People who provide and advocate for affordable housing have been positive about the 2016 federal budget because it moves Canada in the right direction for the next two years.
The budget boosts federal funding for new affordable housing to about $1.1 billion a year nationwide. If we bracket the large and much-needed amounts for First Nations and Northern Canada, the amount that will flow to provinces and municipalities is an average of $352 million annually in federal dollars. With their matching funds, the provinces could see just over $600 million a year. The budget describes this as a doubling of the Investment in Affordable Housing (IAH) program through which these dollars will be delivered. In addition there is an average of $287 million annually for repairing existing older social housing, and modest extra amounts for women’s shelters, homelessness funding, rental mortgage financing, and other essential housing needs.
How big is $600 million? If this money is distributed on a per capita basis as IAH usually is, then Ontario will have about $230 million including its own contribution. It looks like Ontario will need to come up with some more cost-sharing dollars than are visible either in its own 2016 budget or in the following two years under its new Long Term Affordable Housing Strategy. But given the complexity of budgets, it is hard to be sure about this.
For the past decade, Ontario has used IAH and related programs in two main ways: capital funds to build affordable housing, and rent subsidies to make housing more affordable to people with low incomes. (Small amounts also go to housing repair and affordable ownership.) If most of the 2016-2018 money goes to new affordable housing, the likely scenario is that production would increase from average annual levels of 1,400 units, to 2,000 units or more. Rent subsidies, new affordable housing, and new supportive housing are all valid priorities.
To get this moving quickly, the government is providing the new funding through the existing IAH program. This program framework has existed at the federal level, with minor variations, since 2001. It was invented by the Chrétien Liberal government, carried forward under the Harper Conservatives, and now lives on. The federal funding flows to the provinces, they must match most of it, but they have a lot of flexibility whether to use it for housing capital, new rent subsidies, or other things. Unlike the programs of the 1950s to early 1990s, there are no federal dollars for ongoing rent subsidies in the new projects; that sort of challenging long-term commitment is left to the provinces to fund or (more often) not. By next year this will be the longest-lived policy approach to new affordable housing since the federal government first entered the social housing field in the 1940s.
This budget involves funding and production levels similar to 2007 to 2011.That modest peak reflected two things: a Liberal/NDP minority parliament deal in 2006 for “housing trust funds” that were implemented under Harper, and the stimulus spending of 2009-2011. The social housing repair funding in this year’s budget also echoes the stimulus. The annual funding declined considerably after 2011, and it will be good to return in 2016-2018 to those higher levels. But these are interim measures and they fall well short of needs.
The budget also affirms the government’s platform commitment to develop a national housing strategy. For 2018 onward, we need more than an extension of the 2001-2015 programs for new affordable housing and rent supplement. A national strategy must address the need for adequate ongoing increases to the non-profit and co-op housing stock as Canada grows, and find ways to make rents affordable for all Canadians with low incomes. It must also keep existing older social housing in good repair with affordable rents after its existing multi-year funding – under agreements of the 1950s to 1990s – phases out. A good national strategy will take a couple of years to develop; meanwhile the affordable housing provisions of the 2016 federal budget are good steps forward.