This is the second feature in our current series discussing CPJ’s budget recommendations to the House of Commons Standing Committee on Finance on Building a Sustainable Recovery for all Canadians. Last week we considered the importance of a sustainable economic recovery in Canada. Stay tuned for upcoming reflections on ways the next federal budget can better support Aboriginal programs, children and the environment in Canada.
Canada has a housing problem. Actually, it’s more than a problem. According to an assessment made by the United Nations Special Rapporteur on Adequate Housing, Canada’s housing situation qualifies as a national emergency. That may sound theatrical until you consider the reality:
- Approximately 1.5 million Canadian households are in core housing need – that is, their housing fails to meet standards of adequacy, affordability and suitability.
- Nearly 25% of Canadians are required to pay more than they can afford for housing or to depend on subsidized housing. According to the Conference Board of Canada, housing is considered “unaffordable” when it consumes over 30 per cent of before-tax income.
- 1.3 million households in Canada report the need for major repairs (those that left unaddressed risk the health and safety of the people living in the housing).
What is dramatic is the decrease in federal spending on housing over the last two decades. In the 1980s, 20,000 units of social housing were constructed annually. In the past decade, only 42,344 units have been created. According to the Wellesley Institute, by 2013 overall federal spending on housing programs will have dropped 18% since 1989. The federal government’s Affordable Housing Initiative will plummet from $164 million in 2009 to $1 million.
Housing: A Human Right
Everyone needs a secure place to call home. Adequate housing is not a luxury, it is crucial to the social, economic, and emotional and physical well-being of individuals and families. It is foundational to living life in dignity. In short, housing is a human right.
A failure to safeguard this right is a failure to safeguard the value and dignity of every person. If a large group of people in society cannot put a solid roof over their heads, or if the cost of doing so requires sacrificing other essentials, then it is not only buildings that are structurally unsound, it is economic policy. The fact that a number of Canadians are struggling or unable to find affordable housing is more than a cause for chagrin – it is a call to action.
Bridging the Affordable Housing Gap
It is a responsibility of governments to protect the dignity and rights of all its citizens and to promote the well-being of communities. Addressing the need for affordable housing is part of this obligation. Canadians need the federal government, in cooperation with provincial and municipal governments, to acknowledge the ever-widening chasm between Canadians and affordable housing and respond with substantial, sustained support.
The next federal budget provides an opportunity to do just that. The corporate income tax rate will drop from 16.5% to 15% beginning January 1, 2012. This is estimated to cost $3 billion in lost revenues annually. The goal of this corporate tax cut is to stimulate new business investment. However, recent studies by The Globe and Mail and the Canadian Centre for Policy Alternatives suggest that over the past few decades, repeated corporate tax cuts have not led to increased business investment. The Department of Finance calculates that $1 billion in corporate income tax reductions will boost Canada’s GDP by only $300 million.
Meanwhile, poverty is costing Canada a lot. In Ontario alone, poverty in 2007 was estimated to cost the provincial and federal governments more than $32 billion annually. As the Wellesley Institute points out, the cost of “doing nothing” is much greater for Canada than the cost of implementing solutions. Addressing the affordable housing crisis would play a key role in these solutions.
So what if we were to invest $3 billion a year in affordable housing instead of in corporate profits? The Wellesley Institute estimates that Canada needs to create 600,000 new affordable housing units and repair 200,000 existing homes in order to overcome Canada’s significant affordable housing gap. A $200 million annual investment in the repair of existing homes and a $2.8 billion annual investment in the construction of new affordable homes would yield 155,550 new affordable housing units and 200,000 repaired existing homes at the end of 10 years. This would significantly narrow Canada’s housing affordability gap. Based on the Department of Finance’s calculations, it would also result in a $4.5 billion increase in GDP and more than 47,000 new jobs.
To ensure that all persons are able to participate with dignity in society, the federal government needs to address Canada’s housing crisis. Ensuring sustainable economic recovery for all Canadians means ensuring that all Canadians have a secure place to call home.
