HomeBlogHousing Ontario budget 2007: Thanks for the thoughts, but where's the money?

Mar 22, 2007Michael Shapcott

Ontario budget 2007: Thanks for the thoughts, but where's the money?

Ontario’s 2007 provincial budget has plenty of strong language about poverty and affordable housing. But the dollars are missing. Not a single new penny has been devoted to affordable housing, and the dollars devoted to eradicating poverty are limited and stretch over a number of years.

At a time when 600,000 Ontario households are in core housing need’, the Ontario budget merely recycles federal housing dollars that were authorized in 2005. Two years later, the province has finally announced that it will allow the federal dollars to be spent, but there is no new provincial dollars, says Michael Shapcott, Senior Fellow at the Wellesley Institute.

Two days ago, Ontario Premier Dalton McGuinty complained that Monday’s federal budget fell short of the dollars that Ontario was seeking. Justice delayed is justice denied, said the Premier of the Harper budget. The same can be said of Premier McGuinty’s own budget, which falls far short of delivering the dollars that would lift Ontario children, and their families, out of poverty.

After years of Ontario governments that put a priority on tax cuts rather than an investment in people and programs, today’s budget signals a welcome change, says Shapcott. But kind words are not enough. Budgets are about choices, and they are about dollars and cents. Today’s budget doesn’t deliver the dollars that are needed.

For instance, today’s provincial budget announces that some of the recycled federal housing dollars will be devoted to a new housing allowance program for 27,000 low-income working families, even though more than 1.6 million Ontarians are living in poverty. Each household will receive a mere $100 per month, even though poor families face a housing poverty gap of hundreds of dollars.

Renter household incomes have been falling in recent years, even as average market rents have increased. The housing poverty gap ” the difference between what landlords are charging and what tenants can afford to pay ” is wide and growing. Tenant households caught in the financial squeeze are facing an all-time record number of evictions ” almost 67,000 households in 2006 (about 183 families facing eviction every day of the year).

Budget 2007 does provide some more details on the previous announcement by Premier Dalton McGuinty that the Ontario government will start to flow $392 million in federal housing dollars that were authorized by Parliament in 2005. However, there will be at least one more round of announcements on this funding before the money is finally allocated. Some details:

– $127 million will be divided among to municipalities to fund new housing or repair existing homes, with details to be announced later. The money will be allocated by the end of March and there will be few guidelines for municipalities. There is a danger that few of the dollars will actually go to desperately-needed new supply and will instead be diverted to fund much-needed repairs of existing rundown housing.

– $80 million will go to off-reserve Aboriginal housing, following a consultation with Aboriginal housing and service providers.

– the remainder will go to a five-year housing allowance program for working families that will provide a bare $100 per month to help narrow the gap between household income and rents.

Here are some specifics on income issues in the Ontario budget:

– a 2% increase in social assistance (welfare rates in all categories remain well below the poverty line).

– a new Ontario Child Benefit which, when it is fully phased in over five years, will amount to a maximum of $1,100 annually per child.

– an end to the provincial clawback of federal children’s benefits.

– an increase of 75 cents per year in the minimum wage until it reaches $10.25 in the year 2010.

One surprising development is the partial uploading of social services and social housing spending in the 905 municipalities. Social services costs were downloaded by the Harris government in the 1990s and the McGuinty government had promised to reverse this policy. But today’s budget only uploaded the costs for York, Peel and Durham Regions, without uploading the same set of costs borne by Toronto or municipalities in the rest of the province.

The people of Ontario have been demanding that the McGuinty government honour its promises, going back to the 2003 election campaign, to reinvest in the vital services that will help to rebuild the province, says Shapcott. Today’s budget echoes those concerns, but fails to provide the dollars.

The Wellesley Institute is completing a review of the growing housing poverty gap in communities across the province. Working families, along with low, moderate and even middle-income Ontarians are being caught in the squeeze between rising housing costs and stagnant incomes.

About Michael Shapcott

Michael Shapcott is Director, Affordable Housing and Social Innovation at Wellesley Institute. Michael has worked extensively in Toronto, in many parts of Canada, nationally and internationally on social innovation, the non-profit sector, civic engagement, housing and housing rights, poverty, social exclusion, urban health and health equity. He is recognized as one of Canada’s leading community-based housing and homelessness experts. He is currently on secondment to the Princes' Charities Canada.

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