Advocacy & Issues 12/19/2024 The federal government’s much-anticipated 2024 Fall Economic Statement (FES) provides little if any support to help people on low incomes afford food and other necessities. In fact, the FES mentions “food insecurity” only once and with reference to food programs. This is troubling because food insecurity in Canada is deeply rooted in poverty, not a lack of food. Nearly 8.7 million people in Canada experienced food insecurity in the past year—that’s 1 in 4 people who couldn’t afford food. Food insecurity mainly affects people on low incomes. As the cost of living soars, the federal government must step up with long-term direct income support to ensure everyone can access food. Below, we outline key elements of the FES relevant to our policy and advocacy priorities at Community Food Centres Canada (CFCC). For each element, we provide our view. The key elements fall under three sections: Income support Social safety net Equity, access, justice, and reconciliation Income support CFCC continues to call on the federal government to provide income support for people on low incomes. Research shows that policies that increase people’s incomes can move the needle on food insecurity more substantially. But aside from a two-month GST/HST tax break and a Canada Carbon Rebate rural top-up, the FES doesn’t include any long-term income support measures to help people meet their basic needs and thrive. Cost of living measures Providing a two-month GST/HST holiday tax break The government is providing $1.6 billion in federal tax relief through a GST/HST tax break from December 14, 2024 to February 15, 2025. The GST/HST will be waived on a selected range of items to provide relief from the high cost of groceries and other essentials. The government has released a full list of eligible items. Expanding eligibility for the Canada Carbon Rebate rural top-up From April 2025, the government will make the Canada Carbon Rebate rural top-up available to residents in census rural areas and small population centres that are within Census Metropolitan Areas. In 2025, this initiative aims to reach 1.6 million more people with the 20% rural top-up. Our view: These two initiatives give people—especially people on low incomes—some relief in meeting their basic needs. However, the initiatives are band-aid solutions to much deeper problems of food insecurity and poverty. Income benefits Exempting the Canada Disability Benefit from tax and preventing clawbacks To ensure recipients keep the full value of the Canada Disability Benefit (CDB), the government will: legislate to exempt the CDB from being treated as income under the Income Tax Act call on provinces and territories to ensure that CDB payments aren’t clawed back through reductions in support provided under provincial and territorial programs. Our view: People with disabilities and allied sectors have been calling for the exemption of CDB payments from tax and clawbacks. We welcome the steps taken by the FES to fulfil this. However, the FES fell far short of the measures needed to create a fair CDB that lifts all people with disabilities out of poverty—for example, by increasing the benefit amount, and broadening eligibility beyond the Disability Tax Credit. Creating a refundable tax credit for personal support workers The government will legislate as soon as possible to create a refundable tax credit for personal support workers. This will provide income support to a group that often experiences higher workload and burnout rates but receives lower wages. Our view: The challenges facing personal support workers reflect the broader precarious conditions facing many low-wage workers. This tax credit is a welcome but piecemeal solution. Low-wage workers, including personal support workers, can be better served by an enhanced Canada Workers Benefit that has a higher maximum benefit amount and doesn’t require recipients to have employment income. Social safety net Measures to build more homes Launching the Canada Secondary Suite Loan Program (CSSLP) in early 2025 to provide low-interest loans to homeowners who are adding a secondary suite to their existing homes (e.g., converting a garage into a laneway home). The government will double the loan limit to $80,000. Loan terms will be 15 years at a low interest rate of 2%. Topping up the Apartment Construction Loan Program (ACLP): The ACLP provides developers with necessary capital to build homes. The government will accelerate $2 billion in low-cost financing to support building 4000 homes faster. Building up to four homes at a time: Developers can make the most of available land by building more multi-family homes to increase density and housing supply. To incentivize this work, the government and the Canada Mortgage and Housing Corporation are exploring options for using mortgage loan insurance to support the construction of more two-to-four-unit homes. More financing for affordable housing: The government will provide affordable housing providers with financing of $50 million over two years, starting in 2025, through the Affordable Housing Fund. Supporting women and their children fleeing violence: The 2024 FES will accelerate $50 million from the Affordable Housing Fund’s Rapid Housing Stream to build more women’s shelter spaces in 2025. Measures to lower community housing rent and home ownership costs Supporting non-profit and co-op housing residents by extending the Federal Community Housing Initiative (FCHI) The FCHI supports community housing projects (including co-operative housing) with funding to keep rent low, keep up with maintenance, and ultimately preserve the existing supply of affordable housing. The 2024 FES proposes $362.7 million over five years, starting in 2028, to extend the FCHI. This will provide thousands of households with rental assistance. Removing the stress test at mortgage renewal Requalifying against the mortgage stress test (also known as the minimum qualifying rate) at renewal makes it harder for many homeowners to switch lenders. The government is changing mortgage insurance rules to remove the stress test requirement for uninsured mortgage holders who switch from a federally regulated lender to a lender that purchases portfolio insurance for the