Page 3-7, infrastructure acquisition plan, lands administration, tangible capital assets, total tangible capital assets, $500,000.

Infrastructure contributions, total infrastructure contributions, $300,000. Total activity, $800,000.

Page 3-8, activity summary, regional operations, infrastructure investment summary, total net book value and work in progress, $70.556 million.

Page 3-9, infrastructure acquisition plan, regional operations, tangible capital assets and it's continued on page 3-10, regional operations, total tangible capital assets, $11.985 million. Infrastructure contributions is continued on pages 3-11 and 3-12, total infrastructure contributions, $3.644 million. Total activity, $15.639 million. Total department, $26.2 million.

Does committee agree that this concludes the Department of Municipal and Community Affairs estimates? Thank you.

I would like to thank the Minister and Ms. Bassi-Kellett and Ms. DeLancey for joining us this afternoon. Thank you very much.

Thank you, committee. We are going to take a short recess at this moment in time.

---SHORT RECESS

I would like to call Committee of the Whole back to order. We are on the NWT Housing Corporation main estimates. I will ask Minister Krutko if he would please like to present his opening remarks.

Thank you, Mr. Chairman. Madam Chair, I am pleased to present the Northwest Territories Housing Corporation's main estimates for the fiscal year 2005-06.

The overall budget of the corporation for 2005-06 is $105.966 million. The total GNWT contribution towards this budget is $35.956 million. This is a substantial reduction from last year and is due primarily to the transfer of public housing subsidies to Education, Culture and Employment, effective April 1, 2005. Removing this transfer from the equation shows an overall decrease of 3.3 percent from the 2004-05 Main Estimates.

Madam Chair, during 2005-06, the NWT Housing Corporation is planning to increase its rental housing portfolio. The corporation will spend $9.320 million to construct 56 units in communities across the Northwest Territories. Included in this allocation are eight barrier-free units for persons with disabilities in Yellowknife...

---Applause

...and, Madam Chair, 28 units to be built in several communities to help address the significant need for singles units.

---Applause

The remaining 20 units will be delivered under phase two of the market housing initiative.

The Housing Corporation also plans to invest $8.430 in modernizing and upgrading our rental stock and will contribute $12.846 million to assist over 100 families through homeownership programs such as the Expanded Downpayment Assistance Program or the Independent Housing Program. Under our repair programs, we have set aside $2.536 million to fund emergency repair and various seniors programs such as the Seniors/Disabled Preventative Maintenance Program and the Senior Citizen Home Repair Program.

The contributions outlined in these estimates will allow the corporation to work towards meeting the housing needs

outlined in the 2004 NWT community survey. The results of this survey confirm that our investments over the past four years have had a positive impact, but much work remains.

As I mentioned earlier, the $31 million public housing subsidy will be transferred to ECE on April 1, 2005. This will not only improve client services, but will also provide the corporation with an opportunity to redefine its mandate. Work continues on this front and I will be seeking formal Cabinet approval on a revised mandate for the NWT Housing Corporation by April 1, 2005. These two actions should allow the corporation to strengthen NWT housing markets and position itself as a market leader in housing.

As Members are aware, the Canada Mortgage and Housing Corporation continues to reduce housing contributions across Canada. This presents a unique challenge for the corporation and one which will require some difficult decisions by all Members over the coming years.

We have also been working hard to strengthen ties with our federal counterparts. I've been able to meet privately with federal Minister Fontana on a number of occasions and have used these opportunities to outline our concern with per capital funding and other unique challenge we face in the North. The Minister seems to agree with our concern regarding funding arrangements and has indicated support in tackling the numerous obstacles we face. I am looking forward to future meetings and to a possible northern tour by the Minister during this spring.

At this time, I would be pleased to answer any questions the committee may have. Thank you, Madam Chair. That concludes my opening remarks.

Thank you, Mr. Krutko. At this time I will ask the chair of the Standing Committee on Social Programs to provide the committee's comments on the review of the main estimates for the Housing Corporation. Ms. Lee.

Thank you, Mr. Chairman. The Standing Committee on Social Programs met with the Minister and his officials on Thursday, January 13, 2005, to review the draft main estimates of the Northwest Territories Housing Corporation.

