Affordability

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HOUSING AND CHILD CARE AFFORDABILITY UNDER PRESSURE

Programs like the Canada Emergency Response Benefit (CERB) and Canada Emergency Wage Subsidy (CEWS) bolstered household income per capita in Halifax, which grew by 7.2% in 2020. In 2020, consumer price growth was quite slow (+0.6%), meaning this income represents a substantial, if temporary, increase in purchasing power. As government supports are reduced, growth in average household income may also slow.

Though the pandemic might have been expected to increase debt levels and default rates, this was not the case. In fact, 2020 showed record low debt levels and a lower number of insolvencies.

Moreover, both consumer and mortgage delinquency rates in Halifax were at the lowest ever level in 2020. Generous emergency support programs likely explain much of these surprising outcomes.

In the housing market, prices jumped to record highs for both new home and resale transactions in 2020. Although there were more home construction starts, the supply could not keep up with the demand caused by consecutive years of economic and population growth. Adding to affordability pressures, child care in Halifax is relatively expensive in comparison to benchmark cities.

COVID-19 Recovery

Given the massive employment losses experienced at the beginning of the pandemic, drastic worsening for income, poverty, and indebtedness might have been expected. Fortunately, these scenarios were avoided due to government supports and a rapid economic rebound. Access to affordable housing and child care, however, are growing concerns as demand outstrips supply and prices rise.

Income & Prices

In 2020, household income per capita grew by 7.2% for Halifax residents. This was largely due to government grants and subsidies provided for pandemic relief. At $50,147 per capita, Halifax no longer claimed the bottom spot across the 6 benchmark cities and had the second-largest growth in household income.

The price of consumer goods grew by 0.6% in 2020, the second smallest increase among benchmark cities. Purchasing power (per capita income growth minus inflation) increased in all cities, but residents of Halifax experienced the largest increase with a growth of 6.6%.

Statistics Canada publishes indexes of price differences for consumer goods and services across 15 major Canadian cities, including Halifax. The most recent data (2019) showed only one category had a substantial increase: recreation, education and reading. In contrast, there were downward trends for both the alcohol, tobacco and recreational cannabis category as well as health and personal care. Other categories kept pace with the metropolitan average.

  • Source: Conference Board of Canada, Major City Insights (2021)

    Household Income Per Capita

    • Halifax’s household per capita income grew by 7.2% in 2020.
    • Although Halifax had the second-largest growth across all benchmark cities, it was still the second lowest income figure ($50,147). However, Halifax did overtake Kitchener-Cambridge-Waterloo and is no longer at the bottom of the list.
    • Victoria, with a figure of $59,612, has the highest household per capita income across all six cities, taking the top spot away from last year’s leader, St. John’s.
  • Source: Conference Board of Canada, Major City Insights (2021)

    Annual Change in Purchasing Power

    • Halifax had a lower inflation rate (0.6%) compared to most other benchmark cities and the national average (0.7%). Only St. John’s had a lower inflation rate.
    • Income grew across all benchmark cities, but the rate of growth was highest in Victoria at 7.5%, followed closely by Halifax at 7.2%. The smallest growth was observed in Kitchener-Cambridge-Waterloo where income grew by 2.3%.
    • Purchasing power increased by a substantial 6.6% in Halifax through 2020, the largest jump across all benchmark cities.
  • Source: Statistics Canada, Consumer Price Index, Table 18-10-0003-01

    Price Differentials Of Consumer Goods and Services

    • Goods and services related to “Recreation, education and reading” saw the largest index growth in Halifax in 2019, both year over year and through the decade.
    • The largest annual decline in 2019 was for “Health and personal care,” but “Alcohol, tobacco, and recreational cannabis” fell the most over the decade.
    • The index for the “Transportation” category has shown minimal variation since 2009.

Poverty

A focus on headline-grabbing numbers like population, labour force, and GDP growth – especially when the news is good – may divert attention from other issues. Tracking measures related to the distribution of income and poverty are also critical to assessing our success as a city.

Looking at tax-return data, the Census Family Low Income Measure – After Tax (CFLIM-AT) calculates a national threshold dollar value to determine low-income situations. In 2018, the latest year for which data are available, 17.0% of Halifax’s population were in households with income below the CFLIM-AT threshold of $20,137. When broken into age groups, 20.9% of people under the age of 18, 17.2% between 18 - 64 years, and 11.9% of those 65 years and older were under the threshold.

Although CFLIM-AT provides valuable information, the Market Basket Measure (MBM) is used to determine Canada’s official poverty line. This measure is calculated using the cost of a particular basket of goods and services that represents a modest standard of living for a family of four. In 2019, Halifax’s MBM threshold was $46,147, the second highest across the benchmark cities.

