Ontario’s economic and fiscal update: what it means for you
As the global community continues to reel from the COVID-19 pandemic, Ontario’s provincial government laid out a reduced budget on March 25, 2020. These measures are just “phase one” of the province’s fiscal actions, Premier Ford told journalists earlier in the week. He emphasized the federal government will lead the way to provide support to individuals losing wages as various sectors of Canada’s economy shut down. Finance Minister Rod Philips promised a more thorough budget by November 15, 2020.
Before the pandemic, Ontario expected 1.7 per cent growth in GDP for the coming year. On March 20, 2020, Scotiabank forecast the province’s economy will instead retract by 2.2 per cent — with the ongoing recession deepening if emergency measures extend longer than foreseen.
What’s in the Province’s Economic & Fiscal Update for Ontario’s community housing providers and their tenants?
Ontario’s Action Plan: Responding to COVID-19 (March 2020 Economic and Fiscal Update) announced $17 billion for the health system and businesses and restated several announcements to combat COVID-19. The province offered $7 billion in additional resources for the health care system and direct support for people and jobs. It will make $10 billion in support available for people and businesses through tax and other deferrals to improve cash flow and help protect jobs and household budgets.
Major initiatives that will have an impact for community housing providers and their tenants include:
- $200 million for municipalities and social service providers to support vulnerable populations
- Within the $200 million, an expanded Emergency Assistance Program administered through Ontario Works to help individuals who do not qualify for emergency financial supports; and
- $148 million for charitable and non-profit social services organizations like food banks, homeless shelters, churches and emergency services to improve their ability to respond to COVID-19
- $160 million to lower residential and small-business hydro prices to off-peak rates.
- $9 million in direct support for families’ energy bills by expanding eligibility for the Low-income Energy Assistance Program (LEAP) and ensuring electricity and natural gas services are not disconnected for nonpayment during the COVID-19 outbreak.
- $26 million to Indigenous peoples and communities, including emergency assistance for urban Indigenous people in financial need, and costs for health care professionals and critical supplies to reach remote First Nations.
- $6 billion for five months of interest and penalty relief for businesses to file and make payments for the majority of provincially administered taxes.
- $1.8 billion to provide municipalities flexibility to provide property tax deferrals to residents and businesses.
- $1.9 billion for the Workplace Safety and Insurance Board (WSIB) to allow employers to defer payments for up to six months.
- A one-time, $200 per child up to 12 years of age payment, and $250 for those with special needs, including children enrolled in private schools to help families needing childcare.
- Emergency childcare options for frontline workers, like health care workers, police officers, firefighters and correctional officers.
- A proposal to double the Guaranteed Annual Income System (GAINS) payment for low-income seniors for six months.
What does this mean for the community housing sector?
The Province offered and proposed several short-term injections to keep the sector moving during the economic downturn, but it may struggle to support community housing providers and service managers in the long-term with a negative economic outlook on the horizon.
Given near cessation in large parts of the economy, the Province and municipalities will likely see decreases in total taxation revenue in 2020-21, much the same as the 2008 recession. If virus containment takes longer than expected, these figures could compound into a much larger fiscal challenge for the province, potentially impacting funding and financing for the sector.
Providers serving low or limited income residents may see tenants struggle to pay rent in the coming months, considering almost half of tenants are reported to have less than a month’s worth of savings; one-third have two weeks or less.
Decreases to tenants’ income from job loss and/or caring for family members will be somewhat offset by federal income support programs, like Employment Insurance (EI) or the Canada Emergency Response Benefit (CERB). However, EI application influxes and delayed access to CERB applications means tenants requiring income supports will not see funds flow until mid-April at the earliest.
Provincially, income supports for people who do not qualify for federal funding will be available through expanded Ontario Works (OW), Ontario Disability Support Program (ODSP) and other social assistance benefits. It is unclear how quickly funding will be disbursed or how long it will be available.
Though the Province legislated job-protected leave for workers impacted by COVID-19, the legislation does not require the leave to be paid – it remains up to the employer.
In terms of additional protections, the Province also prohibited evictions for non-payment of rent. ONPHA supports the order to halt evictions, but recognizes landlords, especially community housing providers, likely cannot forego revenue for the next two to three months or more. We called on the Province to establish an emergency community housing stabilization fund to offset losses from tenants’ inability to pay rent and/or utility fees, with a temporary rent freeze for tenants impacted by COVID-19.
While the province made reductions in electricity fees and offered new low-income payment options, tenants and community housing landlords may still struggle to pay lower rates from income and rental revenue losses.
With $148 million in funding for municipalities and social services, it will be critical to engage with Service Managers to determine how funding will be distributed to ensure community housing providers are equitably included in the disbursement. ONPHA will continue advocating for increased access to necessary equipment, supplies and resources for the sector, especially for providers serving populations more likely to be at high risk to COVID-19, including seniors, Indigenous peoples, newcomers and tenants requiring support services.
ONPHA’s Next Steps
As the COVID-19 situation develops, ONPHA will continue monitoring and updating members about how to access provincial and federal supports.
We will also continue to engage with provincial and federal governments to advocate for:
- An emergency community housing stabilization fund
- Increased access to healthcare equipment, supplies and resources for community housing providers serving high risk populations
- Increased flexibility around current funding agreements and reporting requirements
- Immediately implementing the Canada-Ontario Housing Benefit
- Repurposing surplus buildings for emergency housing purposes
- Increased federal funding to provinces, territories and municipalities for housing and homelessness services
To build upon our advocacy efforts and better support the sector, we launched a member survey to learn more about issues facing the sector during this time. The survey will be open until April 1, 2020 at 5pm.
ONPHA will continue developing responsive tools and resources for members available on our COVID-19 Member Support webpage. If you have any questions about how to ensure you and your tenants have the information you need, contact firstname.lastname@example.org.