Committee noted the total operating budget for the Northwest Territories Housing Corporation for 2005-06 is planned at $105.996 million. Of this total amount, the corporation proposes to generate $70.010 million in revenues and a GNWT contribution of $35.956 million. The substantial difference from last year's main estimates is the transfer of Social Housing Program dollars to the department of Education, Culture and Employment in the amount of $15.870 million.

The following outlines committee members' issues during their review of the 2005-2006 Draft Main Estimates for the Northwest Territories Housing Corporation.

Market Housing Initiative (MHI)

The committee believes the market housing initiative to be a complete failure. Since the beginning, committee has expressed concerns about how this program came into being. The waiver of the business incentive policy, the rushed nature of the program to meet shipping deadlines and the lack of available serviced lots in some communities, appear to have contributed to the overall failure of the market housing initiative. Further, the Northwest Territories Housing Corporation failed to undertake the proper consultation to determine whether the use of mobile homes met the needs of the target rental market and whether rental rates charged to recover investment costs were acceptable to the target market.

Out of the 22 units delivered in 2004-05, 14 units are presently unoccupied and the professionals who were the target market occupy only five units. The total cost of the project was $2.5 million. The Northwest Territories Housing Corporation believes it can dispose of these vacant units as either public housing units or for sale to interested parties. Committee is not impressed with such a proposal. The market housing initiative was approved for a specific purpose: to house and to attract professionals, like nurses and teachers, into small communities, and not for social or market housing.

Meanwhile, the cost of financing, heating and maintaining the empty units is eating a big hole in the corporation's expectation that the entire MHI would be 100 percent self-financing.

Time and time again the committee has requested a post-mortem on the 2004-05 activities under the market housing initiative. In a December 3, 2004, response to the committee, the corporation committed to providing this post-mortem later that month. In an e-mail dated December 8th, it further revised the delivery date to mid-January and then again, during the main estimates review, revised it to mid-February. The NWTHC is awaiting feedback from the departments of Justice and Health and Social Services to complete the post-mortem on the first phase of the market housing initiative. The plan is then to take it to Cabinet to decide on whether to continue the delivery of 22 more units, the second phase of the market housing initiative project.

Committee has advised the corporation and the Standing Committee on Accountability and Oversight of its serious concerns over the corporation's handling of the market housing initiative and of committee's reluctance to support $2.2 million in borrowing for phase two in 2005-06.

Members await the outcome of the assessment report and the Cabinet's decision and anticipate further discussion on the MHI during Committee of the Whole.

Federal Funding Of Housing Programs

Members were made aware that the Minister is meeting with Housing Ministers from across the country, the federal Housing Minister and Canada Mortgage and Housing Corporation, CMHC, officials to discuss potential CMHC initiatives and the inequalities of current formula financing. The discussions were specifically on base and per capita funding and other CMHC programs primarily focusing on aboriginal housing and whether it meets the needs of the NWT and smaller jurisdictions across the country. The resulting communiqu‚ identifies problems associated with the rural and remote parts of Canada and includes funding inequalities and the lack of and condition of housing for First Nations people.

The Minister stated he has had the opportunity for private meetings with the federal Housing Minister on at least two

occasions. The Minister of the NWTHC believes the federal government is in support of distributing federal funding and program access on a more equitable basis across the country. They are currently discussing formula financing that includes a base minimum plus per capita funding.

The committee acknowledges the Minister and his officials' efforts in lobbying the federal Housing Minister but note that as of yet nothing is in writing. Committee wholeheartedly encourages the Minister to press for an agreement in writing during his next meeting with the federal Housing Minister, some time in the spring.

Budget Reporting For NWTHC

The Standing Committee on Social Programs is concerned with the corporation's budget reporting process. The corporation, because of its unique structure, is not guided by the same principles as the departments. Being a corporation, they have different statutory authority and budget for results. This causes fluctuations between proposed mains and actuals.

Committee is concerned this diminishes the committee's oversight function and proposes that before the next business plan review, the Northwest Territories Housing Corporation, the Financial Management Board Secretariat and the standing committee establish a bureaucratic working group to ensure the needs of the standing committee are met while allowing the NWT Housing Corporation the flexibility to carry out its mandate.

The Standing Committee on Social Programs looks forward to establishing this working group and seeing the results during the next business planning cycle.

