Alberta, Feds set to clash over cash for new rent supplement

Prime Minister Justin Trudeau speaks with The Canadian Press during a year end interview in West Block on Parliament Hill in Ottawa, Wednesday, Dec. 18, 2019. THE CANADIAN PRESS/Adrian Wyld

Alberta is pushing back against the Trudeau Liberals’ expectation that provinces and territories pick up half the cost of a new rent supplement, asking instead to substitute federal funding for their own.

The promised supplement was originally proposed as a joint funding venture between the federal and provincial governments.

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But in negotiations over the funding arrangement, Alberta officials have sought to have their existing spending count towards the cost-matching approach instead of increasing funding as other provinces have said they would.

The details of the behind-the-scenes talks were provided to The Canadian Press by multiple people with knowledge of the talks who spoke on condition of anonymity, either because they weren’t authorized to publicly discuss federal work, or to ensure relationships with governments and agencies weren’t compromised.

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What has housing advocates concerned is that the new supplement may have limited effects if spending doesn’t increase as originally envisioned.

A spokeswoman for Alberta’s housing minister says the province hopes to finalize a funding arrangement with Ottawa to streamline provincial rental assistance programs.

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“We are working with the federal government to reach an agreement under the Canada Housing Benefit to better support Albertans in need of housing and our government hopes to co-ordinate this new federal funding with our rental assistance program,” said Natalie Tomczak, press secretary to Alberta Housing Minister Josephine Pon.

“This will reduce duplication in the application process and ensure Albertans in need of housing can access the supports they need quickly and efficiently.”

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What makes the new rent benefit unusual is that it will be tied to a person, rather than a social housing unit — meaning tenants won’t lose the supplement if they move out of social housing, but rather get to apply it against the rent in a private unit.

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The supplement is part of the federal Liberals’ decade-long housing strategy and is slated to cost $4 billion when accounting for collective spending by federal, provincial and territorial governments.

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The supplement spending is part of what the parliamentary budget officer has noted is $11.7 billion in cost-matching from provinces and territories contained in the Liberals’ housing strategy, which is billed as carrying a $55-billion price tag.

Cost-matching provisions could lead lower levels of government to shift existing funds to meet federal demands without an overall increase in spending, the budget watchdog warned in a report earlier this year.

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Pon spoke with her federal counterpart, Social Development Minister Ahmed Hussen, on Nov. 28. In a statement at the time, she said that Alberta’s “key unilateral spending commitments” made as part of “a sustainable financial framework” must be treated as cost-matching under the housing strategy.

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The housing benefit wasn’t mentioned by name in the statement.

“The federal government must respect how, when and where provinces choose to spend our money in areas of core provincial jurisdiction,” Pon’s statement at the time said.

Even though the housing benefit is mentioned in deals provinces and territories signed with Ottawa to get money through the Liberals’ housing strategy, the main agreements didn’t contain the fine print about the rent benefit. The Liberals have to sign separate deals for that because the benefit is tailored to fit with each jurisdiction’s unique needs and programs.

The first such deal was signed with Ontario this month. Each side is to put up $730 million over eight years for a $1.46-billion total.

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At an event in Ottawa announcing the agreement, a Liberal point man on the housing file said different provinces are challenged by different economic constraints, but argued spending a little more on housing could save governments money in the long-term from things like reduced health care costs.

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“This initiative, small at start, is going to free up other resources to tackle some of the other challenges we have in the housing sector,” said, Toronto MP Adam Vaughan, Hussen’s parliamentary secretary.

Quebec remains the only province that hasn’t signed funding agreement to be part of the national housing strategy, but Vaughan said a deal is close.

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