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Affordable housing, homelessness and the upcoming federal budget

March 24, 2020

3-minute read

This year’s Alternative Federal Budget (AFB) was released on March 17.[1] A general overview of the AFB project can be found here, but in a nutshell, it provides an alternative fiscal framework for Canada’s federal government; it’s released ahead of the actual federal budget in an effort to stir debate about an alternative approach to taxing and spending.

I was primary author of the AFB’s affordable housing and homelessness chapter—that chapter is available here in English and here in French. With that in mind, here are 10 things to know about affordable housing, homelessness and the upcoming federal budget:

  1. Federal housing spending is projected to decrease over the next decade (relative to GDP). That’s a key finding of this recent analysis by Canada’s Parliamentary Budget Officer (PBO).  Put differently, while some elected officials and advocates seem quite pleased with Canada’s National Housing Strategy (NHS) the reality is that we should all be very concerned about the future of Canadian housing policy.
  2. Federal spending on urban Aboriginal housing in Canada is expected to drop quite considerably. Indeed, the same PBO report cited in point #2 above also notes: “The planned level of funding for federally administered community housing for Indigenous households not living on reserves ($257 million) is less than half the level of funding provided over the prior 10 years ($534 million).” This comes at a time when the growth of Canada’s Indigenous populations is occurring at four times the rate of the rest of our population.
  3. Across Canada, federal funding for homelessness is rather modest. For each $1 invested federally, $13 is invested by other sources (mostly provincial and municipal dollars). That assertion is made in this federal report. What’s more, just 5% of new funding under the NHS has been earmarked towards the Trudeau government’s goal of reducing chronic homelessness by half. In light of these unfortunate realities, it’s crucial that Canada’s federal government enhance support for homelessness.
  4. The National Housing Co-investment Fund (NHCF) has received considerable criticism. Created by the Trudeau government, this program both repairs existing social housing and helps create new housing; it can assist non-profit housing providers as well as for-profit private rental developers. However, it is primarily a loan program (as opposed to a grant program) and has been criticized for providing insufficient funding to make rent levels truly affordable for low-income tenants.
  5. Supportive housing providers across Canada need more financial support. Supportive housing refers to specialized housing for vulnerable populations that features professional (i.e., social work) staff support. This is especially helpful for people who have experienced long-term homelessness. The NHS contains no specific provisions for supportive housing, even though one of the Strategy’s stated goals is to reduce chronic homelessness by 50%. [2]
  6. More than two years after the NHS was unveiled, we’re still waiting for the public release of three Indigenous-specific strategies. At the time that the NHS was unveiled, the Trudeau government said it was “working with First Nations, Métis and Inuit organizations on separate housing plans.” They have yet to be released publicly (though a credible source tells me that agreements have been drawn up).
  7. Housing across Canada remains unaffordable, especially in certain cities.[3] Central to the NHS is the planned launch, later this year, of a Canada Housing Benefit (CHB). This benefit will consist of financial assistance to help low-income households afford the rent in both private and social housing units. The Trudeau government estimates that the average beneficiary will receive $2,500 in support per year. This may be too little, too late.
  8. We’re now expecting a recession, making it even more worthwhile to increase federal investments in affordable housing. There is growing consensus among economists that Canada will soon enter a recession (due largely to the COVID-19 pandemic) whose impact on the Canadian economy will likely last years. Increased capital funding for housing can boost employment during an economic downturn, and deeper rent subsidies can assist low-income households facing labour market challenges to pay for housing.
  9. The Government of Canada’s COVID-19 Economic Response Plan is a short term measure. Announced on March 18, the Plan includes very important social policy items, including an additional $157.5 million in one-time funding for homelessness. However, Canada needs new annual funding commitments to address a lack of affordable housing and homelessness challenges that were in place well before COVID-19.
  10. This year’s AFB calls for federal funding of $5.25 billion annually over and above what has already been committed by the Trudeau government. Specifically, it calls for: the enhancement of the NHCF with an additional $3 billion in annual grant money for new builds and repairs; the allocation of $2 billion annually to build new supportive housing for vulnerable populations; and the doubling of the federal contribution to the CHB.
In sum. This year’s AFB provides both a list of new, annual spending initiatives pertaining to affordable housing and homelessness, and a macroeconomic framework that can support them.

Nick Falvo is a Calgary-based research consultant, a research associate at the Carleton University Centre for Community Innovation, and a CCPA research associate. He wishes to thank Susan Falvo, Ron Kneebone, Jeff Morrison, Steve Pomeroy and Vincent St-Martin for assistance with this blog post, which also appears here. Any errors are the author's alone.

[1] For a history of the Alternative Federal Budget, see this overview.

[2] Having said that, supportive housing has received NHCF financing.

[3] For more on how housing affordability varies across Canada, see this two-page analysis by Ron Kneebone and Margarita Wilkins.

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