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Reality check: The truth about rental housing in Ontario!
On May 14, 2002,
the National Housing and Homelessness Network released a
report card showing that,
six months after the Ontario government signed the Affordable Housing
Framework Agreement in Quebec City, Ontario had failed to honour
the commitments it made in November of 2001.
That same day,
in the Ontario Legislature, former Ontario housing minister Steve
Gilchrist (who resigned from Cabinet several years ago amidst allegations
of impropriety) lobbed a couple of easy questions to the current
Ontario housing minister Chris Hodgson about housing in Ontario.
In two short
questions and answers, Minister Hodgson and Gilchrist managed to
dance around the truth six times.
Gilchrist’s
questions, and Minister Hodgson’s reply, are listed below – followed
by six reality checks that correct the
record.
- Michael
Shapcott
* * *
Hansard -
Ontario Legislature
May 14, 2002
AFFORDABLE HOUSING
Mr Steve
Gilchrist (Scarborough East): My question is to the Minister
of Municipal Affairs and Housing. There appears to be a great deal
of confusion, certainly in the minds of some of the media and our
opposition critics, about the relative contribution by the three
levels of government toward providing housing supports here in Ontario.
I certainly recall from my days in the ministry that notwithstanding
the half-truths and mis-truths that are the hallmark of the bulk
of the criticisms we face on this issue, the province of Ontario
was by far the greatest contributor to housing programs.
Minister, I
know you've been working very hard to improve the business and tax
climate for the construction of affordable housing in Ontario. I
was wondering if you could provide an update on the status of the
federal, provincial and territorial agreement on housing that was
reached last year.
Hon Chris
Hodgson (Minister of Municipal Affairs and Housing): I thank
the member from Scarborough East for asking the question. There
has been a lot of confusion. I've read stories that Ontario is somehow
holding up an agreement with the federal government -- absolutely
not true. We are ready to sign an agreement with the federal government.
We have been since last August, when I was the chair of the federal,
provincial and territorial meetings in London, Ontario. Again in
Quebec City, we were ready to sign with Minister Gagliano. They've
had a cabinet shuffle in Ottawa. We're ready to sign today. Quite
frankly, we're getting a little frustrated with the foot-dragging
by the federal Liberals on this issue.
Mr Gilchrist:
Thank you, Minister, for that information. There appears to be real
evidence for the first time in 25 years that there is an equilibrium
developing between rental housing demand and the housing supply
being provided by the private sector all across Ontario and even
here in Toronto. I'm concerned, though, that there appear to be
significant barriers for the private sector in the construction
of affordable rental housing, notwithstanding opposition suggestions
that the supply has been constrained exclusively by the Tenant Protection
Act. So I'm glad to see we're making progress with the federal government
on this agreement.
I was wondering
what other steps you've taken to remedy the damage done by the previous
government and to get the rental industry building again in Ontario.
Hon Mr Hodgson:
We have taken a lot of steps to remove a lot of the barriers and
the damage created by the Liberals and the NDP in their reign in
office and we're seeing results. Housing is working. The numbers
work at the top end. We have a problem at the affordable end.
But the answer
to the provincial Liberals' concern about how much money we're spending
is that the Ontario government is spending $879 million a year.
That's twice as much per capita as any other province. The federal
government -- CMHC -- makes a profit of $400 million a year. They
are talking about putting back $170 million a year. They are still
ripping off poor people in this country by $230 million a year.
If we were to match that the way the Liberals want it done, we would
have to cancel our $879 million on an annual basis and think up
a tax on poor people that the Liberals support in Ottawa through
higher premiums.
There are only
two places that CMHC gets its money: from insurance premiums on
rental accommodation, for which the rates are too high, and from
poor people who can't afford the down payment and need to insure
their premium. They made $400 million last year; they are returning
$170 million. And it gets worse: most of the money comes from Ontario,
and we only get $61 million of that on their four-year, time-limited
program.
If they really
wanted to fix the housing --
The Speaker
(Hon Gary Carr): The minister's time is up.
* * *
Reality check #1 - who's the biggest contributor?
Gilchrist
- Regarding "the relative contribution by the three
levels of government toward providing housing supports here in Ontario.
. . the province of Ontario was by far the greatest contributor
to housing programs."
Reality
- The Government of Ontario downloaded the entire cost of
provincial social housing programs to municipalities in 1998. In
1999, the province signed a social housing transfer agreement with
the federal government. Under the terms of this agreement, federal
social housing programs in Ontario (except for federal-program co-ops)
were transferred to the province. Under the terms of this agreement,
the federal government will continue to pay the costs of this housing
for more than two decades. Page 4-250 of the Public Accounts of
Ontario, Ministry of Municipal Affairs and Housing Statement of
Revenue, tells the real story. Municipalities paid to the province
$741,089,341 for the cost of provincial social housing programs
in 2001. The federal government (Canada Mortgage and Housing Corporation)
paid to the province $589,597,806 for the cost of federal social
housing programs in Ontario in 2001.
The truth
- Municipalities are the biggest contributors to affordable
housing in Ontario, followed by the federal government. The province
paid practically nothing.
* * *
Reality check
#2 - who's holding up the federal-provincial deal?
