As the COVID pandemic began to show signs of receding in early 2022, Canadians were looking to the future with renewed hope. Governments initially spoke of “building back better” after the devastating pandemic, with aspirations for addressing social inequalities and making the country’s systems more resilient.
But for many people, that hope for progress was soon tempered by soaring prices for food, rent and gas, as well as the effects of a record-breaking wildfire season, floods, storms and other climate-change-induced events that have touched virtually every corner of the country.
It was in the context of these twin crises that the Affordability Action Council, a non-partisan collaboration of diverse policy experts and community leaders from across the country, came together to develop a suite of policy measures to simultaneously tackle the effects of high inflation and climate change. The Council gathered experts, commissioned research and convened discussions to provide evidence-based policy recommendations to the federal government. This report is the culmination of our work.
The Council was guided by a new approach to policymaking — one that eschews piecemeal policy measures in favour of a holistic view that considers all basic needs at once. Because no one should have to forgo buying food to pay the rent. No one should avoid heating or cooling their homes to afford a transit pass to get to work. And none of these things should come at the expense of addressing climate change.
Too often we hear arguments that efforts to speed the transition to a low-carbon economy will make life more unaffordable. We think that with the right policies in place it’s possible to ease near-term affordability concerns while putting in place the building blocks for lasting affordability, resilience and emission reductions. Indeed, if efforts to address affordability and climate change remain on separate tracks, low-income families will become more vulnerable to volatile fossil fuel prices and bear the cost of a changing climate.
At the forefront of the Council’s work has been the recognition that efforts to address these challenges should make lower-income families a priority. And younger generations — which have already been saddled with high housing costs, a disproportionate share of social benefit payments and growing climate risks — shouldn’t be further disadvantaged.
The Council’s recommendations will not solve all affordability and climate-change challenges, but we think they provide a good starting point that integrates these policy objectives. It is possible to find innovative solutions that help Canadians make ends meet while preparing them for a lower-emission, climate-resilient future.
President and CEO,
Institute for Research on Public Policy
Trottier Family Foundation
Canada — and much of the world — faces two simultaneous and interconnected challenges: widespread affordability concerns and climate change.
Canadians are struggling. Almost seven million people — including almost two million children — do not have stable access to enough food (Uppal, 2023). More than one million low–income families live in unaffordable and overcrowded homes, and more than 230,000 people are experiencing homelessness (Dionne et al., 2023). Wait lists for community housing in major Canadian cities are yearslong (Vallis, 2023).
How did we get here? Inflation surged in the wake of the COVID-19 pandemic, hitting a peak of 8.1 per cent year over year in June 2022, its highest level since the 1980s (Statistics Canada, 2022a). Although increases in consumer prices have moderated since then, the cost increases for food, transportation and shelter remain above the overall Consumer Price Index (see figure 1). And many of the affordability challenges we are confronted with today have been years in the making and are unlikely to dissipate even as inflationary pressures ease.
High prices are squeezing family budgets. Very low-income households spend more than 100 per cent of their disposable income on necessities including food, shelter and transportation, leaving them caught between a rock and a hard place: cut back on heating and cooling to pay for groceries or cut back on food to pay the rent (Affordability Action Council, 2023c).
There are clear interactions between these affordability challenges and climate change. Building homes that depend on fossil-fuel heating or driving long distances increases future costs for households. A changing climate is also likely to be a significant driver of higher food prices in the coming decades, and Canadians are already experiencing the costs of wildfires, floods, heat waves and power outages. Delaying climate action is not an effective solution to the affordability crisis.
At the same time, governments implementing climate policies need to consider the cost implications for low-income households and help them access affordable, low-carbon alternatives. Helping low-income households reduce their dependence on fossil fuels will provide lasting savings and resilience to policy and market change. Programs such as the federal Oil to Heat Pump Affordability program, which provides upfront payments to cover the cost of a new heat pump, help improve affordability while also reducing greenhouse gas emissions. A low-income household with an energy-efficient, flood-resilient home located close to affordable, reliable public transit is far less vulnerable to energy price increases or a changing climate.
There can be no either-or solutions to these challenges. Canada needs policies that simultaneously help us reduce greenhouse gas emissions and ease the cost-of-living burden for lower-income families. And we must take care not to further burden younger generations by making choices that will increase the costs they face down the line.
The Affordability Action Council has identified five priority areas where urgent action is needed: housing retrofits, affordable housing, food insecurity, urban transportation and rural transportation. The council established working groups composed of researchers and experts in each of these areas and undertook research to identify possible solutions. Based on this work, the Council has identified several policy recommendations for the federal government. The priority areas require significant action across all levels of government, but the Council chose to focus on areas where the federal government could meaningfully take action.
In addition to this report, we have published five accompanying policy briefs that provide more detail about the challenges lower-income Canadians face and the Council’s proposed policy solutions for helping them make ends meet.
Establish a free housing retrofit program for lower-income households
Reducing household dependency on energy and the costs associated with a changing climate is critical to addressing housing affordability.
Lower-income households spend a higher proportion of their income on energy (Natural Resources Canada, 2022), and a significant proportion live in energy poverty (see figure 2). Older homes use more energy than newer ones. And, since older homes are typically more affordable, they are more likely to be owned by people with lower incomes, who, as a result, face higher energy costs (Aviles, 2022).
Likewise, homeowners in rural and remote areas and those in Atlantic Canada who don’t have access to natural gas networks pay more for oil and propane heating and are more exposed to global price shocks. Mismatches between the supply and demand for oil are expected to grow as global climate action accelerates, exposing oil-dependent homeowners to further price increases (Leach, 2022).