Discussions around poverty alleviation often include the topic of income inequality. Comparing the total income shares of the top 5% and the bottom 50% in Halifax, a 20-year view shows generally stable patterns with some narrowing of the gap.

  • Source: Statistics Canada, Annual Income Estimates for Census Families and Individuals, Table 11-10-0018-01

    Share Within Low-Income Families By Age

    • Using the age breakdowns provided by Statistics Canada, those under 18 years make up the group most likely to be living in low-income families. Although this age group’s share has been declining over time, the 2018 figure of 20.9% is 2.7 percentage points above the national average.
    • Between 2009 and 2018, the proportion of those living in low-income families has increased for both groups ages 18 and older:
      • For those 18 to 64, Halifax’s 2018 figure was 0.6 percentage points above the proportion nationally.
      • For those over 65 years old, the Halifax share was 2.6 percentage points below the national figure.
    • The share of the total population of Halifax living in low-income families in 2018 was 17.0%, above the Canada-wide figure of 16.5%. Since 2009, the Halifax figure has remained within a relatively narrow band between 16.3% and 17.2%.
  • *Since thresholds for Kitchener-Cambridge-Waterloo and Victoria are not available, centres in Ontario and British Columbia with populations between 100,000 and 500,000 have been chosen as proxies.

    Source: Statistics Canada, Canadian Income Survey, Table 11-10-0066-01

    Market Basket Measure (MBM) Thresholds

    • All benchmark cities saw an increase below 1% in their 2019 MBM thresholds over 2018. Quebec City and Regina shared the largest absolute increase at $320.
    • In 2019, for a family of four to make a modest and basic standard of living the household needed to earn at least $46,147, an increase of $272 over 2018.
    • According to Statistics Canada’s T1 family taxation files, in 2018, when the MBM threshold1was $45,875 in Halifax, 13.1% of two-parent households with or without children earned less than $45,000.
    • MBM thresholds have not changed significantly from 2015 to 2019.
    • During this time, Halifax saw an overall decline of $300.
    • The largest change occurred in St. John’s with a drop of $418.
    • Quebec City is the only benchmark city where the MBM threshold increased over the period (+$265).
  • Source: Statistics Canada, Longitudinal Administrative Databank, Table 11-10-0055-01

    Share of Income by Income Group

    • Although there has been some closing of the gap, the shares of the top and bottom of the income spectrum in Halifax have not substantially changed between 1998 and 2018.
    • In 1998, the top 1% of Halifax’s population received 6.5% of total after-tax income; this decreased to 5.2% by 2018. Expanding the view to the top 5% of earners, 16.3% of income went to this group in 2018, down from 18.3% 20 years earlier.
    • On the other end of the spectrum, in 1998, the bottom 50% of the population received 18.7% of total income in Halifax. This increased to 20.3% by 2018.
    • Across all benchmark cities from 1998 to 2018, the share of total income earned by the bottom 50% increased the most in Kitchener-Cambridge-Waterloo (up 3.3 percentage points), followed by Halifax (up 1.6 percentage points).
  • Source: Statistics Canada, Income and Financial Data of Individuals, Table 11-10-0047-01

    Population Distribution Of Tax Filers

    • 52% of Halifax tax filers in 2019 were earning less than $40,000 a year, down from 60% in 2009.
    • The share of tax filers earning more than $80,000 in 2019 (17%) has increased by 6 percentage points since a decade earlier.
    • The share of tax filers earning between $40,000 and $80,000 in 2019 has increased to 31%, up 2 percentage points over the same 10-year period.

Child Care

Affordable and high-quality child care are important not only for the development of children, but also for the broader economy as it can lead to increased labour participation and, in turn, higher incomes, reduced poverty, and a larger tax base. Because of the pandemic, however, there were decreases in child care enrolment across the country in 2020. According to a survey conducted by the Canadian Centre for Policy Alternatives (CCPA), Halifax saw a 23% decline in child care enrolment across all ages between February and November 2020. The largest drop in enrolment across benchmark cities was in Kitchener-Cambridge-Waterloo (-27%) while Quebec City saw less than a 5% drop in enrolment.

According to the CCPA, median monthly child care costs in Halifax for infants (<18 months), toddlers (18 months to 3 years), and preschoolers (>3 years) were $957, $853, and $868, respectively.

Halifax saw the largest annual growth in costs for both infants and toddlers across the benchmark cities, and the largest growth in fees for preschoolers occurred in Kitchener-Cambridge-Waterloo.

