As rental rates continue to escalate across the country, the federal government’s $500 top-up to the Canada Housing Benefit (CHB) was designed to deliver a little bit of rent help. But new data shows that the program -- criticized from the outset for being something of a bandaid on a bullet hole -- was “mostly a failure.”
This is according to David Macdonald, Senior Economist at the Canadian Centre for Policy Alternatives (CCPA), who assessed application statistics from Statistics Canada and reported on his findings for CCPA's policy and current affairs magazine, the Monitor.
“The take-up rates were atrocious,” writes Macdonald. Of the 1.8M Canadians eligible for the tax-free, one-time rent top-up, just 798,530 applications were received. That’s a take-up rate of 44%. StatCan’s data also shows that, of the $1,163B available through the benefit, around $393M was actually disbursed, translating to a take-up rate of 34%.
Macdonald adds that StatCan’s findings may be a “generous interpretation.”
“When the budget estimates were calculated, they wouldn’t have assumed a 100% take-up rate on an application-based program in the first place. They would have assumed a more limited take-up rate and put that in the fall economic statement as the budget estimate.”
In addition, the benefit relied on Canadians filing their taxes in the first place. “Up to 12% of Canadians currently don’t file their taxes, so they can’t get any of these transfers. A proper take-up rate would include those Canadians as well."
The application period for the program ran from December 12, 2022 to March 31, 2023. In short, low-income renters meeting the feds’ checklist of stipulations were required to fill out an application through the Canada Revenue Agency website, and those deemed eligible received the benefit in their bank account, in a similar fashion to CERB. However, applicants were urged to be mindful that any information submitted -- including income, rent paid, addresses, and landlord information -- could later be verified by the CRA. Any payments issued mistakenly will ultimately need to be repaid.
“The housing benefit was confusing from the start,” continues Macdonald. “The feds imposed onerous requirements, far from pure attestation, as had been the case for the CERB. These conditions are likely as much to blame for low take-up rates as the approach in general.”
Given the underwhelming response to the CHB, Macdonald goes on to suggest that the government should adopt a “hybrid approach” in future -- one that utilizes the data the CRA already has at its disposal.
“The CRA knows Canadians’ income from last year and, in some provinces, it also knows how much they paid in rent. One could imagine a modified housing benefit where the CRA could use last year’s data on income and rent, along with bank account numbers that eligible people used for previous tax refunds.”
Another approach that could be layered in involves more targeted outreach. In other words, reaching out directly to Canadians who are likely to be eligible and encouraging them to apply, as well as engaging community groups, tax filing clinics, and anti-poverty groups -- essentially, the entities that exist to help lower-income individuals and families navigate Canada's tax and benefit system.
Macdonald concludes that, although targeted benefits programs like the CHB are “very new” for governments and citizens alike, more proactive measures are needed to ensure that Canadians receive the benefits they need and are entitled to.
