Debates of October 14, 2004 (day 20)

Thank you, Mr. Speaker. My questions this afternoon are for the Minister responsible for the NWT Housing Corporation and it’s a follow through. First question, it’s a follow through to an area that I know the Minister has himself favoured in another life of this Assembly, Mr. Speaker, and it’s about affordability and availability of housing, especially on a rental side. Mr. Speaker, while the private sector and their investment is the ideal way to address this issue, we are seeing here in Yellowknife continuing upward pressure on rents and availability; and in a report that I heard on the news last week, Inuvik is even in more dire straits here. My point here, Mr. Speaker, is that while housing is a multi-level responsibility of federal, territorial, provincial and municipal governments, what are we doing as the NWT government and the NWT Housing Corporation to alleviate this problem and to provide incentives to the private sector to do what they do best, which is to build and develop? Thank you.

Thank you, Mr. Braden. The Minister responsible for the Housing Corporation, the Honourable Mr. Krutko.

Return To Question 221-15(3): Private Sector Investment In Housing Development

Thank you, Mr. Speaker. Mr. Speaker, in regard to the one for housing, we did a needs survey which identified that we do have a major problem especially when it comes to affordability of housing, but most importantly the investment to increase the amount of housing in the Northwest Territories. In Yellowknife we see a lot of development happening where the private sector has stepped in. They have taken a lot of slack off in regard to ensuring that they have a thriving industry in regard to the retail industry in providing housing for the residents of the larger sectors. What we also see is that in a lot of the smaller isolated communities there is no investment, and that is where we are having a real problem in regard to delivering this program. We do have programs by way of the Loan Guarantee Program to assist the private sector to get into that market. That’s something that I have been doing over the summer is meeting with people through the different development corporations, the different housing authorities, to get them more involved in the business of building housing.

As a corporation we can’t do it alone, we need the private sector. So that is something we are working on. We do have programs available to assist in that area so that we are working with the private sector, but more importantly through our Loan Guarantee Program we have been working with a lot of major companies. Again, a lot of these corporations will not take the risk in the smaller communities because they know they cannot get these loan guarantees or they don’t have a big enough client base to take on that investment. Thank you, Mr. Speaker.

Thank you, Mr. Krutko. Supplementary, Mr. Braden.

Supplementary To Question 221-15(3): Private Sector Investment In Housing Development

Thank you, Mr. Speaker. The Loan Guarantee Program I am familiar with and I know there has been some uptake and it is a good program. But what else can government do? I suggest that there are a number of other areas in conjunction with working with other levels of government, including our partners in municipalities, to provide incentives and tax breaks and things like this. Our corporation could be a major stimulator or catalyst for this kind of thing. I would like to ask the Minister, is the Housing Corporation considering going into other areas to help stimulate private sector investment? Thank you.

Thank you, Mr. Braden. Mr. Krutko.

Further Return To Question 221-15(3): Private Sector Investment In Housing Development

Thank you, Mr. Speaker. Mr. Speaker, as a corporation, we are developing our 10-year plan. We are looking at different initiatives. We all know that we are seeing a major decline in the amount of money we get through CMHC, so we are looking at new initiatives. One of the different initiatives we are looking at is selling off a bunch of our assets to make our units more operational. Right now, we are paying a large amount of our dollars on the operational side, in regards to the water, the sewer, the electricity. The utilities are very high in a lot of our communities. We have to find ways of bringing down that cost so we could put more money into building more economically-efficient units. We are looking at multi-units to be able to do that, where you have one mechanical system. You don’t have all of these independent housing units which are costing us a lot of money. In order to do that, we have to be able to find ways of streamlining how we do our business but also get into the area of making it more economically affordable, and also on the operational side that we don’t spend one-third of our money.

I will use an example. In Tulita we are spending almost $400,000 a year just on power. That is a large expense that is being expended. We have to find ways of streamlining our dollars, but being more competitive and also finding ways of being more economically sufficient in the way we deliver our programs, especially on the operational side. We are looking at that. We are looking at building more multiplex units, six or eight-plex units, and also ensuring that it is a more affordable way of developing housing. We also need a bigger client base that have these individual units constructed. We are looking at that. It is part of our 10-year plan.

Thank you, Mr. Krutko. Supplementary, Mr. Braden.

Supplementary To Question 221-15(3): Private Sector Investment In Housing Development

Thank you, Mr. Speaker. I take it from the Minister’s answer that there is a considerable focus going on in the Housing Corporation for social renewing and modernizing our social housing inventory. I certainly support that. I restated or refined my question to look at the market communities, Mr. Speaker, where we already have a private sector base of developers and builders. But, for whatever reason, just in keeping up with demand, therefore, affordability and availability is very difficult. Is the corporation looking at all at anything beyond loan guarantees to the private sector to stimulate more construction in market communities? Thank you, Mr. Speaker.

Thank you, Mr. Braden. Mr. Krutko.

Further Return To Question 221-15(3): Private Sector Investment In Housing Development

Thank you, Mr. Speaker. Mr. Speaker, we are doing exactly what the Member is stating. We are working with the private sector through loan guarantees. They are building units here in the city of Yellowknife. In regards to that market, we presently have loan guarantees with companies here in the city of Yellowknife which basically are in the retail business. We are open to that business with any other corporation that is out there. There is that program that is there to stimulate that segment of the economy through these loan guarantees.

Thank you, Mr. Krutko. Final supplementary, Mr. Braden.

Supplementary To Question 221-15(3): Private Sector Investment In Housing Development

Thank you. I think I have my answer there. The areas that I believe our corporation has not explored and that I would like to see some more action on, more investigation on, Mr. Speaker, are things like tax breaks to developers who create housing for lower and middle income people, and modest grants. I am not talking about something that is going to be a market disrupter, but I would like to see modest grants to developers for that area. Work with tax-based municipalities in order to help them afford some tax incentives for people, investors, to develop this kind of thing. That is where I believe we have room to grow. Be more innovative and be more aggressive. I will ask as my final question, what is the appetite of our Housing Corporation to continue these other innovations in incentives to builders? Thank you.

Thank you, Mr. Braden. Mr. Krutko.

Further Return To Question 221-15(3): Private Sector Investment In Housing Development

Thank you, Mr. Speaker. Mr. Speaker, right now a lot of programs that we do deliver are programs that we administer on behalf of the CMHC. A lot of the direction we do get is federal programs. We just administer it on behalf of the Canadian Mortgage and Housing Corporation. I have had a meeting with the federal Minister of Housing. We did discuss looking at the whole mandate of the corporation and look at restructuring it, as we heard in regards to the address by the Prime Minister and also from the Governor General in the Speech from the Throne. Basically, it was clear that housing is an issue that we have to look at nationally. It doesn’t only affect us here in the Northwest Territories, but we also have to be able to look at ways that we deliver housing by looking at a unique system that works for the Northwest Territories. Right now, the direction I was given as the Minister is to look at the mandate of the corporation and streamline the corporation so that we are focusing more on affordability of housing in the Northwest Territories, but also ensuring that we have the resources to continue to meet the demand that is out there.

Like I stated, right now, we have 2,300 units in the Northwest Territories. We realize that, from the information we are getting, we are going to need another 3,000 in the next period of time. At the rate we are going, we are not going to get there. We have to be unique with regard to how we deal with that, but more importantly, we have to work within the confines of the dollars that we do get from the federal government. Thank you.