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Latest CMHC numbers confirm federal housing cuts will grow deeper as housing needs grow

Jun 05, 2012
News source: The Wellesley Institute

The latest corporate report from Canada Mortgage and Housing Corporation, the federal government's housing agency, confirms that the two-decade erosion of federal affordable housing investments is continuing to grow worse. The corporate report from CMHC includes actual results from 2008 to 20010, and plans or estimates for 2011 to 2016. The latest numbers show that federal housing program expenses, including the affordable housing initiative, were $3.6 billion in 2010 as the short-term affordable housing investments from the 2009 stimulus budget reached their peak. However, funding was cut by more than one-third in 2011, and those cuts will continue to get worse through 2016.

The CMHC corporate plan also confirms that the number of households assisted under federal housing programs will be cut by almost 100,000 to fall from 623,700 households in 2008 to 525,000 households in 2016. That cut of 16 percent in the federal of federally-subsidized households comes at a time when most communities across Canada report that the after-shocks from the 2008 recession are continuing to cause deep housing and homelessness distress. For instance, the central affordable housing wait list for the City of Toronto hit an all-time record of 83,681 households in March of 2012. Toronto's affordable housing wait list has set a new record every month, year after year, since the fall of 2008.

By 2016, the federal affordable housing initiative will be cut to zero and combined federal housing investments will have been cut to $1.8 billion  a cut of 52 percent in just six years. The planned housing cuts come at the same time that CMHC is reporting that its net income will rise to $1.6 billion annually by 2016. CMHC generates revenues from commercial activities, including premiums from the sale of mortgage insurance. The net income is the surplus generated after expenses are deducted from revenues.

The financial impact of the federal housing cuts is large. Many of the federal dollars leverage a dollar or more from provincial and municipal governments, and a dollar or more from affordable housing providers  which adds up to an annual loss of $5.6 billion in affordable housing investments in 2016 and every year after. That cumulative total in lost funding could fully finance the entire development of more than 22,000 affordable homes annually across Canada.

Federal housing cuts starting in the late 1980s helped trigger a nation-wide rise in homelessness and a deep and persistent affordable housing crisis. The majority of precariously-housed Canadian households are invisible, as set out in the Wellesley Institute's Precarious Housing in Canada flipsheet, which includes recent numbers on the 1.5 million households in core housing need (the federal government's own definition of the most poorly housed Canadians) and 3.1 million households paying 30 percent or more of their income on housing (roughly one-in-four Canadian households).

Housing is one of the most important requirements for a healthy life. Part one of the Wellesley Institute's Precarious Housing in Canada sets out the research evidence that links poor housing and poor health. Other research, including the Street Health report, document the devastating health impact of homelessness. The health impact of precarious housing is called "Canada's hidden emergency" by a powerful research initiative from the Centre for Research in Inner City Health at Toronto's St Michael's Hospital, which sets out the data and analysis from Vancouver, Ottawa and Toronto.

The Wellesley Institute's Precarious Housing in Canada charts the steady erosion of federal housing investments since the late 1980s. There have been a few upward blips as short-term housing investments were announced in 2001, 2006 and 2009. However, each of these temporary infusions of funding were cut by what the federal government calls the "scheduled termination" of the investments  continuing the downward trend.

In 1993, the federal government stopped permanent funding for new affordable housing. In 1996, the federal government announced plans to transfer the administration of most national housing programs to provincial or territorial jurisdiction. Two years later, the Ontario government announced a further download of housing to municipalities. By the mid-1990s, Canada's national housing program launched in 1973  which generated more than half a more affordable homes across the country  had been completely dismantled. That left Canada virtually alone among the nations of the world without a national housing plan.

Read the full article at the Wellesley Institute's website.

Associated Website: Click here to go to source