Thanks, Mr. Chair. Thanks to the Minister for that. Is this a multi-year cut that is going to happen over a number of years, or is this a one-time thing? Thanks, Mr. Chair.
Thank you. Minister.
Thank you, Mr. Chair. Yes, it is over two years. For the two years, it will be $217,000. Like I said, we are watching them closely. If they need additional monies, we will support that, and we are also looking at different ways that the local housing organizations can bring in funding. For example, some of the communities are talking about how they don't have access to repairs for people who are over the income threshold, and they don't have supplies. We are just in that policy review. We are looking to see if the local housing organizations can expand to meet not only the public needs in the market housing to public housing, but can meet the housing needs within the communities as a whole. Thank you, Mr. Chair.
Thank you. Mr. O'Reilly.
Thanks, Mr. Chair. How does the corporation determine the allocation of this $217,000 reduction? Is it just a handful of LHOs, or is it all of them? How is that calculated? Thanks, Mr. Chair.
Thank you. Mr. Martin.
Thank you, Mr. Chairman. The reduction, as the Minister alluded to, the $217,000 amount over the next two years was determined through the corporation's analysis through the budget reduction exercise. This amount was identified in terms of, well, the aim here was to minimize the impact on the local housing organizations. This reduction translates into approximately 2 per cent of the budgets. In terms of how this budget reduction has been allocated, it has been allocated on a pro rata basis across each LHO based on their total annual operating budget. Thank you, Mr. Chairman.
Thank you. Mr. O'Reilly.
Thanks, Mr. Chair. That is interesting information. I would have thought that it would have been allocated or it would have been some sort of aggregate of the LHOs that are in a surplus situation, but it just seems like it was cut across the board. Can I just get someone to clarify that for me? Is this to just to cut across the board or was this an aggregate of those LHOs that are in a surplus situation? Thanks, Mr. Chair.
Thank you. Minister.
Thank you, Mr. Chair. When we looked at the allocations to the local housing organizations, we realized that some of them actually, like you said, had surpluses. Some of them actually had differing numbers. It is a formula that we need to look at, the amount of funding. As stated, we will be looking at and watching the monitoring very closely. I am committed to ensuring over the next two years that, if the local housing organizations may need more financials to be able to meet their needs based on, because they don't get all of the housing units, at that point, then we will look at reinstating from internally.
Thank you, Minister. The question was whether or not this was a cut across all the LHOs or whether this cut represents an aggregate of those LHOs with the surplus. Minister.
Yes, so the cut was across all LHOs. So far the feedback that we received is that the local housing organizations are stating to us that they are manageable. Thank you, Mr. Chair.
Thank you. Mr. O'Reilly.
Thanks, Mr. Chair. Yes, I'm a bit disappointed to hear that. Is the Housing Corporation then going to develop some kind of policy about surplus retentions and deficits for LHOs? I know the Department of Education has something similar, but is that something that the corporation is going to look at, developing rather than these across the board cuts? Thanks, Mr. Chair.
Minister.
Thank you, Mr. Chair. Yes, we have a surplus and deficit policy in effect already. The policy states that if any local housing organization is over $100,000 in surplus that they need to re-invest that into housing. My goal is that housing organizations should not have a surplus. They need to be using that money. We have critical needs in the community, so I'm trying to just let them know that building a surplus is not acceptable, that they need to actually put those into the housing and repairs that are needed in communities. Thank you, Mr. Chair.
Thank you. Mr. O'Reilly.
Thanks, Mr. Chair. I appreciate the response from the Minister. I would tend to agree that you don't want large surpluses built up over a number of years, but if they have capital needs or something, that might be a good reason to do it. Can the Minister commit to share the policy with standing committee? I just checked with my colleague, the chair of the standing committee, and the committee hasn't seen that policy and the chair is interested in seeing it. I'm interested in seeing it. Can the Minister commit to share the policy with standing committee? Thanks, Mr. Chair.
Thank you, Mr. O'Reilly. Minister.
Thank you. It's actually within our Community Housing Services Agreement, so our operating agreements with the local housing organizations. I can provide a copy of that agreement with that piece in it by tomorrow. Thank you, Mr. Chair.
Thank you, Minister. Mr. O'Reilly.
Thanks, Mr. Chair. I don't think I've ever heard a prompt answer like that before in Committee of the Whole, so that's great. In any event, I just want to go on the record. I don't think this is a good way to cut funds out of the Housing Corporation. If there are some LHOs that are in surplus, they're the ones that you should go after, not just right across the board cuts. I'll just leave that on the record. I don't have any further questions. Thanks, Mr. Chair.
Thank you. Next, I have Mr. Beaulieu.
Thank you, Mr. Chairman. Mr. Chairman, I'm at page 377. I have a question on the electrical power. I noticed that power first dropped by $1.6 million and then another drop now by $700,000. I'm wondering if that's because the Housing Corporation is moving to more user pay. Thank you, Mr. Chair.
Thank you, Mr. Beaulieu. Minister.
Thank you, Mr. Chair. That is correct. We are moving towards a more user pay. We did realize that, in a lot of communities when people are -- and not everyone, so I want to justify that -- but a lot of community members, when the Housing Corporation was paying for all the utilities, the lights were left on, the windows were left open in the winter months. The public housing units were used as the local car washes. We are trying to bring more people more responsibility within that, so the user pay is the reason for it. Thank you, Mr. Chair.
Thank you, Minister. That last remark wasn't on the record.
