Thank you, Mr. Chairman. The Standing Committee on Social Programs met with the Minister and his officials on Tuesday, February 24, 2004, to review the draft main estimates of the Northwest Territories Housing Corporation.

Committee noted the GNWT is supplying $53.047 million of the estimated $103.486 million the NWT Housing Corporation will spend on delivering its programs and services in 2004-2005.

Committee members made note of the following issues during their review of the 2004-2005 draft main estimates for the Northwest Territories Housing Corporation.

Market Housing Initiative

On the face of it, Mr. Chairman, committee is willing to offer limited support for the market housing initiative at this time, based on our initial discussions with the Minister and his officials.

As committee members understand, the market housing initiative is to provide funding for the creation of rental housing in non-market communities to house teachers and medical staff. After the initial purchase of the mobile homes, it is understood that the corporation hopes to recover its cost by selling to aboriginal development corporations.

What is of concern to committee members, and limiting their full support of the initiative, is the lack of consultation with the target rental market. It is not clear that the rental rates that will have to be charged to recover investment costs are acceptable. It is also not clear that the use of mobile homes meets the needs of the target rental market.

Mr. Chairman, the Standing Committee on Social Programs recommends that the NWT Housing Corporation engage an arm's length organization to conduct a survey on whether the market housing initiative meets the needs of its intended target audience: professionals at the community level.

The committee looks forward to further discussion on this potentially valuable initiative.

Somba K'e Healing Centre

The committee was disappointed to hear that the Somba K'e Healing Centre, just outside of Yellowknife, is not suitable to meet the needs of a territorial treatment centre for children. Now that this option no longer exists, it is time to make serious efforts to get this facility off the government books.

The committee was interested to hear that as the mortgage holder on this $2.8 million facility, the NWT Housing Corporation had identified a number of social agencies that were interested in acquiring the facility and planned to issue a directed RFP to these agencies. While it would be preferable for a social agency to gain control of the facility and for the facility to be used for the benefit of NWT residents, there are some concerns. Will the Department of Health and Social Services utilize any of the services that a social agency plans to deliver at the Somba K'e Healing Centre? Will that utilization generate sufficient revenue for the social agency to maintain and pay for the mortgage on the facility? Will the proponents be made aware of the land tenure issues and the maintenance and utility costs of the facility as part of the RFP package?

Committee would suggest any sale agreement have a caveat that the sale would not result in any increased appropriations for the Government of the Northwest Territories.

2004 Housing Needs Survey

During the review of the 2004-2005 draft main estimates, committee members were made aware that the Housing Corporation was putting its finishing touches on the 2004 housing needs survey. This survey is compiled by the Housing Corporation and the NWT Bureau of Statistics every four years and is used in determining housing needs at the community level.

The housing needs survey is important in determining resource allocations for new construction and repairs over the four-year period. Members of the standing committee appreciated the Minister's commitment to table the housing needs survey at the earliest opportunity. It was not clear that this would occur during the March budget session. Members of the standing committee would appreciate being provided copies of the housing needs survey upon completion.

Corporation Goals

Members of the Standing Committee on Social Programs were concerned the Housing Corporation goals changed without a demonstrated plan for implementation.

In particular, Members expressed concern that the new goal related to public education and training to reduce dependency on Housing Corporation social housing programs was not well defined. Members were concerned with how and who would deliver public education and training at the community level. The Housing Corporation admitted it has done a less than stellar job in educating people at the community level about the consequences and ramifications of accessing corporation homeownership programs.

Committee will be looking for a clear indication of an adequate and well-reasoned training and public education component as part of the corporation's 10-year plan when we meet to review that plan in April.

Supported Lease Program

The committee supports the principle behind the supported lease program of providing a transition mechanism to move targeted clients from dependency on social housing to independence. Members are, however, concerned that, as one Member put it, "imposing a market mentality on a small community does have its pitfalls."

