from under the families that are struggling to recover in this economy."

NDP Leader Andrea Horwath agreed with the report's conclusion that the Liberals need to better represent Ontario families.

"We're the only province where people are seeing a decline in their actual wages. That's not acceptable," she said.

"What we have is families that are falling behind, household debts that are off the Richter scale and yet the big corporations and banks making out like bandits. It's absolutely inappropriate and it needs to change."

Progressive Conservative Leader Tim Hudak called the report the latest example of the Liberals' failed economic policy, for different reasons.

"For nine years we tried a policy that basically said throw money at every problem, raise taxes to pay for it and bring in all kinds of government regulations and restrictions. The result of that? The mighty engine of job creation that had always been Ontario is at the back of the pack. The fewer jobs created means that more people are stuck on welfare rolls, are stuck in poverty."

More than 90 labour and community organizations form the Ontario Common Front, whose report compiled research on the province's standing on poverty, income inequality, out-of-pocket costs for social programs, wait lists for community services and other data.

The report was released a day after teachers' unions rallied at the Ontario legislature to protest controversial legislation from the Liberal government that would freeze wages and cut educators' benefits for at least two years.

The unions said the bill tramples on their collective bargaining rights because it also bans strikes and lockouts. McGuinty has said the bill is needed to help reduce the deficit.