2016 federal budget: transit, housing, seniors, Bombardier

Pape subway station platform
Federal Finance Minister Bill Morneau announced in the 2016 budget that public transit for Ontario is gaining an additional $1.5 billion over the next five years. Bradley Dobson/Toronto Observer
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On March 22, the new federal Liberal government released its first budget.

The Toronto Observer’s Bradley Dobson, Daniel McKenzie, Cherry (Changhong) Liu and Amy McNeill take a look at and gather reaction to what’s in store for Ontario’s public transit, social housing, old age security and Bombardier.



Feds announce $1.5B over five years for Ontario public transit

‘Budget will make a noticeable difference’ in commute times, TTC chair says

By Bradley Dobson

As Julian Knauss sits on the TTC subway that just left Yonge Station, he overhears the announcement that there will be delays due to construction and speed restrictions.

“It’s a feeling that all commuters dread” he said.

Knauss, 31, commutes Monday to Friday from Pape Station to work in the downtown core. He hopes that with the announcement of funding for public transit, that was included in the federal budget, the TTC will receive some investment.

“It’s almost every day I hear about how there’s delays going westbound,” he said. “I have no idea what they could possibly be working on for this long,” Knauss said.

Finance Minister Bill Morneau announced public transit for Ontario is gaining an additional $1.5 billion over the next five years. The 2016 budget that was released March 22 outlines that provinces are allocated money based on their percentage of transit ridership. Ontario accounts for 44 per cent.

Morneau insists that infrastructure will be a highlight for the 2016 budget.

The money will be used for TTC line repairs, and the implementation of automatic signals. These signals will reduce the waiting times for customers in between transit, and there will be less reliance on human operators. In addition to the automatic signals, funds may be used to modernize the subway system, acquire more buses and upgrade the streetcar network. In addition to Mayor John Tory’s Smart Track plan, the Waterfront East LRT and the Scarborough Subway system account for nearly $12 billion in spending.

Mark Jespers, a TTC maintenance employee, says that fewer delays and increased efficiency will hopefully make his job easier.

“I get asked questions all the time about what’s going on … ‘Why is the train late?’” Jespers said. “I end up telling customers that it’s not even my department.”

TTC Chair Josh Colle said that the “budget will make a noticeable difference in the commute of all TTC customers.”

It’s also projected that by mid 2017 the turnstile system of entering the subway will be removed in favour of Presto-enabled gate fare to speed the process of boarding trains.

A total of $42 million has been budgeted for the implementation, and TTC spokesperson Brad Ross confirmed that the Main Street station on the Bloor-Danforth Line was the first to be upgraded.

“We want to make sure we get it right,” Ross said.

Liberals acknowledge social housing problem in federal budget

Government investing $2.3 billion in affordable housing over next two years

By Daniel McKenzie

Toronto is running out of time and money for its affordable housing communities.

More than 95,000 families are on a waiting list for a home and a backlog of capital repairs threatens to leave up to 7,500 units inhospitable in the coming years.

On Tuesday, the federal government announced a $2.3 billion investment plan over the next two years for affordable housing initiatives, including $573 million for energy and water efficiency retrofits to existing buildings.


“We clearly have somebody (Trudeau) that believes the federal government has a role in housing. I think that’s to be celebrated,” said city councillor and affordable housing committee chair Ana Bailão. “Is it enough? Absolutely not. It’s not going to solve the issue. But the way I interpret this is that they create this two-year plan basically to give them time to develop a long-term national housing strategy.”

The retrofit investment represents a key change in policy, as the city was not able to use federal funding for repairs or renovations in the past.

[aesop_image imgwidth=”300px” img=”http://specialreports.torontoobserver.ca/wp-content/uploads/2016/04/DM_Susan-Gapka.jpg” offset=”-50px” credit=”Courtesy Susan Gapka” alt=”Susan Gapka” align=”left” lightbox=”off” caption=”‘In our building on Mutual Street there are holes in the ceiling, floods on the top floor when it rains, and I live in a pretty good building,’ says Susan Gapka, a TCHC resident of more than 10 years.” captionposition=”left”]

Bailão says the money will flow through the province, and while she’s relayed the message that Toronto is ready to do repairs immediately, it’s yet to be determined exactly how much the city will get and which projects will come first.

Toronto Community Housing Corporation (TCHC) is the largest social housing provider in the city, with more than 2,100 buildings.

Susan Gapka has been a TCHC resident for more than 10 years and is also an affordable housing activist.

“In our building on Mutual Street there are holes in the ceiling, floods on the top floor when it rains, and I live in a pretty good building,” she said. “Each morning, depending on the weather, I have to wipe the windows because the condensation comes from outside to inside, and leaks. There’s puddles on the windowsill.

“That’s just not energy efficient and it’s dangerous for mold, too. It looks horrible.”

Gapka says they’ve been waiting years for repairs.

