Opinion: Homeowner grant benefits those who have least need for it

Finance Minister Carole James has tightened the rules for homeowner grants. Last year the maximum property value eligible for the grant was $1.65 million. That ceiling has been reduced to $1.525 million, reflecting a decline in house prices.

Nevertheless, James says 92 per cent of homeowners will still qualify, provincewide.

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The basic grant pays up to $570, rising to $770 if the home is located in a rural or northern area, and up to $845 for people who are 65 or older, or who have a disability.

The rationale behind the program is supposed to be that it helps lessen the impact of property taxes. Homeowners who qualify apply to their local municipality, which, in turn, is reimbursed by the province.

But very little about this scheme makes sense. For a start, it’s enormously expensive.

In 2020, the Finance Ministry estimates the all-in cost at $849 million.

That’s twice what the province spends on policing, and nearly four times the Environment Ministry’s budget.

Then again, do people owning homes worth a million and a half dollars really need a government handout to help pay their property taxes?

We can carry that argument a little further. A good chunk of the program’s cost comes from taxes paid by families who could never afford a house of their own.

budget james
Finance Minister Carol James.

This is basically a forced transfer from low- and middle-income earners to the well off. That is the very definition of a regressive policy.

Nor is it difficult to think of ways the money could be better spent. There is no need to detail the many inadequacies of our health-care system. Clearly, it is struggling in nearly every aspect.

Yet the budget increase given the Health Ministry this year was barely enough to keep pace with inflation, population growth and aging.

Add the $849 million we spend on homeowner grants, and the lift would have nearly doubled. Isn’t that a higher priority?

Just one-tenth of the grant funding would have doubled the budget for the Ministry of Jobs, Trade and Technology. And aren’t technology and trade the future of our economy?

The money can’t be found to make significant improvements to the Malahat. Kids are going to school in portables because we haven’t built enough new schools to match the demand. So take the grant, and spend it there.

It’s true a case can be made for helping elderly homeowners who may have difficulty paying their property taxes. The same can be said of people who face serious medical issues.

So yes, properly targeted, and greatly reduced in size, the program could play a useful role.

But as things stand, little effort has been made at selecting those most in need. Indeed, the opposite is true. The major beneficiaries are those least in need.

In essence what we see here is the inability, or unwillingness, of governments to keep up with the times.

When the grant was introduced by premier W.A.C. Bennett in 1957, the safety net programs we take for granted were still in their infancy.

In the early 1960s, the Ministry of Health’s budget stood at $60 million ($520 million in today’s dollars). That was just 16 per cent of the total budget.

In 2020, the Health Ministry will spend around $24 billion, or a little more than 40 per cent of the budget.

Other social programs, like child care, income support and education, have likewise grown in size. The room that once existed for vote-catching schemes like the homeowner grant long ago vanished.

Yet the program lives on, even as truly essential services fall behind.

We understand the courage that would be required to dump this relic. But that’s why we elect politicians: To show some fortitude.

 

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