Proceedings of the Standing Senate Committee on
Aboriginal Peoples
Issue 3 - Evidence - March 8, 2016
OTTAWA, Tuesday, March 8, 2016
The Standing Senate Committee on Aboriginal Peoples met this day at 9:34 a.m., to study best practices and on- going challenges relating to housing in First Nation and Inuit communities in Nunavut, Nunavik, Nunatsiavut and the Northwest Territories.
Senator Dennis Glen Patterson (Deputy Chair) in the chair.
[English]
The Deputy Chair: Good morning. I'd like to welcome all honourable senators and members of the public who are watching this meeting of the Standing Senate Committee on Aboriginal Peoples either here in this room or via CPAC or on the Web. I'm Dennis Patterson from Nunavut, and I have the privilege today of chairing this Standing Senate Committee on Aboriginal Peoples in place of Senator Lillian Dyck, our chair.
I now would like to invite my fellow senators to introduce themselves.
Senator Watt: Charlie Watt from Nunavik.
Senator Enverga: Senator Tobias Enverga from Ontario.
Senator Beyak: Senator Lynn Beyak from Ontario.
Senator Raine: Nancy Greene Raine from B.C.
Senator Tannas: Scott Tannas from Alberta.
The Deputy Chair: Thank you, colleagues. Senator Tannas has a back issue. So, if he stands during the meeting, he's not protesting; he's just getting comfortable. Truly the standing committee.
Colleagues, we begin our study today on housing in First Nation and Inuit communities in Nunavut, Nunavik, Nunatsiavut and the Northwest Territories, and this follows our study done in the last Parliament on First Nations housing on-reserve. So I'm very happy that we're now looking at other regions of Canada that also have pressing housing issues.
Our mandate, of course, is to examine legislation and matters relating to the Aboriginal peoples of Canada generally. This is our first meeting on this important subject, and we begin our study with witnesses from Indigenous and Northern Affairs Canada, as well as the Canada Mortgage and Housing Corporation. I'd like to introduce, from Indigenous and Northern Affairs Canada, Stephen Van Dine, Assistant Deputy Minister, Northern Affairs; Allan MacDonald, Director General, Implementation Branch, Treaties and Aboriginal Government; Elizabeth Logue, Director, Inuit Relations Directorate, Northern Affairs Organization.
From CMHC, we have Charles MacArthur, Senior Vice President, Regional Operations and Assisted Housing; Duncan Hill, Manager, Housing Needs Research; and Luisa Atkinson, Director, First Nation Housing.
I understand we're beginning with Mr. Van Dine from INAC for an opening statement, and then we'll hear from CMHC. There will be some questions from senators following that.
Stephen Van Dine, Assistant Deputy Minister, Northern Affairs Organization, Indigenous and Northern Affairs Canada: Good morning. Thank you very much for the opportunity to present today. Thank you very much for choosing to select us to talk about a very important issue, and that is the topic of northern housing.
I would like to point out that the piece that the Senate did, Powering Canada's Territories — by the Standing Senate Committee on Energy, the Environment and Natural Resources, a different standing committee — was very insightful for providing government with thoughts and ideas on how to move forward, and I can see that this topic will likely have a significant impact over the course of your deliberations.
As mentioned, northern housing is an important issue and not only affects northerners but also Canadians more broadly. The well-being and sustainability of our northern communities are largely linked to our national interests as a whole, and housing and infrastructure gaps in the North continue to delay the social and economic development of a region that is integral to Canada's future. They are an impediment to the ongoing project of reconciliation, which is an important objective of this government and our minister.
I was very pleased to hear that your committee has decided to undertake this study. The housing shortages and overcrowding are presenting severe challenges to Northern Canadians, and parliamentarians have a key role to play in addressing these problems as legislators, policy-makers and educators. Your 2015 report on on-reserve housing and infrastructure provided important insights, largely focusing on the north of 60 context, including a brief look at the housing shortcomings present in remote, isolated communities. Your thoughtful and constructive critique of some of our department's approaches on this issue was very welcome. An expanded study on housing issues in the North is timely, and I look forward to reading your report and hearing your recommendations.
[Translation]
I am joined today by my colleagues from the Canada Mortgage and Housing Corporation. They will be speaking to some of the innovative research that the corporation has undertaken regarding housing in the North.
First, we will talk about the implications of northern housing for northern social and economic development. Second, I would like to outline my department's role on northern housing.
[English]
As my colleagues from Canada Mortgage and Housing Corporation will detail, much of the North struggles with poor housing outcomes. Overcrowding, housing shortages and poorly maintained housing stocks are continually raised as major concerns across the territories and the Inuit regions of Nunavik and Nunatsiavut.
These conditions have the tendency to influence the lives of northerners beyond their housing status, with adverse impacts on their personal health, social well-being and participation in education, training and the labour market. This is particularly true amongst Canada's Inuit, who experience the largest gaps in educational attainment and employment of all indigenous groups in Canada. Inuit also have the highest suicide rate in Canada, more than nine times the national average, and have the highest rate of tuberculosis in the country. Overcrowding in Inuit homes has led to the growing migration of Inuit to urban centres and homelessness in urban hubs, such as Montreal and Ottawa.
Housing challenges not only sharply decrease the quality of life for northerners but also impede the effective development of the region. Housing gaps make it far more difficult for employers to attract and retain skilled employees, thus presenting significant barriers to further private sector growth in the North as well as affecting federal operations there. Housing investments have a strong multiplier effect on the economy. Reducing serious overcrowding and supporting initiatives to increase market housing coupled with support for economic development can lead to improved socio-economic outcomes for all northerners.
In a report released last month, the National Aboriginal Economic Development Board stated that the lack of adequate infrastructure in the North poses significant challenges to community development, socio-economic growth, emergency management and the development of sustainable economies. The NAEDB found that investment in transportation, energy and telecommunications infrastructure is most strongly connected to creating economic benefits by supporting industrial growth and reinvestment in additional economic infrastructure. However, long-term economic growth also relies on community infrastructure that supports a diversified economy and good quality of life for community members. Upgrading infrastructure and improving transportation and energy infrastructure are prerequisites to affordable and sustainable housing in the North. They are all related.
A broad spectrum of federal, territorial and indigenous governments and organizations play a role in addressing the pressing issue of northern housing. This department's role in the North is very different from its role regarding First Nation housing on-reserve, as you outlined in your previous study. The focus is the implementation of modern land claims agreements that blanket most of the North. For the most part, INAC has limited direct programming for northern housing. Rather, the department has a federal coordination role for northern policy and is responsible for the promotion of northern development. These responsibilities apply not only to First Nations, Inuit and Metis living in the North but also to all northerners. In addition to this policy and coordination role, INAC supports some targeted initiatives, particularly in housing in the Inuit regions of Quebec and Labrador.
[Translation]
We are working with Inuit, particularly Makivik Corporation in northern Quebec, on a study of innovative financing options for market housing. This is part of an overall approach to reducing housing needs, including the reliance on social housing, and increasing market housing as a longer-term solution to improving the housing situation in Inuit regions.
[English]
In Labrador, the department offered its support in the evaluation concerning a study done in 2012 in Nunatsiavut, which assisted Nunatsiavut to more effectively target the resources toward housing and to create options for appropriate and long-term housing.
[Translation]
In addition to initiatives in support of Inuit housing, the department also seizes opportunities to advance northern housing that arise through its northern programs and initiatives.
[English]
Our department's climate change and adaptation program supports First Nations and Inuit in northern communities to better understand and adapt to the impacts of climate change. The program provides funds to communities and organizations in order to undertake risks and vulnerability assessments to develop climate adaptation plans. In collaboration with the Standards Council of Canada, the program also participated in the Northern Infrastructure Standardization Initiative, which developed four standards that directly relate to the creation of resilient buildings and infrastructure in the Far North.
The Canadian High Arctic Research Station in Cambridge Bay partnered with Yukon College to install and monitor heat-recovery ventilation systems in Cambridge Bay. This project is now in the hands of Polar Knowledge Canada, which is also collaborating jointly with the National Research Council, Natural Resources Canada and the Canada Mortgage and Housing Corporation to perform monitoring and testing of the research testing station's triplex housing. The intent of these projects is to develop technologies that could be used eventually in housing construction across the North.
