Mr. Chairman, with regard to the motion, I would like to thank the Members for the opportunity they provided to myself and Mr. Pollard earlier this week to hear their concerns regarding the proposed staff housing strategy. We have made note of the concerns from earlier letters and communications we have had. We noted the concerns. As a result, as a Cabinet we have agreed to make some changes to deal with them. In response to the motion I want to indicate to Members that I think the majority of the recommendations contained in the motion can be addressed and met by the government. We are prepared to make some amendments to the strategy which is called for in the proposed motion which the Members are going to vote on.
I agree as a Minister, as well as the Cabinet, that the strategy should be implemented over a longer period of time to give everyone a chance to prepare for staff to have time to budget for their shelter costs. We would agree to implement the strategy over three years instead of two. I still feel confident that the proposed rents are fair and equitable, but I agree that the issue of timing had to be addressed. We are now in a position to agree that the implementation should take place over three years. We, as a Cabinet, had concerns about establishing another steering committee for the strategy. I support the desire of Members to be kept informed about the implementation of the strategy and to have some forum for suggesting solutions to problems as they are perceived or as they arise. Therefore, I suggest again that if Members want to designate two MLAs, I would be pleased to work with them to deal with problems as they arise. Generally speaking, I feel once we establish the policy and the direction, once we have agreed on the strategy, then the matter must be handed over to our officials to manage within the rules we have set.
Officials have been directed to implement the strategy over three years, to advise us of the changes which will be made, and to crunch the numbers. We will give direction to start the rental increases on August 1, 1993, with further increases over the following two years until full rents are reached on August 1, 1995. Our calculations indicate that increases of 15 per cent to the base rents will be required to equalize the three increases.
Rental increases will only be applied to base rents which do not include the charge for utility costs. This is a change from the original proposal which imposed increases on the total rental package. I recognize your motion would recommend that increases not exceed ten per cent in the first year. By calculating the 15 per cent increases strictly on the base rents, the impact on the tenant is actually less than the ten per cent recommended by the motion. However, in using this approach in level III communities, it will still not deal with the fact that tenants will be paying very low rents in comparison to their counterparts in level I and II communities. In order to resolve this problem without financial hardship to the tenants, we now propose to use the solution which was implemented for level II communities in the mid 1980s. That is, after the application of the 15 per cent increase to the base rents the rent will be increased by a further $450 per month which will be entirely offset by payment of the $450 accommodation allowance. That means for all tenants in level III communities, as soon as we implement the rent increases, the standard accommodation allowance will be available to them, starting on the proposed date of August 1, 1993.
Staff housing units, I believe, are generally in better condition than other houses in communities. To deal with some obvious problems where the units may be below standards, as I said earlier, a group of team officials from DPW, Personnel and the Housing Corporation will be visiting every community to inspect and assess all units. Inspections will involve remeasuring to make sure the correct rent is being charged, conducting energy audits for units which appear to be using more energy than community averages and assessing the overall condition of the unit. We have proposed to have these visits take place between March 15 and May 15 of this year. In cases where the energy consumption is unacceptably high, the unit will either be repaired or the rent will be lowered in conjunction with the timing of user-pay.
Mr. Chairman, as a Cabinet we have tried to address the concerns and points raised by Members and tenants over the last few months, and have made these changes to meet what we believe to be the spirit of the motion which is now before you. Thank you.