AANO Committee Report

Mr. Colin Mayes, MP
Chair of the Standing Committee
on Aboriginal Affairs and Northern Development
House of Commons
OTTAWA ON  K1A 0A6

Dear Mr. Mayes:

I am pleased to respond, on behalf of the Government of Canada, to the Seventh Report of the Standing Committee on Aboriginal Affairs and Northern Development, relating to Aboriginal Housing.

The Government has considered carefully the Report of the Standing Committee and has taken note of the recommendations contained therein. The Standing Committee's Report demonstrates the commitment of Members of Parliament and the role that Parliament can play in addressing the housing needs of Aboriginal peoples in Canada. The Government values the work of the Standing Committee and the contribution that the Report provides to our collective effort to improve the housing conditions, and in turn, the quality of life, of Aboriginal people on and off reserve and in the North.

The Government acknowledges that the housing situation on many reserves is inadequate, and that it can contribute to poor economic and social outcomes and contributes to the gap in quality of life experienced by First Nations peoples. The Government also recognizes that simply putting more money into existing programs and services is not the solution to address the housing challenges on reserve. Clearly, structural reform and innovation are required in order to transform the housing system on reserve. By dealing with root causes and structural issues, and by implementing strong accountability and governance structures, concrete improvements in outcomes can be achieved.

The Government has already demonstrated a commitment to innovation through the promotion of market‑based housing on reserve. Market‑based housing refers to a situation where individuals obtain housing using their own financial resources, generally without any government assistance or subsidy. A mainstay of the housing supply in Canada, market‑based housing includes both individual home ownership and private rental housing. Building and owning a quality home instills a sense of pride and responsibility thereby improving overall quality and ensuring that the home will be there for future generations.

First Nations and Canada's New Government have been considering ways to overcome the barriers to sustainable housing markets on reserve. We believe that with appropriate strategies, First Nations communities should be able to enjoy the same benefits of market‑based housing as enjoyed by Canadians living outside reserves. Based on data from the 2001 Census, some 30 to 40 per cent of on‑reserve households may be able to afford to own their own homes.

On April 20, 2007, the Government announced a $300M First Nations Market Housing Fund (FNMHF) that will help create a housing market on reserve. The Fund will be an additional tool to help First Nations address their housing needs. Through this Fund, it is anticipated that up to 25,000 new housing units over 10 years could be provided ‑ housing that offers a solid, progressive step towards increasing quality on-reserve housing stock. The Fund will respect communal ownership of land as defined under the Indian Act.

A critical component to the FNMHF will be the opportunity for a portion of the Fund’s revenues to be used in the development of the capacity of First Nations related to the implementation of market‑based housing. Capacity development efforts will expand upon local community skills and improve their self‑sufficiency, and focus on the promotion of excellence in housing-related policies and practices, such as financial management, property management and loans administration.

This innovative approach to market‑based housing will improve the quality of housing on reserve, increase the supply of housing and provide First Nations families and individuals with a means to build equity and generate wealth by enabling more individuals to own their home on reserve. This fund represents a fundamental shift in how Canada's New Government supports housing on reserve and builds on best practices demonstrated by First Nations themselves.

The design of the FNMHF will be informed by significant input from First Nations, First Nations technical experts, the AFN, and the private sector financial community to create sustainable housing solutions supported by strong accountability and governance structures.

In addition to the bold measures to promote market-based housing, the Government will be undertaking comprehensive reviews of a number of areas in order to significantly improve outcomes for the housing system on reserve. To support the provision of market-based housing, and the access to private sector capital, the Department of Indian Affairs and Northern Development (INAC) will work with First Nations and look at ways to increase the security of tenure and to improve their capacity. In addition, INAC will continue to work with First Nations to improve their capacity to manage their land base. As the supply of market-based homes increases, INAC, First Nations and other agencies will also explore innovative approaches to financing infrastructure on reserve in order to expand the supply of serviced lots.

The Government will review the 1996 On-Reserve Housing Policy, in consultation with First Nation communities, technical experts, and First Nations organizations across the country. The goal of that review is to develop new, innovative, and community‑based approaches to on‑reserve housing that will bring about significant improvements in housing outcomes, such as greater quality of housing, longer term durability of the housing stock, and improvements in the overall adequacy of housing on reserve. The review of the Policy will also provide a clearer understanding of roles, responsibilities and actions of each party.

These new directions will also be undertaken with a concern for the promotion of health and safety by improving the quality of the housing. Comprehensive community-based housing programs should ensure proper maintenance of the housing units in order to protect the health and safety of the occupants. The goal should not only be to construct new homes to meet community needs but to construct new homes in accordance with the appropriate housing standards and building codes.

