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Community Society to End Poverty (CSEP): Letter to Finance Minister Karen Casey

December 27, 2019

The Honorable Karen Casey, Chair, Treasury and Policy Board

Dear Minister Casey,

I am writing to you on behalf of the CSEP ESIA Transformation Working Group in response to your invitation to submit our recommendations for the 2019/20 provincial budget. The CSEP ESIA Transformation Working Group is comprised of members from eighteen organizations that serve low income people in different areas of Nova Scotia and/or advocate on issues that affect them.  Our Working Group focuses on those issues that affect people living on income assistance and in that capacity we have been engaged with the Department of Community Service ESIA Transformation team advising and advocating on issues related to the ESIA Transformation process since 2015.

An important change as a result of ESIA transformation was the introduction of new and more generous employment income disregards, ensuring that clients can retain more income from employment before deductions are made, with a fairer rate of deductions after the first $250. Advocated for by people living on income assistance and their advocates for many years, this change was welcomed by the CSEP ESIA Transformation Working Group.  We understand that it is now proposed to increase the income threshold for those eligible for the Poverty Reduction Credit (clients with no dependents) from $12,000 to $16,000. This should ensure that most clients able to supplement their welfare incomes through employment will not lose the Credit. 

We are, however, concerned that unless the basic amount for the employment income disregard and the deductions schedule is indexed to increases in the cost of living clients who are able to supplement their welfare incomes through employment will find making ends meet increasingly difficult.  

We are also pleased that under the new Standard Household Rate to be introduced at the end of this month, some income assistance recipients who have hitherto not been receiving the full amount of income assistance for which they are eligible will now receive the full amount.  We understand these changes will help some clients, especially those living in public housing and/or in rural areas. However, we are concerned that the 5% increase (for persons with disabilities) and the 2% increase (for others) proposed to take effect under the SHR at the end of December will not be sufficient to make up for the lack of, or the very low, welfare rate increases over the past few years in relation to the higher costs of the basic necessities of life—especially food and shelter. We fear that as a result, most clients will not be much further ahead and many will see their incomes fall further behind, serving to increase, rather than decrease, the large gap that continues to exist between welfare incomes and the Market Basket Measure of Poverty (now the official Canadian poverty measure)—a living standard below which we believe no-one should fall.

As noted in the 2019 Maytree Report on 2018 Welfare Incomes, there were no increases in provincial welfare rates in 2018 and any improvements in welfare incomes between 2017 and 2018 were as a result of increases in the GST Credit or the Canada Child Benefit.  Furthermore, welfare incomes in Nova Scotia are now amongst the lowest in Canada. In this regard, we note that there has been no increase in the Nova Scotia Child Benefit in several years or in the income eligibility threshold and it is of concern to us that despite the emergence and development of the Canada Child Benefit, the average welfare income of a single parent with two children is still 27% below the MBM and for a single parent with one child it is 33% below the MBM.  

As the Maytree Report also notes , while there were slight increases in welfare incomes for some household types between 2017 and 2018, they were all well below the Nova Scotia rate of inflation of 2.2% (CPI).  The rate of inflation year over year for 2018/19 (to November 2019) is reportedly 2.1%. According to research conducted for Canada’s Food Price Report by Dalhousie’s Sylvain Charlebois, food prices in Nova Scotia are expected to increase anywhere between 2% and 4% in 2020.  His research also shows that food prices tend to be higher in small towns and rural areas than in Halifax.  

Rents and shelter costs in Nova Scotia (especially in most small towns as well as in Halifax) have also increased in recent years and are not expected to abate.  This is causing great problems for renters, especially in Halifax. Driven by population growth and an increase in the short term rental market since 2016, higher rents in Halifax are maintained and exacerbated by the very low vacancy rates of 1.6% and a resulting shortage of affordable rental housing.  These changes have resulted in a growing ‘development frenzy’ with an increase in what has become known as “renovictions” whereby some unscrupulous landlords either buy up or renovate their own buildings, evicting existing tenants and raising rents, seemingly with impunity. As a 2018 CMHC Report noted, “…affordability challenges are more evident on the Halifax Peninsula, in the downtown core in particular. This is especially apparent for youth and senior renters as well as one-person and lone-parent households.”  Indeed, “one-person renter households are particularly vulnerable to affordability challenges across many Halifax CMA submarkets.” 

