Reports / Articles

February 28, 2000

Housing and budget 2000:
Cruel disappointment for homeless

Quick response to Canada's federal budget Paul Martin, Canada's Finance Minister, rose in the House of Commons on February 28 to deliver the federal government's 2000 budget. Homeless and housing advocates saw this budget as a key opportunity for the feds to make a massive investment in new housing for the homeless.

The budget is a cruel disappointment. Minister Martin has offered only the faint promise of more affordable housing - maybe next year, maybe not. Contrast this with his rock-solid commitment to cut taxes (with a great deal of the benefits going to middle and upper income Canadians) by $58 billion over the next five years.

Homelessness is a national disaster, the nation-wide housing crisis is growing to unprecedented levels, and homeless people are told that they must wait at least another year before a single new unit of affordable housing is built. And maybe it won't even be built then.

The bottom lines:

  • no national housing strategy, no national targets for new affordable housing units

  • the faint hope of affordable housing as part of a municipal infrastructure program, but only after months of negotiations

  • big tax cuts right away for middle and upper-income taxpayers

Where's the housing?

There are only two sentences in the 24-page budget speech devoted to housing and homelessness. Minister Martin said on page 16: "Affordable housing and green infrastructure are also essential elements of a modern society. They are critical to meeting the 21st century needs for municipalities."

The Federation of Canadian Municipalities had called for a national housing program that would deliver 20,000 new affordable units a year over ten years, 10,000 renovated units and 40,000 rent subsidies. There was no mention of unit targets in the federal budget. The Toronto Disaster Relief Committee and many other groups had called for the One Percent Solution - an additional $2 billion in federal spending on housing and services for the homeless. There was no mention of dollar targets in the federal budget.

In the early 1980s, the federal government was delivering between 25,000 and 30,000 new units every year. The cutbacks started in 1984. By 1993, almost $2 billion was cut from federal housing spending. Then the federal government cancelled entirely all new housing funding. The federal government refuses to take leadership on housing, despite the crushing need across the country.

The 2000 budget was a golden opportunity for the federal government to make a massive reinvestment in affordable housing in response to Canada's massive housing crisis and homelessness disaster. The federal government was facing a surplus of up to $100 billion in the next five years. Minister Martin had real choices to make in this budget, and he chose not to invest in a national housing strategy.

Municipal infrastructure The faint hope on housing offered by Minister Martin in the budget reads: ". . . the federal government will consult with other orders of government and the private sector to reach agreement on a creative and fiscally responsible multi-year plan to improve provincial highways and municipal infrastucture in cities and rural communities across Canada.

An agreement is expected by the end of 2000." "In this budget, the federal government is allocating $100 million in 2000-01, $350 million in 2001-02 and $550 million per year for the next four years." "At the level of $550 million per year, $400 million will be allocated for municipal infrastructure in cities and rural communities across Canada, including affordable housing and green infrastructure, and up to $150 million for highways."

In other words, the feds are going to talk to the provinces, territories and municipalities. These talks may lead to an agreement by the end of this year on an infrastructure program. And a part of that program may be affordable housing. Maybe, maybe, maybe. Housing advocates called on the federal government to take leadership and bring in a national housing program. Minister Martin responded by saying that nothing will happen without months of talking. And only maybe then.

Even if the talks are successful, and housing becomes part of the infrastructure program, total spending on housing will amount to about $1 billion over the next six years (based on the generous assumption that about half of the infrastructure budget will go to housing). Compare that to the $2 billion a year in the One Percent Solution. December 17 announcement The federal government used the 2000 budget to re-announce its national homelessness strategy, which was first announced in December of 1999.

About $753 million over five years will go to improving shelters and services for the homeless. The key part of this strategy is the $305 million Supporting Community Partnerships Initiative (nicknamed "skippy"). These funds will only flow to 10 communities, and even in those areas, almost none of the money will likely lead to new housing. Homeless people in those communities will be more comfortable, but they won't be any less homeless.

When federal housing minister Alfonso Gagliano and federal homelessness minister Claudette Bradshaw made the December 17 announcement, they called it a "first step" and said that affordable housing would be the next step. Minister Martin did not take that step in the 2000 budget.

Cutting taxes

There was plenty of rhetoric around the 2000 budget. It was supposed to be a "balanced" budget between new spending and tax cuts. It was supposed to be a "payback" for Canadians who have suffered for years. There is no balance between new spending and tax cuts.

Over the next three years, there will be about $8.9 billion in new spending (including the possible housing spending in an infrastructure program), as compared to $20 billion in tax cuts. Tax cuts provide no advantage for homeless people and other lowest-income Canadians. They don't pay any taxes in the first place. Richer Canadians benefit most from tax cuts. For instance, the Canadian Centre for Policy Alternatives estimates that the average savings from the elimination of the 5% surtax for a taxpayer earning $250,000 or more is more than $6,000, while taxpayers earning $60,000 or less won't see a penny more.

Changes to capital gains taxation will put $3,836 in the pockets of Canada's richest taxpayers, while it deliver a measly $4 for taxpayers earning less than $25,000. The Canadians who have paid the most for the years of austerity are poor and moderate income households. They've lost income assistance (through cuts to employment insurance), affordable housing (through cancellation of new funding) and faced many other penalties.

The Canadians who will benefit the most from the "payback" in today's federal budget (the massive tax cuts) are middle and upper-income households. Budget day on Parliament Hill Disappointing as the federal budget was, housing and homelessness had a strong presence on budget day on Parliament Hill. And it was reflected in a clear and consistent mention of housing in media reports. George Devine and Michael Shapcott from the Co-operative Housing Federation of Canada, Sharon Chisholm from the Canadian Housing and Renewal Association and Francois Saillant from FRAPRU in Montreal attended the budget lock-up.

Cathy Crowe from the Toronto Disaster Relief Committee, who was locked out of the lock-up, joined in the post-budget media scrum. They did at least 20 print and broadcast interviews. Others who included a housing message in their post-budget comments including Jean-Claude Parrot, Canadian Labour Congress; Joan Grant-Cummings, National Action Committee on the Status of Women; and, Laurel Rothman, Campaign 2000.

Suggestions for action

Homeless and housing advocates should flood their media and the offices of their MPs. Let them know that you are bitterly disappointed that the federal government refused to make the choice to help the homeless find affordable housing. Write letters to the editor, opinion pieces, call your MP, send a fax. Continue to raise your voice for affordable housing. Powerful action by housing and homelessness advocates forced the federal government to announce its homelessness strategy last year.

A step in the right direction. Powerful action by advocates forced the federal government to open the door, ever so slightly, to more affordable housing through the infrastructure program in the 2000 budget. Another step in the right direction. But Ottawa is still taking baby steps when bold action is required. Hundreds of thousands of Canadians are homeless, more than 800,000 tenant households are on the brink of homelessness.

We cannot afford to wait for months of intergovernmental wrangling. Step up the pressure on the feds.

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Housing for all
The One Percent Solution - a national strategy to end homelessness in Canada
Michael Shapcott

For more information, contact TDRC at tdrc@tdrc.net

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