Publications, opinions, and speeches
How the CRA became the Grinch that stole the Canada Housing Benefit supplement
Published on 20/12/2022
On December 12, the federal government opened applications for its one-time, $500 supplement for low-income renters with much fanfare.
This support is welcome, especially during a time of rising rents and inflation. But the government’s intentions are being undermined by the Canada Revenue Agency’s (CRA) implementation of the benefit. The CRA has become the Grinch that stole the Canada Housing Benefit supplement, even as the government shines a light on it.
The original Canada Housing Benefit (CHB) was announced in 2017 and has been implemented across Canada since 2020. While this new, one-time supplement is being called a Canada Housing Benefit top-up, it’s also available, fortunately, to a broader range of people who meet targeted criteria. The benefit is for individuals and families with incomes of less than $20,000 and $35,000, respectively, who pay 30 per cent or more of their income on rent.
Most people living in deep poverty are paying way more than 30 per cent of their incomes on rent. For example, the average private market rent for a one-bedroom unit in Toronto is over $2,500 a month, more than double the maximum Ontario Disability Support Program benefit for a single adult. And contrary to common public perception, most people living in poverty live in private market housing.
The problem isn’t in the requirements for the supplement, but how the CRA is verifying them.
To even apply, the CRA asks applicants to provide their 2022 addresses, including their landlords’ names and contact information. Requiring that people connect with their landlords to apply for a one-time supplement is problematic at best, and disrespectful to its core.
Most people, regardless of their income, would be reluctant to talk to their landlord about their personal income situation. Perhaps their landlord doesn’t want to be named on their tenant’s application, or their landlord isn’t reporting their rental income on their own taxes. What if the tenant doesn’t have a proper lease? What if the landlord is a corporation?
Furthermore, there are risks to tenants speaking to their landlords about the benefits they apply for. For example, if a landlord is aware that their tenant is receiving more money, they may want to charge a higher price. Without rent control applying to all buildings and between tenancies, this isn’t a theoretical situation. It’s a reality.
The CRA is likely asking for this information to lower the risk of overpaying benefits by operating under the assumption that people will cheat “the system.” What it fails to understand is that best practices in compliance are not the same as best practices in social service delivery. The real problem is that the system isn’t working for most people living in deep poverty, and barriers to support fuels mistrust of the very system the CRA is working so hard to preserve.
In fact, the risk of someone receiving the rent supplement who shouldn’t is low given its targeted income criteria and the high market rental rates across the country. In its commitment to risk-aversion, the CRA has decided to push all the risk onto tenants.
Even with the high cost of living, this onerous process will likely mean that some people won’t apply. And anticipation of low take-up is already evident. While the federal government estimates that the supplement will cost $1.2 billion in 2022-23, the Parliamentary Budget Officer puts it at $940 million. That’s more than a 20% difference. This is a shame because the intention behind the supplement is good and, theoretically, a case could be made to make it permanent. But the delivery setup by the CRA makes it clear that there is a mismatch between policy intention and implementation. Unfortunately, people can’t pay their rent with good intentions only.
It’s not too late for the CRA to change course on its verification criteria for the CHB supplement. If it doesn’t, it will have stolen the opportunity from people living in deep poverty to access support they so urgently need.