[homeles_ot-l] Canadian homeowners get multi-billion dollar subsidy FW from WI backgrounder

[Lynne Browne]

FYI…Lynne Browne

Coordinator

Alliance to End Homelessness (ATEH)

147 Besserer Street, Ottawa, Ontario K1N 6A7

613-241-7913, ext. 205

HYPERLINK "mailto:lbrowne at ysb.on.ca"lbrowne at ysb.on.ca 

www.endhomelessnessottawa.ca  

   _____  

From: nhhn-can-owner at povnet.org [mailto:nhhn-can-owner at povnet.org] On Behalf
Of Michael Shapcott
Sent: January 6, 2009 12:29 PM
To: nhhn-can at povnet.org; hhno-on at povnet.org
Subject: [nhhn-can] WI backgrounder: Canadian homeowners get multi-billion
dollar subsidy

 

Canada’s homeowners – who are about twice as rich as the country’s renter
households – pocketed a tax subsidy of $11.5 billion in 2007. That’s more
than more than five and one-half times greater than the annual federal
investment in affordable housing programs for low and moderate-income
households. On Friday, January 2, 2009, federal Finance Minister Jim
Flaherty quietly released the 2008 edition of “Tax Expenditures and
Evaluations” – which lists the annual cost of the tax cuts and other
benefits that flow through a long series of personal and corporate tax
breaks. At the bottom of page 19 of the 53-page document, the federal
finance department reported that the annual federal tax break to homeowners
jumped to $11.580 million in 2007, and is expected to remain close to $11.5
billion annually until at least 2010. 

 

The homeowners’ tax subsidy is the government’s estimate of the benefit that
higher income Canadians receive from the income (capital gain) that they
receive when they sell their house (principal residence) at a higher price
than it was purchased. The biggest gains – therefore the biggest tax subsidy
– flow to owners of the biggest and most expensive houses. Therefore, the
capital gains exemption is regressive and doesn’t pass one of the most basic
tests of tax fairness. The people with the biggest income stand to realize
the biggest gain. The federally-appointed Carter tax commission of 1972
urged that fairness should be a cornerstone of the tax system, and that all
income should be treated equally for tax purposes. But the federal
government of the day watered down many of the Carter recommendations, and
tax changes since then have entrenched a sense of unfairness in the tax
system, especially when it comes to housing.

 

By 2005, the real median household income for owners across Canada was
$55,800 – up 6% over the previous 15 years, according to Statistics Canada.
That same year, the real median household income for renters was about half
($29,000) – and renter household income actually fell by 2% over the
previous 15 years. In 2005, home owners received an annual tax subsidy of
almost $7.2 billion. Federal spending on affordable housing programs was
slightly more than $2 billion. Two years later, the total federal tax
subsidy delivered to home owners had jumped by 61% to $11.6 billion, while
the federal investment in affordable housing was stalled at $2 billion (not
including the one-time-only allocation of $1.4 billion in affordable housing
authorized by Parliament in 2005). Renters not only have much lower incomes
than owners, but dramatically lower net worth. The median (middle) net worth
for renters in Canada in 2005 was $14,000, while the median net worth for
owner households was a whopping $327,000. 

 

The bottom line: Renter households have lower incomes, and less wealth, than
owner households, yet they get only a fraction of the federal subsidies that
owners receive. Federal subsidies to higher-income home owners, delivered
through the tax system, are many times more rich than the federal investment
in affordable housing for lower-income households. 

 

 About two-thirds of Canadians are owners, and one-third are renters. 

 

More to follow…   

 

-          Michael

 

PS – The latest news underlines the urgent need for increased federal
investment in affordable housing in the January 27 federal budget. Please
sign onto the Facebook group Canadians for Affordable Housing in the Federal
Budget < HYPERLINK
"http://www.facebook.com/group.php?gid=39812861251"http://www.facebook.com/g
roup.php?gid=39812861251>. Spread the word.

 

* * *

 

Michael Shapcott, Director of Community Engagement

The Wellesley Institute, 45 Charles Street East - #101

Toronto, Ontario, Canada, M4Y 1S2

Telephone - 416-972-1010, x231

Mobile - 416-605-8316

Facsimile - 416-921-7228

HYPERLINK "http://www.wellesleyinstitute.com"www.wellesleyinstitute.com

 


No virus found in this incoming message.
Checked by AVG.
Version: 7.5.552 / Virus Database: 270.10.3/1878 - Release Date: 06/01/2009
7:56 AM



No virus found in this outgoing message.
Checked by AVG. 
Version: 7.5.552 / Virus Database: 270.10.3/1878 - Release Date: 06/01/2009
7:56 AM
 
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://list.web.net/lists/private/homeles_ot-l/attachments/20090106/d99e707e/attachment.htm>