Housing-resiliency and energy-efficiency challenges are more pronounced among Indigenous people, particularly those living in remote, rural and northern communities (Webber & Berger, 2023). In 2021, nearly one in six Indigenous people resided in dwellings that needed major repairs, almost three times as high as non-Indigenous populations (Melvin & Anderson, 2022).
Low-income households are more likely to face risks to their health during heat waves and from wildfire smoke because they are unable to afford air conditioning, a heat pump or a high-quality air-filtration system (Beugin et al., 2023; Ontario Ministry of the Environment, Conservation and Parks, 2023). This is also true of seniors and people with underlying health conditions.
Lower-income households are also more likely to live in areas at risk of adverse climate events (Canadian Climate Institute, 2020). And they suffer the most during storm-related power outages because they can least afford to replace spoiled food, eat in restaurants or pay for temporary accommodation (Ramesh & Coutinho, 2022).
Housing retrofits can reduce a household’s dependency on energy and avoid costs associated with growing climate risks. The federal government has put in place several programs to encourage homeowners to retrofit their homes, but they often exclude lower-income households.
The main programs aimed at subsidizing homeowner retrofits, such as Natural Resources Canada’s Greener Homes Grant, require homeowners to pay the upfront costs. This can be a challenge for lower-income households. And the programs that provide loans are often out of reach because they require a strong credit history.
The revised Oil to Heat Pump Affordability Program (Prime Minister of Canada, 2023) offers upfront payments that cover part of the cost of a new heat pump, and some provinces and territories offer additional funds that make the average heat pump free for lower-income households. However, most households across Canada rely on natural gas or electric heating and are unable to take advantage of the program (Statistics Canada, 2023a).
These programs are also administratively complex, often requiring long application forms and pre- and post-retrofit evaluations, which effectively act as a barrier for many low-income households, single-parent families, recent immigrants and seniors.
In addition, most retrofit programs for rental buildings are aimed at community housing and large buildings, and exclude small rental units. This has significant repercussions because 62 per cent of low-income Canadians rent, and 72 per cent of renters live in housing built before 1990, when energy efficiency was not included in Canada’s building codes (Kantamneni & Haley, 2023; Randle et al., 2022). Other programs such as the Canada Infrastructure Bank’s Building Retrofit Initiative may be available to privately owned rental buildings but require investments that preclude small landlords with modest financial means (CIB, n.d.).
NRCan’s Deep Retrofit Accelerator Initiative and Greener Neighbourhoods Pilot Program have the potential to support retrofits in affordable rental buildings and community housing but additional funding is required to scale the programs up and prioritize low-income housing.
Done well, housing retrofits can lower energy costs and improve indoor-air quality while protecting people against heat waves, floods, wildfires and other climate-related events (see figure 3) (C40 Cities Climate Leadership Group, 2020; Canadian Climate Institute, 2023; Kantamneni & Haley, 2022). But the scope and scale of existing programs are insufficient to undertake retrofits that address affordability, adaptation and net-zero goals simultaneously.
Renew the federal government’s role in affordable housing and build one million rent-geared-to-income community homes by 2030
Canada has a critical shortage of affordable housing. Most of Canada’s public, not-for-profit and co-operative housing was built more than 30 years ago with assistance from the federal government (CMHC, 2021a) and more than half of Canada’s community and below-market-rent housing stock was built before 1980 (CMHC, 2023a). Federal support for the construction of community housing declined in the late 1980s and ended altogether in 1992, when responsibility was shifted to the provinces (Deng et al., 2023). Some provinces, including Ontario, subsequently downloaded responsibility to municipalities, which lack the revenue streams and budgets to build enough community housing units to meet demand (Canadian Centre for Housing Rights, 2022).
Non-market housing represents just 5 per cent of Canada’s existing housing stock (Statistics Canada, 2023b), compared to 40 per cent in Sweden, 16 per cent in the United Kingdom and 14 per cent in France. More than one million low-income families live in unaffordable, overcrowded, uninhabitable or inadequate housing. And more than 230,000 people are experiencing homelessness (Dionne et al., 2023).
Wait lists for community housing in major metropolitan areas are very long. In Toronto, the average wait time for a one-bedroom, subsidized apartment was 14 years at the end of 2022; in Montreal, it was six years (Vallis, 2023).
Of the households living in poverty in 2016, 62 per cent were renters (Randle et al., 2022). In Toronto, which has among the highest rents in the country, almost one-quarter of renters spend more than 50 per cent of their income on shelter costs (City of Toronto, 2021). This means that people who earn a minimum wage are unable to afford rent in major cities. The situation has broader economic repercussions. Businesses dependent on low-wage workers are struggling to find employees because these workers cannot take a job where they can’t afford to live (Statistics Canada, 2022b).
Housing also has important implications for the climate. In 2021, buildings emitted 40 million tonnes of greenhouse-gas emissions. Canada Mortgage and Housing Corp. estimates that 5.8 million housing units are needed to restore overall housing affordability by 2030. This will require building an additional 3.5 million units beyond what is already planned (CMHC, 2022). If the new and proposed buildings are constructed without changing current building practices, it will be difficult for Canada to meet its emission-reduction targets (Guldimann, 2023).
This could have repercussions for years to come. Residential buildings that are built without consideration for the net-zero target create a future liability. While retrofits generate many benefits, it is much cheaper in the long run to build new housing that meets the net-zero standard than it is to retrofit existing buildings.
Housing that is not designed to withstand the effects of a changing climate will put residents at increased risk (Canadian Council of Academies, 2019). Households that can least afford to rebuild their homes or replace food lost in a power outage are most in need of protection (Dugan et al., 2023).
