COVID-19 has slowed the pace and increased the cost of construction projects, creating still more complications for the social housing backlog in Quebec. The newly released 2021-22 provincial budget allocates $170 million over the next two years to catch up on 5,000 promised but yet-to-be-delivered affordable units under the AccèssLogis program, along with $37 million for an additional 500 units to be built between 2022 and 2026.
Responding to pandemic-triggered financial stresses and general low vacancy rates, the budget also pledges $3.6 million over the next two years to help low-income renters secure housing in the private market and to augment municipal emergency supports for people in transition after losing their housing. Meanwhile, rental housing dwellers aged 70 and older can look forward to an automatic or topped-up refundable tax credit for home support services.
Even before COVID-19 struck, rising construction costs had delayed construction of social housing units announced in earlier Quebec budgets — necessitating an extra $410-million funding injection, which was announced in the 2019-2020 budget. That enabled a 110 per cent uptick in construction completions for 2019, with 1,749 units built versus 834 during the previous 12 months. However, pandemic-related logistical complications shrank 2020’s output to just 841 units.
“Many of the units announced in the past were not yet under construction as at December 31, 2020,” the Quebec budget document acknowledges. “Taking into account the additional funding, 2,411 units will be completed in 2021.”
In the nearer term, the budget commits $1.6 million over the next 12 months to obtain 200 housing units through the emergency rent supplement program. Under the program, tenants pay 25 per cent of their monthly income while government funds bridge the gap to cover rents for private market accommodations or for other cooperative or community-based not-for-profit housing units. In addition, Quebec municipalities that offer emergency support services for homeless people — for example, providing partial reimbursement for the cost of transporting and storing their belongings — will get a boost of provincial funding, equating to $2 million over the next two years.
The 2021 budget also opens up an enhanced refundable tax credit for tenants aged 70 and older and promises incremental upward adjustments over the next five years. Until now, they could claim a maximum of $126 annually for various services defined as home supports — such as maintenance, snow removal and grounds-keeping — that are typically embedded in rent costs. Beginning in the 2022 tax year, that will increase to a minimum of $129.60 or a potential maximum of $259.20, due to two changes in the formula for calculating the benefit.
Although rent continues to represent 5 per cent of eligible expenses, the base rate for calculating that 5 per cent has been doubled from $600 to $1,200 monthly. Concurrently, the rebate itself has been pushed up from 35 to 36 per cent of eligible home-support services for 2022, and will increase 1 per cent in each subsequent year until it reaches 40 per cent in 2026. Together, the two measures are projected as an extra $394-million government expenditure over the next five years.
“This enhancement will be more beneficial to low-income seniors and those with more diminished autonomy,” Quebec Finance Minister Éric Girard, stated in the budget speech.
Eligible recipients can claim the tax credit even if they are not paying taxes. The Quebec government now intends to introduce enabling legislation so that a monthly $600 rent is presumed, but renters will have to make claims for amounts above that minimum benchmark.
“As long as Revenu Québec has the information needed to determine their eligibility for this assistance, tax assistance under the tax credit for home-support services for seniors related to the amount of the ‘minimum eligible monthly rent’ could be paid to the individuals in question, without them having to apply for it, provided their family income and the applicable reduction entitles them to it,” the budget document confirms.
