Martin’s windfall a cold wind for homeless

The $15 billion in debt repayment is at the cost of those without adequate and affordable housing. 

There’s a double boom happening in my community – and we’re not alone. The head of a local emergency relief group tells me, "We have been busier then ever." Volunteers with the Out of the Cold program closed the winter season trying to understand why their business of feeding and sheltering those without had tripled over the past winter.

Because the economy is also booming here. For the past few years, area businesses have prospered. The unemployment rate has been as low as anywhere in the country. Yet, in the heart of one of this most prosperous of regions, church and community volunteers have been run off their feet.

Clearly, some people have been left out in the cold from Canada’s longest economic expansion. Meanwhile other people have benefited from this unprecedented growth. One of them is the nation’s Finance Minister, Paul Martin.

With great regularity the economy has performed well beyond Mr. Martin’s modest expectations. In the comings days, he will announce that, despite an economic slowdown, the federal government has amassed another sizeable surplus. Fifteen billion dollars more or less. That is five billion more than projected last fall.

The federal government foresaw a sizeable windfall. So before the fiscal year came to an end on March 31 they announced new funding for the Canada Foundation for Innovation, Genome Canada and for health information and communications technology. They used some of the surplus to make good on promises to restore E.I. payments for seasonal workers and help farmers. And still they came in with five billion more than planned. So the government has chosen to add onto debt repayment, socking away 15 billion instead of the promised 10.

By doing so, the Liberals bypass their election promise of creating a national rental housing fund. This is a missed opportunity of major proportions. The need was long foreseen. The crisis has been described and analyzed. And the solution of affordable housing was named by the same cities that declared homelessness a national emergency, three years ago already.

Innovative proposals have emerged for how the federal government could make a constructive contribution to a national housing strategy. Several years ago, the Federation of Canadian Municipalities proposed a flexible capital grants fund to create affordable housing. The Canadian Housing Renewal Association likewise put forward the idea of a National Housing Foundation to provide capital grants to build rental housing.

Both plans would have provided a way for the federal government to contribute substantively to a national housing strategy without returning to the role of managing social housing. The plans were flexible enough to enable the federal government to move ahead partnering either with the provinces or directly with municipalities and non-profit groups where provincial governments were intransigent about not wanting to spend money on housing.

Instead, Mr. Martin is spending on debt repayment.

The decision to devote 15 billion dollars to this while hundreds of thousands of Canadians don’t have a secure home may seem like fiscal prudence to business groups, bankers and the official opposition. Indeed, fiscal prudence is what Mr. Martin calls it in his budgets. Paying down the debt has even been characterized as a moral imperative lest we shackle our children and grandchildren with an unjust debt burden.

Such conventional wisdom has a common sense appeal until one stops to think that children can only have a future provided they have a present. Forty per cent of foodbank users are children. Many Canadian families are caught in the cruel dilemma of whether to pay the rent or feed the kids. The wholesale withdrawal of the federal government from building new affordable housing, the unilateral cutback in social transfers and removal of national standards for welfare in 1994, cutbacks to employment insurance – all of these policies implemented by Mr. Martin during his tenure as Finance Minister have left over a million Canadian children out in the cold despite a booming economy.

Not all of the blame can be placed at the foot of the Liberals. The pressures of an increasingly globalized economy have magnified a growing gap between the rich and the poor, between those with well-paid secure work and those struggling to piece together enough income from low-paid jobs, employment insurance (if they qualify) and social assistance. Provincial governments share some responsibility for kicking away the social supports just when people needed them most.

But the spotlight is on Mr. Martin and the Liberals now, because of the choices they’re making. They scrambled to assemble a massive tax cut program in time for last fall’s federal election. They managed to create the Millennium Scholarship Fund with the unexpected fiscal surplus in 1998 and provide a one-time boost to health spending in 1999. Why haven’t they been able to move with the same decisive boldness to bring an end to Canada’s housing crisis?

The message we can expect to hear from Mr. Martin when he presents his economic update to the Commons Finance Committee is that we will have to scale back our expectations. With last fall’s economic projections scaled down and major tax cuts kicking in, the kind of budget windfall the government has enjoyed the past few years is not likely to appear again.

What does that say to the volunteers who are getting burned out by the every growing demands for emergency food and shelter? Plan for another year of booming business. We had the money to end the crisis. But it doesn’t seem to be a priority. It is not a prudent use of the nation’s resources.