The location of housing is critical. Homes built on land that is far from public transit and other amenities such as grocery stores and schools may be cheaper, but the costs for households and municipalities will be higher. Residents will need to travel by car, increasing their energy costs as well as air pollution and greenhouse-gas emissions. Municipalities will need to invest in new road, water, sewer and power infrastructure.
Current spending on housing programs aimed at lower-income households falls short. Canada’s Rapid Housing Initiative, which is part of the National Housing Strategy, has dedicated $4 billion since 2020 to create new affordable homes for those in greatest need (CMHC, 2023b). Still, more than one million low-income households were in core housing need in 2021 and more than 230,000 were estimated to be homeless in 2016 (Housing Assessment Resource Tools, n.d.).
The federal government has announced several recent initiatives to spur construction. It has removed the GST on new rental construction, announced funding through the Housing Accelerator Fund and expanded access to low-cost loans for builders. Borrowing a strategy used to alleviate housing shortages in the postwar era, it has announced plans to develop a catalogue of pre-approved housing designs including multi-unit buildings. These initiatives will increase supply and improve affordability for some Canadians.
However, more must be done for lower- and fixed-income Canadians in need of housing. Building more community housing will target Canadians in greatest need and have the added benefit of relieving competition in the broader rental market (Young, 2023).
Create a Groceries and Essentials Benefit for low-income households
Food insecurity — facing inadequate or uncertain access to nutritious and culturally appropriate food — is growing in Canada (Health Canada, 2020). According to Statistics Canada, almost seven million people, including almost two million children, face food insecurity (Uppal, 2023).
The proportion of families experiencing some level of food insecurity increased from 16 per cent in 2021 to 18 per cent in 2022. This proportion is also higher than before the pandemic (Uppal, 2023).
More than 40 per cent of families led by single mothers and more than one-third of Black families are food insecure (Uppal, 2023). Food insecurity is also higher among Indigenous families. In 2022, 18 per cent of non-Indigenous families reported facing food insecurity compared to 34 per cent of Indigenous families. These numbers do not reflect the full scope of the problem in the territories or in Indigenous communities in the provinces. Recent studies have found that nearly half of First Nations families have difficulty putting enough food on the table and many struggle to access traditional foods due to climate change and industry-related activities such as mining (First Nations Food, Nutrition and Environment Study, 2021).
Other indicators also point to a troubling trend. Food Banks Canada (2023) recorded almost two million visits to food banks across the country in March 2023, up 32 per cent from the same month a year earlier and up more than 78 per cent from 2019. Single, working-age adults accounted for 44 per cent of food bank users, one of the largest subsets of visitors.
Increases in food prices have outpaced overall inflation in recent years. Although food inflation has moderated, prices are expected to continue rising (Janzen & Fan, 2023). Canada’s Food Price Report (2024) forecasts that food prices will rise by as much as 4.5 per cent in 2024; prices for bakery items, meat and vegetables could rise by as much as 7 per cent. A family of four is projected to spend $16,297.20 on groceries, up $701.79 from 2023.
Various factors are behind the run-up in food prices in recent years, including supply-chain disruptions in the wake of the pandemic, higher energy prices, Russian’s invasion of Ukraine and adverse weather events.
A lack of competition in Canada’s retail grocery industry has been identified as another possible culprit. A report by the House of Commons Standing Committee on Agriculture and Agri-Food (2023) notes that Canadians purchase three-quarters of their food from grocery stores and that Canada’s five largest retailers control 80 per cent of the grocery market.
In September 2023, the federal government introduced Bill C-56, the Affordable Housing and Groceries Act (Department of Finance, 2023). Among other things, the proposed bill would give the Competition Bureau enhanced powers to reject mergers in some circumstances. In addition, at the insistence of the federal government, the CEOs of the top-five grocery chains have presented plans to federal officials to explain how they plan to contain food prices. But the results of these efforts are uncertain and unlikely to be felt in the near term.
In addition, there have been growing calls to reduce the carbon tax to lower food costs. However, research by Trevor Tombe and Jennifer Winter (2023) concludes that an increase in the carbon tax and other indirect taxes caused overall consumer prices to rise by just 0.6 per cent between January 2015 and October 2023. The effect of carbon pricing on food prices is even smaller. In British Columbia, carbon taxes pushed up the average cost of food by 0.33 per cent. In addition, they note that most of the revenues raised from the carbon tax are refunded to households through the Climate Action Incentive Payment, and most families receive more in rebates than they pay in carbon taxes.
Food prices in the United States, which has no carbon tax, rose by 24.6 per cent between December 2019 and October 2023, whereas in Canada, prices rose 21.8 per cent in the same period (Stanford, 2023).
The effects of climate change are likely to have a greater impact on food prices than policies aimed at reducing emissions. A severe heat wave in Canada’s Prairie provinces in 2021 contributed to higher prices for meat, particularly beef, and grain products. In the United States, Canada’s top agricultural trading partner, a drought in the American southwest along with heat waves, floods and a snap freeze in other parts of the country led to an increase in the price of vegetables and fresh fruit (Fradella, 2022). According to Canada’s Food Price Report (2024), climate change is the most substantial threat facing Canada’s agri-food sector and will continue to drive food prices higher.
Organizations working in the field of food security have noted that people living on lower and fixed incomes need more and better income supports to make ends meet. While these organizations propose different ways of delivering these supports, they all agree: the current social safety net is not providing sufficient support to those who need it most (Daily Bread Food Bank and North York Harvest Food Bank, 2023; Food Banks Canada, 2023; PROOF, 2022).
