Debates of February 9, 2005 (day 32)

Thank you, Mr. Speaker. In my Member’s statement I spoke about the reinstatement of the rent scale increases and who it affects, Mr. Speaker. It affects the non-government workers in my riding who work hard and pay their bills on time and who are comfortable with the current rent scale because it hasn’t been changed since 1995, Mr. Speaker. Now this 30 percent increase from the 60 percent level to the 90 percent level means at least a $300 increase to their current expenditures, Mr. Speaker. I would like to know from the Minister responsible for the Housing Corporation, Mr. Speaker, what is the implementation plan for these affected tenants of the Housing Corporation?

Thank you, Mr. Menicoche. The honourable Minister responsible for the Housing Corporation, Mr. Krutko.

Return To Question 351-15(3): Proposed Social Housing Rent Scale Increase

Thank you, Mr. Speaker. Mr. Speaker, the question with regard to rent increases, this is a project that has been implemented for a number of years that was a phase-in approach. They were looking at implementing it in 1995. They were supposed to phase it in over a four-year period, so it doesn’t have a big impact on the tenants who are in social housing. It was a system that was supposed to make it fairer and easier for those tenants to realize this is what the increase was. What happened was in 1997 the phase-in was put on hold and now we are bringing it back to conclude the last two years of the phase-in. We have phase one, phase two, and in two years we are looking at completing that. The idea was instead of giving a total 100 percent increase in year one was to spread that out over four years, so you will see a 30 percent increase in the first year, another 30 percent increase in the second year, then a 30 percent increase in the third year and a 10 percent increase for the last phase-in in the fourth year.

The whole idea was to have a system in place to allow tenants to be aware that social housing is there to assist social clients and also to make people aware that we do have other objectives out there. The Member states that people are going to be impacted. A large number of these tenants will not see any increase. Sixty-four percent of the tenants will not see an increase. The other 15 percent, which takes it up to 75 percent, will see a $100 increase. The idea is to have a fair system. This is social housing for social clients. We need to ensure those other people who will be in the higher brackets get into homeownership programs to ensure that they are able to maintain their units for programs to help people get into homeownership. If you are paying that high a rent, it’s important that we look at that.

This is just the conclusion of a program, which stopped two years ago and we are now trying to implement the conclusion of the four-year phase-in. It’s not 30 percent in one shot, it has been phased in over four years. We are only implementing the third year of a four-year phase. Thank you.

Thank you, Mr. Krutko. Supplementary, Mr. Menicoche.

Supplementary To Question 351-15(3): Proposed Social Housing Rent Scale Increase

Thank you, Mr. Speaker. I don’t think I am against the implementation plan, Mr. Speaker. I am in favour that we will have to charge our tenants at the 100 percent mark, but I believe that we can graduate this plan because it’s been so long and going immediately to the 90 percent mark is far beyond what even four or five tenants can handle in Fort Simpson, Mr. Speaker.

Even so, we are forcing our tenants' hands. I don’t think they have a choice where they can go, Mr. Speaker. They don’t have anyplace else to go as an alternative. I would like the Minister to recognize that and at least commit to minimizing the increase, Mr. Speaker. Will the Minister look at minimizing this increase and eventually get to the 100 percent by next year, Mr. Speaker?

Thank you, Mr. Menicoche. Mr. Krutko.

Further Return To Question 351-15(3): Proposed Social Housing Rent Scale Increase

Thank you, Mr. Speaker. Mr. Speaker, like I mentioned earlier, the whole idea of the phase-in over four years is so it would not burden the tenant with seeing a major increase in one year. They’ve phased in the rent increase over the first two years and now we are trying to conclude that. To be fair to everyone out there, we are trying to ensure that those tenants, some 34 tenants, who will be seeing a major increase at the high end, but we also have to realize we have one of the lowest tenant rates in the country. In most jurisdictions, it’s 25 to 30 percent of your income. In the North, we are going to be increasing it from 11 percent to 14 percent. If you start looking at other jurisdictions across the country, we do have a fair rate system for social housing, not like other jurisdictions across the country. They look at 30 percent of your gross income.

So this system is to ensure that we phase it in over the next two years, but also ensure that you don’t get the whole 30 percent or 40 percent increase in one shot. We are trying to spread it out over two years.

Thank you, Mr. Krutko. Supplementary, Mr. Menicoche.

Supplementary To Question 351-15(3): Proposed Social Housing Rent Scale Increase

Thank you, Mr. Speaker. I am in agreement with the Minister, but it’s in terms of percentages. I am proposing to the Minister today let’s phase it up from 60 percent to 75 percent of the rent scale and then we both agree at the same time, as well, Mr. Speaker, that it’s 100 percent for the second year. It’s just the first year of how we are getting there. I am proposing it to be at 75 percent because what we are having here is we are going to create a sector of people who aren’t in arrears and getting them into arrears and further complicating their opportunity to get a house when it’s their turn, or to apply for other housing programs. I would like to know how the Minister will be addressing this concern of our current tenants getting into further arrears. Thank you.

Thank you, Mr. Menicoche. Mr. Krutko.

Further Return To Question 351-15(3): Proposed Social Housing Rent Scale Increase

Thank you, Mr. Speaker. Mr. Speaker, as all Members know, notices have been given with regard to the increases. Under the Landlord and Tenants Act, we do have to give three months' notice. The notice period has gone out and we are looking at implementing it April 1st. So it is based on the phase-in program. We are trying to conclude a four-year phase-in. We have two years left to go and we are in year three. So notices have been given, based on the rent scale implementation that has been put in place since 1995. So we are trying to conclude something that’s been there for 10 years. It’s something that I can look at, but in order to change it now we would have to put out notices to change the whole increase all over again. Because of that complication, I don’t think we can pull it back at this time, but we can look at it with regard to how we deal with it.

Thank you, Mr. Krutko. Your final supplementary, Mr. Menicoche.

Supplementary To Question 351-15(3): Proposed Social Housing Rent Scale Increase

Thank you, Mr. Speaker. It seems ludicrous that the government won’t be flexible on this at all. There will be a surprise if the client were to say you aren’t going to increase it to 90 percent on the scale, but reduce it to 75 because a notice did go out. I think the government can be flexible and they can say yes, you got the notice but, on second thought, we are just going to do the 75 percent for this year because we are still doing 100 percent for 2006-07, Mr. Speaker. I think this is short notice and expecting people to pay higher rents, purchase their homes and/or pay off all their arrears within a few months will have a serious impact on them. I would still like to know what the Minister’s plan is for implementing this and taking care of our clients and try to get them to be homeowners, Mr. Speaker. I don’t think this is the way to do it, by impacting their household budgets with a 30 percent increase to rent charges. Thank you, Mr. Speaker.

Thank you, Mr. Menicoche. Mr. Krutko.

Further Return To Question 351-15(3): Proposed Social Housing Rent Scale Increase

Thank you, Mr. Speaker. We are working with those clients. Like I mentioned, there are roughly 34 clients we are dealing with who are going to be seeing the bulk of this increase which will have an affect on them. We are working with them through our local housing authorities and also through our program officers and counselling these clients to make them aware how the increase will affect them and how they deal with their arrears. There is a way that you can pay off your arrears over a period of time or do a biweekly pay down of your arrears. We are working with clients to try to ensure the impact is as easy as possible. We have gone forward with the implementation of the rent scale rates at this time and notices have been given and we are continuing on that process.