North·In Depth

How CERB is affecting rent payments for N.W.T. clients in social housing

The N.W.T. Housing Corporation is dealing with an influx of people that need to have their rent payments recalculated because they took the CERB payments last year. One housing advocate says this kind of issue will start to be seen across the country.

Sharon Lafferty's rent went from $75 to $350 a month

Sharon Lafferty outside her home in Fort Resolution, N.W.T., in September 2020. Lafferty signed on to CERB to prepare herself and her son for their new normal, but now she's realizing the benefit payments might alter her rent from $75 to $350 a month. (Graham Shishkov/CBC )

Sharon Lafferty brought her tax return to the Fort Resolution Housing Authority in July, like she does every year, so someone could calculate how much rent she owes. 

She was expecting to be charged her regular $75 dollars a month, because she is on income support and is unemployed. 

Instead, her monthly rent assessment came to almost five times that amount: $350. 

The reason it went up, she said, is because she received the Canadian Emergency Response Benefit (CERB) "several times" last year. 

"I don't know what I'm going to do if my rent increases," Lafferty said, noting that the N.W.T. Housing Corporation is now reviewing her rent to see whether it can go back to its pre-CERB levels. "It remains in limbo until there's a decision." 

Sharon Lafferty stands outside her home in Fort Resolution, N.W.T. She says many in her community are coping with the same rent increases, and are having difficulty figuring out backup plans because of the pandemic. (Graham Shishkov/CBC )

Lafferty is one of roughly 10,000 people in the Northwest Territories who signed on to receive the federal government's defunct CERB payment. It gave out $2,000 a month to Canadians who had lost their jobs due to the pandemic or were otherwise eligible for Employment Insurance benefits.​​​

Several months needed to review claims

During tax season, the Canada Revenue Agency counted CERB payments as part of the individual's total yearly income on line 150 of their tax return. 

That is the line used by some public housing agencies, like the N.W.T. Housing Corporation, to decide how much rent a tenant can afford based on their income. 

Eleanor Young, president and CEO of the N.W.T. Housing Corporation, said she doesn't know how many people are affected by these high rental assessments, but that it's a unique situation the department has never seen before. 

"To have as many clients hit by the same situation, I think CERB is the first time we've hit something of that magnitude," she told CBC News. 

"We do need to, all of us, be aware of what is included in line 150 and what the impact of that might be for future years' rent." 

Eleanor Young, president and CEO of the N.W.T. Housing Corporation, says she's never seen as many clients affected by the same problem as she is now with the impacts of CERB on rent payments. (CBC)

To evaluate residents' rent, Young said that the Housing Corporation sees only the total income reflected on line 150. It doesn't have access to a breakdown of the individual's income to see how much can be attributed to CERB payments, and how much was earned in regular income. 

She expects the department to re-evaluate clients' monthly rental charges in the coming months. As residents return from summer vacation and time on the land, she said clients will begin contacting the corporation once they see the rental increases.  

They will not need to hire more staff in order to handle the requests, she continued. Once the requests are processed, it should take a "matter of days" for the decision to come back. 

The CERB payments came to an end last September, but not without controversy. The federal government was criticized for not having stricter eligibility rules in place to avoid thousands from claiming the benefit when they might not otherwise need it. 

From October 2020 onwards, the federal government introduced a series of new benefits to replace CERB. Among them, the Canadian Recovery Benefit (CRB) and the Canada Emergency Rent Subsidy (CERS). 

As a result, Young said the rent hikes could be a one-time thing. 

Part of a cheque for the $2,000 Canada Emergency Response Benefit (CERB), a taxable, monthly federal payment that was made to eligible workers who had lost their income due to COVID-19 pandemic. At almost $82 billion it was Ottawa's costliest coronavirus-fighting measure. (Chris Helgren/Reuters)

"The [CRB] is meant to be like employment insurance," Young said. "[The federal government] is doing a bit more work to examine eligibility up front." 

The Canada Revenue Agency declined CBC's request for an interview. It instead provided a written statement that said they "are not in a position to comment on how another organization runs its programs." 

The statement referred CBC to its website for more information about how CERB impacts taxes. 

CERB benefits are taxable, the website says, and must be reported as income on tax return statements. There's no indication of what line that would be listed on. 

'It's going to happen across Canada at different times'

John Stapleton, a social policy expert, said the N.W.T. is not alone in its rising rent and that CERB-induced increases will soon be seen across the country. 

While each jurisdiction has its own social-housing policy, other Canadian regions will begin to see the change as rent freezes expire.  

"It's going to happen all across Canada at different times," Stapleton said. "This was put in place in a real hurry, and there wasn't time to look at all the unintended consequences of the policy on other social programs." 

The general rule for housing authorities is to charge 30 per cent of income as rent, he said. For those who only had the $2,000 CERB monthly payments to rely on as income last year, authorities could charge an extra $600 a month in rental payments. 

Social policy expert John Stapleton says the rent reviews happening in the Northwest Territories will soon be seen across the country. (Anna Desmarais/CBC )

CERB is classified in the tax system as "other income," Stapleton continued, which means beneficiaries would have received T-4A slips — a "catch-all category" for other social programs like Employment Insurance and Old Age Security. 

"Housing agencies across Canada … have said 'this looks, sounds and tastes like income, so we're going to charge rent on it,'" he said of the benefit. 

It's too soon to know how many Canadians might face this issue, Stapleton said, because little is known about how many applied for CERB. 

Very low-income people are getting hit and possibly becoming homeless ... right at the time where they still need to stay safe.- John Stapleton, social policy expert 

He's calling on the federal government to get involved – and fast. 

"We have to have amnesty on all these charges," he said. "Very low-income people are getting hit and possibly becoming homeless or without enough food right at the time where they still need to stay safe."

Stapleton advises renters in public housing to start putting aside extra money to account for rent differences in the meantime. 

'Somebody has to advocate for us'

Back in Fort Resolution, Lafferty said she's still working on a backup plan,

Between the unknowns of the pandemic, however, and a recently dislocated hip, it's been a challenge for Lafferty to get back on her feet.

If the N.W.T. Housing Corporation decides to keep her rent payments at $350, Lafferty said that will be retroactive to July – meaning she would be several hundred dollars in rental arrears. 

An SOS sign outside of Sharon Lafferty's home. She's asking for someone to step in to help her and her community members, who are seeing steep increases in their rents after taking the CERB payments. (Graham Shishkov/CBC )

There are no other options for cheaper rentals in the hamlet, she added, and options of rooming with friends or family are limited as many others are facing the same challenges.

Lafferty is calling for help.

"Somebody has to advocate for us," she said. "I can speak on my situation, but there's the general population that's affected. There's a lot of social implications to think about."