Numerous studies have shown that the incidence of food insecurity declined among families and individuals who receive income supports such as the Canada Child Benefit and provincial social assistance (Brown & Tarasuk, 2019; Ionescu-Ittu et al., 2015; Li et al., 2016; Loopstra et al., 2015; Men et al., 2021; Tarasuk et al., 2019). Households led by people who are 65 and older, who receive pensions, the Old Age Security benefit and the Guaranteed Income Supplement, also face lower levels of food insecurity (McIntyre et al., 2016; Uppal, 2023).
The federal government has previously acknowledged the link between food insecurity and income. In Budget 2023, it announced a one-time Grocery Rebate that provided $2.5 billion in targeted inflation relief. The rebate consisted of a one-time top-up to the Goods and Services Tax/Harmonized Sales Tax (GST/HST) credit, which was delivered on July 5, 2023, to an estimated 11 million low- and modest-income Canadians as a tax-free payment. The Grocery Rebate was in addition to the federal government’s one-time doubling of the GST credit in the June 2022 to July 2023 benefit year, which was issued to help households most affected by inflation (Department of Finance, 2022).
The most effective way of providing near-term income support to those who need it most is to build on previous top-ups to the GST/HST credit. Research by Gillian Petit (forthcoming) commissioned by the Affordability Action Council concludes that the GST/HST credit is the best option to reach a wide range of family types including adults without children and those who are unemployed, and is well targeted to lower- and middle-income families. However, the existing GST/HST credit is modest.
Reform the Incentives for Zero-Emission Vehicles program and provide accelerated operating funding for public transit systems
Many Canadians lack affordable transportation choices. Public transit is often not available or convenient in areas where housing is affordable, and the costs of car ownership are rising. This results in transport poverty, which occurs when people lack access to transportation options that are affordable and accessible (Kiss, 2022). Without the ability to get where they need to go, people who face transport poverty often experience social exclusion and have limited access to work opportunities and essential services such as health care and education.
Lower-income households are particularly vulnerable to transport poverty because many are unable to afford private vehicles. Other factors, such as disabilities, parenthood, gender and ethnicity, can exacerbate it. A 2019 study found that more than 50 per cent of neighbourhoods across Canada’s eight largest cities were at some risk of transport poverty (Allen & Farber, 2019) (see figure 6).
Spending on transportation is one of the largest costs for Canadian families, accounting for more than one-quarter of the before-tax income of very low-income households in the second quarter of 2023 (Affordability Action Council, 2024a). Between January 2019 and January 2023, the Consumer Price Index (CPI) for public transportation rose 17 per cent, while private transportation prices rose 21 per cent over the same period (Statistics Canada, 2023c).
Across Canada’s 10 largest cities, only 12 per cent of Canadians used public transit as their main mode of transportation to get to work in 2021 (Statistics Canada, 2022c). Yet estimates show that 20 per cent to 40 per cent of people in a typical community cannot, should not or prefer not to drive for most trips (Litman, 2023). This includes people with disabilities, seniors who do not or should not drive, young people, households with a shared vehicle and others.
Access to public transit has important equity implications. Racialized individuals, young people, women, immigrants and individuals with lower incomes are more likely to use public transit to get to work (Statistics Canada, 2022c). However, driving a car may be the only viable option for some people, including those with mobility impairments and other special needs. Yet owning and operating a car is becoming increasingly expensive.
As more housing is built farther and farther from city centres, transit systems are cutting service and increasing fares. At the same time, the size of cars is growing. As a result, household transportation costs are rising. These trends are also pushing Canada off track from meeting its greenhouse-gas emission-reduction targets.
Transportation is the second largest source of greenhouse-gas emissions in Canada, accounting for 150 megatonnes of carbon dioxide equivalent in 2021 (ECCC, 2023). Passenger travel (including passenger cars, light trucks, motorcycles, bus, rail and aviation) accounted for more than half of these emissions.
Emissions from gasoline- and diesel-powered vehicles pose significant health risks, particularly for children and seniors. In 2015, Health Canada estimated that air pollution from car traffic contributed to 1,200 premature deaths and resulted in $9.5 billion in socioeconomic costs (Health Canada, 2022).
Although public transit falls mainly under municipal jurisdiction, the federal government has an important role to play. In recent years, the federal government has introduced several programs to support public transit systems and to encourage consumers to purchase electric vehicles. However, these programs fall short.
In 2016, the federal government launched the Investing in Canada Infrastructure Program (ICIP), which included $23.5 billion in capital investments for transit systems. The program committed to sharing 40 per cent of the costs of capital projects through federal–provincial-territorial bilateral agreements. Despite the promise of these historic investments, public transit service per capita is now 7 per cent lower for the average Canadian than when the program was launched (CUTA, 2022). Public transportation systems have simply not kept up with population growth.
Because the ICIP funds only capital investments and not operating expenses, a growing number of buses are sitting idle in garages. For example, the Toronto Transit Commission has 172 buses, 44 streetcars and 13 subway trains that are idle because of a lack of drivers. Across the country, there are an estimated 1,700 idled buses.
In 2021, the federal government committed to providing $3 billion in permanent public transit funding starting in 2026-27 through the proposed Permanent Public Transit Fund, but the -program will fund only capital projects and not operations (Infrastructure Canada, 2022). Without a predictable and stable source of operating funding, municipalities with tight budgets struggle to shoulder the burden.
To encourage the adoption of zero-emission vehicles, Transport Canada offers the Incentives for Zero-Emission Vehicles (iZEV) Program. However, this program does not serve the needs of lower-income households. These households are more likely to purchase used cars, yet used cars are not eligible under the program.
