Mr. Speaker, this is a return to a question asked by Mrs. Groenewegen on May 13, 1996, regarding local housing organizations funding.

Mr. Speaker, on May 13, 1996, Mrs. Groenewegen, Member for Hay River, asked an oral question about LHO funding. There is no direct connection between LHOs running a deficit and the economic condition of a community. The amount of rent people pay depends upon their family's income, therefore if local economic conditions take a downward turn and people's income falls, their rent is adjusted accordingly.

Any decrease in LHO rent revenue is adjusted in the following year. The experience of the corporation in these situations has indicated that these changes are minor with respect to the overall contribution to the community.

The $6 million in rent arrears is cumulative, created over a number of years. Adjustments for these arrears have been made in previous years. While these accounts are removed from the books of the LHOs, we continue to collect these outstanding arrears. Furthermore, with the block funding arrangements with the communities that I recently announced, there are additional incentives to collecting arrears. Thank you.

Thank you. Item 4, returns to oral questions. Item 5, recognition of visitors in the gallery. Item 6, oral questions. Mr. Picco.

Thank you, Mr. Speaker. Mr. Speaker, the current situation regarding staff housing and the government's move away has caused major concern in my riding and in other communities in the NWT. The units we are giving up leases on and those that were offered for sale, in many Gases our employees cannot either afford to purchase them or afford to rent from an owner on the open market. My question for the Minister of FMBS is have we fully looked into the ramifications of said sell-offs and lease terminations. Thank you, Mr. Speaker.

Minister responsible for the Financial Management Board, Mr. Todd.

Thank you, Mr. Speaker. Let me deal with the issue twofold: one on selling the houses and, two, on the leases. It's the policy of this government to get out of staff housing. As part of our overall budget implementation strategy or deficit elimination strategy, that's one factor that has to be taken into consideration. We're going to continue to pursue a fairly aggressive approach to selling the remainder of the staff housing -- which I spoke about the other day, I believe -- which is somewhere around 560 units. We are, of course, going to, as we have consistently done, encourage the tenants in that housing to purchase them. We will once again go out with a general call to each of the individual tenants asking them to purchase them.

I know there is some concern in Mr. Picco's riding, particularly with respect to the leases. I believe there was a letter drafted from somebody in the Housing Corporation which I really think was an error more than anything else, and we are currently reviewing our whole lease policy right now. I believe the leases in question that Mr. Picco talks about are still in place on a month-to-month basis until such time as we've developed a comprehensive policy as it relates to leasing of units, not purchasing. Thank you.

Supplementary, Mr. Picco.

Thank you, Mr. Speaker. Mr. Speaker, the concern here is that many of our employees in staff housing are not making $70,000 or $80,000 a year and will not be able to afford to rent or purchase on the open market. Maybe some of them don't even want to get into home ownership. Thus my supplementary question for the Minister is have we developed a threshold of home ownership by dollar income, or a rental amount for same, for employees. Thank you, Mr. Speaker.

Mr. Todd.

Thank you, Mr. Speaker. Again, I want to differentiate between the selling of houses and the leasing of housing. Unless my numbers are incorrect -- and I think they are correct -- we believe that most tenants could afford to purchase housing. I would suggest, if I may be so bold, that they would be silly not to because these houses are given at well below the market value, in most cases. So we would encourage our staff to purchase these units because, in some cases, the purchasing and mortgage costs are actually less than the rental costs that they're currently paying.

On the lease arrangements, I concur with my colleague that there is a problem there, particularly with new construction and the cost of new construction and how the rents reflect that. We're going to have to take that into careful consideration and that's what we're doing at the present time. I'm trying as quickly as possible to try and find some reasonable solution to that so that everybody has the opportunity to have a roof over their heads at a reasonable cost and can continue to function in the civil service. Thank you.

Thank you. Supplementary, Mr. Picco.

Thank you, Mr. Speaker. Mr. Speaker, I appreciate what Mr. Todd said about the leases, but if we're selling off 560 houses, the concern here is the mortgage. If you're just carrying the mortgage, that would be one situation. The problem we run into, Mr. Speaker, is I make a good salary. The lease cost, for example, for my lot in Iqaluit is over $3,000 a year -- $668 every three months -the O and M costs of running houses are cost-prohibitive to a lot of our employees. Will these employees be eligible for social housing if they cannot afford home ownership or renting on the open market when they are discharged from that staff house unit? The problem being that our social housing units have a long waiting list at the present time; so where are these people going to go? My question to the Minister then is will he look at letting these employees -- who cannot either afford home ownership because the house is let, sold or if you don't have a place -- to stay in the unit?

Mr. Todd.

Thank you, Mr. Speaker. This problem, I think, must be unique to the Baffin, Mr. Speaker, and perhaps Iqaluit. In my own riding and in other Members' ridings, we don't have any problem with people being able to purchase the houses at the prices that we've determined. But yes, we're sympathetic, and yes, if there are problems and if they are identifiable, we will certainly look at them on an individual basis. But the policy of this government is get out of staff housing. As part of the deficit elimination strategy, we're projecting $15 million to $20 million, over a two-year period, of revenues derived from the selling of the 560 units. So it would be unfair for me not to say to my colleague that the policy is to continue to sell the staff housing, but we will certainly look at the individuals who are suffering, as Mr. Picco has alluded to. When he provides us with the detail of those people, we will examine it at that time. Thank you.

Thank you. Final supplementary, Mr. Picco.

Thank you, Mr. Speaker. Mr. Speaker, I appreciate hearing that from the Minister and I will be receiving that information in the Hansard tomorrow and I'll be passing it on to the constituency. By selling off staff houses and ending leases, will we have houses for our needed staff when we do the recruitment in small communities? So if we don't have any more houses, we've sold them off, we've ended the leases in the smaller communities and our staff are needing houses in those communities, will we have the units available for said staff? Thank you, Mr. Speaker.

Mr. Todd.

Let's be clear, Mr. Speaker, so he can also send this to his constituents in Hansard. We are not getting out of the northern lease arrangements that we have at the present time. We're re-examining them. I said earlier to another question that the letter written by the Housing Corporation district manager was in error and a miscommunication. We're going to continue -- and I've

spoken to some of the individuals who own these units in Mr. Picco's riding -- to make lease arrangements with them. We're examining that. When we have a full policy statement to make on it, I'm prepared to discuss that with my honourable colleague. Thank you.

Thank you. Item 6, oral questions. Mr. Rabesca.

Thank you, Mr. Speaker. Yesterday, my colleague, Mr. Krutko, asked the honourable Mr. Todd about the sale of government houses to the GNWT employees. The honourable Member may know that in Rae we have a very nice house that is one of the government's first homes in the community. The house has traditionally been used for the doctors who have lived in Rae. This house is now up for disposal. There are a number of GNWT employees in Rae who are interested in purchasing this unit. We have been told that there will be a priority list made of these staff members. Will the Minister please inform the House as to what criteria this will follow? Thank you, Mr. Speaker.

Thank you. The Minister of the Financial Management Board, Mr. Todd.

Thank you, Mr. Speaker. I'm not familiar with the particulars of this one particular unit. I must apologize to the Member on not being able to respond to him today. I will take the question as notice and get back to him in the House tomorrow. Thank you.

Thank you. The question has been taken as notice. Item 6, oral questions. Mr. Krutko.

Mr. Premier.