The program risks failing the people it claims to assist
The federal government has launched a one-time $500 housing benefit for low-income tenants. Though a good initiative in times of high inflation, the program is fraught with problems. Unless these problems are fixed – which is doable – the program will fail the people it aims to assist.
The first problem is communication.
The federal government is calling it a one-time top-up to the Canada Housing Benefit, although there is no program with this actual name. The name refers to a federal initiative administered by the provinces under different guises, like Canada-Ontario Housing Benefit and Saskatchewan Housing Benefit. This is already confusing, but it gets worse.
Each province has its own eligibility criteria, which are different from the criteria for the one-time top-up, which is being delivered through the Canada Revenue Agency (CRA).
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People who are not eligible for the provincially delivered benefit may qualify for this one-time installment. But why would anyone apply for a top-up of a benefit they don’t receive? Also, people already receiving the benefit will not automatically get a top-up. If they are eligible, they have to apply separately.
Communications matter because confusion leads to low take-up rates. That is what happened to the Canada Recovery Sickness Benefit.
The second problem is that the income eligibility thresholds – $35,000 for families and $20,000 for individuals – don’t capture all tenants living in poverty.
In 2020, the most recent year for which data is available, Canada’s official poverty line for a family of four varied between $38,600 and $50,600, depending on where the family lived. For single individuals, the poverty line was above $20,000 everywhere in the country except rural Quebec. In Toronto, it was $25,000.
By design, the program excludes thousands of tenants living in poverty and paying too much in rent.
Then there is the problem of trust. Can people be sure they won’t be penalized if they apply?
People who receive social assistance are wary of government initiatives that give with one hand and take away with the other. It happens all the time.
Provincial social assistance programs have yet to clarify how they will treat this additional $500 in income. Will recipients just lose other benefits? Will recipients have to fill out yet more forms and provide yet more justifications, generating more anxiety than security?
Even people who have never received social assistance have reasons to be wary of benefits delivered by the CRA. Will it send letters to people two years from now asking them to pay back the $500 as it is doing with CERB?
The federal government has been touting the program all week, but it has to be more than a media sound bite. The program needs to actually work.
The fixes are simple.
Rename the program. Increase thresholds so all low-income tenants are eligible. Promote the program widely. If the CRA can track down people two years after a pandemic, it can surely identify people likely to be eligible and send them information. Through the Ontario Trillium Benefit, the CRA has the necessary information about low-income tenants in that province. Why not simply send them the top-up like it is done for the Canada Child Benefit?
The federal government should also require that provinces commit to not clawing back the money.
It could do more. In 1975, the federal government requested provinces to enact rent controls as part of its anti-inflation program. The policy goal was to control prices, not to make landlords whole — but that’s a story for another day.
Ricardo Tranjan is the political economist and senior researcher with the Canadian Centre for Policy Alternatives.
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