Members were not confident that the corporation has developed a proper mechanism to report and monitor client progress. There is a concern this new program does not have a coordinated approach between the district housing office and the local housing organization. In addition, concerns expressed by some Members indicate there have been problems in the past with district managers failing to communicate effectively which has led to misunderstanding as to the client's responsibilities when it comes to homeownership. Members are also concerned that credit and lifestyle counselling may not be sufficient to break the cycle of dependency in some individuals and that the program needs to stand ready to deal with its successes and failures.

When reviewing the Housing Corporation's 10-year plan in April, the committee will be looking for evidence that the supported lease program has a clearly developed education component that clearly outlines to the client the intended purpose of the program, its intended outcome and consequences of homeownership.

Counselling Clients

Committee is concerned that the NWT Housing Corporation appears to put too much faith in the adequacy of present counselling services available to their clients. Members do not share that faith and believe that the corporation has underestimated the difficulties in transitioning from dependency to open market.

The committee strongly believes that there is a need to ensure that frontline staff at the district level and the tenant relations officer at the local level are adequately trained to counsel clients.

Members were interested to hear that the corporation is working with the Canada Mortgage and Housing Corporation to develop public education materials on homeownership, but remain convinced that the human quotient is more important in ensuring the client understands the responsibilities of homeownership.

Log Housing

Members of the standing committee understand the corporation has had limited success in delivering affordable log housing programs in the past. However,

some Members did point out that there is an opportunity to possibly use log construction to address the housing needs of single people in some communities through a user-build sort of program. It was felt that small units might be more economical than larger units.

Communication In The Communities

Members are aware there are many residents in the communities who hold the government and corporation responsible for upholding agreements made prior to the Housing Corporation coming into existence in 1974, Mr. Chairman.

Members would compliment the Minister on his awareness of this reality and look forward to further discussions on how we can meld promises made with the programs of today.

Federal Funding For Social Housing

Committee members noted that 2004-2005 marks the beginning of the reduction of funding from the federal government for the construction and upkeep of social housing. Unless the federal government has a change of heart, this will mean the GNWT and the Housing Corporation will be taking on more and more of the fiscal responsibility each year until the funding ends in 2038.

Obviously, this is of grave concern, as we do not have enough money presently to address social housing needs in the Territories.

Committee members have heard indications at the federal level that there may be money made available for social housing in the federal budget. This would be welcome, provided the NWT's share is not based on an inadequate per capita funding formula.

The committee strongly supports the Minister in any and all efforts to restore and increase the amount of money provided to the territorial government for the provision of social housing in the Northwest Territories. The committee also supports the Minister in accessing funding for aboriginal residents of the Northwest Territories through aboriginal on-reserve housing programs that are not available in the NWT. It is unreasonable for the federal government to deny access to funds that are clearly targeted at aboriginal people.

Mr. Chairman, thank you. That ends the Standing Committee on Social Programs report.

Thank you, Mr. Braden. Would the Minister wish to bring in witnesses?

Yes, Mr. Chairman.

Would the Sergeant-at-Arms escort the witnesses into the Chamber? Does the committee agree?

Thank you, Mr. McLeod. Can you introduce your staff, please?

Thank you, Mr. Chairman. Mr. Chairman, with me is Tom Beaulieu, the president of the Northwest Territories Housing Corporation, and Jeff Anderson, chief financial officer for the corporation.

Thank you, Mr. McLeod. General comments. Ms. Lee.

Thank you, Mr. Chairman. I don't have general comments per se, but I do have some questions on the Minister's opening comments. It indicates here that the 2004 NWT community survey; I think that's a needs survey. During the committee review of the budget, the Minister indicated that this would be coming any day now. So I would like to know from the Minister whether he has received the needs survey, and if he could tell us briefly as to what major findings have been made if there are any. Thank you.

Thank you, Ms. Lee. Mr. McLeod.

Thank you, Mr. Chairman. We have looked at the first draft of the 2004 housing needs survey. It is not quite ready, it's not quite in the state for us to table. We are intending to bring the document forward hopefully by Monday, and I will be glad to share it with Members.