[aesop_image imgwidth=”580px” img=”http://specialreports.torontoobserver.ca/wp-content/uploads/2016/04/DM_mold.jpg” credit=”Courtesy Susan Gapka” alt=”Mold around a window in Susan Gapka’s TCHC building” align=”center” lightbox=”off” caption=”‘Each morning, depending on the weather, I have to wipe the windows because the condensation comes from outside to inside, and leaks,’ says Susan Gapka, adding residents in her TCHC building have been waiting years for repairs. ‘There’s puddles on the windowsill. That’s just not energy efficient and it’s dangerous for mold, too. It looks horrible.'” captionposition=”left”]

The backlog started in 2002, when provincial social housing was downloaded to the city after amalgamation. Ontario didn’t include any repair funding in the process, so Toronto’s housing portfolio essentially doubled while its capital budget remained the same.

In 2013, TCHC initiated a 10-year capital repair plan to ensure its buildings remain in livable condition. The $2.6 billion plan, unanimously approved by city council, requires equal funding from the municipal, provincial, and federal governments. The city has already covered its share and is waiting for the other two-thirds.

“It’s definitely going to be a huge help (federal funding),” said TCHC spokesperson Lisa Murray. “Will we have to close up units in 2017? I don’t know. I will tell you that between 2013, the first year of the capital repair plan, to the end of 2016, we will have spent $622 million and completed over 40,000 capital repairs.”

Murray says capital repairs are not leaky faucets or similar issues that you might call your landlord about. Those are called “demand maintenance repairs,” which TCHC completes at a rate of about 400,000 each year, but the backlog still grows.

“It’s probably about $60 million per year to do those 400,000 repairs and if we were able to not have to repair something, but be able to replace it, then that cuts back on the amount of money that we spend every year on that kind of unplanned maintenance,” she said. “So we’re freeing up that money either for more capital repairs or to provide other services for tenants.”

Capital repairs are things like 53-year-old boilers that have a 50-year lifespan, leaking roofs leading to electrical failures, and foundation problems.

“One common thing is elevators not working in buildings. So a lot of people are vulnerable, people with mobility issues,” Gapka said. “You have to have the elevators working.”

Murray says TCHC has approximately 500 elevators, many of which are original and in need of replacement.

The budget also includes two-year investment plans for affordable housing for seniors ($200 million), and doubles the Investment in Affordable Housing (IAH) initiative ($504 million). The IAH covers everything from new home construction to rent supplements and accommodations for victims of domestic violence.

Gapka says it’s a good sign that the federal government is showing an interest in affordable housing but wonders how much of an impact it will actually have in Toronto.

“It’s sort of like throwing bread crumbs to pigeons; there’s not enough to go around,” she said. “They’re throwing a few dollars at a very desperate, needy industry. And that’s partly because they’ve been starved for the past 10 or 15 years on housing.”

Federal budget reveals old age security eligibility to return to 65

East York seniors show mixed reactions to changes

By Cherry (Changhong) Liu

Changes to Old Age Security have been a long time coming for some East York seniors at the Second Mile Club.

On Tuesday, the 2016 federal budget was released, outlining a change for the Old Age Security (OAS) age eligibility back to 65 from 67.

Seniors in recreational club meeting at the Matty Eckler Recreation Centre on Gerrard Street East a day later offered a variety of opinions about the change.

[aesop_image imgwidth=”300px” img=”http://specialreports.torontoobserver.ca/wp-content/uploads/2016/04/CL_Alice-Gillen.jpg” offset=”-50px” credit=”Cherry Liu/Toronto Observer” alt=”Alice Gillen” align=”right” lightbox=”off” caption=”‘Sixty-five is a perfect age,’ says Alice Gillen, 87. ‘If you want to work a bit longer you’ll be free to do that. Some people are not able to work longer and some people can.'” captionposition=”left”]

Alice Gillen, 87, says that “65 is a perfect age. If you want to work a bit longer you’ll be free to do that. Some people are not able to work longer and some people can.”

Gillen lives alone, and her main source of income is the OAS pension. She followed the federal budget coverage on TV, eager to know if any changes will affect her.

“I feel pretty good. It’ll make things much better,” Gillen said.

In 2012, Prime Minister Stephen Harper’s Conservative government increased the OAS eligibility age to 67 years effective, as of 2023. That would have decreased the annual spending by $11 billion by 2030.

“The Conservatives didn’t treat seniors well. They weren’t looking after them at all, and a lot of people in the hospital were not getting enough money,” Gillen said.

Mary Angiers, 84, also believes that it should be a choice, not a necessity, to work past 65.

“With some people, especially those in sports or heavy-duty jobs, they’re worn out and they need help at 65,” she said.

This change actually makes Canada an odd one out as many countries have raised the retirement age due to financial pressure from an aging population that is also living longer.

When the OAS was first introduced in the early 20th century, life expectancy was 69 for men and 76 for women. By 2012, that number had grown to 79 for men and 83 for women.

[aesop_image imgwidth=”300px” img=”http://specialreports.torontoobserver.ca/wp-content/uploads/2016/04/CL_Pearle-Sutherland.jpg” offset=”-50px” credit=”Cherry Liu/Toronto Observer” alt=”Pearle Sutherland” align=”left” lightbox=”off” caption=”‘I don’t think it’s the government’s job to take care of us from cradle to grave,’ says Pearle Sutherland, 84. She is concerned about the cost of keeping OAS eligibility at 65 years old.” captionposition=”left”]

Pearle Sutherland, 84, is concerned about the cost of keeping OAS eligibility at 65 years old.

