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.