Thank you, Mr. Chairman. My clock is off a little bit, so if I run over...I don't think I am going to have long comments to make, I just want to lend a couple of comments. I guess we held the completion of this department's budget because various Members had questions or extra information they needed to get with regard to the budget. I do believe that we have been working through this process. I didn't have specific issues there that I needed to get information on. Obviously, I have been asking questions to the government and Minister of Finance, in particular, about the budget address with regard to the workforce conversion project.

Mr. Chairman, I just want to state, though, I was surprised to hear earlier today when we had other meetings on that issue, the Minister suggested that somehow I was not appreciative or grateful about the information that I am getting from the officials of the corporation, and I think that's misstating the situation a bit. I think it is our job here to ask questions and to keep the government accountable. In fact, I believe I'm on the right path of asking these questions and making sure what due diligence that I feel are not being done, I somehow try to do my best to get the government to do that. But in asking those questions, it's never a question about whether I question the work, or work ethics, or competence of the staff. I believe that my work here is...and my questions are really always geared toward the Ministers and not to the staff, and it's up to the Ministers. I question the information that the Minister or the decisions that Ministers make, not to the staff. In fact, I think I made statements here, in one of my statements, stating that my criticism of any department on any issue is at the political level, not at the administrative or bureaucratic level. I think it's really important to keep that straight, because sometimes that's hard to tell. I could appreciate that when the discussions and debates here get heated and I could see that some people might feel that that's somehow reflecting on what they might be producing or not producing. So I just want to keep that straight. If there were any misunderstandings, I want to offer an explanation and clarification.

I do have one question in line with what Mr. Braden has been asking about the marketing housing initiative. The latest information we have on that new housing concept is that the government is hoping that 50 percent of the 1,400 homes would be taken up by the private sector. I guess one of the past performances that we could look at to gauge as to what would happen in the future is that there's no question that the Housing Corporation has had difficulty filling a majority of the market housing initiative properties. So if the Minister wants to present to us that he now wants to forecast that 50 percent of the 1,400 homes, which makes that 700 homes by the private sector; I'd like to know what the Minister is planning on doing differently or better to make sure that those lots are available. I would think that they have to do some kind of a market analysis, because we know from the market housing initiative...In fact, I think I was there when the official said that we heard that the teachers needed these

homes, and nurses needed these homes, and we had lots of need; there were lots of people who needed these homes. But when we got them there, there were lots of issues about people not wanting them. So I believe in learning from past experiences, so I'd like to know what best light the Minister can present to us as to what sort of steps the Minister and the corporation will take to make sure that doesn't happen again. Thank you.

Thank you, Ms. Lee. Minister Krutko.

Thank you, Mr. Chairman. Mr. Chairman, in regards to the Member's first question about how we're going to deal with 50 percent of the units that we're looking at for sale of the 1,400 units, right now we've acquired some 600 clients who own their own homes, they're our EDAP program. Out of that, they were able to acquire almost $46 million from bank financing. I think this EDAP program will continue on into the future. So there's an existing program that can assist people to get into homeownership, and that's an area that we're going to offer.

Also, we are laying out a new program that we are going to be delivering into the future. So these programs will continue, in which we're hoping to be able to stimulate homeownership through those programs we already have.

In regards to the issue of market housing, yes, the intention was to provide housing to people in communities to basically assist professionals to stay in our communities and also to provide services. Someone that's local or whatnot that works for the band, or works for the municipal council, or provides a municipal service, they also provide a service to people in communities. So I don't know why we're trying to put people in different boxes, saying, well, this was only for you. The program was a general program out there to offer the communities houses where there is a shortage of houses in non-market communities. So this offers an alternative to one time where we provided so-called staff housing. We are no longer doing that. The idea was that we had to provide housing in those communities at a cost-recovery basis, either through rents or basically being able to sell them off and recoup our costs. That, for me, is, if anything, the program is now showing that it is successful, out of the 22 units we originally started with where we have one vacancy in Fort Resolution. That tells me that people are now taking up these units; they're moving into them and they're acquiring them by way of purchasing them outright. For me, that's a good thing.

I think in regards to the other 22 units, to accommodate the professions and arguments, we heard that these units were too big. The second 22 units that we're putting on the ground are duplex configuration where, basically, they're independent, two-unit modular homes which will offer teachers, or nurses, or whatnot, that they'll have independence of their unit where you can accommodate two people in one unit, again which cuts down the costs to be able to deliver that by way of your transportation cost, your land development cost, and also being able to...The operational costs have also come down. So again, that's how we've been able to evolve this so far.

I think that anything, it has provided an option or opportunity to professions, people providing programs, services in communities without having to be classified, which now is being taken up by people in those communities. Thank you.

Thank you, Minister Krutko. Ms. Lee.