In addition, the iZEV program is not income-tested. As a result, higher-income households are the primary beneficiaries. Many higher-income buyers purchase an EV regardless of government subsidies, which means the government is effectively subsidizing existing behaviour (Sheldon & Dua, 2019). Studies show that 90 per cent of EV incentives are distributed to the top 20 per cent of income earners (Borenstein & Davis, 2016) and are predominantly distributed to more affluent neighborhoods (Guo & Kontou, 2021).
Lower- and middle-income consumers are typically more on the fence about purchasing an EV. Tying price discounts to income would better influence their buying decisions (DeShazo et al., 2017). Some jurisdictions such as British Columbia and California are already income-testing their EV incentives.
The iZEV program also does not apply to newer forms of zero-emitting micro-mobility such as e-bikes, mopeds and quadricycles despite the growth in demand for these forms of mobility. Globally, ZEV adoption reduced oil demand by nearly 1.7 million barrels of oil per day in 2022, with 61 per cent of that accounted for by two- and three-wheeled vehicles (BloombergNEF, 2022).
Canada’s new vehicle regulations announced in late 2023 will require all new light-duty vehicle sales to be zero-emission by 2035. Modelling suggests that these regulations can lower the price of a ZEV by approximately 20 per cent below the current baseline trajectory by encouraging more investments in vehicle and battery research and development, which will bring more affordable models to market (Axsen & Bhardwaj, 2022).
As requirements for zero-emission vehicle sales ramp up, price discounts will play a reduced role in driving demand for EVs and broad-based incentives will become fiscally unsustainable.
Close gaps in affordable and safe passenger transportation for rural,
remote and Indigenous communities
More than four million Canadians live in low-density areas, which include rural, remote, Indigenous and northern communities. Transport poverty is increasing across these communities (Affordability Action Council, 2024b).
People living in these areas rely heavily on cars to get to work and to access services and amenities, in part because they must travel long distances and because they have access to significantly smaller public transit systems. The increasing costs of car ownership may also limit their transportation options.
Some very remote communities have few roads and lack ferry access for much of the year (Transport Canada, 2020). These communities can be reached only by plane, seasonal ferries and water taxis, which in some cases don’t have a regular schedule or must be chartered. Northern communities face the added challenge that ice roads built on permafrost only function part of the year (Barrette & Charlebois, 2018). Climate change is increasingly creating uncertainty around the future of these ice roads.
Compared to urban areas, large-scale public transportation options are less feasible in rural and remote communities. Less than 2 per cent of commuters in rural and remote regions use public transit to get to work (Statistics Canada, 2023d). This is because communities are spread out over a large territory, and rural populations are smaller (Larijani et al., 2019). Consequently, rural transportation systems are often smaller, have fewer riders and lack the economies of scale of many urban systems.
A lack of transportation options for those living in low-density areas can restrict their access to health care and social activities, and put people at higher risk of physical harm. Those who are low-income, Indigenous, older, young people and those who have disabilities are particularly affected.
Although fewer people live in these areas, they generate more greenhouse-gas emissions per person (OECD, 2021). In part, this is because Canadians living there must travel long distances and are likely to rely on more expensive and polluting fuels such as diesel, propane and home heating oil (Campbell, 2023; Lovekin & Heerema, 2019; Statistics Canada, 2022d).
As Canada and other countries transition to net-zero and adopt more renewable energy options, mismatches between the supply and demand for oil could lead to increasing price volatility (Leach, 2022). Households that remain dependent on fossil fuels for transportation and energy will be increasingly exposed to cost increases.
Passenger transportation in Canada is a shared jurisdiction across federal, provincial, territorial and Indigenous governments. The federal government plays an important role through infrastructure funding, Via Rail, regulation and its collection and analysis of transportation data.
In 2013, federal, provincial and territorial transportation ministers agreed on a strategic vision for transportation that would maintain, promote and enhance safe, competitive, viable and sustainable transportation networks that would in turn enhance economic prosperity and Canadians’ quality of life. It included a five-year priority plan to foster seamless transportation systems that connect people, services and jobs (Council of Ministers, 2013). While progress has been made in some areas, gaps still exist.
The closure of Greyhound Canada bus routes and the Saskatchewan Transportation Company in 2017 and 2018 led to sharply reduced affordable transportation options for many Canadians in rural and remote communities. What’s more, Via Rail services and ridership have been in significant decline since capital and operating subsidies to the Crown corporation were reduced in the 1990s (Dupuis, 2014). Between 1983 and 2022, combined capital and operating subsidies decreased by 66 per cent (Dupuis, 2014, Via Rail Canada, 2022). The loss of these transportation services and many more since the onset of the pandemic has left passengers in communities across Canada without safe and affordable transportation options.
The 2023 report of the House of Commons Standing Committee on Transport, Infrastructure and Communities called on the federal government to collaborate with other levels of government and public and private operators to identify and close gaps in passenger transportation services.
The federal government has several levers at its disposal, including infrastructure funding for provinces, territories and municipalities, Via Rail and the Canada Infrastructure Bank (CIB).
Since many of the routes that are needed most urgently in rural areas are not profitable, the federal government would either need to adjust the mandate of the CIB or provide supplementary sources of funding for CIB investment to be a long-term solution that creates permanent and reliable transportation options. It will also be important to keep fares affordable for those that need transportation the most. In many cases, a public or non-profit entity may be best suited to providing affordable passenger transportation services in rural and remote areas.
Via Rail provides important linkages to and between rural and remote communities. These routes could be extended, and the frequency of service could be improved and made more affordable. The federal government has announced plans for a high-frequency rail project that will span the Toronto to Quebec City corridor. To ensure that rural and remote communities also benefit from these and other improvements to the system, rail stops could be part of a regional hub-and-spoke system that provides bus or van connections to smaller communities, as well as warm buildings, washrooms, seating and food services.
