Debates of February 6, 2006 (day 23)

Thank you, Mr. Speaker. I give notice that on Wednesday, February 8th, 2006, I will move that Bill 19, Supplementary Appropriation Act, No. 3, 2005-2006, be read for the first time. Thank you, Mr. Speaker.

Thank you, Mr. Speaker. I give notice that on Wednesday, February 8th, 2006, I will move that Bill 20, An Act to Amend the Income Tax Act, No. 2, be read for the first time. Thank you, Mr. Speaker.

We have a number of items before us in Committee of the Whole today. I would suggest that we take a break now and resume with opening comments for the NWT Housing Corporation immediately after the break. Is the committee agreed?

Agreed.

Okay, thank you.

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I am going to call Committee of the Whole back to order. We have in front of us Bill 18 and in the order of departments, the first one we want to deal with is the NWT Housing Corporation. At this time, I would like to ask Minister Krutko if he would like to please provide the general comments for the NWT Housing Corporation. Mr. Krutko.

Yes, Madam Chair. Madam Chair, I am pleased to present the Northwest Territories Housing Corporation main estimates for the fiscal year 2006-2007 for a total contribution of $26.828 million.

This is an increase of 2.4 percent from the 2005-2006 main estimates. Including other revenue sources, the corporation will spend over $120 million on housing in the Northwest Territories this year. This funding includes contributions from our federal partner, the Canadian Mortgage and Housing Corporation.

During 2006-2007, the NWT Housing Corporation is planning a significant increase in our housing delivery to help address the housing needs of our residents. The corporation will invest $32.896 million to construct 185 housing units in communities across the NWT. Included in this allocation are 73 public housing replacement units and 112 homeownership units under the Supported Lease Program to assist families to become successful homeowners. This ambitious plan is subject to continued support from the federal government in the amount of $50 million over two years.

The Housing Corporation also plans to invest $10.439 million in modernizing and upgrading our rental stock through our local housing organizations and we have set aside $4.448 million to fund emergency and other repair programs, and various seniors’ programs such as the seniors/disabled preventative maintenance program and the Senior Citizens’ Home Repair Program.

The Housing Corporation is committed to meeting the targets set out in Motion 21-15(3) passed by this Legislature. The 185 units planned for delivery this year, along with those planned for next year, will put us on target to reduce core need by 10 percent by 2007. Investments made during the life of this Assembly have made a positive impact, but much work remains.

As you are aware, during the past year, the corporation has been involved in redefining its mandate. MLAs have expressed concerns about the level of involvement of stakeholders in this process. I have heard these concerns very clearly. As a result, a consultation process with MLAs, LHOs, community leaders and other stakeholders will occur over the next few months. Following this process, we will return to standing committee with the results of the consultation for their review.

The corporation made significant progress in its efforts to lobby the federal government during 2005. As Members may be aware, the federal government made significant commitments to deliver new affordable housing in the NWT prior to the election call. However, the election of a new government has caused a delay in the formal approval of those commitments until a new federal Cabinet is formed. We intend to resume discussions with the Honourable Diane Finley as soon as possible.

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

Thank you, Minister Krutko. At this time, I would ask the chair of the Standing Committee on Social Programs, Sandy Lee, if she would please provide for us the comments by her committee. Thank you. Ms. Lee.

Thank you, Madam Chair. Members of the Standing Committee on Social Programs, as Members of the Accountability and Oversight Committee, were involved in the new pre-budget consultation process with the people of the Northwest Territories in late August of 2005. Hearings were held north and south of the Lake, and gave ordinary northerners and non-governmental organizations the opportunity to provide input to MLAs on the priorities that the budget should focus on.

The committee then met with the Minister and his officials on Wednesday, September 21, 2005, to review the draft business plan of the Northwest Territories Housing Corporation.

Members also received a briefing from the Minister of Finance on January 17, 2006, outlining the changes to the budget of the NWT Housing Corporation since the committee reviewed the business plan in September.

Committee noted the total operating budget for the Northwest Territories Housing Corporation for 2006-2007 is planned at $122.486 million, or is $122 million…$122.486 million. Sorry. Of this total amount, the corporation proposes $85.658 million in revenues or non-cash items, and a GNWT contribution of $36.828 million.

The following outlines committee members’ issues from their review of the 2006-2007 Draft Main Estimates for the Northwest Territories Housing Corporation and the new budget planning cycle.

The one consistent concern heard in all communities was the need for more housing. The majority of presenters felt that if we could reduce overcrowding and provide suitable and affordable housing in the communities, many of the pervading social problems that exist would be relieved.

