Province must ease burden on low-income seniors

Hey there, time traveller!
This article was published 15/01/2020 (2427 days ago), so information in it may no longer be current.

MY mother turned 90 this past year, and we had a great family gathering to celebrate her birthday at Lions Place Housing on Portage Avenue, where she has lived for the past 20 years. A major reason she enjoys living at Lions Place is that it is affordable. The rent for her apartment was based on her income and provided through a federal-provincial rent subsidy program that had been in place for the past 35 years for people on low or fixed incomes.

However, on July 31, 2018, this social housing operating agreement expired at her apartment building, which meant her basic rent went up from $628 per month to $848 per month, an increase of $220 per month, or 35 per cent.

The end of these operating agreements, and collateral impacts that have followed, is a challenge facing non-profit housing providers throughout Canada. In the Manitoba legislature on May 23, 2018, then-minister of families Scott Fielding, now the minister of finance, stated that he wanted to find a solution regarding the changes to the rent subsidy program involving the residents at Lions Place “where, in fact, all residents would be made whole.”

The provincial government replaced the former rent subsidy with a program called Rent Assist for 66 of the 287 residents at Lions Place who were eligible for the subsidy. The Rent Assist program covered $152 of the $220 monthly rent increase; Lions Place Housing agreed to cover the remaining $68 of the monthly rent increase on a two-year interim basis until July 31, 2020.

One of the overlooked consequences of the changes to the rent subsidy program at Lions Place is the tax-related impact of the provincial Rent Assist program that claws back $900 of the seniors’ rent tax credit. This is a significant annual loss of income for these seniors, who rely on this income tax refund to pay for basic needs, including medical services and drug prescriptions.

One of my mother’s neighbours at Lions Place was counting on the $900 seniors’ tax credit refund to pay for the two ambulance bills she had this past year because of emergency visits to the hospital.

The Rent Assist clawback, on line 6126 of my mom’s provincial income tax return, means she is in essence self-financing 50 per cent of her new rent subsidy benefit. Rent Assist provides an annual $1,800 rent subsidy, which is now offset by the $900 she loses each year on her seniors’ rent tax credit refund.

On Dec. 19, 2019, the government of Ontario and the federal government signed a $1.46-billion funding deal, split 50-50 by the federal and provincial treasuries, to deliver the Canada Housing Benefit that is providing a $3,000 annual or $250/month rent subsidy for low-income households. This rent subsidy agreement is aimed at survivors of domestic violence, people who are at risk of being homeless, Indigenous peoples, seniors and people with disabilities.

A key provision of this agreement is that the federal money cannot reduce the provincial value of other benefits, in order to avoid the ripple effects that would leave individuals and families with less. In terms of the Manitoba context, a good example of this negative ripple effect involves the $900 clawback of the seniors’ rent tax credit that is faced by many seniors at Lions Place, which reduces a housing-related benefit they previously received.

This unique feature of the Canada Housing Benefit program to prevent negative ripple effects into other benefits has been among the reasons why negotiations with other provinces regarding this agreement have taken as long as they have. Federal officials are aiming to close the deals with the other provinces by April 2020 for this 10-year, $4-billion program.

The Manitoba provincial government could alleviate the stress and hardship faced by the affected seniors at Lions Place and make them “whole” again by restoring the annual loss of $900 from the seniors’ rent tax credit clawback. In following the leadership of the Ford government in Ontario, the Pallister government should sign the cost-shared Canada Housing Benefit agreement with the federal government to help address the collateral impacts of the end of social housing operating agreements.

These additional resources are urgently required in order to better meet the housing challenges of low-income seniors and families in our community.

Tom Simms is a longtime social-housing advocate in Winnipeg.