Madam Chair, at this time I would like to ask the Member for Great Slave to continue on with the report. Thank you.

Thank you, Ms. Lee. Mr. Braden.

Selling Off Public Housing Units

Thank you, Mr. Chairman. Committee supports the plan to sell off 450 public housing units over the next eight years and replace them with 250 new multi-family units. The corporation will be replacing older inefficient units with newer cost-efficient units and thus will reduce operating costs in its public housing portfolio.

Committee was particularly concerned with the negative press generated by the media who appeared unaware of the intent behind the sale of public housing units. Members informed the Minister that a communications strategy should be implemented to alleviate any community or client concerns.

The Standing Committee on Social Programs' support for the sale of public housing stock is conditional on the continued adherence to the replacement plan and revenues generated from the sale of public housing units not being used to support administration costs.

Committee recognizes that housing needs change from time to time, and from community to community. In this context, we support the strategy of selling older, high-cost units or those units surplus to a community's foreseeable social housing needs.

The committee will be monitoring this issue and following up at the next available opportunity with the Minister responsible for the Northwest Territories Housing Corporation.

Maintenance Management Operating System (MMOS)

The Standing Committee on Social Programs has previously recommended the Northwest Territories Housing Corporation respect its mandate and turn over the marketing and support function for the MMOS program to the private sector or to a more appropriate government department or agency.

The corporation has been charged with redefining its mandate to better meet the housing needs of northerners. It appears from the tone of their December 20th response, that the MMOS system may very well be a part of any new mandate. In addition, the information systems/information technology plan, presented as part of the business plan, clearly states that information services will be working with business development personnel within the corporation to develop a corporation marketing plan.

During the main estimates review, the Standing Committee on Social Programs was reassured the NWTHC is not presently marketing this software. It will strictly be used as an in-house tool to manage their assets.

Committee is still concerned that in their new mandate the MMOS software application program may appear as a new marketing initiative to generate revenues.

Local Housing Authority Versus Headquarters Funding

In a time when housing needs are growing in virtually every community, and when the government overall is looking to reduce internal expenses, it would be anticipated that spending on housing programs would be increasing while costs for overhead and administration would be going down. Sadly, the NWT Housing Corporation has demonstrated its ability to defeat logic.

The district offices and the local housing authorities will see budget cuts of some $1.1 million this year, while the four headquarters functions will see increases of $1.17 million.

Committee is troubled by its observation that the corporation is maintaining the same number of person years at the Headquarters level as last year. Across the GNWT, departments have reduced headquarters staffing to meet some of the targeted, government-wide fiscal reduction requirements. The Minister and his officials were adamant that headquarters staff is essential with the focus of transferring Social Housing Program funding to the department of Education, Culture and Employment and with the redefining of the NWTHC's mandate.

Committee will monitor any further financial reductions and changes to the NWT Housing Corporation to ensure that financial restraints are met at the headquarter level and not by the local housing authorities. In addition, with the transfer of social housing to ECE, the NWTHC will

have to examine decreasing staff at headquarters and regional levels.

New Mandate For The NWT Housing Corporation

The Northwest Territories Housing Corporation is in the initial phase of redefining its mandate to better provide affordable housing for the residents of the Northwest Territories. The Minister and his officials are currently working on a paper outlining the new mandate that is scheduled for Cabinet review and possible approval by April 1, 2005.

Committee members would like to encourage the Minister to improve stakeholder involvement in determining the new mandate for the NWT Housing Corporation. It appears there is limited stakeholder involvement, which committee believes is a crucial element in developing an effective mandate.

In addition, the committee proposes a limitation on the percentage of the budget that can be spent on administration, policy development and finance. This should ensure the bulk of the corporation's money is utilized building or repairing housing units, rather than on administration costs. Members believe the corporation's priority should be program delivery rather than administration.

Committee looks forward to participating in defining the new mandate for the NWTHC and would appreciate the opportunity to be involved in setting the performance measures once the mandate is established.

Madam Chair, that concludes the Social Program's report on the Housing Corporation. Thank you.

Thank you, Mr. Braden. If the committee is agreed, could I ask the Minister if he would like to bring witnesses in?

Agreed. Mr. Krutko, would you like to bring in witnesses?

Agreed.