The standing committee has heard this concern and will be working with our Cabinet colleagues to formulate a plan to address the long-term housing and attendant social problems in the North during the final two years of our Assembly.

Madam Chair, at this time, I would like to ask my colleague from Sahtu, Mr. Norman Yakeleya, to continue with the report.

Thank you, Ms. Lee. Mr. Yakeleya.

New Mandate And Structure For The Delivery Of Housing In The NWT

Thank you, Madam Chair. Much of the discussion at the committee level over the budget planning cycle has focused on the need for a new mandate and structure for the NWT Housing Corporation.

With the transfer of responsibility for existing social housing to the Department of Education, Culture and Employment there is an opportunity to revitalize housing programs to meet the housing needs of all northerners.

Over the next year, the committee will be working with its Cabinet colleagues to come to a consensus on how government can best address the housing shortage in the NWT.

Once roles have been defined, work can begin on developing a government-wide business plan that will secure community and aboriginal governments’ cooperation in developing the building lots our communities require to build the houses that we need.

Focus For Capital Spending

During the pre-budget consultations, we heard many stories of people living in housing units that lack adequate water and sanitary systems and heating sources.

Many of these units were built for people who have subsequently aged and are now having trouble in keeping up with the chores that a house with minimum services demands.

Thank you, Madam Chair. Much of the money for new social housing and housing in non-market communities is predicated on the federal government providing a significant portion of the required funding.

With the recent change in government at the federal level, it is unclear when, or even if, the funding for northern aboriginal housing contained in the Kelowna Agreement or the Novel housing proposal will come to the Territories.

Members of the committee are concerned with the plans of the corporation should the potential federal funding for these new initiatives not materialize, Madam Chair. There does not appear to be any plan on the part of this government to address the housing needs of northerners within the context of our present financial reality.

The committee is not saying we abandon pushing the federal government for more funding to take advantage of the Novel housing proposal and to address the shortage of housing in many of our smaller communities, but we, as a government and territory, should be prepared to react to our housing crisis on our own.

The committee looks forward to further information on the economic viability of the Novel housing proposal and other options on financing much needed housing in our communities.

For now, Madam Chair, the NWT Housing Corporation needs to focus on what it can do today, not what it may be able to do five years from now if the federal government comes up with the money.

I would like to ask, Madam Chair, my colleague from Inuvik Twin Lakes, Mr. McLeod, to carry on with the report.

Thank you, Mr. Braden. Mr. McLeod.

Policy Issue - One House In A Lifetime

Thank you, Madam Chair. Many of the first clients of the NWT Housing Corporation’s programs are now senior citizens. They no longer require the three or four-bedroom houses they had built for their young families. However, these people now find themselves unable to access any of the services of the corporation, because of the one house in a lifetime policy.

The committee is of the opinion that the corporation would be able to free up houses for the private market if it were to provide smaller housing packages/construction services or possible bridge financing for those elders who no longer require such a large home, but still wish to live in their own stand-alone house.

Committee will be pursuing this with the Minister responsible for the NWT Housing Corporation.

NWTHC And School Trades Programming

The Standing Committee on Social Programs is pleased with the support that the corporation has been providing to school trades programming.

Exposing young adults to the trades and letting them work on real world applications is the only way that they would be able to make intelligent career choices that take into account the opportunities in the trades.

Members are concerned that in providing housing packages to the schools, the Housing Corporation has thus far concentrated on larger communities. The committee is not saying this is the fault of the Housing Corporation and suspect that it is more a result of the corporation taking advantage of the opportunities that are presented to them.

However, the committee would like to see the Housing Corporation, in cooperation with the Department of Education, Culture and Employment, make a concentrated effort to expand into smaller communities and work on developing partnerships with industry and other levels of government.

Madam Chair, I would like to ask the Member for Nunakput, Mr. Pokiak, to carry on. Thank you.

Thank you, Madam Chair. Should the corporation be successful in securing federal financing under the aboriginal housing Initiative and for the Novel housing project, they will be faced with the problem of a lack of suitable, developed land in virtually every community in the Northwest Territories.

Our discussions indicate that the corporation is alive to this issue, but Members were concerned that there was no specific mention in the business plan narrative about the need to cooperate with other departments and levels of government.

When the committee looks at the problems the corporation had and is having in securing land for the 45 units under the market housing initiative, we cannot help but have feelings of trepidation when the corporation is proposing building or placing 1,600 units in the communities over the next 10 or so years.

