By Canadian Press

Spending plans may limit impact of Liberals’ housing strategy, PBO says

Jun 20, 2019 | 8:39 AM

OTTAWA — The federal government’s 10-year housing strategy may not be as effective as promised when it comes to easing Canada’s housing crunch, the parliamentary budget officer warned Tuesday in a new report that suggests the Liberals have oversold the program’s impacts and finances.

Parliament’s spending watchdog is questioning whether the decade-long strategy can, “without major changes in funding levels or program design,” live up to its promise to trim by half a million the number of families who live in substandard housing or are struggling to afford the homes they do have.

The plan doesn’t boost funding all that much from current levels, relies on billions from provinces and territories as well as spending from before the Liberals took office in late 2015, and slightly reduces funding targeting households whose costs stretch them too thin, says the report by budget officer Yves Giroux.

The idea was to lift 530,000 families out of “core housing need,” meaning they spend more than one-third of their before-tax income on housing that may be substandard or does not meet their needs.

The strategy is also intended to lift 50,000 people out of homelessness, but the report struggles to reach “any conclusion regarding whether it is achievable and what achieving it might cost,” based on the plan the Liberals put forward.

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The government argued that the PBO report shows that absent the Liberal actions, federal housing spending would have dropped by 75 per cent over the next 10 years.

“Thanks to our unprecedented investments in housing since taking office in 2015, we’ve helped more than one million Canadians have a place to call home, and the National Housing Strategy ensures we’ll continue to be a full and active partner in Canada’s housing sector for the decade to come,” said a statement from the office of Social Development Minister Jean-Yves Duclos.

The Liberals unveiled the 10-year, $40-billion national housing strategy in late 2017 in partnership with provinces and territories, and have since boasted the total cost to be over $55 billion when including new spending measures in this year’s budget.

But a review of the details showed the Liberals committed to just $16.1 billion in new federal spending and $11.7 billion in cost-matching from provinces and territories — a number that may represent not new spending, but lower levels of government shifting existing funds to meet federal demands.

Funding ramps up over time as money budgeted pre-2016 peters out. The report noted that 92 per cent of strategy funding happens after 2021, meaning “funding could be rolled back by the government.”

“This report clearly shows that the Liberals are inflating their own figures to mislead Canadians about their own commitment to ending homelessness, making housing more affordable and investments in housing,” NDP housing critic Sheri Benson said in a statement.

“Liberals are great with symbolic gestures, but cannot be trusted to do what they say.”

The report also questioned a soon-to-launch housing subsidy that would attach to a household, rather than a social housing unit, so a family could take the benefit with them into the private housing market.

Federal spending plans peg the average subsidy at $3,000 a year, which the PBO said falls short of helping the most financially stretched of households and may create pressure to increase rents in subsidized housing as federal spending on community housing declines.

Jordan Press, The Canadian Press