The $250-million, five-year federal Rural Transit Solutions Fund (RTSF), introduced in 2021, was a first step in addressing the severe lack of access to day-to-day transportation options that rural communities face. The RTSF has supported solutions in very small communities and small cities with rural peripheries, and provides significant support to Indigenous communities (Infrastructure Canada, personal communication, September 6, 2023). However, the program only covers the capital costs of transit systems, and not their operations. For rural transportation, operating costs such as employee wages can be one of the most significant expenses and a barrier to service expansion. The focus on capital costs also prevents the use of leased vehicles, which can be a cheaper option.
Providing affordable, sustainable transportation services to rural communities requires a national backbone of motorcoach and rail routes along the most travelled corridors, with hubs along the way where smaller communities can develop fixed or on-demand transportation solutions that safely drop off passengers to continue their journey. Yet Canada lacks such a network.
Canada, one of the richest countries in the world, should not be a place where children don’t have enough to eat, where thousands are unhoused and where those who can least afford it bear the costs of a changing climate.
Canadians need policies that make life more affordable today and that build a better future for tomorrow. We can address the affordability and climate crises at the same time. The solutions exist: energy-efficient housing, heat pumps, incentives for used electric vehicles and e-bikes, improved public transit, on-demand transit, regional buses and trains — and more. And for those who struggle to afford food, additional income each month to cover groceries and other essentials.
Unaffordable energy, food and housing costs may seem like a temporary concern, but many Canadians are likely to continue to struggle to make ends meet for years to come. It takes time to build the homes needed to meet demand. Food prices will remain vulnerable to global supply shocks, many of which are caused by droughts, floods and storms associated with a changing climate. And oil prices are likely to become more volatile as consumers shift to alternative forms of energy. Affordability will remain an ongoing concern, particularly as governments ramp up efforts to reduce greenhouse-gas emissions.
Without government intervention, low-income Canadians will be the most vulnerable to these challenges. They will continue to be pushed out of the housing market. They will forgo food to pay the monthly bills. They will be unable to afford adequate heat in the winter and cooling in the summer. They will be the most likely to be displaced by natural disasters and the least likely to recover financially. And, because they are the least able to afford electric vehicles, heat pumps and other alternatives, they will be the last to get off the fossil-fuel roller coaster.
Yet even as many households struggle, low-income lifelines such as not-for-profit housing, public transit and regional motorcoach buses struggle to provide essential services. Affordable housing providers are being squeezed by high interest rates and inflexible government programs. Public transit authorities are cutting service and hiking fares as they recover from the pandemic. Intercommunity buses are shutting down unprofitable routes.
If governments don’t intervene soon, low-income Canadians will face fewer options to meet their basic needs and it will become harder to reduce greenhouse gases.
The recommendations of the Affordability Action Council won’t completely solve these complex problems, and other levels of government will need to do their part. But the federal government has a chance to address immediate needs and provide an important start that others can build on. The Council has developed a package of “all-in” integrated affordability and climate solutions that can be put to work immediately.
Let’s make 2024 a turning point — a time when we help Canadians put behind them the upheaval they have weathered in recent years and begin to look to the future with renewed hope and resilience.
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Members of the Affordability Action Council
Yasmin Abraham is president and co-founder of the Kambo Energy Group, a social enterprise that reduces energy poverty and improves housing in communities that have been historically underprioritized. She is a steadfast advocate for equity, diversity and social change, and her commitment to eliminating energy poverty has shaped much of her career over the last decade. She is a leading expert in equity-based energy and climate programming, and works with governments and utilities across Canada to design and deliver inclusive solutions.
Jasveen Brar is the executive director of the Youth Climate Lab. Her work centres around environmental justice, intersectional environmentalism and ensuring that youth are involved in decision-making. She holds a bachelor of science from Dalhousie University and has experience working in ocean conservation, polar policy and education. Jasveen has been named a Corporate Knights’ Top 30 under 30 Sustainability Leader and a Top 25 Environmentalist by Starfish. She holds a Sovereign’s Medal for Volunteers from the Governor General of Canada and she serves on the Council of Advisors at the Canadian Climate Institute.
Caroline Brouillette is the executive director of Climate Action Network Canada. As the first francophone director of the network, Caroline works tirelessly to create strong social consensus for climate solutions that address the convergence of crises the world is faced with, both through national policy development and in international diplomacy forums. Caroline is a columnist for L’actualité, Canada’s leading French-language public affairs magazine, where she writes about climate issues. Her commentary has appeared in CBC/Radio-Canada sites, the Washington Post, Reuters, Al Jazeera and many other current-affairs television, radio and written media. She joined the climate movement in 2018, when she represented Canadian youth at the G7 summit in Charlevoix, Quebec.
Cherise Burda is executive director of City Building TMU at Toronto Metropolitan University, where she specializes in relevant and proactive policy, strategic communications and creative engagement. Cherise’s research and activities have directly influenced policy change in Ontario and British Columbia on housing, transportation and energy. She has authored more than 40 policy reports, book chapters and academic publications, as well as dozens of magazine articles and op-eds. She previously served as Ontario director of the Pembina Institute, program director at the David Suzuki Foundation and senior researcher at the University of Victoria’s Eco-Research Chair in Environmental Law and Policy. She participates regularly in public and private-sector working groups.