To conclude, the gaps are enormous and the needs are great. We need to work closely with a number of different sectors to make sure that we undertake a coordinated approach to this complex problem. Conversely, addressing housing shortcomings in the North could unlock a wider range of social and economic benefits for northerners. Access to housing is not a panacea but is certainly an integral part of the solution to the challenges faced by northerners and the Government of Canada in serving its northern citizens.
Your committee has undertaken important work in studying the issue. The Department of Indigenous and Northern Affairs is eager to assist you as you move forward with this initiative in the coming months.
Thank you for your time. I would be happy to answer any questions you may have.
Charles MacArthur, Senior Vice President, Regional Operations and Assisted Housing, Canada Mortgage and Housing Corporation: I'm pleased to be here with my colleagues to help inform the committee's study of northern housing.
[Translation]
As Canada's national housing agency, CMHC's mission is simple. We help Canadians meet their housing needs. We do that in a number of ways, which I will outline today, specifically as they relate to the North.
[English]
One of the most important ways we help Canadians meet their housing needs, while also contributing to Canada's overall financial stability, is through our mortgage loan insurance products that help consumers to buy homes with down payments of less than 20 per cent. CMHC offers mortgage loan insurance in all markets, including small and rural communities throughout the North, which may not be well served by private insurers, and through all economic cycles. CMHC's mortgage loan insurance also helps to finance rental housing and affordable housing as well as care facilities and retirement homes.
As Canada's authority on housing, CMHC aims to lead through information and insight. This is another way that we help Canadians to meet their housing needs. Our objective is to ensure that decision makers have access to timely and relevant analysis and information to support informed decision making. As a component of its product suite, CMHC's Market Analysis Centre produces an annual Northern Housing Report that focuses on housing markets in Whitehorse, Yellowknife and Iqaluit. We will be pleased to provide copies to the clerk of the committee after the meeting.
On the research front, through the Northern Sustainable House initiative, CMHC has worked with northern housing providers to design, build and monitor energy-efficient, culturally appropriate housing projects in each of the three territories. Participants have learned a great deal from these projects, and CMHC is sharing this information with others through a series of Research Highlights and project profiles. We have a robust research plan for 2016 that includes new projects to help inform our ongoing work to improve sustainability, resiliency and affordability of northern housing. As well, we have done extensive research on housing need and the impact of changing demographics on housing markets and trends. Among other things, this research has revealed stark information about housing challenges in the North.
We know, for example, that northern households are more than twice as likely to be in core housing need as households in the rest of Canada. Core housing need means that households live in overcrowded, unaffordable and inadequate housing. Northern housing units are more likely to be overcrowded than those in the South and are more likely to be in need of major repairs to problems such as plumbing, electrical and structural deficiencies.
Housing needs are more acute in Inuit communities, particularly in Nunavut and Nunavik, within the northern regions of Quebec. In 2011, one out of every two Inuit households were living in housing that was not considered to be in an acceptable state of repair, nor suitable to the number of family members living there. Approximately one third of all Inuit households across Inuit Nunangat are in core housing need.
In addition to pressing housing needs, the costs of building, operating and maintaining housing in the North is very high. The harsh climate, limited transportation infrastructure, short construction season and heavy reliance on fossil fuels are all factors that drive costs higher, impact affordability and create unique challenges for territorial governments.
This brings me to the third way that CMHC helps Canadians meet their housing needs. Working with territories, provinces and other organizations, we provide an annual federal investment of about $2 billion in housing assistance to support low-income households and other vulnerable Canadians. The bulk of this funding is used to support the ongoing costs of operating social housing.
In 2015, assistance was provided to a total of 5,800 households living in existing social housing in the Yukon, the Northwest Territories and Nunavut. CMHC delivers federal housing investments in the North under our on-reserve housing programs and through the Investment in Affordable Housing, or IAH. These initiatives support the construction and repair of affordable housing projects and shelters for victims of family violence. They also help to maintain housing affordability for low-income northerners. Specifically, under IAH, the total federal funding commitment is close to $2 billion over eight years, to March of 2019. The territories and provinces match federal investments in their jurisdictions and are responsible for program design, delivery and administration. Combined, the three territories receive approximately $5 million annually through IAH. As of the end of December, IAH funding had supported close to 950 households in the territories.
On-reserve, CMHC provides approximately $152 million annually through renovation programs, shelter programs and through the On-Reserve Non-Profit Housing Program. In the North, since April 2010, this includes an investment of $8.3 million in subsidies paid and funding for the construction and renovation of 48 households, including 18 new housing units on-reserve.
There have been additional, short-term federal investments in northern housing over the past 10 years. This includes $200 million over two years, announced in 2009, to support new construction and renovation of existing social housing in the territories, and in 2013 a one-time investment of $100 million was added to Nunavut's IAH allocation to support the construction of 253 housing units over two years.
In addition to the federal investments, CMHC's Affordable Housing Centre works with private, public and non- profit sectors to develop affordable housing solutions that do not require ongoing federal assistance. Our affordable housing consultants offer advice and expertise to project proponents, and seed funding may be available to cover some of the soft costs incurred in the early stages of an affordable housing project.
[Translation]
I can assure the committee that CMHC is very aware of the unique nature and extent of northern housing challenges and recognizes that more needs to be done. As Canada's housing authority, we are committed to exploring new and innovative ways of supporting northern housing. Housing matters much more beyond providing shelter. It is a critical stepping stone for improving other socio-economic outcomes for northerners, including Inuit, and helps support a more robust northern economy.
[English]
We look forward to the outcomes of the committee's study and to working collaboratively with partners to identify innovative and sustainable solutions in the North.
Thank you again for the opportunity to be here. We would be pleased to answer any questions the committee might have.
The Deputy Chair: I'd like to thank you for those presentations. I guess, unlike the First Nations housing on-reserve, where we saw a role for both INAC and CMHC in providing housing support for First Nations on-reserve, we're mainly dealing with CMHC in providing support for the housing in the regions we are studying.
Mr. Van Dine, you described, though, the Climate Change Adaptation Program that your department has to provide funds to communities and organizations to deal with climate adaptation, and the Northern Infrastructure Standardization Initiative has been developed. Could you provide, either now or later, more details on that initiative and its impacts in the regions we're studying?
Mr. Van Dine: The Climate Change Adaptation Program provides funding to Inuit, First Nation and northern peoples to ensure their resiliency to climate change and to provide support for community vulnerability assessments, which is where most of our projects have gone, and the development of community adaptation plans and tools that contribute to decision making with respect to these issues. The program began in 2008 and over its first three years of operation funded 93 projects in 84 communities across Canada, including the regions mentioned. I will have to get more specific information for you with respect to the regions under study.
The Climate Change Adaptation Program was funded under the Clean Air Agenda through Environment Canada and was renewed in 2011. The program received $20.02 million over five years, ending this coming year, and supported 72 projects across all provinces and territories. The program is set to end in March 2016.
The kinds of projects that were funded include adaptation projects to address permafrost degradation, rising sea levels, coastal erosion, and water quality and availability in flooding. Three types of projects can be funded by the program: community vulnerability assessments; community adaptation planning; and developing tools related to vulnerability assessments such as guide books, guidelines and best practices, or initiatives to support knowledge transfer of the development tools.
Given the role that you've mentioned, Mr. Chair, we do have a unique mandate in the North. Territorial governments have specific responsibilities toward their communities. We've developed an approach to support territorial governments in developing information and tools required by the communities to integrate adaptation into management and development decisions. We work closely with territories, and that relationship is slightly closer in the jurisdictions of the three territories than, I would say, with Nunatsiavut and Nunavik.
The Deputy Chair: Senator Beyak on this subject, please.
Senator Beyak: Thank you very much, chair. I have the same concern as you.
Would you be able to elaborate on the four standards that you identified that directly relate to the creation of resilient buildings, which you mentioned in your presentation? We've looked a lot at the resiliency of buildings in the North.
Mr. Van Dine: Thank you, senator. The four standards deal with the construction, heating — and the others I will have to check for you.
The focus of the program over the last little while has been cognizant that climate change has been occurring much more quickly in the northern environments. It's been referred to as the canary in the coal mine for other parts of the country. We have been working in partnership with territories and national research councils to take advantage of that body of knowledge that is so important to support decision and standard making.
