Debates of October 28, 2010 (day 25)

I call Committee of the Whole to order. Items in Committee of the Whole today are: tabled documents 4, 30, 38, 62, 66, 75, 98, 99, 100, 101, Bill 4, Committee Report 3-16(5), and Minister’s Statement 65-16(5). What is the wish of committee? Mrs. Groenewegen.

Jane Groenewegen

Hay River South

Thank you, Mr. Chairman. The committee today would like to do Tabled Document 66-16(5), NWT Capital Estimates 2011-2012, and we would like to deal with the Housing Corporation. Thank you, Mr. Chairman.

Committee agree?

Agreed.

Okay, we will move to the capital, page 3-10, information item. With that, I would like to ask the Minister if he will bring in any witnesses.

Yes, I would, Mr. Chairman.

Does committee agree the Minister brings in his witnesses?

Agreed.

Sergeant-at-Arms, escort the witnesses.

For the record, Mr. Minister, can you introduce your witnesses?

Thank you, Mr. Chairman. I have with me, to my left, Mr. Jeff Polakoff, president and CEO of the NWT Housing Corporation; to my right I have Mr. Jeff Anderson, vice-president of finance with the NWT Housing Corporation.

Thank you, Mr. Minister. Welcome, witnesses. We are dealing with an information item with regards to page 3-10. Are there any questions? Mr. Abernethy.

Thank you Mr. Chair. I’ve gone through the list of items identified within the capital estimates, they’re information items. It looks like there are one, two, three, four, five new units under the HELP program for construction in ‘11-12, and I know there’s been a lot of talk about the number of vacancies and the Minister has made some commitments in the House about getting rid of the vacancies that exist in the Northwest Territories, but over my three years in the Legislative Assembly, I have been to a number of the communities and a lot of the communities that I go to, there are vacant HELP units. What kind of analysis is done before we decide to put more HELP units in a community? On this list I see HELP units going into Aklavik, and I see HELP units going into Colville Lake, and I see HELP units going into Fort Simpson as well as Whati. So what kind of analysis is done to determine that that’s the community that needs a HELP unit? Has there been any analysis to see if there’s a demand for those HELP units? Are there people that will meet the programs as they exist to take those HELP units?

I think we need to be cautious about creating more and more units when we have some vacancies and the department’s already challenged with trying to get rid of some of the HELP units that we have. What kind of analysis goes into play, how do we decide where they go? Those types of things.

Mr. Minister.

Part of the analysis was through the Needs Survey. Part of it was some of the units that were put down, 2009, the Member’s correct; there has been a lot of HELP units on the ground. This number is actually a little lower than was originally planned for because of the number of vacant units we have on the ground. Part of the analysis was based on the Needs Survey. There’s still a need for some of the HELP units in some of the communities. That was the reason these particular communities were chosen.

I recognize compared to previous years there seem to be a lot less HELP units being built, which I think is fine given that you guys already have a number of vacancies. Once again, I recognize that you’re working hard to fill those vacancies. There are a lot of public housing replacement lines within this capital plan. Once again, I’m curious about the process. How does one determine when a public housing unit has reached the end of its lifecycle? How do we decide to dispose? Are they all destroyed? Are some simply renovated and their life is reinvigorated, if you will? Are some of them sold off to private interests? How do we determine and, I guess, further, do we maintain a particular size of housing stock? Do we plan on our housing stock for public housing to grow or do we maintain a static number over time that we’re replacing and fixing, replacing and fixing, and disposing where appropriate? Just if you could help me understand that, that would be great.

There are condition ratings done every year on public housing units and if they reach a certain condition rating after they’ve been renovated a few times, then this one is determined that they’re taken out of stock.

The public housing replacement units that you see, as we bring in new public housing units into a community we have to remove a few of them to keep our public housing portfolio level because of declining O and M funding from CMHC. So we try to dispose of the units. I think we have 44 right now that we’re looking to dispose of.