Evan Fraser is a professor of geography at the University of Guelph, where he helps lead the Food from Thought initiative, a multimillion-dollar research program that explores how to use big data to reduce agriculture’s environmental footprint. He works with large multidisciplinary teams on developing solutions to help feed the world’s growing population while not
destroying the ecosystems on which we depend for life. He is also the director of the university’s Arrell Food Institute. A passionate communicator, Evan has written for numerous media outlets, co-produced and co-hosted radio documentaries for CBC’s Ideas, and has published two non-fiction books about food and food security, including Empires of Food: Feast, Famine, and the Rise and Fall of Civilizations, which was published by Simon & Schuster and shortlisted for the James Beard Food Literature Award.
Brendan Haley is an adjunct professor in the School of Public Policy and Administration at Carleton University and policy director at Efficiency Canada, a research and advocacy organization focused on creating an energy-efficient economy. Previously, he was a SSHRC Banting Post-Doctoral Fellow at the School for Resource and Environmental Studies at Dalhousie University and the energy co-ordinator at Nova Scotia’s Ecology Action Centre. He played an important role in the development of the province’s energy-efficiency framework, which led to the creation of Efficiency Nova Scotia, Canada’s first energy-efficiency utility. He is a policy fellow at the Broadbent Institute and a research associate at the Canadian Centre for Policy Alternatives.
Kate Harland leads the research and policy work of the Canadian Climate Institute’s mitigation team on issues including building decarbonization, the future of the gas network and energy affordability. She brings extensive experience analyzing and delivering climate policy and responsible innovation. She has worked with governments across multiple jurisdictions and in both the public and private sectors. Her previous roles include climate policy and economic analysis for the United Kingdom and European Union, managing low-carbon technology trials for Transport for London, working on low-carbon vehicle strategies for Nissan and acting as research lead for the chief science adviser to the New Zealand prime minister.
Paul Kershaw is an award-winning policy professor in the School of Population and Public Health at the University of British Columbia and founder of Generation Squeeze, which champions generational fairness to preserve what Canadians hold to be sacred — a healthy childhood, home and planet. He is the recipient of several honours from the Canadian Political Science Association and the federal government, the Academic of the Year Award from the Confederation of University Faculty Associations of British Columbia and the UBC President’s Award for Public Education through the media. Paul is committed to mobilizing evidence into action, and his work has directly shaped the federal $10-a-day child care program and the National Housing Strategy. He also helped to defend the constitutionality of pricing pollution at the Supreme Court.
Marc Lee is a senior economist with the British Columbia office of the Canadian Centre for Policy Alternatives. Marc joined the CCPA in 1998 and is one of Canada’s leading progressive commentators on economic and social policy issues. He led the CCPA’s Climate Justice Project, which published a wide range of research on fair and effective approaches to climate action through integrating principles of social justice. Marc continues to write about climate and energy policy, strategies for affordable housing, federal and provincial budgets, and economic trends. He is a past chair of the Progressive Economics Forum, a national network of progressive economists.
Angella MacEwen is a senior economist at the Canadian Union of Public Employees and a policy fellow at the Broadbent Institute. She has worked as a labour economist in Ottawa since 2012. Angella sits on the board of Our Times magazine and Canadians for Tax Fairness, and is active with the Green Economy Network. She follows a wide range of economic issues that impact workers, such as understanding precarity and inequality in the Canadian labour market, evaluating the impact of international trade, and investigating the role of fiscal policy and tax policy on income distribution and wealth inequality. She provides expert advice to governments, both as a member of advisory panels and through parliamentary committees. Angella is co-author of the book Share the Wealth! How we can tax Canada’s super-rich and create a better country for everyone.
Mike Moffatt is assistant professor of business, economics and public policy at Western University’s Ivey Business School, and senior director of policy and innovation at the Smart Prosperity Institute. Mike’s research at the institute focuses on the intersection of regional economic development, building child-friendly, climate-friendly housing and communities, and clean innovation. Previously, he was the chief innovation fellow with the federal government, advising deputy ministers on innovation policy and emerging trends. He has also previously worked as interim director at the Lawrence National Centre for Policy and Management, director of policy at Canada 2020 and chief economist at the University of Toronto’s Mowat Centre. From 2013 to 2015, Mike served as an economic adviser to Justin Trudeau.
Gillian Petit conducts research focused on intersectionality-informed, data-driven solutions to economic and social issues in Canada. Her work in economics and public policy focuses on the design and implementation of income and social supports spanning several areas including tax policy, municipal policy, poverty policy and access to justice. She has advised expert panels, including the B.C. Basic Income Panel, published in peer-reviewed academic journals and co-written a book on basic income. She is a senior research associate at the University of Calgary, where she works on projects related to the intersectional effects of taxation, municipal housing and tax policy, and intersectional access to legal aid. Gillian holds a PhD in economics from the University of Calgary and a juris doctorate from Queen’s University.
Shelagh Pizey-Allen is the executive director of TTCriders, an advocacy organization of transit users that campaigns for fully accessible, frequent, dignified public transit that connects all Toronto neighbourhoods. Shelagh participated in Maytree’s Policy School in 2019 and holds a master’s degree in communication and cultural studies from York University and Toronto Metropolitan University. She has been a longtime supporter of Grassy Narrows First Nation’s fight for mercury justice.
Rosemarie Powell is executive director of the Toronto Community Benefits Network. She is a passionate advocate for social, economic and environmental justice. For more than 20 years, she has managed and developed several innovative community programs and services to help historically disadvantaged communities and equity-seeking groups access the labour market and the economy. Her community engagement work has earned her several awards.
Lisa Rae is the director of system change at Prosper Canada and is responsible for advancing policy and advocacy efforts. Lisa has worked in public policy, advocacy, stakeholder engagement and communications for 15 years. She has held roles in membership organizations, the post-secondary education and health sectors, and in government. Lisa served as a senior adviser to the Ontario minister of Advanced Education and Skills Development and served as the minister’s lead on the co-creation and introduction of legislation recognizing Indigenous Institutes and on the transformation of the Ontario Student Assistance Program.
