Budget leaves lower-income renters behind: critics

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This article was published 13/04/2022 (989 days ago), so information in it may no longer be current.

A new Manitoba tax credit targeting renters and low-income earners is being met with skepticism by advocates who argue the Progressive Conservative budget does not go far enough to tackle poverty.

Canadian Centre for Policy Alternatives Manitoba director Molly McCracken said the Tory government’s plan to return up to $525 to renters through a new tax credit while signing hefty rebate cheques for property owners will leave lower-income earners behind.

“So those people are getting big, big cheques,” McCracken said in an interview Wednesday. “It’s disproportionately giving more money to the higher-income people who own property and less money to the renters, and that entrenches income inequality.”

Finance Minister Cameron Friesen unveiled the province’s spending blueprint for the upcoming year Tuesday. The 2022-23 budget included a new Residential Renters tax credit for the approximately 40 per cent of the population who rent their home.

The new tax measure will replace the Education Property tax credit, which renters could claim on their income taxes for up to $525 last year.

Previously, renters could claim up to $700, but that figure was slashed as the province moved towards eliminating the Education Property tax credit over a 10-year period.

On Tuesday, Friesen said people enrolled in the province’s Rent Assist program (but not collecting employment and income assistance) and people living in social housing, would also qualify for the new credit.

The province estimates about 45,000 more households would receive the benefit come tax season.

“That’s a good news story for all of us,” the minister said.

Meanwhile, the average homeowner can expect to see a $581 rebate cheque in the mail prior to their property tax bill arriving, as rebates are set to increase 12.5 per cent this year and next, Friesen said.

According to budget documents, the average homeowner will receive a total of $1,019 in credits and rebates related to property taxes this year.

While the Tories have kept annual rent increases at zero per cent this year and next, McCracken said her office hears regularly from renters who have seen their cost of living rise after their landlord successfully applied for an increase to the Residential Tenancies Board.

“So people are getting hit by above-guideline rent increases and the tax credit they get for that is less,” she said. “So all renters are, in fact, losing out.”

McCracken argued the cash returned to property owners and renters would be better spent by the province on new social housing units, increasing the basic amount for people on social assistance ($195) and offering programming for poverty reduction.

“What the government is doing is trying to address poverty through the tax system, and we know that more is needed to support people. We need social housing. We need low-cost or free education. We need mental health supports and adult education,” she said.

“They’re not using a comprehensive approach. They’re really focused on the tax system, which is part of the equation, but they’re missing a lot of other pieces.”

Kirsten Bernas of the Right to Housing Coalition said every additional dollar will help people living below the poverty line, but tax credits are not top of mind for those struggling to cover the rising cost of living.

“It’s not lifting people who are living at 55 per cent of the poverty line any closer to that poverty line,” Bernas said. “We have to stop tinkering with little programs like this and really commit to a long-term, comprehensive investment in things like social housing, income supports, mental health supports.”

About 4,000 people are waiting for social housing, Bernas said. At least another 1,500 people are unsheltered in Winnipeg.

The coalition had expected the Stefanson government’s budget to lay the groundwork for its upcoming homelessness strategy, with commitments for social housing and increasing basic income supports, Bernas said. Both of those items did not materialize.

“We are really worried that the homelessness strategy that’s going to come out is going to fail if we don’t invest in those two key pieces,” Bernas said.

The province is expected to release its homelessness strategy this spring.

danielle.dasilva@freepress.mb.ca