Mr. Speaker, I have a return to written question asked by Ms. Lee on October 25, 2005, regarding the ATCO Novel housing project.
Q. Given that the NWT Housing Corporation has been actively engaged in the negotiations with the federal government and ATCO Novel housing project in Calgary, Alberta, when would the Minister provide the detailed plan on the entire Novel housing project and discussion?
There are a number of key prerequisites to the Novel initiative becoming a reality. First and foremost, there must be a pipeline project. Second, ATCO must be the successful supplier of workforce housing and Mackenzie gas project must accept the Novel product as meeting its workforce housing needs. Third, Canada Mortgage and Housing Corporation must agree to contribute over $90 million to the project. Finally, MGP must agree to release the workforce housing at the end of pipeline construction at no cost.
To date, there have been extensive discussions with ATCO to ensure the housing product meets or exceeds Housing Corporation standards and can be cost effectively converted to quality permanent homes. There have also been extensive discussions with CMHC to secure their commitment to providing critical financial assistance to the project. There have only been preliminary discussions with Imperial Oil Ltd. as they have been reluctant to engage in full discussions until they make a decision on proceeding to the next stage of the pipeline project. Although the Government of the Northwest Territories has been very active in promoting the Novel initiative, we are at a stage where many questions still exist. As a result, a detailed plan such as you request is not practical at this point in the process. However, a status report and discussion with the Standing Committee on Accountability and Oversight and/or the
Standing Committee on Social Programs could occur at either or both committees' convenience.
In 2005, a proposal was submitted to then federal Minister responsible for Labour and Housing, the Honourable Joseph Frank Fontana, to ensure a funding commitment from the federal government.
Following a positive response from the federal government, and an announcement by MGP to proceed with the next stage of the pipeline project, implementation planning and consultations can commence in earnest.
The implementation planning process will take place over several years as it will involve consultations with communities, aboriginal groups and self-governments, labour, northern business and manufacturers. As the earliest availability for the conversion of Novel homes in communities appears to be 2011, it is our intention to use this time to the fullest extent possible to complete a comprehensive implementation plan. This time frame will provide northern business and industry with the opportunity to participate fully in the economic benefits that will be derived from this project here in the NWT.
Q: What is the budget breakdown of this project in terms of who is paying for what: How much is the federal government paying; how much is the territorial government payment; how much is ATCO paying?
The recent proposal to the federal government provides an estimated breakdown of project financing. As noted earlier, this initiative is premised on being able to level the MGP's investment in workforce housing for pipeline construction. The goal is to have MGP fully depreciate its investment in workforce housing over the construction period and release the workforce housing at the end of construction at no cost. The budget breakdown is as follows:
CMHC contribution - $119 million
GNWT contribution - $116 million
Private purchasers - $62 million
Total project funding - $297 million
How much of the final cost to purchasers will be assumed by GNWT versus private homeowners depends on the demand for the units and the ability of private purchasers to finance the cost. Obviously, the lower the capital cost to home buyers, the more units will be privately purchased and the fewer the GNWT will purchase for public housing purposes. Currently, we are estimating that 50 percent of the units will be privately purchased. The fundamental goal of this initiative is to provide quality affordable homes to meet the critical housing needs of non-market communities. Although there will be over $220 million of economic activity available for NWT businesses in the lot development and conversion process, the end goal of affordable housing cannot be compromised. Without this approach there is no way the GNWT could deliver 1,420 homes in this time frame at this cost and make such a substantial dent in critical housing needs.
Q. How is the territorial government going to fund its portion of the project?
Based on the assumptions contained in the proposal to CMHC, the net cost to the GNWT is currently estimated at $116 million. This cost will go up or down, depending on the number of units sold to private purchasers. Some of this cost can be funded from within the Housing Corporation's existing funding level, but some of it will require new financing. Given the substantial cost-benefit of this approach and the dramatic improvement in community housing that will be achieved, it is proposed that any net cost will be a wise investment well within the Housing Corporation's and the GNWT's financing ability.
Q. What impact would this have on other NWT Housing Corporation projects?
The proposed project will not have a negative impact on the Housing Corporation's program delivery. As the Novel units would not become available until 2011, the existing housing program and investments will continue in the interim. The infusion of homes through this project will allow us to make significant reductions in core housing need levels across the NWT after pipeline completion.
Q. Have the NWT Construction Association, NWT Chamber of Commerce, or NWT Association of Communities and other aboriginal governments been given such a public plan for discussion with their constituents? If not, when would they be?
Aboriginal leaders from across the NWT have been actively engaged in the Novel initiative. Over 30 northern leaders have toured the ATCO plant and the Novel show home to demonstrate the quality of construction and the quality of the end product. Community and aboriginal acceptance of the Novel product is seen as critical to the success of this initiative. The Housing Corporation, ATCO and the Deh Cho Bridge Corporation have been working on a pilot project using the Novel product.
Assuming commitments are made from the MGP to proceed with the pipeline project and the federal government makes a positive commitment on our recent funding proposal, the Housing Corporation will begin to work actively with the MGP group on the workforce housing component of the pipeline project. Consultations will also commence with communities on lot and infrastructure requirements, and with the business and manufacturing sector on how they can take advantage of the $220 million of local economic activity that will be provided by the Novel project. There will be more than enough work and opportunity to go around. In fact, our largest concern is with the capacity of the northern business community to meet the needs of the project.
Q. How does this ATCO Novel housing project plan include involvement of northern buildings and suppliers, not only on how to take part in the ATCO Novel housing project, but on other options that could be available for the $220 million plus housing project?