In a recent Statistics Canada survey, 17.3% of Nova Scotia parents with children ages 0 – 5 said they encountered difficulties finding child care in their community. Affordability (13.6%) and finding child care that fit work and study schedules (12.2%) were other leading issues. All these figures represent increases over 2019 responses. Additionally, the 2021 City Matters Survey carried out by MQO Research found that in Halifax 8% of individuals with children under 18 in the household faced major difficulties with child care. It may well be that school and daycare closures for most of the second half of the 2019-20 school year posed challenges for many parents.

  • Data were unavailable for Victoria.
    Source: Canadian Centre for Policy Alternatives, Sounding the Alarm: COVID-19's Impact on Canada's Precarious Child Care Sector

    Median Monthly Child Care Fees for Infants

    • Monthly child care fees for infants in Halifax grew by 10% between 2015 and 2020. This translates to an increase of $90 per month.
    • Although high, this 5-year increase is about 6 times smaller than the 60% growth (up by $521) in Kitchener-Cambridge-Waterloo over the same period.
    • In 2020, median monthly fees in Halifax grew by 2% ($18) over 2019, the largest annual increase across benchmark cities. St. Johns, Kitchener-Cambridge-Waterloo, and Regina saw no change.
  • Data were unavailable for Victoria.
    Source: Canadian Centre for Policy Alternatives, Sounding the Alarm: COVID-19's Impact on Canada's Precarious Child Care Sector

    Median Monthly Child Care Fees for Toddlers

    • Monthly fees for toddlers in Halifax have grown by 9% since 2015. From 2019 to 2020, fees grew by 3% ($24) in Halifax, the largest increase across all benchmark cities.
    • St. John’s was the only benchmark city to experience a decline in costs over the 5-year period. Monthly fees fell by 25% between 2015 and 2020, taking the city from the most expensive spot to third place on the list.
  • Data were unavailable for Victoria.
    Source: Canadian Centre for Policy Alternatives, Sounding the Alarm: COVID-19's Impact on Canada's Precarious Child Care Sector

    Median Monthly Child Care Fees for Preschoolers

    • Halifax was the second-most expensive city for monthly child care fees for preschoolers at $868, behind only Kitchener-Cambridge-Waterloo ($1,051).
    • Halifax experienced an 11% increase in these fees between 2015 and 2020. Over this 5-year period, St. John’s was the only city to see a decline in fees for this age group, with a drop of 24%.
    • Quebec City remains the cheapest across all ages due to the provincially set flat fees for children of all age groups.
  • Source: Statistics Canada, Survey on Early Learning and Child Care Arrangements, Table 42-10-0008-01

    Difficulties Finding Child Care Arrangements

    • Out of 10 options provided, 13.6% of Nova Scotia parents with children ages 0 – 5 cited affordability as a significant difficulty. This was second only to finding care, which was identified by 17.3% of parents as a difficulty.
    • According to the City Matters Survey, of the 99 respondents in Halifax who had children under 18, 24% said they faced no difficulties with their child care situation in 2020, and 8% said they had major difficulties.

Debt

At the onset of the pandemic, many experts feared that employment and income losses might lead to spiralling consumer debt loads and insolvencies. Fortunately, that has not been the case to date.

The average non-mortgage consumer debt in Halifax was $22,584 at the end of 2020, down 4.2% from the previous year. This was $615 above the provincial average, but still below the national average by $459.

Debt levels have been declining since 2017, but the drop at the start of 2020 was particularly large. Debt per consumer fell 2% (from Q4 2019 to Q1 2020) when COVID-19 struck, and then fell another 2% throughout the year. This decline in consumer debt could have multiple explanations such as people spending less during the recession or using government supports to pay off their existing debt.

Falling average debt per consumer has been accompanied by falling consumer debt delinquency rates. From Q4 2019 to Q4 2020, the delinquency rate in Halifax fell from 1.52% to 1.17%. This figure was lower than the Nova Scotia delinquency rate (1.37%) though higher than all of Canada (0.98%).

Consumer insolvencies2in Halifax have been steadily growing over the past decade, peaking at 2,081 in 2019. However, last year there was a sharp drop in insolvencies (-35%), reaching a new record low of 1,355. At face value this is good news, but less so if the drop in insolvencies was due to, say, business closures or temporary pauses in debt collection because of the extraordinary pandemic circumstances. If this is the case, insolvencies could potentially rise sharply in the near future.

Despite the abnormal market conditions and severe hits to employment and GDP growth, overall consumer debt metrics appear encouraging. However, the full story will not be known until debt deferral and income-support programs wind down.