We’ve had discussions with community groups. They’re quite interested in taking over some of these units. We’ve been able to broker a few deals with them, which worked well for the Housing Corporation. There’s an interest out there. I was at a couple of meetings recently where they expressed an interest in some of our older stock. Some we would sell off to the existing tenants, if the need arises.

Our last option would be to totally destroy the units. We’ll explore all other opportunities to put these units to use before we actually demolish them.

The next area I just have a few questions on is, I’m looking through your list and I’m seeing a lot more duplexes in here. I’ve been to a lot of communities over time and I guess I’m seeing more and more duplexes and more and more row housing type units over time. I think that’s a good direction for us to be going. I really feel that getting away from sort of single, stand-alone units over time will be better as far as maintenance costs, heating costs, if we can share some of the costs on a unit basis, construction costs, all of those types of things.

Does the Housing Corporation have a program where we’re going to be moving away from single, detached units to multi-family units? Is there any move towards apartments in some of these communities that can house a larger number of people for a far more economical cost? I mean, apartments that we can heat with a single sort of source rather than multiple sources. As far as reducing our overall costs but maximizing the number of people, have we thought about going down that direction? I see duplexes, great. Is there any thought about taking that next step to maybe more or larger multi-family dwellings?

The Member is very correct; that is the direction as a corporation that we’re trying to go. With the changing demographics across the Northwest Territories, we’re finding that we have a lot more younger people, small families, single people getting into units, and seniors. This is one that works well with the declining funding. We need to try and be as efficient as possible.

There is a move towards more multi-family type units, duplexes, triplexes, four-plexes. We have some nine-plexes in some of the communities. That is a direction that the Housing Corporation will go. It used to be that the bulk of our units were all detached units and awfully expensive to maintain and heat. If we can use a common system to heat the units, that is the direction that we are going. Especially with the changing demographics too, I think it’s the right direction to go.

I agree 100 percent. I think about our long-term costs, given that our funds are decreasing, I think it’s super important.

Which I think goes to the next thing and I know my colleague Mr. Bromley always asks these types of questions, and I know the Housing Corporation has already accepted a standard of construction that is higher than, say, the national standard. When it comes to what we’re doing, I mean, it’s a little bit more expensive to do some of these things now to increase our efficiencies, to go with pellets, to go with other things, woodstoves, all these types of things in our communities, but there is some real benefit to it. Forget the positive side of the environment and just think about the positive side of the costs. Huge opportunities here to help people reduce their costs which might address some of those things we were talking about earlier today.

I encourage you to continue to push the envelope as the Housing Corporation and move even further beyond what you’re doing as far as efficiencies in the homes, your construction techniques to help the people in those homes and ultimately you as the Housing Corporation reduce your costs, because it’s going to get harder and harder over time, especially with the decreasing funds.

I’m encouraging you to push and push and push and move further and further beyond the national standards for building to increase those efficiencies and opportunities to help us save costs. Just a comment. Doesn’t really need a response.

Just a comment. Mr. McLeod, if you want to reply, it’s up to you.

Thank you, Mr. Chairman. I appreciate the comment from the Member. It is something that as a corporation we’re constantly trying to keep on top of the technology and how we can improve the products we put on the ground. At the end of the day, you’re absolutely correct that there is a savings to the Housing Corporation. Obviously, it’s climate-friendly and a saving to the homeowners at the same time. It is something that we’re constantly trying to do, is improve the product we put on the ground.

Next on the list I have Mr. Beaulieu.

Thank you, Mr. Chairman. My first question is for the Housing Corporation Minister. I wonder what type of cycle the construction is on. I see there’s materials, labour and land development. I’m wondering if the corporation is building on three-year cycles.

Minister McLeod.

Thank you, Mr. Chairman. In some of the communities it would be a one-year cycle. In some of the smaller communities, as you can see from the list, materials are brought in one year and then labour. So it’s a two-year cycle, the short answer.