Taken together, support for market‑based housing and the review of the 1996 Housing Policy will result in the implementation of a sustainable on‑reserve housing strategy.  This strategy will be characterized by increased individual responsibility for and ownership of housing, social housing for those families requiring assistance, shelter allowances that permit effective rental regimes, encouraging business and skills development opportunities in the housing sector and alternative approaches to finance housing-related infrastructure.

Off reserve, the design and delivery of housing programs for Aboriginal people is generally the responsibility of the provincial government, often with federal funding provided through CMHC. The Government of Canada has made considerable investments to support affordable housing, including $1 billion for the Affordable Housing Initiative to increase the supply of affordable housing; and an $800 million affordable housing trust, in Budget 2006, for provinces and territories to alleviate pressures with respect to the supply of affordable housing. The Government encourages a portion of these funds to be directed to Aboriginal households. In December 2006, the Government announced a $256M two-year extension to CMHC’s housing renovation programs that will assist Aboriginal households, both on and off reserve and in the North. In addition, it is estimated that about $163M of the almost $2B that the government provides annually to CMHC to support the existing social housing portfolio supports the housing needs of Aboriginal households in urban, rural and remote areas.

Budget 2006 provided $300M to assist provinces to address short‑term pressures with regard to the housing needs of Aboriginal Canadians living off reserve and to support investments to increase the supply of rental housing and enhance home ownership opportunities.

In addition to the funding in Budget 2006, the Homelessness Partnership Strategy (a two‑year, $270M initiative) was announced by the Government of Canada on December 18, 2006. While the Strategy itself is not Aboriginal-specific, it has an Aboriginal‑specific component funded at $14.6M annually and designed to meet the unique needs of homeless Aboriginal people in cities and rural areas.

There is a critical need for more affordable housing in the North. Due to high unemployment rates and high construction and operating costs, a large portion of the northern population relies on assisted housing. In Nunavut, the need is especially great.

In recognition of the particularly acute housing needs in the territories, Budget 2006 allocated $300M as a one‑time investment for housing in the territories. While these funds are not specifically earmarked for Aboriginal housing, Aboriginal people will benefit greatly, given the high proportion of Aboriginal population in these jurisdictions.

In Nunavik in northern Québec, Canada and the Province of Québec funded in 1999 a one‑time special initiative for the Inuit of that region. This was followed by a five‑year arrangement (2000‑2005) under which the Government provided $10M per year for five years, while Québec agreed to fund, for 20 years, the difference between operating costs and rental revenues. The renewal of this arrangement was negotiated in the spring of 2005 for a further five years at a federal cost of approximately $70M.

With respect to the North, in Budget 2007, the federal government addressed the issue of fiscal balance with the territories by putting the Territorial Funding Formula (TFF) on a renewed, principle‑based footing. The renewed TFF program will provide an additional $115M to the territories in fiscal year 2007‑08 over the previous year, bringing the total TFF grant to $2.2B for all three territories.

In conclusion, with the assistance of this committee and other members of Parliament, working in concert with First Nations; and provinces and territories, the Government will continue to address the underlying causes of the challenges raised by the Committee's report.

Sincerely,

Chuck Strahl

The Committee recommends that the Department of Indian Affairs and Northern Development and its federal partners with responsibilities in the area of Aboriginal housing take immediate steps, in close collaboration with Aboriginal organizations with housing expertise, to develop and implement an accelerated, co‑ordinated, comprehensive 10 year Housing Action Plan to address and remedy the critical shortage of adequate, suitable, affordable housing affecting Aboriginal people on‑ and off‑ reserve and in the North, said Plan to take account of relevant recommendations set out in previous housing reports by governmental, parliamentary and non‑governmental bodies, and:

1. commit to significantly increased annual investment in Aboriginal housing based on actual regional construction and repair costs,
2. define specific roles and responsibilities of and specific measures to be undertaken by each department and agency at every stage,
3. include comprehensive measures for capacity‑building within Aboriginal communities in areas of construction and maintenance,
4. define mechanisms and processes for federal‑provincial‑territorial collaboration with respect to programs and funding to meet off‑reserve and northern housing needs, and,
5. set clear target dates for implementation and completion of every stage.

Specific Response:

The Government of Canada is undertaking a long-term approach to achieving a fundamental transformation of the housing mechanisms on reserve. The First Nations Market Housing Fund (FNMHF) will increase market‑ based housing on reserve and provide First Nations people with the same housing opportunities and responsibilities as other Canadians. Market‑based housing is expected to increase the supply of homes by providing for up to 25,000 homes over ten years.

The market‑based housing approach will be complemented with a review of a number of key policy areas, including the 1996 On-Reserve Housing Policy. This will ensure the Government of Canada’s investments support the implementation of the housing programs in First Nations communities are as effective as possible in improving housing outcomes on reserve.

