Holding the government to account on budget issues is a complex and difficult task. However, a small number of nonprofit organizations regularly provide this type of analysis. The Edmonton Social Planning Council, the Alberta Seniors Community Housing Association, and the Calgary Chamber of Voluntary Commerce have all called attention to the government’s inadequate support of important public services, the nonprofit sector, and affordable housing in Budget 2022.
In 2021, VCC’s response to the budget stressed the importance of investments to tackle inequities that were exposed by the pandemic, including systemic racism, income security, and precarious work. In Budget 2022, our concerns remain unaddressed. Spending was maintained in most areas, although when inflation and growth are taken into account, most budgets were decreased. And, where we do see funding increases, as is the case with child care and affordable housing, this is primarily attributed to federal government transfers.
Affordability
On the rising cost of living, Budget 2022 indicates that “Alberta is one of the most affordable places to live” due to higher on average earnings, low taxes, and lower home prices. However, a more accurate measure of affordability would involve a comparison of earnings to expenses. For those able to earn income from employment, VCC calculates the living wage, a proxy for the cost of living in any given community and determined by calculating average expenses, taxes and government transfers for a given household using local costs. The hourly rate a person living in Calgary needs to earn is $18.60 per hour - a difference of 24% from Alberta’s minimum wage of $15 per hour.
For those unemployed or unable to work we compared benefits from Alberta’s income support program to Canada’s official poverty line of $2,060 per month. Even Alberta’s Assured Income for the Severely Handicapped (AISH) program doesn’t meet the mark at $1,685 per month. In fact, some income support benefits are as low as $745 per month or 37% of the poverty line.
The government’s assessment of affordability is based on averages. However, a key problem with reporting on average incomes is that incomes at the top are skewing the average; this is especially true in Alberta where income inequality is higher compared to other provinces. In their book Sustainability Matters authors Noel Keough and Geoff Ghitter report Calgary’s after-tax inequality is “four times higher than the national average.” In reality, many Albertans are struggling to get by. A recent study reported 44% of Albertans were within $200 of being unable to meet financial obligations and insolvency rates rose 6% in 2021.
The response from government on affordability challenges is disappointing. Apart from the child care investments (which is primarily being funded by the federal government), the budget ignores repeated calls from disability and anti-poverty advocates to align income support benefits with the cost of living. This would involve indexing benefit programs to inflation and applies to rent supplements, the Alberta Seniors Benefit, AISH and Income Support.
Housing
Affordable housing continues to be a serious problem in Calgary. Calgary also has more than 50% of Alberta’s homeless population at approximately 2,000 people and 81,240 Calgarians spend more than 30% of their income on rent. There are between 4,000-4,500 people on the wait list for Calgary Housing, but many more are in precarious housing situations. To reach the national average of affordable housing stock, Calgary would need to add approximately 2,000-2,500 housing units per year for six years to close the gap. However, we are only adding about 400 units per year. The supply is not meeting the demand.