Wellesley Institute federal budget scan:
Healthy corporate profits – healthy communities???
Minister Flaherty federal budget fails to offer funding;
Billion-dollar housing / homelessness gap is looming
Just five days before federal Finance Minister James Flaherty rose in the House of Commons earlier today (February 26) to deliver the 2008 national budget, Statistics Canada reported that corporate profits reached their highest level ever in 2007. “Canadian corporations earned record high operating profits of $262.5 billion in 2007,” reported Canada’s national statistical agency on February 21.
“Canadians want a healthy environment,” said Minister Flaherty in his budget speech. “They also want healthy, safe communities.” The national budget is the place where the government sets out its fiscal plan of strategic investments so that the top priorities of Canadians can be met.
Put the two together (record-high corporate profits and an urgent need for healthy communities), and you’d expect that the 2008 federal budget would include a sensible plan for increased strategic investments in Canada’s fraying economic and social infrastructure paid with a fair share of those record-high corporate profits.
That didn’t happen. In fact, profitable corporations will continue to benefit from billions in corporate tax cuts announced in the past two years.
There’s not a penny for new truly affordable homes in federal budget 2008, even though all three national housing and homelessness programs are due to expire in fiscal 2008.
Minister Flaherty missed the opportunity to announce plans to renew and enhance those programs in his budget speech. If the federal government doesn’t renew these programs within the next 12 months, then there will be an annual billion-dollar hole in funding for new affordable homes, transitional housing and supports / services for the homeless.
That’s the amount of money that will be lost each year from a failure to renew federal affordable housing spending, along with funding for the federal housing rehabilitation program and the national homelessness strategy.
Officially, 1.5 million households (about 4.2 million women, men and children) are in “core housing need” and perhaps 300,000 Canadians will experience homelessness over the course of the year. Housing insecurity has a large personal cost, leading directly to increased illness and premature death. It also disrupts communities and puts a brake on economic competitiveness, according to a growing number of business organizations.
Homelessness – the most visible sign of housing insecurity – also carries a high cost for taxpayers. One recent study estimated that homelessness costs Canadians between $4.5 and $6 billion annually – more than triple the dwindling amount that the federal government pays for affordable homes.
In his budget speech, Minister Flaherty said: “Even in good economic times, there are those at risk of being left behind. But Canadians are guided by the values of compassion, kindness and generosity. That’s why the Mental Health Commission of Canada was struck last year. Under the leadership of the Honourable Michael Kirby, the Commission has recommended the Government proceed with five pilot projects across the country. These will help increase our knowledge of those who are homeless and suffering from mental illness.”
Increasing knowledge is critically important, but so too is building affordable homes with the appropriate supports for people with mental health concerns. And the money to do that is absent from the 2008 federal budget except for a handful of pilot projects in just five communities (Vancouver, Winnipeg, Toronto, Montreal and Moncton).
These projects, while worthy, will at best prove the very same lessons that Canada’s supportive housing providers have demonstrated time and again over the past two decades in previous pilot projects: Safe and affordable homes combined with accessible and appropriate services are the most fundamental needs for people suffering mental health issues.
There was some new spending in federal budget 2008, including an additional:
– $122 million for prisons;
– $400 million to recruit new police officers; and
– $43 million for the super-secret Communications Security Establishment (Canada’s electronic snoopers).
“The fundamentals underpinning the Canadian economy remain strong,” says the 2008 federal budget plan at p.29 in what is the traditional message of finance ministers. But Canada’s housing fundamentals are extremely shaky:
– housing affordability is deteriorating for homeowners across the country;
– average market rents have outpaced the household incomes of more than half of Canada’s renter households; and
– homelessness and housing insecurity remains deep and persistent in urban, rural, remote and Northern communities.
– Michael Shapcott