Minister
Hodgson - "We are ready to sign an agreement with the
federal government. . . We're ready to sign today. Quite frankly,
we're getting a little frustrated with the foot-dragging by the
federal Liberals on this issue."
Reality
- the Affordable Housing Framework Agreement, which Minister
Hodgson signed in Quebec City in November (along with all the other
provinces, the territories and the federal government) states "Provinces
and Territories will be required to match Federal contributions
overall". The federal government is prepared to spend $245
million over five years in Ontario. Minister Hodgson has only announced
$20 million in matching funds. While the Quebec City agreement does
allow the province to get credit for spending by municipalities
and third parties, the tiny amount of new money that Ontario has
put on the table is clearly a betrayal of both the letter and the
spirit of the agreement that it signed last November. In addition,
the framework agreement states "this initiative needs to create
affordable housing for low to moderate income households",
yet the definition of affordability being considered for Ontario
would create housing with average rents of $863 per month, which
is 50% higher than the $580 per month that half of all renter households
in the province (low, moderate and middle-income renter households)
can afford. The province is also considering barriers that would
prevent non-profit and co-op housing providers from accessing the
new funding, in order to steer money to private developers.
The truth
- Ontario is dragging its feet by failing to honour the
commitment that it made in Quebec City to match federal funds with
real money.
* * *
Reality check
#3 - is the private sector meeting the need?
Gilchrist
- "There appears to be real evidence for the first time
in 25 years that there is an equilibrium developing between rental
housing demand and the housing supply being provided by the private
sector all across Ontario and even here in Toronto."
Reality
- the official rental vacancy rate for Ontario is a dangerously
low 1.7%. Fifteen of the 21 urban areas in the Where's Home? study
have rental vacancy rates in the danger zone below 3%. Last year,
rents in Ontario increased at more than double the rate of inflation.
Figures from the Ontario Ministry of Municipal Affairs and Housing
show that the private sector has built less than 2,000 units annually
since 1995. In several parts of the province, private landlords
have demolished or converted more rental units than they have built,
leading to a net loss of private supply. In 1995, the province killed
17,000 units of co-op and non-profit housing that had been approved
for development in order to allow the private sector to build affordable
rental housing. The private sector has built less housing over the
past seven years than the Ontario government cancelled in its early
days in office. According to the mid-range scenario published by
the Ontario Ministry of Finance, the province needs 18,400 new rental
units annually to meet the demand - that's nine times what the private
sector is able to deliver.
The truth
- the need for affordable housing continues to dramatically
outpace the supply provided by the private sector.
* * *
Reality check
#4 - is housing working?
Minister
Hodgson - "Housing is working. The numbers work at
the top end. We have a problem at the affordable end."
Reality
- See reality check #3 (the need for new housing is nine
times what the private sector is able to deliver). As for the "top
end", the numbers are not working. The most expensive rental
units are units with three or more bedrooms. Province-wide, the
rental vacancy rate for 3+ units is lower than the overall rental
vacancy numbers - which demonstrates a clear problem.
The truth
- housing is NOT working in Ontario.
* * *
Reality check
#5 - is Ontario the best in the country?
Minister
Hodgson - "the Ontario government is spending $879
million a year. That's twice as much per capita as any other province."
Reality
- see reality check #1. Ontario's spending on affordable
housing is offset by revenues from municipalities and the federal
government. The province shouldn't get political credit for spending
money from other levels of government. Deduct the federal and municipal
payments and Ontario spends practically nothing on housing - far
worse than any other province in the country.
The truth
- Ontario, the richest province in the country, has the
worst record on housing spending since the province downloaded the
entire cost of the provincial programs to municipalities.
* * *
Reality check
#6 - who's overtaxing the poor?
Minister
Hodgson - "The federal government -- CMHC -- makes
a profit of $400 million a year. They are talking about putting
back $170 million a year. They are still ripping off poor people
in this country by $230 million a year. If we were to match that
the way the Liberals want it done, we would have to cancel our $879
million on an annual basis and think up a tax on poor people that
the Liberals support in Ottawa through higher premiums.
Reality
- Minister Hodgson is on to something here. Canada Mortgage
and Housing Corporation returns hundreds of millions of dollars
annually to federal coffers as a surplus from its insurance business.
For years, housing advocates have said that CMHC should reinvest
this money in new housing programs, rather than sending it into
general revenues. It's nice to see that Minister Hodgson agrees.
But his math is a bit off. The federal contribution is $136 million
annually ($680 million over five years), so the "rip-off"
is even worse than Minister Hodgson believes. As for his concern
about "a tax on poor people", Minister Hodgson should
look at his own government. It downloaded about $750 million in
social housing costs to municipalities. Municipalities pay for this
through local property taxes, which are among the most regressive
form of taxation (property taxes are not based on ability to pay).
In fact, renter households (which are the poorest households in
the province) pay higher property taxes in many municipalities,
including Toronto, than owner households.
The truth
- The feds should be reinvesting the entire CMHC surplus
into new affordable housing, but Minister Hodgson is hardly in a
position to complain about overtaxing the poor since his government
dumped social housing costs onto the municipal property tax base.
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This
page was updated on May 16, 2002
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