Hundreds of recipients received more than their rent
Nova Scotia is making changes to its rent supplement program after discovering hundreds of recipients received more financial support than their actual rent costs.
About 860 applicants under the Canada-Nova Scotia Targeted Housing Benefit program are currently receiving more benefits than they pay in rent, with overpayments averaging $145 a month. The program was initially designed to help those struggling with rising rental costs by providing supplements based on the average market rent in their area.
John Lohr, Nova Scotia’s minister of housing and municipal affairs, explained that the issue arose due to a formula implemented in October 2020, which calculated rent supplements based on the average market rent in a given area rather than on the actual rent paid by recipients.
"I think that's been going on since the program was designed," Lohr said. "In the beginning of this program, the federal government wanted it based on average market rents. So if you were considerably less than average market rent, and we're basing a calculation on average market rate, you could receive more."
Under the current program, Canada Mortgage and Housing Corporation (CMHC) lists the average market rent for a one-bedroom unit in Halifax at $1,382 per month. However, this method of calculation has led to overpayments for those whose rent is significantly lower than the average.
Starting in December, the government will calculate the benefits based on each applicant's actual rent, with the new formula being phased in over three years to allow recipients time to adapt.
Lowering income threshold
In addition to correcting the overpayment issue, the province is also lowering the program's income threshold to increase the number of people eligible for the benefit.
Read next: Buyers seek bargains in distressed real estate, but sellers hold firm
Previously, households had to spend 50% or more of their income on rent to qualify. This threshold has been lowered to 40%, which is expected to make the program accessible to an additional 1,000 Nova Scotians. The program currently benefits about 8,500 households.
Opposition calls for more action
While these adjustments aim to correct imbalances and broaden access, critics argue they don’t go far enough.
Liberal housing critic Braedon Clark pointed out that the program's previous shift from a 30% income threshold to 50% was a mistake, and he advocates for a return to the lower percentage.
"I think it shows perhaps that the program was not being as rigorously examined as it should have been," Clark told CBC News. "I would still like to see that threshold move back to 30% so that more people become eligible."
NDP leader Claudia Chender also voiced concerns, suggesting that the government’s adjustments are merely a temporary fix rather than a solution to the underlying issue of housing affordability.
"We need affordable housing. Until we have that affordable housing supply, until we prioritize that, we have these stopgaps," she said.
While she acknowledged that lowering the threshold to 40% is an improvement, Chender called for more substantial action to address the province's affordable housing shortage.
"We think that this program needs to be as generous as possible so that people can stay in their homes and have a roof over their heads," Chender added.
Make sure to get all the latest news to your inbox on Canada’s mortgage and housing markets by signing up for our free daily newsletter here.
