By Nick Falvo, PhD
Nick Falvo is Director of Research and Data at the Calgary Homeless Foundation.
On March 22, the Trudeau government tabled its 2017 budget. Titled “Building a Strong Middle Class,” it proposes $305 billion in federal program spending for the 2017-18 fiscal year. I consider this the most important federal budget for housing since 1993.
Here are 10 things to know:
- Compared to the previous year’s budget, this year’s federal budget is very status quo. Last year’s budget contained major spending initiatives (including the introduction of the Canada Child Benefit and the announcement of a $15B infrastructure bank). By contrast, some are calling this year’s budget an ‘implementation budget.’
- No major changes to tax expenditures were announced. A December 2016 report by David Macdonald argues that Canada’s tax expenditure system disproportionately benefits higher-income earners. What’s more, in its 2015 federal election platform, the Trudeau Liberals note that reforms to Canada’s tax expenditure system could generate up to $3 billion in annual revenue, and that they’ll undertake such reforms once elected. Yet, this year’s federal budget makes no effort to change this (the Toronto Star’s Tom Walkom suggests the government fears a strong political backlash to such measures).
- The Trudeau government projects federal deficits in the range of $20-$30 billion for roughly the next five years. If the government didn’t run these deficits (and assuming current tax rates) the government would have no choice but to spend substantially less. Readers should keep in mind that public social spending accounts for just 17% of Canada’s Gross Domestic Product, well below the 22% average for member countries of the Organization for Economic Cooperation and Development (OECD). You can see these figures yourself here.
- The Trudeau government has framed this as an ‘innovation budget.’ By ‘innovation,’ the government means long-term economic growth strategies, the incubation of new types of business (e.g. ‘clean technology,’ digital industries, agri-food), finding new export markets for Canadian goods, developing new technology and encouraging higher post-secondary participation rates and new training opportunities. As Andrew Jackson notes here, the federal government has announced: $950 million over five years for sectoral development strategies; $1.3 billion over five years for private investments; and $400 million over five years for the ‘clean technology’ sector. Most of this is previously-announced funding.
- This was probably the most important federal budget for housing since 1993. This budget proposes $11.2 billion over 11 years for housing (keeping in mind that last year’s federal budget announced details on two years of housing funding, for 2016-17 and 2017-18). It also announces that the Investment in Affordable Housing (IAH) initiative, which is set to expire at end of 2018-19, will be replaced by a new framework. Steve Pomeroy has recently written a nuanced overview of what this budget means for affordable housing; it’s available at this link. After the budget was released, federal officials released the bar graph below.
Graph was built by staff at Canada Mortgage and Housing Corporation and Employment and Social Development Canada. Note: it includes loans, but omits pre-2016 IAH and trust funds.
- The budget contains ‘good news’ for the homeless-serving sector specifically. This budget commits $2.1 billion over the next 11 years “to expand and extend funding for the Homelessness Partnering Strategy (HPS) beyond 2018-19, when current funding is scheduled to end ( 136).” It commits no new homelessness money for 2017-18 (keeping in mind that last year’s budget already did), a modest $54 million in new homelessness funding for 2018-19 (to ‘top up’ HPS) funding by roughly the same amounts it was topped up for 2016-17 and 2017-18 (thanks to the 2016 federal budget), $203 million annually in new homelessness money beginning in 2019-20, $213 million annually the following year, and then $237 million annually up to and including 2027-28. For an illustration of this funding, see the visual below. An advisory committee of homelessness experts will help guide how the Homelessness Partnering Strategy (HPS) should be redesigned. (See pp. 266-267 of the budget for the timeline).
- Virtually none of the newly-announced money for housing and homelessness starts to flow until 2018-19. Almost none of the new housing money will start to flow until 2018-19, which is one year from now (keeping in mind that last year’s budget announced two years of housing funding that extends into the upcoming fiscal year). And total HPS funding for 2018-19 will be roughly the same as it was in 2016-17 and 2017-18.
- This budget discusses $8.4 billion over five years for Indigenous communities—not all of this is new money. The $8.4 billion discussed in the 2017 budget includes funding for education, infrastructure and training. In addition, starting in 2018-19, there is $4 billion over 10 years for “housing, water treatment systems, health facilities and other community infrastructure” for Indigenous communities ( 146). This CBC News article and this APTN News article further discuss this funding.
- The budget contains important new funding for child care, home care and mental health. The budget proposed $7 billion over 10 years for child care (this wasn’t new money per se); that funding won’t start to flow until 2018-19 (see 132). The budget proposed $6 billion over 10 years for home care, starting in 2018-19. Finally, the budget proposes $5 billion over 10 years for “mental health initiatives” (p. 156).
- This is the first time a Canadian federal budget has ever included a “gender-based analysis.” Indeed, Chapter 5 of the budget discusses the relevance of each section of the budget to gender. In the words of Kate McInturff: “It gives concrete breakdowns of how income transfers like the Child Benefit affect women and men differently.” It also notes that, though Canadian women are among the most educated in the world, Canada has the fourth-largest gender pay gap among member countries of the OECD. The budget also promises approximately $100 million over five years, and then $20.7 million annually thereafter, for a National Strategy to Address Gender-Based Violence. And as noted by Angella MacEwen, the budget mentions women 274 times. She further notes: “It even acknowledged that there were different kinds of women, mentioning Indigenous women 34 times, and women entrepreneurs 14 times.”
In Sum. It appears that Canada’s annual federal spending on housing and homelessness in the post-2015 era will be considerably higher (nearly double) what it was in the decade prior. What’s more, the National Housing Strategy will likely bring increased coherence to this spending.
The author wishes to thank Louise Gallagher, Rob Gillezeau, Andrew Jackson, Kara Layher, David Macdonald, Angella MacEwen, Kevin Milligan, Steve Pomeroy, Greg Suttor, and one anonymous reviewer for invaluable assistance with this blog post. All errors lie with the author.
Photo Source: Chan, J. (2017, March 30). Federal Budget 2017: Homelessness Partnering Strategy Funding [Blog Post]. Retrieved from Calgary Homeless Foundation website: http://calgaryhomeless.com/blog/federal-budget-2017-homeless-partnering-strategy-funding/
Download a PDF version on this blog post here: Ten Things To Know About The 2017 Federal Budget