The federal budget is being lauded for painting some broad strokes of the National Housing Strategy and putting dollars to it. The government is showing how it will deliver on its election platform and on the 2016 housing consultations. So how much fuel and capacity are inside this shiny new vehicle? Because funding shifts with fiscal and political conditions, it’s useful to focus on what the budget tells us about priorities in the term of office from now to 2019, as well as the new long-term priorities.
Spending in the current fiscal year (2017/18) continues according to the two-year plan announced in last year’s budget with tiny adjustments. There are two quite separate components: $1.2 billion flows under long-term agreements for twentieth-century social housing and $1.0 billion for current initiatives. The latter include new affordable supply, repair and retrofit, housing allowances, expanding Indigenous and Northern needs, and extra funding for homelessness programs and victims of domestic violence. In Ontario, the current initiatives are mostly within the Social Infrastructure Fund (IAH-SIF) program cost-shared by the province and delivered by municipalities. Federal funding for current initiatives is similar to the annual levels of 2007-2011, which included Trust Fund transfers to the provinces and stimulus in the recession.
For the multi-year plan, the promised $11.2 billion over 11 years is an average of $1.0 billion annually for current initiatives. This is about the same as average annual funding this year and last year. Depending on provincial matching funds and loan financing arrangements yet to be determined, it may turn out to be more. But in general terms it’s a modest rise from the average annual funding levels of the past 15 years.
What would this mean in terms of people and homes? Here is one likely scenario. Half the $1 billion goes to new affordable housing or regeneration at $120,000/unit, with the rest split evenly between repair/retrofit and housing allowances; Ontario receives a per-capita share and Greater Toronto gets 50 percent of that. This region would then see close to 1,000 new affordable rental homes each year, 3,000 units rehabilitated, and 16,000 households keeping their housing allowances. This will make a positive impact. But it falls far short of needs in a city-region where over 200,000 low-income households struggle to pay market rents, where urban growth adds about 5,000 to that number each year, and where tens of thousands of old apartment units need repair and retrofit.
The centrepiece of the National Housing Strategy will be a National Housing Fund. This will be separate from the cost-shared federal-provincial programs – signalling that the federal government would deliver it. The last time Canada had a large federally-run housing program was in the 1970s. This fund will average a modest $203 million annually in its first two years, but ramps up to over $400 million by year four (2021/22). Cost-shared, provincially delivered programs such as IAH-SIF will continue alongside this, but their federal funding will be reduced and they will be restructured. Next year (fiscal 2018/19) will be a transition, with federal IAH-SIF funding reverting to the lower 2011-2015 levels. The National Housing Fund will include loan financing. This is big missing piece, returning to federal policy after two decades’ absence that could help providers and municipalities to build and repair affordable housing.
The budget includes an important statement about the $1.2 billion annually that flows, mostly via the provinces, to twentieth-century social housing and helps keep its rents affordable. The federal government will “preserve the baseline funding related to Operating Agreements.” In other words, the year-by-year phase-out will be halted. The government has indicated to housing organizations that the National Housing Strategy would also restructure these funding flows, again signalling an active federal role.
There is also new funding to federal agencies for housing research and big new nationwide database.
As well, the new federal mental health transfers to the provinces, confirmed in this budget, could create more supportive housing for the many people who need that type of accommodation. This will depend on whether if Ontario or other provinces decide to use some the funding in that way. But it could help house many homeless people. The funding for First Nations includes some resources for housing, but the amount is not broken out.
In sum, it is a steady course for this year, a complicated transition next year, and in 2019 onwards a big National Housing Fund as the centrepiece of the national strategy. The general level of funding will continue at approximately current levels on a multi-year basis, but loan financing will be added to that mix and the federal government will be visible running housing programs. We await announcements this year on the National Housing Strategy, as well as news on whether the mental health funding will help Ontario with supportive housing.