Policy Brief: National Housing Strategy MARGOT YOUNG - SEPTEMBER 06, 2019 As the October federal election approaches, housing continues to be one of the critical issues Canadian face. After over 20 years of minimal attention on the issue, the federal government has finally re-engaged with housing policy and funding. While much jurisdictional authority for housing provision and regulation lies with provincial governments, the federal government, nonetheless, can leverage significant affordable housing infrastructure through its spending powers. Indeed, federal leadership in ensuring affordable housing has been key in the past. Yet, housing experts worry the current initiative promises too little, to be delivered tomorrow and not today. This comment sets out the general framework of legislation and policy for the federal governments current housing engagement and concludes with some of the ways in which the government falls short of its own declarations of commitment. The National Housing Strategy On November 2017, the Liberal government unveiled a large policy document, the National Housing Strategy: There is No Place Like Home, marking the federal governments re-engagement with housing provision and affordability. That this initiative is framed as a national strategy is welcome: it thus promises to encompass structural, systemic change, coordinated across federal, provincial, and territorial government actions and policies. Approaching housing from a systemic perspective is critical; the federal governments recognition of this is to be lauded. In 2018, the government followed up this strategic vision with the National Housing Strategy Act. The Act does not have any fiscal impact beyond administrative costs. It commits the government to a long-term policy vision for housing, to national goals and priorities, to a focus on those in greatest housing need, and to public participation in policy generation and implementation. Two sets of features in the National Housing Strategy (NHS) implement these statutory goals. First, the statute itself sets up a human rights based approach to housing. Housing experts, activists, and other levels of government have forcefully called for recognition in Canadian law of housing as a guarantee essential to human well-being. Section 4 of the NHS Act recognizes the right to adequate housing as a fundamental human right affirmed in international law, central to human dignity, well-being, and community. The government commits to prioritizing the most vulnerable in need of housing. The Act does not establish a legally enforceable individual right but it does stipulate what are known in human rights parlance as accountability mechanisms: institutions and requirements focused on reporting, oversight, and participation in decision-making. Thus, an advisory body, the National Housing Council, is established. A Federal Housing Advocate will monitor policy implementation and progress. The Advocate will consult with groups vulnerable to housing insecurity, receive public submissions on policy, and report annually on the Advocates actions and systemic housing issues. The Advocate may require the Council to establish a review hearing into any systemic housing issue within federal jurisdiction. The Minister must respond to the report from such a hearing, as well as to the more general annual reports submitted by the Advocate. Further, the Minister has a reporting requirement to Parliament every three years, beginning in 2021, on the effectiveness of the Strategy. A public engagement campaign is also part of this structure. The second aspect of the NHS lies in its funding and programme features, linked to concrete targets. The NHS, as of Budget 2019, is touted as a $55 billion, 10 year plan that will reduce chronic homelessness by 50%, remove 530,000 families from housing need, modernize 300,000 homes, and build 125,000 new homes. To meet these goals, federal budgets from 2017 onwards have contained a mix of provisions for funding, grants, and loans focused on housing. A number of key initiatives, each with its own price tag, stand out: the direct funding programmes of the National Housing Co-Investment Fund, the Rental Construction Financing Initiative, and the Federal Land Initiative; the Canada Community Housing Initiative; and the Canada Housing Benefit. Other measures, such as tax laws and mortgage loan insurance, make up the larger policy footprint of the Strategy. The Canadian Mortgage and Housing Corporation (CMHC) administers programme expenditures related to housing affordability while Employment and Social Development Canada (ESDC) handles transfers to communities and service providers targeting homelessness. Thus the NHS is complex - as strategies must be - stipulating a rights accountability framework, funding and loan arrangements, programme provision, and capital projects. So far, so good - perhaps. The success of any policy initiative, particularly one as important and complex as a national strategy, lies in the details of how promises and programmes are delivered. Here, the policy starts to look less like a return to active duty on the housing front by the federal government and more like an elaborate scaffolding of incomplete policy and recycled spending. Key Issues 1. Funding Two key issues define the funding promises of the Strategy. First, it appears the Strategy promises little new spending - at least relative to its claims. The June 2019 report, Federal Program Spending on Housing Affordability, from the Office of the Parliamentary Budget Officer (PBO) concluded that the Liberal government was not putting significant new money into housing; there is no marked increase in federal spending by the Liberal government on housing beyond the historic 10-year average. While the NHS has been promoted as a $40-billion federal investment, in reality, the Strategy commits to $16.1 billion in new federal planned spending ($14.0 billion for CMHC and $2.1 billion for ESDC). The bulk of the NHS total reflects such things as existing loans, new loans, existing planned spending, and provincial-territorial cost matching. Thus, actual money promised is similar to that of prior governments - around $2.6 billion per year on housing, based on real purchasing power calculations - and, indeed, amounts to a bit less for people who have the greatest housing needs. The Strategy largely maintains current funding levels, slightly decreasing targeted funding for households in clear need. Funding for Indigenous housing providers off reserve, for example, is expected to be significantly lower than the previous 10 years. Second, cost sharing with provinces and territories constitutes $11.7 billion of the total federal commitment, giving provinces and territories significant gatekeeping power. The PBO report found cost-sharing assumptions problematic: cost-matching requirements are mostly already met by current levels of provincial spending. It is unlikely that the NHS will leverage meaningful increases in provincial/territorial funding. Both of these sets of observations have led a leading housing researcher, David Hulchanski, to argue that: The housing strategy is a public relations gimmick, assisting fewer low income people than in the past and it is not actually federal spending of $40 billion or $55 billion over 10 years but about $16 billion. 2. Canada Housing Benefit This $4 billion programme, delivered by provinces/territories and to be launched in 2020, will provide financial support directly to families and individuals in housing need, The Government estimates that the Canada Housing Benefit will deliver an average of $2,500 per year to each recipient household, ultimately to at least 300,000 households. Funding is to be phased in, with provincial/territorial matching. But, the Benefit will reach a fraction of the millions of Canadians whose rent is currently unaffordable, by CMHCs own benchmark. Likewise, though funding for social housing has picked up, construction of such housing is unlikely under the NHS to grow back to peak, and necessary, levels. More cash and targeting of well-below-market housing construction is needed. 3. Homelessness The NHS includes the programme Reaching Home, a homelessness strategy that funds other levels of government. Under this programme, funding has been increased substantially. It will average $224.8 million per year: $85.6 million per year higher than the five-year historical average of $139.2 million per year. This is good. Yet, the PBO report says that the NHS is unclear as to whether it will meet its stated objectives of reducing chronic homelessness to 50% by 2030, imperilling the Strategys commitment to the most vulnerable. 4. Time Lag Funding under the NHS increases over time: 92% of the funding lands after 2020-2021. A small percentage only has been provided to date. Thus, funding depends both on the electoral fortunes and on the continuing commitment of the Liberal government. This is too much uncertainty and delay in a time of crisis. In sum, a strategy is necessarily a complex network of programmes and funding provisions. Analysis is therefore unavoidably detailed. But it is important to remember the conclusions of the PBO report. This study states that under the NHS in its current form, it is not clear housing needs will be decreased to below 2017 levels. Retention of current funding levels, paired with the slight reduction in funding for households in core housing need, as well as the design failure of specific programmes to adequately target low-income households, jeopardize reaching the numerical targets trumpeted by the Strategy. The upcoming October election is an opportunity to ask the federal Liberal government to provide more hard funding sooner, more programmes targeting those most in need, and effective incentives for new purpose-built, low income rental housing construction.