mortgage. In addition, the government will launch consultations on how to improve the structure and effectiveness of the stress test on insured mortgages. Reviewing long-term fixed rate mortgages: To examine the barriers to making long-term mortgages more widely available, the government will launch consultations on the market development of long-term mortgages in Canada. Enhancing the Canada Greener Homes Loan Program (CGHLP) The CGHLP provides 10-year interest-free loans of up to $40,000 to help homeowners with the cost of retrofits that reduce their home energy bills. The CGHLP will provide a further $600 million in interest-free loans, starting in 2024–25. This will support 15,000 to 24,000 more homeowners to reduce their energy costs. Tackling mortgage fraud The Canada Revenue Agency (CRA) has expanded its outreach to the broader financial sector on how to design and implement a new tool to combat mortgage fraud. The CRA aims to start implementing this new tool in early 2025. Our view: The FES doesn’t provide housing-related direct income support for people on low incomes. Although the measures to build more housing are welcome, they will only yield results in the future. With housing costs remaining high, people on low incomes need support with their rent or mortgage payments for the housing they have today. Equity, access, justice, and reconciliation Support for Indigenous peoples Advancing Indigenous priorities and reconciliation: Key federal ministers will develop a clear plan to ensure that financial predictability and sustainability is interwoven with the government’s reconciliation efforts. Launching the Indigenous Loan Guarantee Program (ILGP) The ILGP is a $5 billion loan guarantee initiative to address barriers to supporting Indigenous ownership in natural resource and energy projects. The government has created the Canada Indigenous Loan Guarantee Corporation (CILGC) to run the ILGP. The CILGC will provide loan guarantees to Indigenous groups. This will enable Indigenous groups to obtain more favourable borrowing rates, and increase Indigenous ownership of cash-generating assets in the natural resource and energy sectors. Applications submitted to the CILGC will be accepted on an ongoing basis. Keeping Northern Manitoba connected by rail: The government will provide $43.8 million over two years, starting in 2025, to Transport Canada. This will support the operations and maintenance of the Hudson Bay Railway through the Remote Passenger Rail Program. Our view: While well-intentioned, the FES provisions to support Indigenous communities fall far short of the Truth and Reconciliation Commission’s Calls to Action and other related recommendations. In particular, Indigenous peoples experience food insecurity at double the national average rate, due to historical and ongoing colonialism and discrimination. Tackling these issues requires bold action in consultation and partnership with Indigenous communities. Support for Black peoples Establishing Canada’s Black Justice Strategy: To support efforts to tackle anti-Black violence and systemic discrimination, the 2024 FES commits $77.9 million over two years, starting in 2025, to launch Canada’s first Black Justice Strategy. Created in partnership with Black communities, the strategy complements the efforts of other government departments in this work, including Department of Justice and Statistics Canada. Supporting Black entrepreneurship and Black youth employment: The 2024 FES provides: $189 million over five years, starting in 2025, for the Black Entrepreneurship Program (BEP). The BEP helps Black entrepreneurs and business owners to access capital, mentorship, financial planning services, and other related support. $9.5 million over two years, starting in 2025, to help Black youth overcome employment barriers through the Youth Employment and Skills Strategy Program. Supporting Black community organizations: The 2024 FES will provide $36 million in 2025 to enhance the Supporting Black Canadian Communities Initiative. This program empowers Black-led, Black-serving, and Black-focused community organizations to build foundational infrastructure within Black communities. Our view: Black people in Canada experience food insecurity at three times the national food insecurity rate, due to structural inequalities, racism, and discrimination. The initiatives to support Black people in the FES are positive steps, but they do very little to tackle the root causes of food insecurity and poverty in this demographic. Equitable access to federal programs Automatic tax filing helps to ensure that more people receive benefits they are eligible for through the tax system. The government will: legislate to allow the CRA to automatically file a tax return on behalf of certain lower-income Canadians using the data it has already. This will start in the 2025 tax year. Eligible Canadians will be invited to review, modify, or confirm a pre-filled tax return based on CRA data, or opt-out of this service. explore options to expand automatic tax filing to middle-class Canadians with simple tax situations (e.g., non-filers who don’t claim most deductions and credits). explore options to ensure the Minister of National Revenue’s responsibilities include advancing the simplification and automation of individual tax filing in Canada. This would be implemented by amending the CRA Act. Our view: CFCC and other organizations have been calling on the government to implement automatic tax filing to help increase access and uptake of tax system-based federal benefits. This initiative is a welcome development. We will continue to monitor progress and we urge the government to expedite the process. Next steps Join us in calling on the federal government to address the root causes of food insecurity by implementing long-term, direct income supports for households on low incomes. As the cost of living continues to grow and wages remain stagnant, many more people will likely face challenges in accessing food in the coming year. As we head into Budget 2025 and what potentially could be an early federal election, your support is vital. To learn more, read our blog analysis of the 2024 FES. To get involved, learn about our Poverty Action Unit or contact us.