The 2024 federal budget will impact several areas of the Enough for All strategy, particularly housing, equality for Indigenous people, and income inequality. VCC has reviewed the budget and here is a breakdown of what it means for people living in poverty.
Housing
Budget 2024 has allocated significant funding for housing with some calling it the biggest housing plan since the Second World War! And the funding can’t come soon enough, Canada’s social housing represents only 3.5% of total housing stock, half the OECD average. Notable announcements include:
- The creation of a Public Lands for Homes Plan and enabling Canada Post to prioritize leasing or divestment of properties for housing. A Canada post office in Fort McMurray, Alberta is currently being assessed for housing development.
- Considering a potential tax on residentially zoned vacant land. The government will launch consultations later this year.
- $50 million over two years to scale up innovative housing technologies such as modular homes, the use of 3D printing, mass timber construction, and panelized construction.
- $15 billion top-up to the Apartment Construction Loan Program, building 30,000 more new homes.
- $400 million top-up to the Housing Accelerator Fund for an additional 12,000 homes.
- $6 billion to the Canada Housing Infrastructure Fund.
- $918 million for Indigenous housing and infrastructure.
- Enhancing the Affordable Housing Fund with an additional $1 billion top-up. In 2023 the government already committed $14 billion. This funding will support non-profit, co-op, and public housing providers in building more than 7,000 affordable homes.
Additional measures include enhanced tenant protections through a new renters’ bill of rights to “crackdown on renovictions, create a nationwide standard lease agreement, and give renters more agency.”
Health
Budget 2024 expands dental coverage for households with an adjusted net income of under $90,000 however the full plan will not be rolled out until 2025. The budget allocates $1.5 billion over five years towards implementation of Pharmacare, and immediate funding for certain diabetes medications and birth control contraceptives. Health Canada has already published lists of eligible diabetes medications and contraceptives for potential coverage, subject to discussions with provinces and territories. Regrettably, Alberta has expressed that it intends to opt out of the national Pharmacare plan.
Budget 2024 also includes several initiatives aimed at addressing improved health and education outcomes for the Indigenous population as well as addressing overrepresentation in the child welfare system -- 76% of children in Alberta’s child welfare system are Indigenous despite representing only 10% of the Alberta population. These initiatives include $1.5 billion for Indigenous child and family services, $1.2 billion for First Nations education, and $1 billion for First Nations and Inuit health.
Hunger & food security
There is no Alberta advantage for the 22% of Albertans who are food insecure. Budget 2024 includes $1 billion for a national school food program and while we’re pleased this government cares about childhood food insecurity, it has been well documented that income-based measures are more effective in tackling this issue.
Budget 2024 also aims to tackle the lack of competition and unfair practices in the grocery sector through the Affordable Housing and Groceries Act. The Act empowers the Competition Bureau to investigate instances of price fixing or price gouging and would repeal the "efficiencies defence," which previously allowed mergers that often resulted in higher prices and fewer choices for consumers.
Support for people with disabilities
The federal government has finally introduced plans to fund the Canadian Disability Benefit, but it has limitations. With a maximum benefit of only $2,400 per year, or $200 per month, it falls short of what’s needed. About 1.5 million Canadians with a disability live in poverty and must navigate a complex web of income supports to make ends meet. This often involves out-of-pocket expenses for specialist reports, exams, and medical assessments. As part of the rollout plan, the government will use eligibility criteria for the disability tax credit and apply it to the Disability Benefit. However, not everyone with a disability qualifies for the tax credit, a signal that the eligibility criteria should be reviewed alongside the rollout.
Predatory lending
The budget also aims to crack down on predatory lending by lowering the criminal rate of interest to 35%, but it’s unclear if these regulations will cover all consumer lending, including pawn lending which is inextricably linked to the world of subprime and fringe lending and contributes to a cycle of unaffordable debt.
Higher taxes on wealthy Canadians
Budget 2024 proposes higher taxes on the wealthiest 0.13% of Canadians through an increase to the capital gains tax from 50% to 66.6% for gains above $250,000 a year. Data from the Statistics Canada report High-income Canadians and Capital Gains indicates the share of total income for those in the top 1% (one measure of income inequality) is increasing in Canada. Why does this matter? Because research suggests income inequality is harmful to society, not only from a fairness perspective but it can have negative implications for our health. For more information on wealth inequality and CEO pay visit our podcast episode Exploring Canada’s Growing Wealth Inequality.
We are pleased to see some positive actions. But, with many of the affordability programs coming into effect in 2025 and beyond, we’re concerned that there is no immediate relief for people in the short term. We’re also disappointed the federal government has not followed through on its promise for automatic tax filing which could be a game changer for many people living in poverty, nor has the Canadian Disability Benefit received adequate funding. VCC will continue to monitor these budget measures to assess whether they are effectively addressing the root causes of poverty.
