The Alberta government has tabled a bill in the Legislative Assembly that changes the rules for indexing several social benefits to inflation.
If the bill passes, social benefits will not increase by more than 2% per year, unless the government makes an exception. If inflation is below 2%, they would be indexed at the same level as inflation.
This means that if the annual inflation rate exceeds 2%, benefits will not keep pace with increases in the cost of living.
“The Treasury Board will examine [la situation] each fall and will decide” whether benefits should be increased beyond the 2% limit, says Nate Horner, the Minister of Finance and President of the Treasury Board.
The government is therefore partially reversing its decision, taken two years ago, to link the increase in social benefits to the increase in the Consumer Price Index (CPI).
Some of the programs affected:
- Guaranteed Income for Severely Disabled People (AISH)
- Income support (Income Support)
- Alberta Seniors Benefit (Alberta Seniors Benefit)
- Supplementary housing benefit (Supplementary Accommodation Benefit), for the elderly
- Alberta Child and Family Benefit (Alberta Child and Family Benefit)
Interest-free mortgages
Furthermore, if the bill is adopted, Alberta would also become the first province to allow financial institutions to offer interest-free mortgages, also called Islamic mortgages or halal mortgages.
These financial products would only be available in establishments regulated by the province, namely credit unions and ATB Financial.
What is a halal mortgage?
Many people of the Muslim faith are opposed, for religious reasons, to adding interest to a loan.
Halal mortgages are structured to get around this problem. The lender, the financial institution, is the owner, or co-owner, of the house from the time of purchase. The borrower repays the lender by paying rent and fees, rather than a mortgage payment with interest.
Once the borrower repays the lender, ownership of the home transfers to the borrower.
“We’re not requiring financial institutions to implement these different financing models, but we’re opening the door for anyone who wants to offer them,” explains Nate Horner.
The big six Canadian banks (RBC, TD, BMO, CIBC, Scotiabank and National Bank) will not offer these mortgages, because they are regulated by the federal government.