An informal survey of agencies assisting individuals and families to find low cost rental accommodation conducted by the writer demonstrates that there is now an emerging low rental housing crisis in Halifax.  The public housing waiting list is far too long and several agencies have waiting lists of people needing housing subsidies that they are unable to find for clients. Some agencies cannot cope with the influx of people seeking help and have refused to add more clients to their waiting lists. Unless something is done soon, predictions are that the number of homeless individuals and families on the street, in shelters, or couch surfing will increase dramatically in the coming year.  

A recent report by the Canadian Centre for Policy Alternatives on the affordability of rental accommodation in major Canadian cities illustrates the problem for people finding affordable housing where vacancy rates are low, but rents are high—especially in a low wage economy, as is the case in Nova Scotia.  

CCPA surveyed average rents for 2 bedroom apartments in various neighbourhoods in major cities across Canada in relation to the hourly legislated minimum wage and the income required to make the 30% rent to income benchmark.  They found that it would require earnings of $22.57 an hour (or 78 hours of work at the Nova Scotia minimum wage of $11.55 an hour) to afford the average rent in HRM. Even in traditionally low rental areas such as Spryfield, it would require an hourly wage of $17.43 (or 60 hours of work a week at minimum wage). Figures for the North End were $23.74/hour (or 82 hours at the minimum wage) and for Albro/Lake Banook, $21.04 an hour or 73 hours at minimum wage.   As the cost of living (especially for housing and food) rises, these figures demonstrate that it would be very difficult for a single parent working full time at minimum wage, but next to impossible if she lives on welfare—or even supplements her welfare income through employment–to afford an affordable 2-bedroom apartment in Halifax. We therefore believe that income assistance rates need to increase and the employment income disregards brought into effect in 2018 should be increased and indexed on a yearly basis in tandem with a benchmark such as the cost of living index.

Income assistance clients living in small towns and rural areas are also subject rent increases and increased shelter and energy costs, but unlike clients in HRM (because of the no-fee bus pass), they are particularly vulnerable to higher transportation costs, exacerbated due to a lack of or limited publicly funded transportation. The Department of Finance website reports, for example, that year over year to November 2019 the cost to consumers of transportation in Nova Scotia increased by 4.2%.

By the end of 2019, it is expected that the cost of living in Nova Scotia will likely have increased by a total of 4.3% since the end of 2017.  The increase of 5% in the SHR for people with disabilities, therefore, will barely cover increases in the cost of living increases since 2017 and the increase of 2% for others will leave many individuals and families worse off than they were in 2017. Furthermore, neither the 5% nor the 2% SHR increases will close the gap between welfare incomes and the MBM, or assist with the severe income deficits all clients have been experiencing for a numbers of years.  Additionally, higher than average increases in the costs of rent and food—both of which are necessary to sustain life—are anticipated in 2020. Unless there are further increases in the SHR in 2020, therefore, most clients will experience increased deprivation.

In conclusion, as you consider the Province’s 2020/21 budget, we urge you and your Treasury Board ministerial colleagues to advance just ESIA transformation outcomes and take the above issues into account. We ask that you ensure the 2020/21 provincial budget allocates sufficient funds to enable the Departments of Community Services and of Housing and Municipal Affairs to make the following investments in people living in poverty in Nova Scotia in 2020:

  • Increase the Standard Household Rate amounts  to take into account increases in the cost of living since 2017 (especially for essentials such as food, shelter, clothing, heating and transportation) and to reduce the gap between welfare incomes and the Market Basket Measure of Poverty.
  • Increase the employment income disregard schedule to account for increases in the cost of living since 2018 when the policy came into effect. 
  • Increase the Nova Scotia Child Benefit amounts and the income eligibility threshold.
  • Make more significant investments in all forms of social housing, including housing supplements, public housing, and other kinds of non-profit housing. 
  • As a matter of urgency, use taxation and any other strategies at your disposal to intentionally increase the vacancy rate and dampen the inflated rental market in Halifax.   

Yours sincerely,

Stella Lord

Stella Lord, Ph.D, Coordinator and Co-Chair, CSEP ESIA Transformation Working Group

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