The Canadian Standards Association has targeted the North as an area where they are particularly focused on dealing with these issues, and that work is ongoing.
Senator Enverga: Thank you for the presentation. Mr. Van Dine, you mentioned that in Labrador the department invited support for the Nunatsiavut Government Regional Housing Needs Assessment in 2012. What time was spent, and what have you found out about that?
Mr. Van Dine: I will turn to my colleague, Ms. Logue, who was the project lead.
Elizabeth Logue, Director, Inuit Relations Directorate, Northern Affairs Organization, Indigenous and Northern Affairs Canada: It has been a few years since we worked with the Nunatsiavut government and Statistics Canada to do a housing needs assessment in the region. It was focused mainly on the five communities within the Inuit land claim of Nunatsiavut. They used the actual National Household Survey, the same questionnaire, adapted it for the specific needs of the community and then came through with a housing needs assessment that identified some aspects of the effects of climate change. Building codes also came through in a very strong way. As you probably saw in your previous study, a lot of the houses built to code back when are no longer to code, and codes have changed over time.
One of the main aspects they found through that housing needs assessment was that a lot of the attics in the houses were not insulated. They targeted that and managed to get some project funds from the Newfoundland government to take care of that issue.
There were aspects of overcrowding, some infrastructure issues with water and access to heating. There's access to wood burning. There's not much access to wood, so there's a lot of dampness that leads to mould. They found those correlations through that housing needs assessment and have slowly been chipping away at some of those issues through a priority list. We've been working closely with them on how to address those.
Senator Enverga: Can you let me know the participation level? Are they all participating? Because one of the issues we heard about before was the unwillingness of some people to participate.
Ms. Logue: For this particular housing needs assessment, as I said, we worked with Statistics Canada and the Newfoundland & Labrador Statistics Agency, in collaboration with the Nunatsiavut government; so they trained people on the ground in the communities to go door to door. They became the data collectors and assessment folks. It was a collaborative process. There was an ownership of the project that meant a good success down the line and a feeling that they would work together to address what came out of the study.
Senator Enverga: What conclusions have you made after the survey or assessment?
Ms. Logue: With this particular housing needs assessment, the Nunatsiavut government took ownership of the results and have been working on the priorities. In that region they have a signed land claim agreement where they get fiscal financing. They use some of that for housing, so they would set their levels to address those needs.
The findings of the housing needs assessment led to how to address mould and overcrowding. The system in Nunatsiavut is more of a rent-to-own system, which they feel can work. The building construction is more of an area that needs to be addressed.
Senator Enverga: Have you got a completion time, or how it can be done? Was any time frame studied to complete the assessment?
Ms. Logue: No. The housing needs assessment was completed; so it was more using those results to identify areas to work on with specific partners. That's what they've been doing over the last two or three years.
Mr. Van Dine: The needs assessment survey was a catalyst to develop some relationships with the key players that were involved in addressing this housing need, which resulted in the establishment of a multi-agency working group. That working group continues to drill down on the results of the study, and they have submitted an interim report. We're expecting a final report on the recommendations over the long term.
Do we know when, Elizabeth?
Ms. Logue: Yes. That's work that we're doing in Nunavik. We'll be getting those results from a different region. With the housing needs assessment in Nunatsiavut they've also been working inter-regionally. Coming out of that housing needs assessment they've worked very closely with the Newfoundland and Labrador government and I think CMHC.
We had formed a small working group with the regional housing authority in northern Labrador. Since then they've taken it upon themselves, and we've been focusing, as Mr. Van Dine said, on similar work in Nunavik to get the data to identify the needs.
Senator Enverga: Mr. MacArthur, you mentioned about PPP, a public-private partnership. How successful are you in having this kind of partnership in the North? Have you noticed any similarities between a PPP in the North and in the South of Canada?
Mr. MacArthur: With regard to public-private, it's much more challenging. It's often more challenging to find financing than to put the projects together. Most of the work we do is trying to help proponents find sources of funding. I'd have to get specifics for the North to see how successful public-private partnerships have been in the North, but we have folks on the ground who work with proponents who are trying to identify different ways of putting together a project. Sometimes, as I mentioned, our seed funding up front might be the catalyst for going forward for private funding, or it might lead to some of the government funding that's available.
With regard to public-private partnerships, I will have to get back to you to identify specifics that have been successful.
Senator Raine: Thank you very much. I appreciate getting the background documentation.
It's quite evident there's a different household status between Nunavik and Nunatsiavut in terms of ownership versus renting. How did that come about? In Nunatsiavut 72 per cent own their homes versus 3.2 per cent in Nunavik. Did it start differently, or has it evolved? Is the rent-to-own program available in the other Inuit jurisdictions as well?
Ms. Logue: Within each of the Inuit land claim regions, through the negotiated settlements, they do set up their housing in different ways; so definitely, as you note, with the Makivik Corporation in Nunavik, housing is mainly social housing.
As Mr. Van Dine mentioned, we are working on a working group with the Quebec government and Makivik to look at how to build a housing market, including looking at using the rent-to-own model.
In many cases, where there's resource development, one of the aspects is that some housing is temporary. It goes toward workers that are there on a temporary basis, and then that gets converted into the social housing model.
Within Nunatsiavut, it is very much, as I mentioned, five communities, so it is a little bit more manageable. They've also worked with the Newfoundland and Labrador government and I think looked at that rent-to-own model that works also. In Newfoundland, they've incorporated it into northern Labrador, so that has taken hold. That's something that Nunavik will be looking at it. It's a big shift, especially looking at the numbers dependent on social housing, to move to rent-to-own.
There's also the economic development factor — sustainable economic development in the region so that people will be able to pay the rent levels towards home ownership. That's something we're working on.
Senator Raine: As a follow-up, when you look at the statistics again, it's obvious that a lot of the housing that does exist is in poor repair. I see, in one note, you're talking about a training program for youth — Housing Internship Initiative for First Nations and Inuit Youth — which provides work experience and on-the-job training across Canada for those interested in pursuing a career in the housing industry. Is this program getting some traction in the North? Obviously, if you have to fly people in from somewhere else to fix houses rather than having people who live there with these skills, there's a different dynamic.
Luisa Atkinson, Director, First Nation Housing, Canada Mortgage and Housing Corporation: The Housing Internship Initiative for First Nations and Inuit Youth is available in the North. I would agree with you that there's probably a little bit less traction there than in the other areas. The funding is available, and we work with communities on the ground to see how we can bring more people on board. But there is limited traction.
The Deputy Chair: Maybe you could kindly give us some details on how that program has been rolled out, particularly in the regions under study, please.
Senator Raine: My experience has been that, when a person owns their house, even if it is in a rent-to-own situation, they're much more motivated to learn how to repair it and keep it well maintained because it's their asset. How are we working towards that dynamic of learning how to look after your house and then eventually owning it? Have any statistics or studies been done on that?
Ms. Atkinson: No, I don't think so. I could look into it to see if there are any specific statistics. From what I have seen specifically on-reserve, I think you're absolutely right. If there is pride of ownership, pride in the home, there's more opportunity for the home to be resilient in the long term.
For example, I just visited Taku River, which is on the border of Yukon and B.C., and they have made some small changes to the way that they manage their band housing: When a tenant goes into the house, they're able to pick their own paint colours and their own cabinet colours. Even though it's a rental property, the sheer fact that they're doing that creates that ownership of the home. Little things like that really go a long way, and I think the communities themselves are finding those innovations and those ways to entice both youth and residents to find that pride of ownership.
Mr. MacArthur: We have a capacity development program that functions in First Nations communities, and that helps with understanding best practices relating to property management, rent collections, managing the housing as an asset and the like. Speaking specifically of First Nations, we have individual plans in place with many of the First Nations that we're dealing with, to help them to improve their management of their housing over time. These are agreed-upon plans that we work with the First Nation individually to come up with: What is the best way forward for you? So they're customized to meet the needs of the individual First Nations. We don't have the same product off- reserve.
Senator Watt: Thank you for your presentation. Maybe this will help us to have a clear picture of the problems that we're facing in the North, especially in Nunavik. That's where I come from.