It is very important the Housing Corporation makes sure that communities and governments understand the magnitude and expectations that will be placed on them, should the corporation secure federal funding. At minimum this would require concentrated and coordinated partnerships and firm agreements with municipal and aboriginal governments to be reached beforehand.

Thank you, Mr. Pokiak. At this time, I will ask that if Mr. Krutko would like to bring witnesses into the Chamber, is committee agreed?

Agreed.

Thank you. Minister Krutko. I would ask then, please, that the Sergeant-at-Arms bring the witnesses into the Chamber.

Mr. Krutko, for the record, could you please introduce your witnesses? Mr. Krutko.

Thank you, Madam Chair. To my left I have the president of the Housing Corporation, Mr. Fred Koe; to my right I have Mr. Jeff Anderson, chief financial officer.

Thank you, Mr. Krutko. So we will then proceed to general comments for the NWT Housing Corporation. Mr. Braden.

Thank you, Madam Chair. I would like to start with a few specific queries to the Minister’s opening statement. It starts off, Madam Chair, right in the third paragraph where the Minister told us that in the coming fiscal year, the corporation is planning a significant increase in housing delivery, some 185 units, $33 million. A number of them are replacements for public housing; the Supported Lease Program to assist people to become homeowners. These are very much at the core of why we want a successful housing agenda, but, Madam Chair, the statement then goes on to say this ambitious plan is subject to continued support from the federal government in the amount of $50 million over two years.

The report of committee, Madam Chair, specifically highlighted that we are concerned that the Housing Corporation is planning and relying too much on projected plans on the ability or the will of Ottawa to deliver on promises or expectations and that we continue to miss the boat and we continue to not meet the needs of our people because our planning is not solid enough. Madam Chair, if the Housing Corporation is becoming before us to tell us of something as critical to the NWT, something as major as a $33 million investment for 185 housing units but it’s still subject to continued support from the federal government, what do I have as a committee member to approve? It’s a hope; it’s a maybe. I want to know what is the Housing Corporation going to be capable of doing in the coming fiscal year, Madam Chair, not what it hopes to do dependent on the federal government. Thank you.

Thank you, Mr. Braden. Mr. Krutko.

Thank you, Madam Chair. Madam Chair, we are committed to the 185 houses that we have budgeted for, but it is hinging on federal support. As we know, there was a call for election. The majority of this money that has been identified has already been approved by the federal House of Commons July 28th when they passed Bill C-48. Bill C-48 was $1.6 billion for housing in Canada, and out of that we put a proposal to my federal colleague, Mr. Fontana, of which we gave him two proposals. One was for 530 houses, $60 million over three years. The proposal went forward to CMHC and he came back in regards to stating that we were going to get $50 million over two years and the money has been identified by way of a budget item that will have to be approved through Treasury Board. So it is presently sitting before Treasury Board. Because of the federal election, the meeting did not take place and it is presently, I understand from CMHC, on top of the pile to be approved by Treasury Board. So that's where the money is at. I do have faith because of the minority government we have again, that those dollars that have been approved through the $1.6 billion, the passage of Bill C-48, those dollars have already been budgeted for through the House of Commons. Thank you.

Thank you, Mr. Krutko. Mr. Braden.

Madam Chair, so sort of best efforts on everybody's part, including the federal government, the previous government. We still have something in abeyance; it's not for sure. So I guess my own dilemma continues here, Madam Chair. The spending allocation by Treasury Board it's at the top of the pile. What are the chances that it's going to see approval before the end of our budget session, Madam Chair? Maybe we'll go at that. Let's take that angle. You know, if we, for instance, left the Housing Corporation's budget until the latest possible time, might we see approval of this federal government and more certainty that we can approve this?

Thank you, Mr. Braden. Mr. Krutko.

Madam Chair, as we all know, the federal Cabinet was just pointed today, so it will take them awhile before they are able to sit down and formulate the dollars that have been approved through Treasury Board, and then it will have to flow to their Cabinet colleagues for approval. So we can't dictate to the federal government on exactly how fast this transition will take place. But it is, basically in order for this government to operate, they will have to approve expenditures. By way of that decision, by way of the Cabinet and Treasury Board, it's out of our ring to dictate when that can happen. But the process will have to flow. Now I know who the federal Minister is. I will be contacting her as soon as possible to see exactly how soon, or when this item will be dealt with. I haven't had that contact yet, so it's speculative of me to elaborate any farther than that. But I think by making that contact, with the information we've received from CMHC, it has been positive that our basic request is in the system to be approved by Treasury Board.

