Closing housing gap for urban Indigenous people could cost $1.4 billion a year: PBO

OTTAWA — The federal government would have to spend about $1.4 billion more a year to close a housing gap facing urban Indigenous people, the parliamentary budget officer says in a report that hints at the scale of a promised federal strategy to address the issue.

The cost in the report would be at the upper end of a range that starts at $159 million annually, depending on what percentage of construction costs and rent subsidies the government wants to cover.

As is, the Liberals’ decade-long national housing strategy explicitly allocates $179 million per year to Indigenous housing in urban, rural and northern areas, the PBO calculated. 

The Liberals bill the cost of the strategy at over $55 billion, which includes spending to help offset mortgage costs for first-time homebuyers, as a key avenue to help ease a housing crunch for hundreds of thousands of households.

Nationally, about 124,000 Indigenous households are in core housing need, the PBO report estimated, meaning they live in units that stretch them financially, need hefty repairs, or are not large enough for their families.

The budget office’s calculation estimated the annual gap between what those households pay and the housing costs deemed affordable by a federal housing agency to be $636 million.

The federal Liberals have promised to create an urban Indigenous housing strategy, with details expected in this year’s federal budget.

Already, Liberals have been out touting coming spending to meet a promise made during the 2019 federal election campaign and sprinkled into multiple ministerial mandate letters.

The Liberals have spoken about funding for urban Indigenous housing providers as the missing piece of the national housing strategy, having already provided funding for on-reserve housing.

More than half of Indigenous households living in inadequate homes reside in the country’s biggest cities, with Winnipeg housing the highest number based on the PBO’s estimates, followed closely by Vancouver.

The report from budget office provides an idea of how much spending the Liberals would have to add to the national housing strategy, depending on how much of the housing and affordability gap the government wants to close.

Budget officer Yves Giroux said the gap is unlikely to shrink, pointing to relatively hot housing markets across the country, despite the pandemic, and demographic factors: Indigenous populations have recently grown faster than non-Indigenous people.

“These two factors suggest that the numbers to plug the affordability gap are likely to go up rather than down,” he said.

That could change if Indigenous households gain a larger foothold in the labour market and see their incomes rise, Giroux said, “but it’s not what we are seeing in the last several years.”

Indigenous households are one-and-a-half times more likely to be in housing need than non-Indigenous households, Giroux noted, with an average annual gap of $5,000 between what they should and do pay for adequate housing.

The situation is even more acute in the North, with Inuit households almost two-and-a-half times more likely to live in inadequate or unaffordable housing.

Part of the gap has to do with the adequacy requirement that the Canada Mortgage and Housing Corporation uses to define “core housing need,” which looks at how many rooms are needed depending on family size.

Indigenous families tend to be larger than non-Indigenous households, and census data has shown that multiple Indigenous families can be living under one roof in overcrowded homes.

A parliamentary committee researching urban Indigenous housing issues commissioned Giroux’s report released Thursday. 

The House of Commons committee is expected to soon release its report, which would lay the foundation for a federal program.

This report by The Canadian Press was first published Feb. 11, 2021.

Jordan Press, The Canadian Press