When you were making the presentation, I noticed that you have taken in and are putting weight on the fact that climate change has kicked in. It's been around for quite some time now and having a great deal of influence over what is happening on the ground itself, especially when you have to decide where the buildings are going to be put up.
As you know, we do have two kinds of soil. One is soft soil, which is being impacted by climate change. Permafrost is practically disappearing all the way through, and, the further north you go, the more you still have a certain amount of permafrost that exists. But, when you go to the Subarctic, for example, where I come from, the permafrost is nowhere to be seen at this point. You probably have to dig down quite a bit to be able to find it.
Nevertheless, my interest is this: Does that mean that the housing is already hard to get hold of, whether it's social housing or self-owned houses, because of the availability of the capital requirement to put up those buildings? Does that mean that, because of the Climate Change Adaptation Program that you're talking about, it has to be taken into account now in terms of the overall cost of the materials that have to be transported up from the South to the North? You also mentioned the fact that the construction season is quite short, and I do fully agree with you. It's a very short season.
I wonder if you can give me a clear picture of whether costs are going to escalate for housing that needs to be put up from now on because, as I mentioned, you have soft soil, and you also have hard bedrock that you could also redirect yourself to, depending on the conditions of the ground.
In a community like Salluit, for example, up in Hudson Strait, the community itself is right on the slope. It's not a hard bed. So there is a certain amount of erosion that has already taken place because of the disappearance of permafrost.
Understanding that, am I hearing you correctly that the cost is going to go up, not necessarily on the actual price of the building but due to the fact that you have to go through a finding in terms of where the best place is to put up the houses in order to avoid a disaster down the road? Am I hearing you properly on this, that the cost is going to go up? I know that you didn't specifically mention that, but I tend to feel that that's what's going to happen.
Duncan Hill, Manager, Housing Needs Research, Canada Mortgage and Housing Corporation: I think, on the location of houses, particularly in areas where you've got changing permafrost, challenged lands, part of community planning is to map out those lands where you can do your development and keep away from the soft soils, or plan accordingly for the foundations of the houses.
In the community planning and the delivery of the houses, we'd imagine that that would be a cost that's already factored into the delivery of housing in the North.
Senator Watt: I don't think so.
Mr. Hill: We had an interesting presentation by a gentleman from Memorial University at a conference held by Polar Knowledge Canada in Ottawa. They talked specifically about the need to map communities so that they could spot the development land, the land that's likely to be challenged over time, the fact that this had to be built into community planning going forward, if it hasn't already been done, and also the capacity development to understand the plans that are coming forward and how to read the maps and where the development land is. Again, that's a community planning exercise as part of the housing delivery.
Senator Watt: The problem is that the community already exists, not down the road, and climate change is here. We're already being impacted.
Those sets of information should have been there at the beginning, but we don't have those, as you mentioned. It's fine to read the materials written from the perspective, but not coming from the community, they're pretty hard to understand. This is why I'm raising the issue about whether there will be an additional cost that we'll have to realize down the pipe. Am I hearing you correctly on that?
Mr. Van Dine: If I could add, I would offer that land development costs are an important part of the overall housing cost in the end, which includes servicing of water, power and others. Community planning is where that all comes together. In communities where lands for development are limited or have not been identified, then there is potential for costs. If land development costs go up, then the overall cost will go up as well.
I would offer to identify who shares those costs throughout the system. There is a bit of a distributed model of responsibilities from the community to the regional, territorial and provincial governments and on up to the federal level. In terms of distributing those costs and making sure the homeowner or the one particular level of government versus another is cognizant of those costs, it will require ongoing dialogue and some coordination.
As has been pointed out, a fair amount of science is only now being put in to understand what the impacts are and to identify where development parcels would be most suitable.
Senator Watt: I'm slowly getting to my point.
You talked about the land claims agreements in the North and that they vary to a certain extent because of the commitments of the provincial government and the federal government under their respective jurisdictions. We are at a certain stage now of thinking about things we didn't think about 10 years ago because of climate change. I wonder if there is a need to revisit the so-called amending formula with regard to who provides the financing — whether it's the federal government, depending on their jurisdiction, and what that responsibility might be. In some cases, the provincial government has to kick in either 75 per cent or 25 per cent. That's the funding formula that I'm used to, because I dealt with those during the negotiations at the time.
I wonder whether there will be a requirement to make some adjustment in those areas. I think we need to identify them if that is the case. You're talking about huge additional dollars not only for housing but also for municipal planning for water, the environment and whatever else exists in the North. These will have to be revisited, but not necessarily in the same capacity as in the past, let's say 10 years ago. It has changed — a big deal.
I tend to think to a certain extent that maybe we need to revisit those agreements we worked out. If that is the case, some agreement worked out before by Nunavik, Nunavut, Nunatsiavut or N.W.T. might have to be revisited. We all might have to revisit those commitments made by the Government of Canada. Does the provincial government have a commitment also? Maybe in some cases, as you mentioned, the territorial government has made some commitments.
Could you provide me with some answers as to whether that is the case? Could you help me out a little bit in this area?
Allan MacDonald, Director General, Implementation Branch, Treaties and Aboriginal Government, Indigenous and Northern Affairs Canada: Maybe I'll take a crack at that one, senator. Thank you for the question. You're right: We've negotiated 21 treaties all across the North, and they're all a little bit different. They were negotiated at different times with different people with different aspirations. There is no uniformity across the North on how to manage treaties.
I would say, generally speaking, that where we have signed treaties, there have been improved socio-economic outcomes, much greater economic activity, and much greater stability and certainty around Aboriginal rights and claims; so they are benefiting folks globally out there, I think.
With respect to whether claims get opened to address some of these issues is quite a large question for people to think about. As you said, it involves many partners, including First Nations and Inuit groups and the provinces and territories. That's perhaps an open question for the committee to study. There's also a larger question at play in terms of how we're going to manage going forward. Maybe adjusting land claims going forward is part of the answer. There are also larger federal transfers involved and other players that need to be factored in. Maybe the land claims can be part of the adjustment going forward; but that's open for the committee to study.
The Deputy Chair: I think it would be useful, considering Senator Watt's broad question, to ask INAC to get back to us with a summary of the obligations respecting housing in comprehensive land claims agreements in the regions we're studying. What are the commitments or obligations, and are there any constitutional obligations from these modern treaties related to housing?
That would be useful background for the committee, if we could ask you to do that for the regions that we're studying.
Mr. MacDonald: We would be happy to provide that.
The Deputy Chair: If I may, following up on the discussion of climate change, Mr. Van Dine, you mentioned the department's Climate Change Adaptation Program and that you would provide us with some details. The program is ending March 31, 2016. I don't know if you have an answer for us today, but has it been evaluated? Is there a recommendation from the department that it should be continued in light of the topicality of climate change?
Mr. Van Dine: I'm certainly not in a position to talk about what will be in future federal budgets and where the government will go. However, I will say that as a part of normal administration of the program, an evaluation was done. It revealed that the program had a high level of participation and success in many small and remote communities that were taking advantage of the program.
As has been pointed to in other comments, climate change and adaptation pressures will continue to exist for some time, we expect, so we'll have to see what decisions are taken downstream regarding renewal.
The Deputy Chair: Could that evaluation be shared with the committee?
Mr. Van Dine: I'll have to check on that, Mr. Chair. From memory, I'm not sure if it was an internal or external evaluation; but I'll certainly get back to the clerk with that information quickly.
Senator Tannas: I want to thank you for providing this Research Highlight document, which has a lot of terrific information in it.
I'd like to pose some questions around Annex Figure 7 in the CMHC document, where it compares the shelter-cost- to-income ratio of all Aboriginal households, all Inuit households and all Canadian households. I read it — and I confess I haven't had much time to look at this — but it looked like the shelter-cost-to-income ratio was based on pretax numbers, which would mean it would be somewhat skewed because Aboriginal and Inuit households would pay fewer taxes than the Canadian household average, I'm guessing.
Senator Watt: No, they pay the same tax as anybody else.
Senator Tannas: Good. So the question I have is specific to the Inuit households, where it says that the shelter-cost- to-income ratio for Inuit households is 15.6 per cent, while for all Aboriginal households renters it is 29 per cent, and for all Canadian households it is 28.8 per cent.
