Erosion of housing, homelessness spending continues, as latest federal spending estimates are released

by NationTalk on March 14, 2012256 Views

March 13, 2012

The erosion of federal housing and homelessness investments is continuing, according to the 2012/13 Estimates, the official inventory from the Government of Canada of detailed spending by every federal department and agency. With inflation running at 4.87 percent over the past two years, the federal government would need to spend about $3.3 billion in the coming year just to stay even with the $3.1 billion in housing and homelessness investments in fiscal 2010/11. The latest estimates put federal housing and homelessness spending for the coming year at $2.3 billion, down 30 percent from the inflation-adjusted level of two years ago. And, of course, over the past two years, in addition to inflation, there has been growing housing need in most parts of the country, and a growing population.Affordable housing is one of the most fundamental determinants of personal and population health. Canada’s ownership and private rental housing markets are increasingly out of reach to low, moderate and many middle-income households – underlining the ongoing need for federal investments in new homes, and in the repair of existing rundown housing.

Over the past two years, the biggest cuts in federal housing and homelessness investments came last year – fiscal 2011/12. Overall, the federal government made a 39 percent cut in affordable housing spending – down from $3.1 billion to $1.9 billion. The federal affordable housing initiative (which funds new homes) was cut by 97percent from $452 million to $16 million. The federal housing repair and renovation programs were cut by 94 percent from $674 million to $37 million. The federal on-reserve housing program was cut by 27 percent from $215 million to $156 million. The federal homelessness initiative was cut by 11 percent from $124 million to $110 million.

In the coming fiscal year (which runs from April 1, 2012, to March 31, 2013), the national housing repair and renovation programs will take another 22 percent cut from $37 million to $29 million. The federal on-reserve housing programs will also take another 2percent cut from $156 million to $153 million. The ongoing cuts to on-reserve Aboriginal housing are especially jarring considering the headlines that the housing crisis at Attawapiskat and other reserves have generated in recent months. Federal homelessness funding has been restored to the fiscal 2010 level after last year’s cut.

The main bright spot is a $235 million increase in federal funding for the affordable housing initiative. The new funding is short-term, and will be terminated by 2014, and it is only a fraction of the $436 million that was cut from this program last year. But that short-term infusion of cash has temporarily boosted the bottom line at Canada Mortgage and Housing Corporation, which this year will receive a tiny 1 percent increase in funding – well below inflation, and well below the growth in housing need across the country.

Canada Mortgage and Housing Corporation, the federal government’s housing agency, publishes its own nine-year financial highlights report. CMHC projects that national affordable housing investments will fall to $1.7 billion by 2015 – down 43 percent from spending in the year 2010. The funding cuts mean fewer affordable homes for Canadians. The estimated number of households assisted under federal programs has dropped by 85,500 (or 14 percent) from 626,300 in 2007 to a projected 540,800 in 2015.

The Wellesley Institute’s Precarious Housing in Canada 2010 includes data and analysis on housing and homelessness across the country. The report notes that federal housing investments started the downward slide in the late 1980s and included a series of cuts at the federal level and in many provinces in the 1990s. Cuts in governmental housing investments over the past two decades have helped trigger a rise in mass homelessness and precarious housing throughout the country.

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