Thank you, Mr. McLeod. Ms. Lee.

Thank you, Mr. Chairman. I also would like to ask another question at this juncture, rather than waiting until we get into details, Mr. Chairman, and it has to do with the document that I tabled this week. I believe it was two days ago. It was a copy of a notice for tender that was sent out with the Minister's name on it. The Housing Corporation is looking for 22 mobile homes, and I guess the most interesting thing that I noticed was at the bottom of the document where it was indicated that the NWT BIP would not apply in this tender. So I would like to know if the Minister could advise us as to what's behind this latest exemption of the BIP on a government tender. Thank you.

Thank you, Ms. Lee. Mr. McLeod.

Thank you, Mr. Chairman. This initiative to provide market housing in communities is something that was decided in the 14th Assembly. The direction from Cabinet was to implement an initiative to provide market housing in the communities across the Territories as a result of many of the communities indicating that there is no market accommodation for a lot of the people who are considered professionals, people who are working. To rent, it's limited, there is practically a zero vacancy, there is no accommodation, no houses on the private market. We have a small private housing market in our communities. The direction was to provide accommodation that is affordable, that is competitive to market rate, that is re-sellable so that it would give opportunity to private enterprise and the development corporations in the communities to purchase these units in an attempt to encourage the market in the communities. We are also directed to provide a full cost recovery. We took that direction and looked at how we could accommodate this initiative. It was clear that stick-built houses were not the way to go; it would not provide us with our desired results. We decided to look at trailers, and trailers were considerably less expensive. Also, as part of this requirement, we were directed to have them landed and set up by August of this year. We have done that. We have developed a communications plan, we

have developed an implementation plan, we have consulted the affected communities and are in the processing of tendering, as the Member has indicated. It's being advertised and part of this strategy was to waive the BIP. We've approached Cabinet for approval and we've received approval to waive the BIP on this whole initiative. Thank you.

Thank you, Mr. McLeod. Ms. Lee.

Thank you, Mr. Chairman. I guess we could ask a similar series of questions that we had asked previously where there was an exemption of BIP on a capital project. Although in previous experiences, those capital projects weren't much larger than the one, I am assuming, we are dealing with here. Mr. Chairman, I need to ask the Minister if there has been any analysis done to figure out how much BIP would have cost. I still don't understand why the decision was made to exempt BIP. I think it sends a wrong message about what the government is doing. I don't know if we are ever going to fix this, but if the government has evidence to suggest that the BIP does not work or that it costs too much money or it gets in the way of government advancing its agenda, whether it be providing housing in small communities to professionals or figuring out that the stick built houses don't work for some reason, I don't know what the reasons might be. But the government has an obligation if it decided that BIP does not work for us and it's costing too much money, then say so. You can't spend years revising the policy, working out the policy, having a whole office on the BIP and then at a whim and on its own discretion say in this case it's not going to apply.

The transparency is the important thing here. I don't know if it should be acceptable for the Minister to say, he's been a Minister there for four months and for him to say this decision was made previously and I am going to follow it, at least if the Minister has a view of the situation and feels that is the way to go, he should be prepared to defend that and not just say the decision was made before I was there and we are going to go with that. I have some questions. I want to know what kind of cost-benefit analysis was done and whether the Minister himself supports this initiative regardless of what the instructions from the last Cabinet has been. Thank you.

Thank you, Ms. Lee. Mr. McLeod.

Thank you, Mr. Chairman. This whole initiative was not done on a whim. I do support it. I think we have to take a look at what our options are to provide housing in our communities. We have a real problem in all the small communities in the North. It may not be a big problem in a larger centre. We have requests from practically all the communities to deal with the issue of housing teachers, band managers, SAOs and nurses. We have communities that will not be able to attract professional people in the communities if we don't provide accommodation that is suitable and affordable. We are not in a position, as the Member knows, to say with any great certainly that it's going to cost more if we don't waive the BIP. At the same time, we can't say it's going to cost less with any certainty either. All we can do in this situation where we are required to put houses on the ground at the cheapest cost possible is to anticipate the worst case scenario and the best-case scenario and eliminate any potential for raising the cost of these units. That's what we are attempting to do.