Do you have any idea why there would be close to a 50 per cent discount on rents for Inuit households versus the other two groups here? Would this, in each case, capture all of the costs associated with maintaining those households? I certainly would suggest that on the Canadian household side of things it would include all the costs plus, probably, a profit for whoever is doing the renting. Would that be the same in the Aboriginal households, as well as in the Inuit households?
Number one, can anybody explain why there is a roughly 40 per cent discount on costs relative to income for Inuit households? And number two, does this capture, in any way, all the costs associated with renting those houses?
The Deputy Chair: Colleagues, this is Annex 2 of the Research Highlight.
Senator Tannas: Page A5, Annex Figure 7. It's the last one on the page.
Mr. Hill: Without getting into details on the number, we do feel that the difference is largely due to the subsidy on Inuit rental accommodations. There is a deeper subsidy on the rent in the territories for the Inuit populations, which may explain the difference in the numbers that you are seeing.
Senator Tannas: Is there any explanation, other than that they are over-subsidized compared to everyone else? Why is it so different?
Mr. Hill: I would have to explore that. Right now our understanding is that there is a subsidized rent that will skew the numbers somewhat.
Senator Tannas: It would be great if you could provide some kind of rationale that you might come across, afterwards.
Could you tell me if there is any data that would show the total of the subsidies across these three subgroups?
This is one of my questions. We've heard a lot about this program and that program — little, narrow ones that come and go, and last and don't last. Has there been a steady aggregation over time of what the subsidies have been for housing? Frankly that's probably where a lot of the under-maintenance and under-repair is happening: our subsidies are not keeping up with the costs.
If that's the case, I think we're doing ourselves a disservice: If we are not aggregating these numbers and making them transparent, then we're talking around the problem. We should probably get to the heart of the problem, which is that we are making subsidies, and they are large subsidies, but for whatever reason they are not enough.
Is there some data somewhere that actually gives us a quantum of all the subsidies going into housing in both Aboriginal and Inuit communities?
Mr. MacArthur: With regard to the CMHC programs, we could look back and provide you with that. Just to give you a sense of what is happening now, in 2015-16, the 5,800 units, plus or minus, in the North are social housing. Through the legacy programs that existed for a while, there would be about $59 million of subsidy that would flow through the three territories in the coming year.
With regard to our affordable housing program, about $5 million a year is flowing, and since it started, the total of federal money over an eight-year period — 2011 to 2019 — will be $36 million. Thus far, the territories have claimed the roughly $20 million available to them to assist approximately 950 households.
We can put together our programs in a more comprehensive look back to provide a view of the subsidy.
Senator Tannas: Just using cowboy math, 5,800 houses and $59 million sounds like about $10,000 per house in subsidy. Until we get your numbers, can we think along those terms?
Mr. MacArthur: Not to go into specifics, but costs and maintenance are more expensive. We signed these agreements with the territories a long time ago, and there are a variety of agreements within the social housing envelope. For some of those we are paying 75 per cent. I'm not sure of the exact details in each one, but there are about 2,450 houses in Nunavut, and our funding this fiscal year will be about $34 million. We estimate about 2,350 in the Northwest Territories and about $20 million in funding. And in the Yukon there are 500 houses, and it's about $4.2 million.
We'll get the details. The social housing agreements with the territories were signed in the late 1990s, when they took over the administration and they got the ability to make decisions that were closer to the ground. They knew what was going on, and they had more flexibility than when they were just federal-provincial agreements. We can give you a cast back of the numbers.
Senator Tannas: The two things we are looking for are just those: a cast back on a per-household basis of what we think the subsidy has been; and number two, an explanation as to why the Inuit households are paying less rent than Aboriginal or Canadian households relative to their income.
The Deputy Chair: In this connection, if I may, I think it's important to note that the social housing agreements you referred to, Mr. MacArthur, which were signed in the 1990s, were to support the sustainability of social housing, the operations and maintenance funding, and repair, and the funding is declining. It reduces, every year, to zero in approximately 2037, I believe.
I wonder if any consideration has been given to the issue of declining operating funding and the effect that that might have on the maintenance of these aging units. One would hope that, as the units grow older, the funding for maintaining them would at least be sustained or increased, but in fact — and we'll hear this from the territorial authorities — the funding is steadily declining. Is that true? If so, what was the rationale, from the point of view of the federal government, for reducing the operation and maintenance funding? What was the policy reason behind those steadily declining numbers?
Mr. MacArthur: I'd mentioned a $200 million investment that was made in 2009-10.
The Deputy Chair: That was capital.
Mr. MacArthur: Yes, that was capital for the renovation of existing social housing. So that was to bring the existing social housing up to investments that were required and needed.
With regard to the social housing and the drop-off, at the time that the government made the decision, we invested, as CMHC, in the last social housing in 1993, and then a decision was made that provinces and territories were closer to it and that we should pursue opportunities to see if they wished to manage it. As the funding declines, the mortgages are generally paid off. Our funding is associated with the mortgage flow. At that time, that should free up some additional funding that would be available that was going toward mortgage interest and principal. At the time, as they come off agreement, there is not the requirement any more to provide payments for a mortgage and interest, which may create opportunities. Each social housing unit is unique. It may create the opportunity where further investment could be made, where folks could seek additional funding or additional mortgages to do renovation and retrofit. But you are correct. The agreements do end in 2037, I believe it is.
The Deputy Chair: As to the $200 million and the $100 million you mentioned that were provided to Nunavut, is my understanding correct that that was virtually all used to build new houses as opposed to repairing and maintaining? Perhaps you could answer that, and perhaps you could give us more detail on how those monies were spent. If it had been used to rehabilitate the older units, this would have been an investment in dealing with the problem of declining maintenance funding, but I believe it was mostly in new construction.
Mr. MacArthur: The $100 million in 2013 was for new construction in Nunavut, absolutely, and it created 253 new units in Nunavut. I'll check my facts, but I believe the $50 million, $50 million and $100 million, which was the $200 million, was for the renovation and retrofit of existing social housing. But I need to confirm that. That's 2009.
Senator Moore: I want to thank the witnesses for being here and to apologize for being late. I was at another committee.
My first question is for Mr. Van Dine. On page 4 of your brief, you mentioned that in addition to initiatives in support of Inuit housing, the department also seizes opportunities to advance northern housing that arise through its northern programs and initiatives.
What kind of opportunities has your department seized?
Mr. Van Dine: Thank you. There have been a few, I guess, tangential programs, Climate Change Adaptation being one, in which we've been supporting and working with our territorial and community partners to look at the housing questions. We've also worked, through our Inuit Relations Directorate and with our colleagues in Treaties and Aboriginal Government, on the implementation of our obligations under certain agreements in Nunatsiavut and Nunavik to support working groups. We have been consulted and have worked with our colleagues at CMHC and Finance Canada, from time to time, on housing additions to budgets; for example, Nunavut received $100 million in, I believe, 2014-15 or 2013-14 — I'll have to check the dates — and other investments that have occurred in other parts through the federal budget processes.
Senator Moore: I think the chair pointed out that the Climate Change Adaptation Program expires at the end of this month. How long has it been in place?
Mr. Van Dine: It's been in place since 2008.
Senator Moore: What was the funding for that?
Mr. Van Dine: It was, for this component, just over $20 million.
Senator Moore: Twenty million spread over eight years. Is that it?
Mr. Van Dine: That was the last three-year renewal, senator. I'll have to check back to see what the accumulated —
Senator Moore: Was it $20 million per year or $20 million over those three years?
Mr. Van Dine: It was, I believe, $20 million over those three years.
Senator Moore: You're going to provide the information with regard to the four standards that were developed. I look forward to receiving that.
The next question: Mr. MacArthur, on the first page of your brief, you said that you have a robust research plan for 2016 that includes new projects to help inform your ongoing work. Who is doing that research, and how is it being done?
Mr. Van Dine: I'll ask my colleague, Duncan.
Mr. Hill: CMHC budgets our research through a planning process, and once we've got the projects nailed down, we issue statements of work through procurement processes to retain outside consultants, largely. Some projects are done internally, but by and large, most of them are done externally.