Thank you. In the two minutes remaining here, I have a question to ask, but before I do that, this is so bizarre because, you know, it wasn't us sitting here saying we need housing for nurses and teachers. We were aware that professionals weren't being attracted to communities because of lack of housing or whatever, but it was the Minister and his corporation that came and said we have this great idea, we've got this market housing initiative, we think we can house nurses and teachers in there, and then he's asking me, well, then why should we make them a separate group. I mean, why is he asking me? He should have asked that when he was working out this policy. I mean, talk about justifying the policy afterward. I'm telling you, what that is saying...What he's saying is, well, they tried this policy, it didn't work, so then they had to widen the scope, which tells me they didn't do a proper market analysis.

The third thing is...I don't know. Sometimes you sit here and everything is so surreal, it's just a bizarre experience. He's saying, well, we just figured maybe we should have two bedrooms. Well, why didn't they know that then? I mean, when they ordered 44 units they should have known if there's a market analysis done, other people are going to rent, is this going to meet the needs that we're supposed to, and should we set up a separate housing program for teachers and nurses when there are local professionals who are going without housing. I mean, all those questions he should have asked. He didn't do it. He's coming around and giving us heck for them not getting the stuff in the first place. Anyway, gosh, this is the beginning of ongoing, just illogic kind of giving us heck for asking questions in effect.

Anyway, I want to ask a question about this EDAP thing because the Minister is suggesting that there are people who are buying housing under the EDAP program in homeownership and all that, and I know that some of the money that the GNWT is going to put on for the new housing concept is coming from that money. So I'd like to know if the Minister is proposing that all of the 50 percent of the 1,400 units...The latest proposal is half of that will be bought by the private sector. I'd like to know if the Minister is proposing that all of that will be through the EDAP program. Does he foresee that all these are going to be bought by EDAP clients? If not, what percentage does he think will be brought by the EDAP program? I'd like to know, does he foresee 100 percent of the EDAP program being taken by this program? Does he mean that anybody who wants to get EDAP from housing has to buy this unit, or do they have an option of buying anything else? Thank you.

Thank you, Ms. Lee. Minister Krutko.

Thank you, Mr. Chairman. Mr. Chairman, there are other options individuals could look at. EDAP is one of them. IHP, we're looking at a lease program that we're involved with. But I think, in most cases, people can go directly to the bank and basically talk to the financial institutions out there and be able to acquire it through their own means. But for those people who may need assistance in acquiring the financing from

the bank, we will have programs there to assist them to be able to do that. So there are avenues and options we are able to look at again. Similar to the EDAP program, I was just using the illustration of how we were able to get bank financing to fund 600 houses in the Northwest Territories where $46 million of that was basically through the banks. It's the same programs we have here. We will be able to assist low income people, give them the down payment assistance they re going to need and also go to the bank for the rest of their financing. Those are the existing programs, and they will continue on and we are hoping to be able to leverage that for low income people. As we know, the majority of these units we are talking about will be in outlying communities where we have large market communities such as Yellowknife and Hay River.

So we are looking at our programs and services, looking at the qualifications of the applicants and seeing which programs will fit the need of that client. Thank you.

Thank you, Minister Krutko. Mr. Menicoche.

Thank you, Mr. Chair. I just want to offer, if I may, a couple of comments with regard to having the Housing ministry back up before us and comment on the deferment. Like I said in my Member's statement and in committee as well, a lot of the concerns really don't seem that that programming is really working or getting down to the constituents. I often share the concern that the Housing Corporation is legislated by a 1978 act and that's very old. There hasn't even been one amendment to that act. Hence, I think a lot of the operational concerns because the corporation has been legislated from a distant past. In fact, that's in the late 1900s and here we are in the 2000s, Mr. Chair.

I think it needs revisiting and another grave concern is decision-making has to be revisited. I don't know how they do it in other departments, but our corporation was set up to be run like a corporation, business-minded with a board of directors, but none of those things are in existence today. In fact, I mentioned today that some of the programming type was specifically intended for the Housing Corporation to provide housing to NWT residents, build them houses, get them on the ground, get them in the communities. I can see that in the '70s we didn't even have houses. We had lots of dilapidated buildings that people were living in and so the Housing Corporation was born to address those needs and we built houses for everybody. Yet, now, we want to still provide housing, we want to provide people and say we have to generate our own revenue, now people have to pay for those houses. Hence, lots of confusion. In fact, the communities I represent are adamant that housing is a treaty right. I don't know what happens. People say they should be providing houses, why am I paying rent. So there is lots of confusion that's happening in the communities.

It just stems from how we do business. All of a sudden, the Housing Corporation changes midstream, so people are confused about consistency of programming. They are sitting there saying you refuse me housing, yet the guy across the streets, he's in the same wage category as I am yet he gets approved and I don't. What's going on? I want to appeal it and there is no appeal mechanism. I think that's how the Yukon had done it, Mr. Chair. They took a good, hard look at how they provide housing and how they best meet their people's needs. I am supportive of that.