  • Source: Equifax Canada, Canadian Consumer Credit (Various)

    Non-Mortgage Debt Per Consumer

    • Halifax’s average debt per consumer was at its lowest level in many years at $22,584 by yearend. The provincial and national averages in comparison were $21,969 and $23,043 per consumer, respectively.
    • Out of the 9 cities analyzed, Halifax had the third-lowest average debt per consumer, behind only Montreal ($17,103) and Ottawa ($21,891). The highest figure was reported in Fort McMurray ($39,717).
  • Source: Equifax Canada, Canadian Consumer Credit (Various)

    Consumer Debt Delinquency Rate

    • In the second half of 2020, Halifax had the lowest delinquency rates of the past three years: 1.08% (Q3) and 1.17% (Q4).
    • Out of 9 cities documented, Halifax had the fifth-lowest delinquency rate. Vancouver had the lowest (0.69%), and Fort McMurray had the highest (1.69%).
  • Source: Office of the Superintendent of Bankruptcy, Insolvency Statistics in Canada (Various)

    Consumer Insolvencies by Agreement Type

    • Consumer bankruptcies3 in Halifax plummeted 46% to a low of 589 in 2020. Consumer proposals also declined by 23% to a total of 766.
    • Overall, consumer insolvencies fell by 35%, breaking the general trend of annual increases over the past decade.

Housing

New-home construction maintained a vigorous pace throughout 2020. Halifax registered 17% growth in single-unit housing with a total of 1,019 new units, surpassing the 10-year average by 275 units. Construction on multi-unit housing dropped by 41 units (-1.8%) in 2020; however, that is still 291 units above the 10-year average.

The type of units constructed continues to vary by region in Halifax. Starts of single-unit housing grew by 28% in rural parts of the municipality but fell by 8.6% and 28.6% in suburban areas and on the peninsula, respectively. In contrast, multi-unit-housing starts in suburban Halifax saw the largest growth in 7 years (61%), followed by peninsular Halifax (27%). Multi-unit starts fell by 71% in rural Halifax.

Average rent for a 2-bedroom apartment in Halifax rose 4.4% in 2020, to $1,255 per month (+$53 over 2019). After sharp declines over the past 5 years, the vacancy rate increased by 1 percentage point, the largest year-over-year growth in over a decade. This increase may be attributed to the significant decline in international migration and university student enrolment brought on unexpectedly by the pandemic.

Housing supply did not keep up with demand in 2020, and as a result, the average home resale price increased by 19.4% to just under $400,000, the largest jump among the 6 benchmark cities. The average price of a new single-detached house in Halifax was $506,047 in 2020 (+9.1%). Halifax was the third most affordable place to purchase a new single-detached home and the fourth most affordable for resale across the benchmark cities.

  • Source: Canada Mortgage and Housing Corporation, Housing Market Information Portal

    Single and Multi-Unit Housing Starts

    • In 2020, Halifax saw 17% growth in starts of single-unit housing with a total of 1,019 units, 275 units more than the 10-year average of 744.
    • Multi-unit housing starts dropped by 41 units (-1.8%) in 2020.
  • Source: Canada Mortgage and Housing Corporation, Housing Market Information Portal

    Single-Unit Housing Starts by Region

    • Construction of single-unit housing in 2020 continued to be led by rural Halifax, with a 28% increase from 2019.
    • Construction in both suburban (-8.6%) and peninsula regions (-28.6%) continued to slow.
  • Source: Canada Mortgage and Housing Corporation, Housing Market Information Portal

    Multi-Unit Housing Starts by Region

    • In 2020, construction on multi-unit housing increased in suburban Halifax (+61%) and on the peninsula (+27%) but dropped in rural regions (-71%). This is a notable change from 2019, when construction increased in rural and suburban Halifax and dropped in the peninsula.
    • Construction of multi-unit housing in suburban Halifax hit 1,329 units in 2020, the highest in 7 years.
  • Source: Canada Mortgage and Housing Corporation, Housing Market Information Portal

    Two-Bedroom Apartment Rent and Vacancy Rates

    • Average rent increased by 4.4% in 2020 to $1,255 per month (+$53 over 2019).
    • The vacancy rate increased by 1 percentage point in 2020, the largest increase in over 10 years, though the rate remains below historic norms.
  • *Data are unavailable for St. John’s; Newfoundland and Labrador prices were used as a proxy.
    Source: Canada Mortgage and Housing Corporation, Housing Market Information Portal and Conference Board of Canada, Metropolitan Resale Snapshot

    Average vs Resale Home Prices

    • The average home resale price in Halifax was $399,619 in 2020. The price increased by 19.4% over 2019, the largest percentage increase across the 6 benchmark cities.
    • The average price of a new single-detached house in Halifax increased 9.1%, climbing to $506,047 in 2020. This price growth was tied for highest with Kitchener-Cambridge-Waterloo among the 6 benchmark cities.
    • In 2020, Halifax was the third most affordable place to purchase a new single-detached home and the fourth most affordable for a resale home.

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