Senator Moore: Contracted out. Who sets the format as to how this research is being done to make sure that the residents who have a stake in this are properly consulted and have an opportunity to provide advice to the researchers?
Mr. Hill: By and large, most of our research that we do in the North is done in collaboration with the territorial housing agencies. We rely on them to be a conduit and a channel to the end users — the occupants, tenants and owners of the housing units that we're studying. Going forward, we are looking forward to additional collaboration with our partners at INAC, Natural Resources Canada and NRC, with the territorial governments included, in deploying research through opportunities offered, such as the Canadian High Arctic Research Station, which we're hoping will embed research in the North more firmly and build capacity more firmly for research in the North by northerners as opposed to southerners. We're very conscious of this issue of southerners studying northerners' problems. It's something we've avoided in the past, and something we hope to address further going forward.
Senator Moore: So the contractors primarily speak with the housing agencies in the territories. Is that how they are doing their work?
Mr. Hill: Certainly we work with the territorial housing agencies to set up the statements of work that we ask consultants to respond to, and that forms the structure, the framework, for the research that we do. Then, for any work conducted in the North, again, we find that we're only more enriched by having the people delivering housing as part of the studies. So our consultants will consult directly with the territorial housing authorities as appropriate.
Senator Moore: It goes on to say that you have also done extensive research on housing need and the impact of changing demographics on housing markets and trends. When was that research done, and is there a report that you can provide to the committee?
Mr. Hill: Yes, there is a report we can provide to the committee. The research on the 2011 Census/National Household Survey Housing Conditions, Inuit Households in Canada, was done in November 2015.
Senator Moore: So it was just done.
Mr. Hill: That's right. It's fairly fresh. It was done internally, based on Statistics Canada information.
Senator Moore: Done internally. Okay. Then, on page 2, I am going to ask some questions about the funding. You said that CMHC helps Canadians with a federal investment of $2 billion in housing assistance. Is that provided across Canada, or are we talking about just in the North?
Mr. MacArthur: That's the total national investment across Canada.
Senator Moore: You talked about the bulk of the funding and said that assistance is provided to a total of 5,800 households in the North.
When you say "bulk of the funding" of $2 billion, what percentage or what amount is that?
Mr. MacArthur: Do you mean in the North? For 2015-16 it will be about $58 million.
Senator Moore: That's in the North. So the balance of the $2 billion was spent across the rest of the country. Is that right?
Mr. MacArthur: I'm talking specifically about the social housing agreement with each province, where one exists or where there are federal-provincial agreements. That's where the bulk of the funding goes. The other major component is the investments in affordable housing.
Senator Moore: I will get to that.
With regard to 2014-15, how much was spent in the North? Do you know?
Mr. MacArthur: I'd have to get the 2014-15 social housing number. I don't have it today.
The Deputy Chair: It would have been more than $58 million spent in the most recent year because it is declining.
Mr. MacArthur: That could be, yes.
The Deputy Chair: It is a declining amount.
Senator Moore: The investment in the affordable housing program is $2 billion over eight years. It started in 2011-12 with $250 million a year. Was that spent each year?
Mr. MacArthur: Yes.
Senator Moore: Where it says that the territories and provinces match federal investments, does the $2 billion include the matching dollars, or is that strictly the federal contribution and we look to the territories to match that?
Mr. MacArthur: The $2 billion for social housing is in one pot, and there's $2 billion from 2011 to 2014 for investments in affordable housing, which is $253 million a year matched 50 per cent by the provinces and territories. There is leveraging of that funding for housing.
Senator Moore: Okay, all right.
Senator Raine: I have to say that the numbers and the financing stuff are pretty overwhelming, but we all know the need is there.
I'm very encouraged to see the Research Highlight you sent us called Design and Construction of the Northern Sustainable House — Arviat, Nunavut. In the floor plan, there is a room labelled "sealift." What does that mean?
Mr. Hill: It is the movement of construction goods from Montreal or wherever by barge to Arviat.
The Deputy Chair: It stores the dry goods for the winter.
Senator Ringuette: It's the storage pantry.
Mr. Hill: Specifically for this house, they wanted a storage area to manage all of the goods.
Senator Raine: In our study last year we saw housing where people would walk from outside minus 30 into a living room; so I'm happy to see the wind porches. It looks like the house has been well designed for the cultural needs of the community. This house has actually been built. How will it be evaluated? How will it role out into new housing going forward? I'm wondering if during the research for this new type of sustainable housing unit you were able to visit other regions in the world where they have a similar climate, such as Greenland and Alaska, to see what, if anything, they are doing better than we've been doing in the past to learn from their experience. Could you give us an overview of how the design process is moving forward? That will give everybody some optimism toward the sustainability of the housing that will be built.
Mr. Hill: I would be pleased to respond. We have been putting an awful lot of work into the Northern Sustainable House initiative at CMHC. The initiative has taken about 10 years so far and has resulted in four model houses being built across the North, two in Dawson, one in Arviat and one in Inuvik, N.W.T. Each design was done in consultation with the local community, not only the territorial housing provider but also the people to be housed in the units. We found it necessary not only for northerners to understand and accept innovation in housing but also for southern providers to understand northerners' needs. It spoke volumes with some of the changes introduced into the housing; for example, you pointed out the porch and the additional space for the sealift. These are very important and worked their way into our integrated design process.
In Dawson, we were surprised to learn that the women were not contributing in the mixed forum, so we held a separate charrette the next day with the women. We got an earful, which went into the design. It was news to us that we had to do this because we were used to running events down South where such a barrier does not exist. It was a learning exercise.
Yes, the house in Arviat is built. It was the first one designed under the Northern Sustainable House initiative and the last one built because they had some other pressing obligations to deliver a massive amount of housing recently due to funding made available under the National Housing Trust. Nevertheless, the house did get built, and we monitored the performance by looking at the utility bills. We asked the Arctic Energy Alliance, a non-profit consulting agency in N.W.T., to evaluate the performance of the house.
We are pleased with the performance. Like many other houses we've looked at across Canada and the North, we found that the best designs and efforts can go a bit astray when you allow people to plug in things and use them in their houses. Occupant usage becomes an unforeseen impact on energy performance. And it's nothing to do with the North as it's all across Canada. When we monitored the house, we found that we were 20 per cent to 30 per cent off target on the occupant end-use side of the equation. When we set up the targets, they were based on modelling and assumed usage.
We are pleased with the design and the performance. We would like to understand more about why some of the power consumption is higher in some areas. We have interest from the Nunavut Housing Authority to participate in a follow-up study to chase down the last kilowatt hours in that house.
We understand that the design of that house influenced the design of other houses being built in Nunavut. They built a similar house right next door out of structural insulated panels. That construction approach then flavoured a whole lot of housing delivery in the North. There was a direct trickle-down in the experience in the Arviat sustainable house because it led to a construction form reflected in many other houses.
In terms of sharing with other organizations, CMHC is linked closely with other organizations, such as the Cold Climate Housing Research Center in Alaska. It is a dynamic organization that tests housing in Alaska. It follows much of the work of CMHC, NRCan, INAC and the NRC on this side of the border. The flow of information is quite tight. We did have representatives of the Canadian government at a conference at the Cold Climate Housing Research Center, which might have been last week. The sharing is going on.
Through the Research Highlights and CMHC's website, we are sharing the results of each of the northern sustainable houses with designers and the territorial governments.
Senator Raine: Did I understand that the sustainable house was delayed in being built because there was an opportunity to build a whole bunch of other houses that wouldn't take advantage of the new technology?
Mr. Hill: No. It's just a question of priorities, and when things were coming along. The design influenced the next batch of houses that were going forward. We didn't consider it an interruption, because it was one house where an integrated design process happened, a design got laid out, and that design did influence what was delivered anyway. You might just say it was a premature success. That's the way I like to look at it, anyway.
Senator Enverga: Thank you again for your presentations.
I think Senator Raine mentioned other regions. Have you looked into other regions? Do we still have the same problem with regard to housing? If we compare ourselves to Alaska or Greenland, is there anything we can learn from them, or something we can adopt here?
Mr. Hill: Yes. Again, the sharing is going on with the Cold Climate Housing Research Center. They have many of the same problems — coastal erosion, permafrost, and ice roads that are no longer usable — so we are looking at best practices back and forth across the border, and we are watching closely one another's trials and successes.