“I don’t think it’s the government’s job to take care of us from cradle to grave,” Sutherland said. “There are too many baby boomers who are going to be retiring, and the government won’t have the money.”

The OAS changes mean much higher government expenditure, which in turn means more tax on citizens, she said

“I think people should have more education on how to effectively save for retirement instead of leaving it to the government to take on everything,” Sutherland said.

There have been no changes to the OAS clawback threshold to affect higher income retirees.

“As it is, the clawback clause almost discourages people from saving, because those who have savings to withdraw from are penalized in the form of decreased OAS payments,” said certified accountant and owner of accounting firm, Ping Yang.

During his election campaign, Liberal leader Justin Trudeau had promised a short-term deficit of less than $10 billion for each of the first three years. However, the changes to the OAS among others highlighted a deficit of $29.4 billion in the 2016 federal budget.

Despite the mixed reactions, Gillen feels that the Trudeau government has been doing a decent job of keeping its promises, so far.

“Some people agree with it and some people may not agree with it. That’s the situation with everything,” Gillen said.

Talks continue after Bombardier snubbed in federal budget

By Amy McNeill

Bombardier’s ability to compete internationally may hinge on $1 billion in funding it hopes to receive from the federal government.

Michael Levitt, Liberal MP for York Centre where Bombardier’s Toronto plant is located, says that the money still may come but when is unclear.

“No decision has been made yet because it is being looked at in a very thoughtful and empirical way,” Levitt said. “I don’t think there’s a rush for the ministers involved.

“The aerospace industry is an important sector for the Canadian economy, and a lot of thought is going into making sure that the decision is well thought-out.”

Bombardier is struggling to remain competitive in an industry where foreign aerospace programs are funded by government.

Bombardier was expecting to receive $1 billion US for its C-Series aircraft program as a part of the federal budget on March 22 but the funds were not included.

The money would help finance the recently certified jets to enter the production phase, while also providing C-series customers with more financing options. Engineering work on the project would happen at the Toronto Downsview plant. Manufacturing is expected to be outsourced while assembly would happen at the company’s Mirabel facility in Quebec.

“I can’t comment on ongoing negotiations at the federal level, other than to acknowledge that they are ongoing,” Bombardier spokesperson Marianella De la Barrera said.

“What we’ve seen with the Quebec government coming in with the investment is a positive effect in discussions with our customers,” De la Barrera said. “There’s more confidence in our relationships.”

Mary Ellen McIlmoyle, president of Unifor local 673, the union that represents Bombardier workers in Toronto, said the budget snub should not be viewed so negatively.

“It shouldn’t be viewed as an indication or decision not to support or invest in the industry by our government,” McIlmoyle said just before the budget was released.

The issue was raised in both the Ontario Legislature and House of Commons on March 21, and Finance Minister Bill Morneau was expected to announce the $1 billion allotment the next day.

“A successful aerospace industry is very much dependent on its government for support, particularly when an aircraft is in development stage or infancy,” McIlmoyle said after the budget was delivered.

“We are optimistic that the government will invest in Canada’s aerospace industry.”

Asked whether the federal government should provide aid for Bombardier if the company shifts jobs overseas, union chairperson Gus Goncalves said they are two separate issues.

“Whether Bombardier outsources some work here and there is not the present issue,” he said.

McIlmoyle agreed.

“I understand the legitimacy of concern by the government that Bombardier would consider offloading work while at the same time as they are seeking an investment,” she said. “Alternate solutions need to be explored.”

The Montreal-based aircraft manufacturer’s push for federal funding for the C-Series program comes after the Quebec government committed to $1 billion in October, 2015.

The program is more than two years behind schedule, and more than $2 billion over budget. By committing the $1 billion, Quebec secured a 49.5 per cent stake in the C-Series and two of five board seats.

Bombardier holds the three remaining seats and has the right to appoint the subsidiary’s chairman.

The C-Series planes compete against the American-made Boeing 737 and Airbus A320.

Without federal funding, the C-Series “is having a very difficult time competing,” Goncalves said.

“The Airbus is funded through the European governments and Boeing is funded through the U.S. government – both in highly lucrative contracts from the federal government.”

When asked if this was purely a Canadian issue, Goncalves says that it shouldn’t be an issue at all.

“Anytime a country has an industry that is significant to their economy, the government will prop it up anyway it can,” he said. “It’s no different than putting the money in any other industry.”

Goncalves and McIlmoyle see the potential funding not only as an investment in Canadian aerospace, but an act of confidence in a competitive contender on the international playing field.

“We believe this government recognizes the importance of the industry and the technology and jobs linked to it and remain optimistic that the government will do what is necessary to support it,” McIlmoyle said.

Maria Augimeri, Toronto city councillor for Ward 9 where the Downsview Bombardier plant is located, declined to comment.

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Posted: Mar 23 2016 11:59 pm
Edition: Toronto
Filed under: Special Reports News