One of the needs at the community level has been a need to provide small, detached units for a certain type of homeownership clientele in the communities, and the Housing Corporation has been working on a small unit. There is a need for units that are maybe a little under 500 square feet to something that may be a little over 700 square feet. Those are fairly small units basically designed for a single person or a two-person family. I’m wondering if there’s been any progress made for that type of unit.

There has been some discussion amongst myself and the officials to put this out for an expression of interest to see what kind of feedback we get on it, what we get back for as far as pricing goes. I believe we kind of have a design in mind, one that we’re proposing to go with, and a lot of this was working with the Rural and Remote committee who felt there was a need for this particular type of unit in some of the smaller communities.

Mr. Chairman, I’m wondering if the Minister and the corporation have contemplated design-build for this type of unit.

Well, we’re looking for more innovation. I mean, if somebody wanted to put in a proposal to do a design-build, I mean, we’re always looking at ways where we can get… At the end of the day, as long as we get a quality product out there, how we come about it, I don’t think that’s set in stone. If there’s an opportunity for someone out there to do a design-build, I mean, we’d obviously welcome that too. I think that would all be part of this expression of interest that we’re proposing to put out.

Staying on the same line of questioning, Mr. Chairman, I’m wondering if there are construction regulations, or standards, perhaps is a better term, that is preventing this unit from being delivered at an economical rate per square foot.

It has to meet standard building construction practices. It has to meet industry standards, but it is not one that is preventing us from getting it out there. We just need to make sure that we get a quality product. Thank you.

Mr. Chairman, there is a lot of work being done in the public housing area in the area of replacements and retrofit and possibly, well, replacement is new public housing units. I recognize that retrofits are just maintaining the same units and retrofitting them if they’re within economical repair, and the ones that are being replaced, my assumption is that they’re beyond economical repair. Is there any possibility that those units could be put essentially on the market for individuals that perhaps could do some renovations to the unit and keep the unit or the corporation assisting maybe this type of clientele who would go for the smaller unit? Some of these units, the detached units that are being replaced may be the right size unit. I’m wondering what types of discussions has the Minister had with the corporation in that area of the disposition of the units that are being replaced.

Mr. Chair, we’re looking to dispose of some of the old units that we’ve written off, and as I mentioned to Member Abernethy, the last thing that we want to do is demolish them if there’s an opportunity for someone that might want one of these units. You know, at the end of the day, we’ve written them off because they’re beyond economical repair, so obviously it’s going to be an as-is, where-is, and Housing completely out of the picture. On the other hand, they’re going to need to be able to maintain the unit as far as looking after all the utilities and that goes.

We’re looking at different ways of how we can dispose of the units without having to demolish them, because we know in today’s environment we don’t want to be seen as going into a community and demolishing units that there’s a possibility that these units could be put to some use.

That’s one of the reasons that we had discussions with and been approached by communities that want to take on some of these old units. They understand that they’ll be getting them on an as-is, where-is basis. Thank you.

Mr. Chairman, on the retrofit of public housing units, can the Minister tell me if there’s been any discussion with the corporation on the disposition of materials that are coming off the units that are being retrofitted, possibly to give the materials to individual homeowners that may otherwise not be eligible for regular repair programs? In a sense, for clarity, I’m saying that if they take replacing the siding with a better grade of siding on the retrofit of these public housing units, can that siding be given to an individual or individuals in the communities that are otherwise not eligible for any assistance through the Housing Corporation due to various reasons? Thank you.

Mr. Chair, we have heard of stories where a contractor would be taking a unit apart and are approached for some of the materials that are coming apart. For the most part, I mean, it’s the contractor’s responsibility to dispose of this material and if they can give it away or if somebody comes and takes it, then that would be something to do.