Thank you, Mr. Krutko. Mr. Braden.

Thank you, Madam Chair. It still doesn't help resolve my concern that by the time we get to the point where we have to vote the Housing Corporation's expenditures here, we may not know, even if we defer the corporation's detail approval, even if we defer it to the end of the month, we may not know in time. So I'd like to know what's plan B here. If the feds don't come through in time, is the Housing Corporation still going to commit to a $33 million/185-unit housing program, or just what is the extent of what we're able to do if the feds don't come through, Madam Chair? Thank you.

Thank you, Mr. Braden. Mr. Krutko.

Thank you, Madam Chair. Madam Chair, as you know from the budget, we are approving the $38 million and that money will be expended on the delivery of the 185 units. Yes, there may be a delay in delivery because already the winter road access and whatnot. There will be delays. There's our mandate change that will possibly cause some delays. We have land issues we have to deal with. So there will be technical delays through the process. We are still committed to meet the goal where the motion passed in this House to deliver the housing needs to bring down our core needs by 2007. How we get there, yes, it will mean we do have to have resources. But this year we feel that we can deliver on the amount of money that is going to be approved here before the House and the other dollars we have internally.

With the question of the federal support, I feel pretty positive that it is there and that will be carried forward. The allocation we were looking at is that we were looking at over three years because the federal obligation under Bill C-48 has to be expended in two years. So we were going to look at putting our money at the back end of this delivery process in year three. So because of that, we'll just have to readjust our funding so we're funded at the front end, and use federal funding to pick it up at the back end. Thank you.

Thank you, Mr. Krutko. Mr. Braden.

Okay. So then I want to go back to the opening statement then, Madam Chair, where the Minister said this ambitious plan is subject to continued support from the federal government. Then this plan is not subject. From what I've just heard, whether or not the federal government comes through with the bucks doesn't matter. This is the target that we're going to be proceeding with and that you're asking us to vote on. It is not subject to the federal government. Is that the way we should be looking at this now, Madam Chair? Thank you.

Thank you, Mr. Braden. Mr. Krutko.

Thank you, Madam Chair. Madam Chair, the allocation we're looking at for the federal government is $50 million over two years. If we don't get any of those dollars from the federal government, it will have an impact on our ability to deliver the number of houses we're looking at: over 500 houses over the next three years. It will have an impact on that. The crucial thing is that we have to have that federal funding to be able to deliver the 500 houses. It's just that without that federal funding, we will not be able to deliver 500 houses over the next three years.

Thank you, Mr. Krutko. Next for general comments I have Mr. Pokiak.

Thank you, Madam Chair. Some of the questions I was going to ask were taken care of by Mr. Braden already, so I wouldn't dwell too much on those ones. The only comments I would like to hear from the Minister, Madam Chair, is in regard to his mentioning consultation with MLAs and LHOs, community and other stakeholders. What I'd like to know from the Minister is what timeline is he looking at. Is he looking at the next couple of years, or the next three/four months, or what timelines? What is the deadline prior to the consultation process? Thank you, Madam Chair.

Thank you, Mr. Pokiak. Mr. Krutko.

Thank you, Madam Chair. Madam Chair, we are hoping to have the consultation concluded in the next two to three months, so we're able to have something back for our next sitting which is in June. So we're hoping to arrive at that date with the review and have that completed and have something hopefully back to committee and back to the House for June session. Thank you.

Thank you, Mr. Krutko. Mr. Pokiak.

Thank you, Madam Chair. For the past year-and-a-half I've been looking at the corporation trying to set out a new mandate, so it's been a long process coming now. If the Minister is very firm that within the next two to three months that the consultation will take place, I'm assuming that he's got his department right now working on a process for consultation. So is that correct? Is the Minister getting his department ready to visit the communities for consultation? Thank you, Madam Chair.

Thank you, Mr. Pokiak. Mr. Krutko

Thank you, Madam Chair. Madam Chair, we do have people from different areas. The committee will be chaired by the assistant deputy minister of the strategic planning from the Executive. Along with him will be somebody from the directorate of budget and evaluation, which is FMBS. Along with that, we will have our chief financial officer, Mr. Jeff Anderson, as part of this committee. Now, committee will go out to meet with the stakeholders through the local housing authorities, mayors, chiefs and MLAs, and also we will be reviewing it with other journal departments. We are hoping to have the report completed, or report back, hopefully, by the end of May, or May 15th at the earliest. Thank you.