Mr. Van Dine: The Arctic Council is another forum in which circumpolar countries are collaborating on a whole range of issues, and Canada is playing a role through the Sustainable Development Working Group of the Arctic Council, in which housing issues come up from time to time.
Senator Enverga: Are we better off? How is the cost? Which is more cost-effective, their projects or ours?
Mr. Hill: I wouldn't say either is better off. We're both in the learning stage and going forward. We're sharing back and forth. Here in Ottawa, a firm called Triodetic has built a number of space-frame foundations that went into Alaska to help them move houses off a coastal plain. There is a sharing of information, and we're both recognizing that there is a lot of value to the collaboration and experience sharing. I wouldn't say one is better off than the other; I would say we're both learning together.
Senator Watt: I would like to cover an area that has been brought to my attention from time to time, over the years since the Canada Mortgage and Housing Corporation and Quebec housing corporation worked together and came up with a program that could be adaptable to Nunavik, for example. Now I'm talking about Kuujjuaq again.
There were five applicants this year, and they got to the point where they were going to have to start making arrangements with the shipping companies, due to the short seasons that we face on an annual basis.
I would like your help in this area to understand the real problem: One day the program is there, and another day it is not there. I guess you would call that affordable housing. I'm not talking about social housing. I'm talking about various individual people who have the ability to get mortgages and subsidies from the governments of Quebec and Canada.
I don't know how they work it out between the two governments in regard to subsidy issues, but at one point it was considered a very attractive, highly subsidized amount when it first came out. I think that's going back to the point my Senate colleague on the other side was mentioning, about why the subsidy is so high in this area.
I wonder if you could help me understand why the program seems to appear at times and then disappear, and no one seems to have a clear idea what is really happening at the administrative level. Why are people having a great deal of problems? They make financial arrangements, prepare themselves, get organized, get a hold of the contractors and architects, and things like that. The money is spent, and then they turn around and hear, "Well, you can't have it this year." Could you help me out on that one?
Mr. MacArthur: I believe we're talking not about social housing but about affordable housing.
Senator Watt: Affordable housing.
Mr. MacArthur: Our affordable housing agreements are with the Province of Quebec. We will sign an agreement, and the agreement is until 2019. They have the responsibility to design and administer the programs as they see fit, on the ground, within the parameters of certain key areas. New construction can affect affordability and renovation, but they design individual programs that meet their needs and meet the specific needs of their populations in the particular province. So it would be the Province of Quebec and our partner, the SHQ, who would deliver that. We sign the agreement with them and we put our funding in based on broad parameters of construction, renovation, affordability or helping populations in need. Then they design it and administer it and set up their programs.
I can't speak to this specific case, as I'm not aware of it, but it's the same in every province. For example, Nova Scotia would have the same agreement. They design their programs to meet their particular needs as well, based on broad parameters, and the like.
I can't speak to the specific case in point, but it's the province that administers and designs the program and makes sure that it moves forward.
Senator Watt: Are you saying, then, that this should be answered by the Government of Quebec rather than the federal government?
Mr. MacArthur: I don't know the specifics of the particular program, but the Government of Quebec, for investments in affordable housing, designs and delivers the program, and it would be within their purview to answer the question.
Senator Watt: So do you really have no answer to the question of whether it's related to the lack of financing availability? I don't know what the problem is. You're not giving me anything to go by.
Mr. MacArthur: Not being aware of the particulars of the situation, it's very difficult to say whether the folks were unable to find appropriate bank financing. Many issues can arise during the course of a project. Sometimes there's funding available from a government entity, but then the group might need to get private-source or own-source financing.
Without the particulars, it would be speculation on my part, which would not be fair without seeing the particular project in this case. As it relates to the investments in affordable housing, it's our partner in the province that administers the details of it.
Senator Watt: Mr. Chair, I think we have to take notice of what we have heard, because it is a big problem. One day the program is there, and another day it is not there. It's hard for the people to cope with that, because they have to spend their own money to make their own investment. I think we need to ask this particular question to the housing authorities. Maybe they will be able to answer that.
The Deputy Chair: Yes, we're planning on travelling to your region.
Senator Watt: And then we can get back to you, probably, after that.
Senator Tannas: Would the affordable housing agreement that you have with the Province of Quebec be segmented such that certain dollars would flow to Inuit communities, or is it a pan-provincial kind of a thing? Could you have something where it's being spent in Montreal, but not being spent here, and allocated in different priorities in different years and different months? Is it fair to say that is what is going on?
Mr. MacArthur: Without speculating on what our partner did, it's up to them in the province of Quebec to determine the priorities.
Senator Tannas: It's one pot for the province of Quebec?
Mr. MacArthur: It's one pot for the province, absolutely.
Senator Watt: On that point, and it's also important to take note that still today and for a number of years, in monitoring the implementation of the treaty that was signed 40 years ago, at times we have really no idea of what money flows from the federal government to the provincial governments. Are we getting our money's worth? That's an issue I brought to the attention of the Auditor General the other day because we have no idea, and I don't think you have any idea either. This is a long-term problem existing between the federal and provincial governments of not knowing how much they're holding back. Are they holding back only 10 per cent, 5 per cent or 50 per cent? We don't know.
Those are very important questions.
Senator Beyak: Thank you very much for your presentations, everyone.
Mr. MacArthur, you mentioned the heavy reliance still on fossil fuels by northerners — and I'm a northerner from Dryden, so I certainly concur — by Aboriginals, Inuit and Metis. My question isn't political so much as pragmatic common-sense survival. With all the talk today on climate change — and the world spends $100 billion annually on that, yet we have clean fossil fuels and pipelines that have been safe since the first one was applied for in the year I was born, in 1949 — how much would you estimate is the reliability of fossil fuels? How will those people survive if we don't find a balance between that and climate change? We should look at the all options, but we're going to be driving our cars, flying our jets and heating our homes on clean fossil fuels for many decades to come, and I have a concern about the survival.
Mr. MacArthur: That's a big question. I think we need to invest in innovation and sustainability as much in northern housing as in other places. We have to make sure that innovation is just not for us driving a car in the South but that we're also thinking about how we can have sustainability in the North. The senator mentioned sealift. The oil from the East is going into the North by sealift, and if the ice is a problem it's a real issue.
It's innovation, and we need to be looking at things in a different way, and we need to be open to different thinking and focus as much attention on the issues of our fellow citizens living in the North with regard to the challenges that they face.
The Deputy Chair: I'd like to get back to what I know is familiar to CMHC, and that is the burning issue, I'd say, of the operating, maintenance and upgrading needs for the social housing units in the three territories, and I'd like to get some figures on the record.
In N.W.T. and Nunavut — these are fairly recent figures — the average annual cost to maintain a social housing unit was $18,900 per year in the Northwest Territories and $25,000 per year in Nunavut, where 70 per cent of the units were built before 1999. The occupants of these social housing units have low income, and in Canada we gear the rent to income.
In Nunavut, 80 per cent of public housing tenants have annual incomes of less than $23,000. Because of that formula for rent to income, the average rent in N.W.T. for social housing units was $2,600 per year. The average rent in Nunavut was $2,800 per year. Therefore the subsidies paid by those territorial governments amount to 86 per cent and 88 per cent of rental costs in N.W.T. and Nunavut respectively. You have high operating costs and low rental revenues.
Now, because the agreement signed with the federal government, the social housing agreement which you mentioned, was signed in the 1990s, and I understand this agreement goes right up to 2037-38, the contribution of the federal government through CMHC is declining. The territorial governments must increase their subsidy just to maintain these units. I don't need to add the high costs of utilities, which are also subsidized, and those include water delivery as well as electricity and heat.
The numbers I have show that in Yukon, N.W.T. and Nunavut the governments were paying, as a percentage of their total budgets, 2.5 per cent towards operation and maintenance in Yukon, 6.8 per cent in N.W.T. and 13.3 per cent in Nunavut, reflecting the higher cost there.
Looking ahead to 2038, I understand that the territorial governments are projecting they'll face steep increases in their contribution to operating costs. In Nunavut, from 2015 to 2038, the Government of Nunavut is projecting it will have to increase its contribution by 78 per cent or $96.3 million. In the Northwest Territories the government projects it will have to increase its support for operation and maintenance of social housing an additional 5 per cent on an annual basis from now until 2038.