I am very supportive of the motion that's going to be before the House in the next couple of days of providing a performance audit by the Auditor General's office. That's only one way for me, as an MLA, to support a comprehensive operational review of the Housing Corporation. We talked about other ways of doing it, of actually hiring somebody to do an operational audit, but legislatively the only person who can get to the inner workings of the Housing Corporation and ask the employees to be a fair and impartial and provide information on a timely basis is the Auditor General's office, so I don't mind doing that. Let's have a good, hard look.

The other thing, too, is, yes, housing has to be delivered by us. People look to us to be champions in that regard, but once again that's from a distant past and now we want people to pay. So things have to be done a lot differently. I am not convinced that when we are providing loans, like EDAP, we have to build the houses for them, that we have to tender it out, we have to do this. The Minister indicated, Mr. Chair, that for consistency, for quality, for accountability of public dollars, it has to be done this way. I am not entirely convinced. Because we have other departments that provide loans to people and they get hold of their own contractors, but the whole fact is that they signed documents saying that they are being lent money and they are totally responsible and that's what we are doing, yet we are not allowing people the flexibility of controlling the pace of their houses. I don't know if there is any comparison. Perhaps I could ask a question. I don't want to debate the merits of the program, but specifically perhaps the Minister can tell me about the products for people in the free market; how fast do they get their houses and the quality of their houses that they create in the market as opposed to something that is controlled by us. Every time the Housing Corporation gets involved somehow, it gets botched or they have skyrocketing costs. What is the root cause of that? Is it because we are not doing our homework?

Quite often, with government, we get a good idea and we just hit the ground running and we are just sitting there a couple of years later, whoops, I guess it wasn't a good idea. I think a lot of Members on this side of the House keep asking that. We have to do our due diligence first. Let's have a good, hard look at the numbers and justification before we take a program and start running with it. I am supportive of that. Let's have a good, hard look at our programming.

Some of the decisions are based on policies and guidelines that are not even pertinent anymore. Once it is public dollars, but is it applicable anymore? Do you lend the guy money? Is that applicable anymore? It's in his hands. He signed the document that he's letting money out and that he's responsible for the quality and the construction of his home.

You go to the bank and borrow money for a home, it doesn't matter if it's a mobile home or frame built, as long as you make the business case for it, you get lent the money. So it's that kind of flexibility that people want. They want to hire their own contractors and we should have that. There's got to be a way of doing that. We've got to take our hands off the big brother approach, Mr. Chair, and say we know better than you. You can't handle

a $150,000 loan that we have to do it for you. Yet, everyday people do it in the North.

With that, Mr. Chair, if the Minister can answer me that. Are there any stats that we can compare how much of a delivery of the programs that we deliver compared to the free market? How much quicker? Is there a comparative analysis that we can do? I am sure if we are flexible enough and change our programming geared towards full responsibility of the owner and true ownership, I think that we can go a long way in having better homes on the ground no matter what type they are. Thank you, Mr. Chairman.

Mahsi, Mr. Menicoche. Mr. Krutko.

Thank you, Mr. Chairman. Mr. Chairman, I would just like to point out to the Member that we were in the process of making changes to the NWT Housing Corporation Act by way of the mandate process. We were hoping that by making those changes in the mandate, it would allow us to change the act itself. We were in the process of doing that. In the process, we were also looking at changing the programs and services as we deliver right now. As I mentioned, we deliver something like 19 programs. We were hoping to consolidate them down to five areas. Again, that was something that we were working on going forward. That presentation was given to committee.

Mr. Speaker, also as part of the program evaluation, we were also looking at putting an appeals board in place, so people could appeal decisions with regard to applications that they did not feel comfortable with or they did not like the decision that was made. Again, the Member is right; we do have an act which was in place since 1994, which is over 30 years old. A lot has happened in that period of time. I think we have to realize as a corporation, in 1995 when we were part of Nunavut, we had 190 PYs running housing programs throughout Nunavut and the Northwest Territories. Today we have 98 positions within the government. We lost almost 100 PYs on programs and services through budget cuts and program services being delivered.

I think with regard to Members' comments about why different programs and services that are delivered in different centres throughout the Northwest Territories, larger centres or communities. I think you can answer that question simply by looking at market communities and non-market communities. There are no markets in a lot of those communities and in a lot of communities, we don't have the human resources or expertise locally where we depend on people from outside the communities, either regional centres or territorial centres to provide the manpower that's needed to construct a lot of these houses in a lot of communities. So it adds extra costs to these projects that has an effect on being able to deliver these programs and services. The biggest challenge is the logistical challenge that's in place.

