Homelessness could rise with economic downturn

They should fix problems caused by the Canada Emergency Response Benefit (CERB), increase income assistance and enhance spending on homelessness prevention. (File Photo by Jon Tyson/Unsplash)

The COVID-19 pandemic has negatively impacted those who are homeless. The pandemic has resulted in the closure of daytime services like drop-in centres and the closure of public spaces offering access to washroom facilities such as libraries, along with free Internet access.

But things may get even worse in light of the current recession. In order to stem the possibility of a rise in homelessness as a result of the economic downturn, senior orders of government must act boldly. They should fix problems caused by the Canada Emergency Response Benefit (CERB), increase income assistance and enhance spending on homelessness prevention.

What have been the main policy responses?

In Canada’s major cities, senior homelessness officials have partnered with health officials and others to respond to the pandemic. Typically, local officials have done so by creating more physical distancing at existing shelters, opening new facilities and creating facilities for both isolation and quarantine.

The Government of Canada has provided important financial support for the homelessness sector during the crisis. Indeed, Canada’s COVID-19 Economic Response Plan, announced in March, included an additional $157.5 million in one-time funding for Reaching Home (the federal government’s major funding program for homelessness). On September 21, Ottawa announced an additional $236.7 million for Reaching Home, along with $1 billion for modular housing, the acquisition of land, and the conversion of existing buildings into affordable housing. Provincial governments have also stepped up with funding enhancements of their own.

Despite this enhanced financial support, a number of challenges remain in the sector, including the existence of shared bathrooms; harm reduction, such as safe access to illicit drugs; outdoor sleeping; a dwindling workforce at emergency shelters and drop-in centres; and an anticipated increase in homelessness resulting from the economic downturn.

What should the federal government do now?

The federal government should take a soft approach to recovering CERB overpayments from social assistance recipients, add a prevention stream to the Reaching Home program, and enhance the Canada Housing Benefit.

Offer CERB forgiveness. There is growing concern across Canada about CERB overpayments made to many low-income individuals, including to social assistance recipients — people who are already very vulnerable to homelessness. There are anecdotal accounts of social assistance staff in some parts of Canada encouraging their clients to apply for CERB, even though they may not have been eligible. With this in mind, the federal government should consider taking a soft approach with some recipients of CERB who may not have been eligible for the benefit. Such an approach might include not trying to fully recover the value of CERB from these individuals. Even complete amnesty should be considered in some cases.

Add a Reaching Home prevention stream. Reaching Home is a federal program that funds communities across Canada to respond to absolute homelessness. It currently funds some prevention work (in addition to other initiatives). However, Employment and Social Development Canada should consider creating a new funding stream within Reaching Home with a specific focus on prevention. The focus would be short-term financial assistance to prevent persons from losing their existing housing.

Enhance the Canada Housing Benefit. Central to the Canadian government’s National Housing Strategy is the launch, in 2020, of a Canada Housing Benefit (CHB). This benefit provides financial assistance to help low-income households afford the rent, mostly in private-landlord buildings. The government estimates this will cost $4 billion over eight years. It is expected that half of this money will come from the federal government, and the other half from provinces and territories.

The CHB was supposed to launch nationally on April 1; however, at the time of this writing, just two provinces (British Columbia and Ontario) had formally agreed to terms regarding the CHB. The federal government could increase the value of this benefit, which would encourage provinces and territories to sign on. For example, the federal government might offer cost-sharing.

What should provincial and territorial governments do?

Provincial and territorial governments have crucial roles to play in preventing further homelessness. They should reinstate social assistance eligibility for recipients who became ineligible due to the CERB, and also encourage housing-focused emergency shelters.

Reverse social assistance suspensions caused by CERB. Many public officials have been unclear with social assistance recipients as to whether or not they are eligible for the CERB. Some administrators penalized social assistance recipients who received it, while others did not. Some provinces (Newfoundland and Labrador) even encouraged CERB applications and then suspended social assistance benefits from the same individuals after they received it. Such suspensions often result in the loss of health and dental benefits, in addition to the loss of social assistance cash benefits.

For people who have lost their social assistance benefits after receiving the CERB, re-applications for social assistance may take a considerable amount of time thus increasing their vulnerability to homelessness. Provincial and territorial officials should not suspend people from social assistance because they received the CERB. Anyone who has already been suspended should be immediately reinstated.

Encourage housing-focused shelters. The concept of “housing-focused shelters” is growing in Canada. It refers to operators of emergency shelters moving shelter residents into permanent housing. Such a practice is easier to carry out when rental vacancy rates are relatively high–and vacancy rates are expected to increase in light of COVID-19.

Not all shelter operators in Canada currently encourage residents to move on to housing to the same degree. Provincial and territorial governments can encourage emergency shelters to be more housing focused by changing the terms of funding agreements. For example, they can incentivize flow rather than bed occupation. (For a brief consideration of housing focused shelters, see the module titled “Innovative practices” in my Homelessness 101 workshop.)

Homelessness officials in Canada’s major cities have partnered with health officials and others to respond to COVID-19, arguably this sector’s greatest challenge since the Great Depression. However, the current recession may make matters worse and bold policy responses are needed to prevent this.

This article is part of the Tackling inequality as part of Canada’s post-pandemic recovery special feature.

This article first appeared on Policy Options and is republished here under a Creative Commons license.