Posted March 24, 2016
Analysis: 2016 Budget and ACORN Canada National Campaigns
The 2016 budget might seem like it is providing some positive steps forward for Canadians, and in some cases it is. For example, the government’s plan to replace the child benefit system with the new Canada Child Benefit, giving families more money to raise their kids, is a big help to low-income families struggling to make ends meet. The federal government’s commitment to close the gap in quality of life between First Nations people and Canadians is also a necessary step forward in addressing the inequality that persists in this country. Investments in transit infrastructure and making changes to help older Canadians are good improvements that will help Canada’s low- and moderate-income people.
That being said, closer examination indicates that there are still many missing pieces to this budget. There is still much more that this government should be doing to help low-income and moderate-income Canadian families get ahead.
Here is how the budget holds up to ACORN Canada’s National Campaigns:
Internet for All
ACORN Canada has been pushing the telecom industry and federal regulators to address the digital divide in Canada by ensuring affordable internet rates are made available to low-income Canadians, specifically $10/month high-speed internet options for Canadians living below the Low Income Measure.
The 2016 budget does recognize that “few jobs, sectors or aspects of life are untouched by information and communication technology,” (p.104). However, the federal government has decided to continue on the path of the Conservative government by only focusing on internet access for members of rural and remote communities. ACORN Canada’s membership recognizes the importance of developing internet infrastructure in these remote areas, but this budget demonstrates a total disregard for the high-cost barriers to internet access that low-income earners face in urban and rural communities.
Canada needs to commit to developing a national broadband strategy that will level the playing field and provide equal opportunity to digital access for all Canadians.
National Healthy Homes
ACORN Canada members want a federal minimum standard of housing – covering livability of housing for many low-income families across the country. It should include basic standards of maintenance, health standards related to mold and pests, and a minimum enforcement regime for any level of government responsible for housing.
In this budget the federal Government has committed $2.3 billion to housing over the next two years. This is a good start in improving housing quality and affordability, yet it is by no means enough to be able to tackle the grave housing concerns for thousands of low- and moderate-income Canadians. The Government has committed to supporting efficiency retrofits and renovations to existing social housing, but has left out enforcing a federal minimum standard of housing of existing low-cost rental housing. It is true that existing social housing needs attention – but landlords of private rental housing need to have their buildings held to minimum standards of maintenance in order to ensure that low-income tenants are living in “housing that is safe, adequate and affordable” (p.97).
The Government’s plan to invest $208.3 million into a fund that will support the construction of up to 4,000 new affordable housing rental units over five years is a start, but long term commitments are yet to be seen. Further, the government’s trust that low cost loans for municipalities and housing developers will result in the construction of up to 10,000 new affordable rental housing units is questionable. Whether municipalities and developers will take full advantage of this opportunity is yet to be seen. It is also important to note that a definition of what “affordable” means to this government is lacking in this budget. Affordable for whom?
The government needs to show a stronger commitment to the housing needs of low- and moderate-income families.
Many ACORN Canada members and low-income Canadians across the country have fallen victim to the predatory lending practices of payday lenders and installment loan operators. Payday and installment loan business models are set up to charge high interest rates, targeting low-income earners on fixed incomes and keeping them stuck in debt traps.
ACORN Canada members want the federal government to do more to regulate the practices of fringe financial services by doing such things as:
• Reinstating a National Postal Bank;
• Amending the Criminal Code to lower the maximum interest rate from 60% to 30%;
• Creating an Anti-Predatory Loan Act and legislate a code of conduct for all lenders;
• Amending the Bank Act to include Community Reinvestment that will require banks to devote a portion of their profit to community investments, and disclose information about their practices;
• Cracking down on exorbitant and unfair bank fees;
• Legislating reinvestment targets to ensure Canada’s banking sector invests in the Canadian communities where they’ve made their money.
This budget makes no commitments to banking sector changes that will benefit low- and moderate-income Canadians. There may be opportunity for positive change in the new consumer chapter in the Banking Act, yet the language in the 2016 budget indicates that banks will not be bound by law to make changes to their unfair policies. Rather, banks will be encouraged to follow a “set of guiding principles, reflecting that banks should act fairly and responsibly” (p.222). This suggests that the banks will still be able to do business as usual and charge exorbitant and unfair fees, unless, of course, banking executives decide to put Canadians’ best interests before their own. Highly unlikely.
Further, the fact that there is no mention in this budget of the increased reliance Canadians have on fringe financial institutions which employ predatory lending practices shows how unresponsive this Government is to the banking needs and concerns of thousands of low- and moderate-income Canadians.
ACORN Canada members want transparency in the industry, meaning full disclosure on costs of remittance payments by banks and Money Transfer Organizations; and regulation where charges - including all fees, such as exchange rate fees - be no more than 5% of the amount remitted, as recommended by the World Bank.
Despite having officially stated to our membership their belief that fees associated with remittances should be fair and transparent, and promising to work with stakeholders to ensure Canadians aren’t overcharged for this necessary service, the 2016 Federal Budget makes no commitment – or mention whatsoever – regarding tackling the exploitative practices of Money Transfer Organizations in Canada.
ACORN Canada members want the federal minimum wage reinstated at $15/hour.
The 2016 federal budget makes no indication that the government will commit to an increase of a federal minimum wage. The budget mentions that “the Government is committed to negotiating in good faith to reach agreements that are fair for public service employees and Canadians,” but the lack of commitment to increasing wages that will make life easier for thousands of low- and moderate-income Canadians working federally regulated jobs is disheartening.