If there is no desire and BIP came in at a higher rate, it would really make it difficult to go forward with this whole project. We don't have a lot of time to get these houses on the ground. I certainly support this initiative. We are responding to the needs of the people of the North. We can share some of the information that we've compiled. We've gone into the communities. We haven't done, as the Member is indicating, gone out on a whim and said let's do this. We've talked to the affected communities, we talked to the different agencies, we talked to the LHOs, we've tested what it would come out to in the different communities and we've done an assessment to see what we could afford to rent these places out at cost recovery with no built in profit margin. So I think we've done due diligence to this project. If the Member is concerned about waiving the BIP across the board and the government picking and choosing when it applies, that's a bigger issue that maybe Cabinet has to look at. I understand RWED is doing an assessment of what this may cost in terms of supplying a subsidy or a preference to different companies. There is a lot of interest in this whole initiative. We know this is certainly not going to satisfy the communities. Most communities are coming back and saying our allocation is not close to meeting what they need.

So the demand for 45 units is not all that's being requested out there. However, this is the direction and how many units the Cabinet directed us to go out and do. We've done assessments. We know it's higher. We know this may have a positive aspect to it. There are a lot of people coming forward and indicating that they would like now to look at setting up manufacturing of these units and other units. There is a high potential that we are going to need camps, well-site trailers, right across the North from the Deh Cho Bridge project to the pipeline to the Bear River project. There are a number of different things which will place a requirement for trailers in the North. So it is a big project. I can understand the concern. However, in this case we wanted to remove any potential for increasing the cost of the units.

Thank you, Mr. McLeod. Mr. Delorey.

Thank you, Mr. Chairman. Along that same line of questioning, I can agree with the Minister that there is a huge need in the communities for housing and a need to put them on the ground as cheaply as we can. I certainly don't agree that to do that we have to throw the doors wide open and totally bypass all our northern partners, if I can call them that. I suspect that the Housing Corporation has over the past years worked with many people in industry that they can call partners. If this is the area that the Housing Corporation wants to go and they do have an agreement from Cabinet to waive the BIP on an issue such as this, I would think we could at least involve our northern partners in some way. I understand that the tender is not just open to northern contractors to bid on. It's wide open. I think that is a terrible move on this government. I cannot agree that this is a good move from this government or the Housing Corporation to just totally bypass our northern partners to look at this thing. We've talked about different approaches before to putting housing units in communities. We spent a lot of time in the last government going over a harmonization plan that was intending to do what the Minister is referring to now as a

10-year plan to remove people from dependency on housing. This is a 10-year plan being put in place with no involvement that I know of from committee Members or Regular Members. The first time I heard of it was in these main estimate reviews.

On the part of the 22 units that have been put out to tender, I don't see any northern content in them at all. I think the contract even calls for the 22 units on the highway system to be on pads, skirted and everything fully set up within that contract, which totally removes any northern content in the program at all. I would just like to clarify if that is the case. Thank you, Mr. Chairman.

Thank you, Mr. Delorey. Mr. McLeod.

Thank you, Mr. Chairman. I will respond to the last comment first regarding the contracting being exclusive of pads. No, that's not what we put out there. The trailers that are targeted for off-road communities will be FOB Hay River and the communities that will be on the road system, I believe there are eight this time around, will be FOB the communities they are indicated for. The LHOs will be handling the gravel pads, the set-up of tank systems, water, sewer and fuel.

In response to the comment that this is tendered into the South also, as well as the Territories, that's correct. We were directed to bring these units forward in the lowest cost as possible. An open tender would achieve that, in our opinion. We are not leaving any room for preferential treatment.

Thank you, Mr. McLeod. Mr. Delorey.