Ontario’s 2008 Budget is long on language, but short where it counts the most: The dollars fall short of the words.
Budgets are about choices and, fundamentally, budgets are about dollars. The real choices are revealed in the spending and revenue columns.
When it comes to housing, Finance Minister Dwight Duncan has offered the millions of Ontarians who are suffering housing insecurity and homelessness $100 million for a social housing repair program (this money was first announced by Premier Dalton McGuinty last week). Some experts put the repair bill for social housing at $1.3 billion, so the $100 million is at best a modest down-payment.
There’s no additional money for new affordable homes and, overall, funding at the Ministry of Municipal Affairs and Housing is shrinking as federal housing dollars (which flowed through the province to municipalities) decline.
Compare that to the $1.5 billion the government has allocated to highway repairs and construction. That’s 15 times more money for roads than for homes.
Roads are, of course, very important and physical infrastructure investments are important for our communities and our economy. But so, too, are social investments in critical needs like new affordable homes.
The 2008 Budget sets out planned spending of $796 million for the Ministry of Municipal Affairs and Housing – down almost six per cent from the actual spending in 2006. One reason for the cut in planned spending is the drop of $18 million in federal social housing transfer funds. On top of that, the province is making a further $29 million in MMAH spending cuts. Health spending is the single biggest item in the provincial Budget – about 46 cents out of every provincial dollar in 2008.
The Budget proclaims: “The government’s plan for achieving better health is about keeping Ontarians healthy, providing high quality care if they become sick, and sustaining the public health care system for generations to come”.
But when the dollars are added up, the biggest share of health investment from 2003 to 2008 has been to hospitals, doctors and drugs. This spending is vital to achieve the government’s second and third goals (high quality sickness care and a sustainable public health care system). Just a tiny fraction of health spending goes to public health and health promotion – critical components of a health equity agenda.
The government says that “keeping Ontarians healthy” is a key health priority, but the budgetary dollars to support that commitment are missing.
On its plans for a Poverty Reduction Strategy to address deep and persistent poverty across the province, the Budget proclaims: “The government is committed to improving the quality of life for all Ontarians, particularly the most vulnerable”.
The poverty reduction dollars set out in the Budget add up to almost $270 million (not counting the $100 million in social housing repair funding).
On the revenue side, the 2008 Ontario Budget offers more than $1.25 billion in tax cuts – with about half going directly to tax cuts for businesses. Corporate tax cuts are double the amount slated for poverty reduction.
Tax cuts are being sold as vital to the economic prosperity of the province, especially as Ontario faces a downturn and possible recession triggered by the U.S. subprime mortgage crisis.
But tax cuts don’t create the smart and necessary social investments that will make a tangible difference to Ontarians bracing for even worse economic bad times.
In our pre-budget backgrounder, the Wellesley Institute set out five key questions for Finance Minister Dwight Duncan as he delivers Budget 2008. Here are the questions, and the answers as revealed in the budget documents:
ONE: Will Minister Duncan commit the funds to close Ontario’s billion-dollar housing deficit?
ANSWER: No. Ontario’s billion-dollar housing deficit remains devastatingly wide.
TWO: Will Minister Duncan ensure that the $150 million or more in unspent federal housing funds are allocated before the funding expires this fiscal year?
ANSWER: There’s nothing in the Budget to acknowledge the critical delays in committing the federal housing dollars from last year’s budget which remain unspent, and which are due to expire at the end of fiscal 2008. A senior Ministry of Municipal Affairs and Housing official assured the Wellesley Institute that the Ontario government remains committed to spending the federal trust fund dollars and added that the $80.2 million in unspent federal off-reserve Aboriginal housing trust fund dollars have been “re-profiled” so that they won’t expire at the end of fiscal 2008, even if they are not committed by then.
THREE: Will Minister Duncan complete the uploading of the cost of social housing programs back to the provincial level?
ANSWER: No, the partial uploading remains just that – partial. The 905 municipalities had the cost of social housing uploaded in last year’s Budget. Toronto and the rest of the province must wait at least until a long-awaited provincial-municipal social services review is completed. It is now promised for the spring of 2008.
FOUR: Will Minister Duncan ensure that the Ministry of Municipal Affairs and Housing, and other provincial ministries, have the capacity to fund and deliver critical housing and homelessness programs?
ANSWER: No. Ministry of Municipal Affairs and Housing funding is down.
FIVE: Will Minister Duncan use the 2008 Ontario Budget to make a major down-payment on a comprehensive Poverty Reduction Strategy, as promised in the government’s last Speech from the Throne?
ANSWER: As noted above, the poverty reduction investment is modest.
Finally, some general notes about housing and urban health:
The Wellesley Institute’s National Housing Report Card from February of 2008 shows that Ontario has the worst record among Canada’s provincial / territorial governments in meeting the housing commitments it made under the Affordable Housing Framework Agreement of 2001. Under that deal, Ontario promised to increase provincial housing spending by $358 million but the province has actually cut provincial housing spending by $732 million since 2001 – creating a massive housing deficit of more than $1 billion.
Average market rents have increased in recent years, while median renter household incomes have been falling, creating a housing affordability gap that measured $1,776 annually in 2005. That’s the difference between what a typical landlord charged and the amount that a typical household could afford to pay.
Lack of new supply as Ontario’s population increases (and growing income inequality in many parts of the province creates a growing need for truly affordable homes); the increased need for new supportive housing for those with special needs; the urgent requirement for repairs as the province’s housing stock ages; and the critical need for affordability measures (such as rent supplements) to ensure existing housing is affordable to low and moderate-income households – all these add up to an urgent and unmet housing need.
Growing housing insecurity and homelessness are a critical factor in increased illness and premature death among those directly affected, and they also disrupt communities as well as putting a brake on economic competitiveness.