Thank you, Mr. Krutko. Mr. Braden.

Thank you, Mr. Chairman. I would like to follow through and I think just a couple more questions on the market housing initiative. On this one, I am perhaps a little bit on Ms. Lee's page from the original call for a program like this was to satisfy what was perceived to be an urgent need to house these essential employees. Yet, the Minister has told us it includes other employees of the GNWT and, in fact, virtually anybody in these communities, given that they fall into a certain criteria and could have access to these places. I wanted to ask again just what was really the absolute original intent of the Market Housing Program from the Minister's point of view. Did the criteria of who was an eligible tenant change as the number of units that went out were not filled? Just what happened to that original mandate, which, from my recollection, Mr. Chairman, was issued on an urgent basis? I would not have approved a program, Mr. Chairman, I don't think I would have approved a program on an urgent basis to house basically the regular folks in a community. This was for essential people that we have a hard time housing out there, yet it's opened up and expanded to include more types of tenants. I will stop there, Mr. Chairman. Can the Minister give some accounting of that original mandate and why does it now seem so broad, Mr. Chairman?

Thank you, Mr. Braden. Minister Krutko.

Thank you, Mr. Chairman. Mr. Chairman, there was a directive given by the Department of Finance to look at putting houses in non-market communities to assist in where we try to attract professionals or people delivering programs and services in those communities where we don't have a market in place to provide housing. A majority of our communities, 75, 80, in some cases 95 percent of these houses in those communities are public housing for social clients. There is a very small portion of those houses owned by the private sector that are available for rent. We are finding that we have professions trying to get jobs in communities and renting whatever they could find. In most cases, there was very little opportunity to rent or whatnot in those communities. So a decision was made by the government to pass a directive directing ourselves, as the Housing Corporation, to deliver houses to non-market communities to assist in accommodating those people going into those communities, providing a government service by way of housing at the lowest cost possible with regard to a cost recovery principle where we could not add on any extra cost in regards to administration or extra operational costs. We had to do it on a cost-recovery basis. So we were only able to recoup the cost of those units by way of rent or selling those units outright to professionals or people in the communities who provide services.

Also, as part of the directive, there were three principles. The first principle was to give the options to the professionals coming from outside of the community. The second principle was to offer it to government bodies, municipalities, band councils, community governments. The third option was for people in the community who would be able to acquire it who needed housing in communities where right now there was no market. Those were the three guiding principles that we were following. Thank you.

Thank you, Minister Krutko. Mr. Braden.

Mr. Chairman, the Minister mentioned that part of the criteria here was cost recovery. In fact, one aspect that I recall was a design and part of the financial design would be that there would be a 10 percent premium charged by the Housing Corporation to cover

vacancies and this kind of thing. In effect, they were getting the rents or tenants to provide a contingency fund for the Housing Corporation. That's my reading of it. How are we doing on that basis, Mr. Chairman? Perhaps even if we look only at the units that are occupied now, are we doing so on a cost-recovery basis and meeting that 10 percent contingency cushion, Mr. Chair? Thank you, Mr. Chairman.

Thank you, Mr. Braden. Minister Krutko.

Mr. Chairman, there was a vacancy factor added in, which was 10 percent. As we all know, teachers, in most cases, leave the communities for their summer holidays and they are gone all summer, so someone had to cover the accommodation costs. The same thing with different professions who do provide services in the communities. They do come and go and, because of that, having the units unoccupied for that period of time during the year. That was what that thing was built in for. With regard to the cost, maybe I will...So that is sort of the reason for having the 10 percent vacancy built in there, to ensure that we are able to cover off our costs, so that we weren't losing money for that time that those units were sitting empty. Thank you.

Thank you, Minister Krutko. Mr. Braden.

Thank you. Perhaps we can just leave that question about the cost recovery for the units that are now occupied.

On a broader scale, given the mandate that the corporation had, the costs that it incurred, the vacancies and the issues and difficulties we are still trying to overcome, the Minister mentioned that one of the major ones was land in a number of communities. How would the Housing Corporation characterize the results of this initiative at this time? Could we get a qualitative assessment? Is the market housing initiative something that was worth the investment and has it more or less done the job, Mr. Chairman?

Thank you, Mr. Braden. Minister Krutko.

Thank you, Mr. Chairman. Mr. Chairman, as we can see from the first phase of the 22 communities, we have one vacancy and again we already have communities asking for these units in their communities that did not receive them and want to be able to have these units similar to other communities. With regard to the new 22 units that we have put on the ground, we have already people on a waiting list to get into them. So we are seeing a major uptake of these units. As far as I can see, we have had positive responses with regard to the take-up and, because of the occupancy numbers we are seeing, we feel that all of these units should be occupied within a year. Thank you.

Thank you, Minister Krutko. Minister Krutko.