We could probably have the discussion of maybe making it a condition of the contracts where houses are being retrofitted that they allow people to come and take the material. I’ve heard of cases where contractors allow people to actually take the unit apart and just keep whatever they salvage out of it, which worked well for a lot of people. It is something. We hear the term, “thinking outside the box” and “doing things differently,” “being a little innovative,” and if this is one of the ways that we can assist in helping people using some of the old material, then it’s something that we would consider.

I encourage the Minister to put that provision in the contracts. I think it’s very important. There are a small percentage of people in the communities that could use those materials and assist their own housing needs even though they may not be eligible for the regular programs. Thank you.

I will take the Member’s advice and in my discussions with the officials when we’re done this process, we’ll look at making it a condition of the contract where it’s appropriate and where it would help people in the communities. Thank you.

Mr. Bromley.

Thank you, Mr. Chair. I want to just ask a few questions about the plans for Dettah and Ndilo and the situation there. I understand, from the material provided by the Minister, that there will be 13 retrofits planned and four new units for Dettah/Ndilo next year, 2011-12. Are these units on this plan completely separate from those scheduled for the 2010-12 year? Thank you.

Minister of Housing.

Yes, Mr. Chairman, the Member is correct; they are completely separate from the ones that are going there now. Thank you.

Bob Bromley

Weledeh

Thanks for that confirmation. We are seven months into the year 2011. The last I understood, the units planned for this year had not started construction. Obviously, we are into the winter season now. I am wondering, first of all, what is the status of construction for the 2010-11 year. What are the expectations for carryover into 2011-12?

Mr. Chairman, we are just in the process of trying to finalize some of the contractual details. That is one of the challenges we face when we enter into these particular type of contracts. The Member is correct again; there will obviously have to be some carryover into the next fiscal year. Thank you.

Bob Bromley

Weledeh

Mr. Chairman, I realize there are challenges and in negotiating a construction by local businesses I hope that is a policy of the Housing Corporation throughout the Northwest Territories. I certainly appreciate any progress on that front, because I think that work is obviously quite critical to the communities.

I also understand that crucial delays can happen in Cabinet decisions during the prime construction season. I think that is something that the Minister might take up to see if progress can be made and the timing of those decisions. What are the cost implications for construction during the winter as opposed to during a more appropriate construction season? Will that affect the amount of projects that are able to be completed? Thank you.

Mr. Chairman, that would depend on some of the terms of the contract. There are many cases. There are some cases where there are cold weather clauses that kick in. If you are building in a particular type of year, obviously the cost is going to be higher. It is a cost that is the cost of doing business in winter when the construction season is a lot different. There will be costs. As to exactly how much, we wouldn’t be able to give that information to the Member until after these are completed or we make some progress on them, then we will have a fairly good idea of the actual cost of this. I will be willing to share that with the Member. Thank you.

Bob Bromley

Weledeh

Mr. Chairman, thanks for those comments from the Minister. I think, Mr. Chairman, this highlights a situation that we faced in all of our infrastructure in other departments. I think the government has been quite progressive. They have had an infrastructure subcommittee. I believe the deputy ministers tuned up that process quite a bit. We also, as a House, have implemented a new process for our capital budget. That has allowed that implementation.

I am wondering, it is different for the Housing Corporation, I understand. I appreciate this opportunity to discuss this now, but my understanding is that we don’t actually approve this budget until perhaps the winter session because it is somehow related to O and M.

I suppose this is a convoluted way of saying it would be great if we could begin negotiation now with the sort of okay of the House on this budget so that we don’t have these construction delays and higher costs during the 2011-12 season. Is the Minister working on this? Is there any solution to this dilemma in sight that we could actually allow negotiations to...

Again, horribly important here to get our local businesses and people employed. They sometimes take longer to negotiate. We are talking capacity building and another very important and identified role of this government. Is there potential? Is the Minister thinking about how we can tune up this approval process and budgeting process to allow that early discussion and negotiation to happen? Thank you.