Like I had said before, another reason is for energy efficiency. It's not okay to have your windows open and your lights going. We need to recognize that, in this day and age, we need to be more energy efficient and energy conscious. The money that we're actually saving by making people more responsible for their utilities will be utilized for the declining CMHC funding that we will be facing in 2038. Thank you, Mr. Chair.
Thank you. Mr. Beaulieu.
Thank you, Mr. Chairman. Mr. Chairman, I wonder if the Minister could advise the House now of what the user pay is. I'll be a little bit more specific. I think it started at three cents per kilowatt hour for the tenants and then it went to six. I don't know where it's gotten from there. I wonder if the Minister could just give me a little history lesson on that. Thank you, Mr. Chair.
Thank you. Mr. Martin.
Thank you, Mr. Chairman. Yes, so the Housing Corporation has been implementing the user pay power initiative for the last few years; 2018-2019 will be the last year in implementing this initiative. We started out with a subsidized rate for power, for public housing tenants at nine cents per kilowatt hour. In 2018-2019, through incremental adjustments over the last two years, we will be going to full residential rates for public housing tenants. Thank you, Mr. Chairman.
Thank you, Mr. Martin. Mr. Beaulieu.
Thank you, Mr. Chairman. Mr. Chairman, is the vice president saying that the tenants will be paying their full power, full residential rates, as all living in residences? Does that mean they're paying their power from now moving forward as of 2018-2019? Thank you. Mr. Chair.
Thank you. Minister.
Thank you, Mr. Chair. Yes, the idea is that residents would be paying their full power, which would be at residential rates, which would actually be more economically viable, but the important thing to also recognize is that we're just currently looking at the rent that we are charging within the zones. We'll be taking that into consideration and that's one of the policy renewals that we're doing just currently at this time.
The goal is not to make people poor. The goal is to actually make people more energy efficient and responsible for their electricity and to realize that there is a cost. The cost of the power will be considered when we do the new rent assessments. Thank you, Mr. Chair.
Thank you. Mr. Beaulieu.
Thank you, Mr. Chair. Mr. Chair, that's not good news. Mr. Chair, I guess I often wondered because I don't get into the bills and so on, but I often wondered why so many people were having such a difficult time maintaining their power account, but it's so expensive in the small communities that it's difficult for the people to afford power. I felt that a user pay of a certain amount, like a flat rate for all user use, and I don't know, whether it be nine cents and whatever it was heading to was sufficient to govern the people to make sure that they are reducing their power usage, but it is not good news to hear that individuals this year, in addition to all of the difficult times -- we have heard in the House today about people appearing in front of the rental officer for non-payment of rent, and now they are probably going to be losing their power meters, at no fault to anyone, but just that people can't afford more bills in the communities. We can't afford more bills in the communities until there are more jobs.
People are, I think, going to have a real difficult time with this. I think we are going to see some serious issues here if people start paying all of their power, but that is just more commentary, Mr. Chair. Thank you.
Thank you. Would the Minister like to respond?
Thank you, Mr. Chair. Like I said, the goal is not to make people live in poverty. That is not what my goal is. We have done, over the years, a lot of investment into alternative energy and things like solar in our units and putting LED light bulbs in all of our public housing units, and those are things that should bring down the costs.
In some communities, people are only paying $70 a month. I understand that that is all they can afford, but the reality is that, down south, people are paying 25 per cent of their income towards public housing. We are charging people between 4 per cent of their income to 19 per cent is our cap. I recognize that it is difficult for people, but we are one of the most generous provinces in Canada. Thank you, Mr. Chair.
Thank you. Mr. Beaulieu.
Thank you, Mr. Chairman. Mr. Chairman, we shouldn't be compared to other jurisdictions at all. There are jurisdictions where it is common, right across entire provinces, to have 70 per cent employment rates across the provinces. In addition to that, the social housing program is designed for divestment, and it is targeted to divesting in the provinces, which is easy to do. There are many jobs down there. People are able to take over their public housing.
This government is initially trying to divest some units right now, 60 units, in fact, and now we are going to make it even more difficult for people to be able to afford to operate their house. We are going to have people evicted right across the territory if people are asked to pay all of their power.
It is generous to say that people are paying 4 per cent of their income to pay for their rent, but if the 96 per cent that they have left can't afford to feed them, then it's not so generous. At one point, seniors didn't pay anything, and seniors certainly didn't pay for power. That was reversed a few years ago. Seniors are paying. Now we are saying that poor people who are in public housing are now going to start paying power. I don't think this is going to be a good move going forward by the government. Sorry. Thank you, Mr. Chair. That's all I have to say.
Thank you. Next, Ms. Green is on my list. Ms. Green.
Thank you, Mr. Chair. Mr. Chair, I want to just follow up on a couple of responses that I heard here this afternoon. What I recall about the LHOs is that some of them had considerable surpluses, and some of them didn't have surpluses at all. How is this cut going to be applied? What is the methodology? Thank you.
Thank you, Ms. Green. Mr. Martin.
Thank you, Mr. Chairman. The Housing Corporation, as part of this implementation of this reduction exercise, does recognize that there is a need to continue to closely monitor the LHOs' fiscal situation. As part of that process, the Housing Corporation will be undertaking a full review of the LHO funding formula in 2018-2019, and we have already received a fair amount of feedback from the local housing organizations in that regard. We are expecting to implement the outcomes of that review later in 2018-2019. Thank you, Mr. Chair.
Thank you. Ms. Green.
Thank you, Mr. Chair. With respect to the current situation, which is making the cut, do I understand correctly that 2 per cent is going to be cut from every LHO, whether the LHO has a $10 surplus or $1 million surplus? Thank you.
Thank you, Ms. Green. Mr. Martin.