The Novel home represents a very significant opportunity for northern business, suppliers, contractors, manufacturers, labour and skilled trades and transportation companies. It is expected that the conversion work required to complete the home will be done in the communities with northern workers using materials supplied through northern companies. The Novel home features that will be completed in the communities include: completion of interior sheet rock walls, doors and trim; crack filling, sanding and painting; installation of new bathroom fixtures; installation of new kitchen cabinets; installation of new flooring throughout; installation of heating systems; electrical fixtures; exterior skirting; exterior steps; water and sewage tanks.
Every component of the conversion process represents an opportunity for northern business and labour. The Housing Corporation fully expects this project will attract a
lot of interest from both business and labour. It should be noted, however, that we are still in the early stages of this process. If we have a commitment from industry that it is proceeding with the gas pipeline and we receive a positive commitment from the federal government, we will then be in a position to discuss with northern business the very significant business opportunities that will be generated by the Novel project.
Q. What other options have been considered for how to spend $220 million plus housing investment and meet the social housing needs of the North, other than going with the ATCO Novel housing, and what cost-benefit analysis has been done on them?
It is the unique opportunity represented by the pipeline project that makes it possible to create 1,420 new homes in northern communities. In this sense, this is a once-in-a-lifetime opportunity made possible by levering the significant capital investment in workforce housing being made by industry. This capital investment gives this project a head start over traditional stick-built approaches. Another unique feature of this project is the significant conversion component built into each home, which will generate employment and business opportunities.
Generally speaking, stick-built homes are more expensive, resulting in fewer homes and a slower pace in dealing with core need problems and satisfying future population growth and demand. Manufactured homes, though more affordable than stick-built, are still more expensive than the Novel home and do not represent the same level of economic activity for northern business and labour. Manufactured homes are often categorized as "trailers" in the North. The Novel home is not a trailer. It is an attractive, quality built two or three-bedroom home of approximately 1,378 square feet.
Novel home features include: durable metal roofs; R40 insulation; wood soffit; built up wood beam support; durable exterior wall construction; drywall interior; stipple ceilings; 1.75 bathrooms; modern kitchen area; energy-efficient exterior windows and doors. The Novel home represents extensive opportunities for local labour and business.
Q. How does this ATCO Novel plan include training opportunities for northern labour in northern communities, in what communities, in what regions, how many people, and how?
The training and capacity development component of this project will be developed as we proceed further with the implementation planning process. We view this as an important aspect of this project and have received assurances from ATCO that they will support training for northern labour. The locations will be determined as the planning process continues.
Q. How does this plan include meaningful partnerships with other departments and agencies such as Aurora College, Department of ITI, Transportation and others, as well as the construction and building industries in the North? Please explain their roles in detail.
The size of this project required interdepartmental coordination and planning at the government level and consultations with business, communities and labour. The Housing Corporation supports this approach. Following commitments to proceed by the MGP and the federal government, the Housing Corporation will submit to the GNWT a proposal to structure an interdepartmental working group to facilitate the planning and the implementation of the project.
Q. What work has been done with municipal governments and aboriginal governments to ensure a cooperative partnership regarding land development?
The role of municipal and aboriginal governments in the development of Novel homes is extremely important, particularly so in the development of suitable building lots and subdivisions. It is our intention to consult actively with all community government bodies through the NWT as soon as it is determined the gas project is proceeding and the funding from the federal government is available.
Q. Is there an inventory or plan on how the government will find 1,400 lots for those mobile units to be placed on?
The Housing Corporation continues to work on community lot inventories for all its program delivery requirements. MACA, as well, has a database with lot information per community. It is clear, however, that a lot of work will need to be completed in identifying and developing suitable building lots to accommodate the 1,420 new homes. The current proposal calls for investment in lot development to commence 24 months before the arrival of the housing units in the communities. This will leave time for zoning subdivision development and infrastructure investments to be made.
Q. Has there been any survey or means for input from the potential tenants to gauge the interest or support for this mega project?
As mentioned earlier, over 30 community and aboriginal leaders have toured the ATCO plant and Novel demonstration home. Plans are underway to field test the conversion process and to place show homes in select (central) northern communities. Marketing materials are being developed. The Housing Corporation has not as of this date surveyed residents to gauge interest in the Novel home. However, the 2004 NWT community survey revealed 2,260 households in core need in the NWT. According to the NWT Bureau of Statistics, approximately 1,600 new homes will be needed to satisfy incremental population growth and further overcrowding in NWT communities between 2005 and 2014.
Q. How much money would it cost the proponents of the pipeline project Novel housing, whoever is responsible, to pay for the removal of the campsite trailers if they had to move them after use and not be turned into Novel housing units?
Estimates for the removal cost of traditional workforce housing dorms from the NWT following completion of the pipeline by the MGP are $25 million.
Q. The Minister indicated in this House that he expects to move 100 mobile units a year. Given that estimation, it would take at least 14 years to move 1,400 units. Where would these units be stored in the interim and secured and protected from the elements and potential vandalism?
We estimate Novel home delivery and conversions will begin in 2011 and be completed by 2014. We estimate delivering 460 to 470 per year. Implementation planning will also take into account work camp decommissioning schedules. The timing for delivery of Novel homes to communities will take into account the decommissioning schedule. This will support delivery efficiencies and reduce handling and storage requirements. In this
respect, the need for security requirements will be reduced as work camp security will remain in place until the completion of the decommissioning process.
Thank you, Mr. Speaker.