Nate Wallace is the clean transportation program manager at Environmental Defence. In this position, he works on decarbonizing the transportation sector, with a particular focus on electrifying light-duty vehicles, expanding public and active transportation options and building more sustainable and inclusive cities. He is a member of Transport Canada’s Zero-Emission Vehicle Council and co-chair of the Affordability Working Group. Nate has been a frequent contributor to infrastructure-related chapters of the annually published Alternative Federal Budget co-ordinated by the Canadian Centre for Policy Alternatives. His commentary on public policy issues has been published in The Globe and Mail, Toronto Star and Hill Times. Before joining Environmental Defence, Nate was a policy adviser at the Canadian Urban Transit Association.
Armine Yalnizyan is the Atkinson Fellow on the Future of Workers and writes a biweekly business column for the Toronto Star. Previously, she served as a senior economic policy adviser to the federal deputy minister of Employment and Social Development Canada, and has been a member of a high-level task group on women in the economy convened by the federal ministers of Finance and Middle Class Prosperity. Armine helped shape and advance the Canadian Centre for Policy Alternatives’ Inequality Project, provided weekly business commentary for the CBC, and served as vice-president and president of the Canadian Association for Business Economics.
Catherine Abreu is the founder and executive director of Destination Zero. She is an internationally recognized, award-winning campaigner whose work centres on building powerful coalitions to advance action on climate change. One of the world’s 100 most influential people in climate policy as named by Apolitical in 2019, she has over 15 years of experience campaigning on environmental issues, including 10 years in the heart of the climate movement.
Annie Bérubé is program director at the McConnell Foundation, where she works to advance the contribution of Canada’s philanthropic sector to an equitable transition to a net-zero carbon economy. She spent most of her career as a policy adviser and economist with the federal government, including in the office of the Commissioner of the Environment and Sustainable Development, Environment Canada and Health Canada. After volunteering in Rwanda for two years, Annie switched to the not-for-profit sector, working at the University of Ottawa’s Smart Prosperity Institute and at Équiterre as director of government relations in Ottawa. She holds degrees in economics from McGill University, an MES (ecological economics) from York University and a postgraduate diploma in environmental epidemiology from McMaster University.
Ricardo Chejfec is lead data analyst at the Institute for Research on Public Policy. His previous experience includes working as a business analyst at Scotiabank and research positions at McGill University. Originally from Mexico, he has lived in Canada since 2014. He holds a bachelor of arts and science in cognitive science and a master of public policy from McGill University.
Abigail Jackson is a research associate at the Institute for Research on Public Policy. Previously, she worked at Habitat for Humanity for four years developing programs related to energy efficiency, affordable housing and community development. She holds a bachelor of arts in business and international political economy from the University of Puget Sound and a master of public policy from McGill University.
Josha MacNab is a civil society leader and senior associate at Destination Zero. She has more than 17 years of experience in the climate movement, most recently as the national policy director for the Pembina Institute. Her expertise is built on developing and implementing solutions in municipal, provincial, national and international arenas. She is a trusted group facilitator and engagement specialist whose work centres on building bridges and understanding to advance common goals. She has supported numerous organizations and coalitions in sharpening and re-energizing their work. As a skilled campaign strategist, Josha focuses on bringing the right people with the right skills together at the right time to create the space for change.
Dale Marshall is the climate program senior director at the Trottier Family Foundation. Dale has more than 20 years of experience working on climate change through policy advocacy, anti-fossil-fuel campaigning and building climate resilience through development programs. He has a master’s degree in resource and environmental management from Simon Fraser University and is a graduate of Western University and McGill University.
Rachel Samson is vice-president of research at the Institute for Research on Public Policy. She is a policy research executive with 23 years of experience providing evidence-based policy advice. Rachel spent 15 years as an economist and executive with the federal government, working at Finance Canada, Environment Canada, Natural Resources Canada, the Privy Council Office, the Treasury Board Secretariat and the Canadian Environmental Assessment Agency. As a consultant, she led projects for the Organisation for Economic Co-operation and Development, Canada’s Ecofiscal Commission and the Smart Prosperity Institute. She was previously the research director for clean growth at the Canadian Climate Institute. Rachel holds a master’s degree in economics from Queen’s University.
Rosanna Tamburri is the senior writer and editor at the Institute for Research on Public Policy. Before joining the IRPP, she was the manager of research publications at the Higher Education Quality Council of Ontario, a copy editor at Postmedia Editorial Services and a business and economics reporter in the Ottawa bureau of the Dow Jones News Service and the Wall Street Journal.
Shaimaa Yassin is a research director at the Institute for Research on Public Policy. She is a policy-oriented economist with more than a decade of experience in translating challenging academic research into strategic advice for a broad audience. She holds a PhD in economics from the University of Paris 1 Panthéon-Sorbonne and an MSc in empirical and theoretical economics from the Paris School of Economics. She was a research fellow in the economics departments of several academic institutions, including McGill University, the University of Lausanne and the University of Neuchâtel. Prior to joining the IRPP, Shaimaa served as senior director at the Community Economic Development and Employability Corporation.
The Affordability Action Council would also like to acknowledge the contributions of Étienne Tremblay, editorial co-ordinator and translator, Chantal Létourneau, production and layout co-ordinator, Anne Tremblay, art director, and Zofia Laubitz, proofreader. Thanks also to the IRPP communications team: Cléa Desjardins, director of communications, Ricardo Bonjean Montrose, communications officer, Luc Barter Moulaison, digital engagement officer, and Blair Elliott, event co-ordinator.