I'm sure this dilemma is not unfamiliar to CMHC. I'm amazed. This agreement was signed in the 1990s. It runs until 2037. The houses are not getting newer, and 77 per cent of them were built before 1999 in Nunavut.
This doesn't look sustainable, at least for the territorial governments. It's okay for the federal government, but it sort of looks like off-loading. I know that you made the point that mortgage payments and interest costs are going down as the mortgages end, so there should be more money available to the territorial governments to put into capital upgrades and maintenance, but still the territories are paying a much higher percentage of their revenues to operating costs.
By comparison, the most a province pays, I understand, is 1.8 per cent of revenues in Saskatchewan and 0.7 per cent in Prince Edward Island, whereas here the three territories are paying a low of 2.5 per cent in Yukon, which doesn't have such a big social housing base, up to 13.3 per cent in Nunavut and growing.
I hope I've explained the facts objectively. Is CMHC concerned? You provided the funds to build these houses. There's less money to maintain them, and it's costing more.
Is any consideration being given — and I believe this has been requested by the territorial governments — to revising or replacing the existing agreements, with their declining contributions, with other programs that will target operations, maintenance and capital upgrades? Are discussions going on?
I believe a business case has been presented by the territories on the importance of continued federal investment in northern housing. Are there discussions about revising that agreement, or is it locked in stone until 2038, when some of us won't even be here in our present positions?
Mr. MacArthur: The investments in affordable housing can be used. I know it may not be enough, but once a unit comes off of the social housing agreement, provinces and territories can choose to use the investments in affordable housing to make upgrades and repairs to the existing social housing.
When I think about a go-forward thing, these were complex and built for a multitude of reasons. The different programs under the legacy programs were complex and built in another era. Is that the solution going forward, just to continue, or is it to step back and look at what's the best approach moving forward, to look at sustainability? Of course, we're always interested in that. We try to maximize the resources made available to us in trying to squeeze as much out of those as we can to help Canadians, because we're very aware that one house and one warm place to stay at night makes a difference to those Canadians. It's not lost on us at all.
We try to maximize. We're trying to innovate and the like, but we use the money that is given to us by the government in our appropriations to the best extent we can and maximize those dollars.
The Deputy Chair: One thing that I think seems to characterize this relationship between Canada and at least the territories, which I'm more familiar with, is that from one year to the next, there is no predictability.
You talked about the infusion of funds to Nunavut in two years under the last government, for which we are very grateful, but it was a one-time thing. In fact, in one of the years there was a big contribution of money late in the fiscal year, and we might all agree that it could have been better spent because of the rush. Perhaps we should get some details about the problems that occurred because of the large contribution that had to be spent quickly.
The one thing that seems to characterize this is that there's no long-term predictability, particularly in the capital contributions. Would you agree that there has been some unpredictability? Maybe this is something that CMHC would like as well, longer-term predictability to allow for planning, even at the community level. Has that been an issue we should focus on?
Mr. MacArthur: Through our investment in affordable housing, the $253 million a year — and that's the national number — that has some predictability. At the moment, it's predictable to March 2019. That does provide some.
The pieces that you're talking about were twice. Once, during the economic crisis, $200 million was provided over a two-year period. The second was the $100 million.
Yes, there are times when there is fiscal capacity to make investments in important areas.
With regard to the $100 million, that was split over two years. The folks in Nunavut Housing Corporation would be better able to answer, but my understanding and recollection is that the first $30 million was to set up the land, to do the purchase, to get all the infrastructure in place, and then the second year the sealift happened and the like. But you're right, when it came out of the budget, it was late in the year. We worked with them to find a solution that would allow for some investments, some design, all of the softer pieces, knowing that there would be a press to get to the sealift the next year.
When money is made available, we do the best we can to squeeze it. With the money we are given, we are very conscious of the stewardship that's put in us, and we try to squeeze the hardest we can. We know the difference it makes in Canadians' lives.
The Deputy Chair: Just one final question for Mr. Van Dine. In your opening remarks, you mentioned a study of innovative financing options for market housing that you're working on in Nunavut with Makivik Corporation. I wonder what kind of financing options are being explored and what might have been the results or conclusions thus far. If that's still under way, you can get back to us.
Mr. Van Dine: It's an important piece of work that we have under way. Elizabeth is closest to it, so I will ask her to provide a short update.
Ms. Logue: We have a tripartite working group with the Government of Quebec, Makivik Corporation and ourselves at Government of Canada, Indigenous Affairs. We've put together an interim report which points towards some ideas on innovative financing, but again, we're not quite done that work. We have a working group meeting next week. It's real time.
Makivik has contracted, and we've partnered with CMHC and Makivik with the International Institute for Sustainable Development. They're looking at some innovative financing models globally — but also in Nunavik specifically — what could work. That's under way. It's not quite done yet. It's been in three phases, and we get that third phase of the report probably in the late spring.
Senator Watt: I know a little bit about it. I don't know in depth the terms of the actual arrangement they have, but I'm just wondering whether you are talking about the construction company that Makivik Corporation created on a not-for-profit basis. Is that what you're talking about?
Ms. Logue: Who is working with us, you mean?
Senator Watt: The Makivik Corporation has created a not-for-profit corporation to undertake construction of the housing in every community in Nunavik. That's what they're doing now. Is that what you're talking about?
Ms. Logue: Yes. We are working with them.
Senator Watt: That's been in existence for quite some time.
Ms. Logue: It's more exploring the models, the different programs or policies for incentives for home ownership and also building that housing market in the region, the barriers and challenges, and what can be explored to actually build a housing market.
We co-chair this working group together with Makivik. They're at the table, and KMHB — the Kativik Municipal Housing Bureau — is there as well, and SHQ from the Government of Quebec.
Senator Watt: Is this the first model that the communities — at least Makivik — have undertaken to create a company of that kind in order to cut the capital cash down? That is one of the reasons why they got into those activities at the beginning.
I do believe that Jobie Tukkiapik had a meeting with the minister not too long ago. When I say "not too long ago," that was the previous government, not today's Liberal government. I do believe the way that Jobie brought the information back to me — he's the president of Makivik Corporation — was that the minister of the day very much welcomed that idea of doing it in that fashion.
I don't know exactly what percentage you're cutting down in terms of the actual cost requirement. Nevertheless, it was a not-for-profit. It probably has a certain amount of additional expenditure that would go with it. It would be realized at the end of the year, on an annual basis, because they are carrying out the responsibility on an annual basis.
Ms. Logue: Makivik's model is —
Senator Watt: It's one of a kind. You are looking, in a sense, to see if that kind of arrangement could be adaptable to the others, let's say Nunavut, Nunatsiavut or N.W.T. Is that the idea?
Ms. Logue: Makivik has a very efficient way of delivering on the cost per unit. They have quite a good delivery model, and that's something that we are sharing with other regions. The working group is also looking at, for citizens, for Inuit in communities, whether there are financing models that could work better for the sustainability of their housing over time.
Mr. Van Dine: If I may, Mr. Chair, offer the senator this, there are always two really strong pressures. One is to deal with the immediate housing need of those that are in extreme situations that require immediate social housing. The other is the home ownership long-term issue and trying to move in that general longer-term direction. I believe that the working group that the Makivik partnership has brought to bear is to manage those two pressures simultaneously to try to find adaptive solutions for short-term needs, as well as moving more stridently toward a more private ownership in that particular part.
All of those lessons I think are going to be very important all across the North and, indeed, potentially internationally as we are describing our experiences to other countries and trying to leverage our experiences.
Mr. Chair, without, hopefully, being ruled out of order, I did find an additional fact that I did want to update the committee on, and I misspoke with respect to the Climate Change Adaptation Program. It did begin in 2008, as mentioned. It was renewed in 2011, and that was a five-year renewal. That five-year renewal included the $20 million over those five years, and it is applicable to all 10 provinces and three territories.
The Deputy Chair: We're going to have to wrap up, but I would like to have your undertaking to follow up on the Nunavik work once it reaches a conclusion toward the spring. I would like to close by thanking the witnesses, all of you. The meeting is now adjourned.
(The committee adjourned.)