Taken together, support for market‑based housing and the review of the 1996 Housing Policy will result in the implementation of a sustainable on‑reserve housing strategy.  This strategy will be characterized by increased individual responsibility for and ownership of housing, social housing for those families requiring assistance, shelter allowances that permit effective rental regimes, encouraging business and skills development opportunities in the housing sector and alternative approaches to finance housing related infrastructure.

Off reserve and in the North, the federal government has made significant additional investments in support of affordable housing and housing renovation, in addition to annual support to the existing social housing stock, which benefits a significant number of Aboriginal households.

Significant investments in housing on reserve, for Aboriginal people off reserve, and in the North include:

• $300M for the FNMHF (Budget 2007);
• $300M trust for Aboriginal housing off reserve (Budget 2006);
• $300M for housing in the Territories (Budget 2006);
• $800M for the Affordable Housing Trust to help provinces and territories with short-term pressures relating to the supply of affordable housing including those of Aboriginal households (Budget 2006);
• $295M over five years for housing on reserve, for the construction of 6,400 new units, renovation of 1,500 existing units, and lot servicing of 5,400 units (Budget 2005);
• $256M two-year extension to CMHC’s housing renovation programs, which will benefit Aboriginal households both on and off reserve and in the North (announced in December 2006); and
• $29.2M over two years for Aboriginal people off reserve, under the Homelessness Partnership Strategy (HPS) (Budget 2006)

In addition, in 2006, INAC, Health Canada (HC), and Canada Mortgage and Housing Corporation (CMHC), supported by the input of the Assembly of First Nations (AFN), formally tabled a draft National Mold Strategy to the Standing Committee on Public Accounts to address the problems of mold in on‑reserve housing. This strategy included specific actions and responsibilities, time lines, objectives and performance indicators. Currently, federal agencies, with AFN support, are developing a process to engage First Nations on the draft mold strategy.

These new initiatives complement existing annual investments from each of the key Government of Canada departments and agencies that have a specific role in improving Aboriginal housing outcomes:

• Indian and Northern Affairs Canada: INAC provides $138M annually in funding to First Nations communities living on reserve, based on population, to support the implementation of their housing programs. This includes support for a wide range of activities including housing construction, maintenance, planning and renovation. INAC also provides Ministerial Loan Guarantees to support private sector lending on reserve.
• Canada Mortgage and Housing Corporation: CMHC provides some $123 million annually to support the construction of new social housing units, the rehabilitation of existing units, ongoing subsidies for a portfolio of over 25,000 social housing units, First Nation capacity development and other housing‑related activities on reserve. Off reserve, working in the main through federal-provincial-territorial agreements, CMHC provides annual subsidies of close to $2 billion in support of the existing social housing stock, including the on‑reserve portfolio, and annual housing renovation assistance of $128 million; of this, an estimated $163 million supports Aboriginal households off reserve. Aboriginal households may also benefit through the $1 billion Affordable Housing Initiative. 
• Human Resources and Social Development Canada: By working with communities, provinces and territories, partners in the private and not‑for‑profit sectors and Aboriginal partners, the Homelessness Partnering Strategy (HPS) encourages an effective alignment of federal-provincial- territorial investments and helps homeless Aboriginal Canadians and their families to access the range of services and programs that they need to move towards self‑ sufficiency. Under the HPS, the federal government offers the provinces and territories the opportunity to enter into bilateral partnerships to improve collaboration and develop linkages between the federal homelessness programs and provincial/territorial social services to help communities make strategic investments that will best serve their homeless populations, including Aboriginal people.
• Health Canada: Health Canada is responsible for a number of health services for First Nations and Inuit. With respect to housing on reserves south of 60, Health Canada inspects houses from a public health perspective upon the request of communities. In cases where a health hazard is identified, Health Canada advises occupants, Chief and Council and maintenance personnel as appropriate, on remedial actions that should be undertaken to protect public health. Health Canada also promotes the concept of healthy housing through awareness and educational activities in the communities. In communities north of 60, the territorial governments are responsible for public health through territorial transfer agreements of universal health care services.
• North: In the North, the design and delivery of housing programs for Aboriginal households is generally the responsibility of the provincial or territorial government, often with ongoing or one-time federal funding, or First Nations themselves. In recognition of particularly acute affordable housing needs and high construction and operating costs in the territories, Budget 2006 allocated $300M as a one‑time investment for housing in the territories, including Aboriginal housing.

Capacity building is a key component of the Government of Canada’s efforts in this regard.

• FNMHF will have the authority to spend a portion of the Fund’s revenues, up to 50% of net revenues, on targeted activities designed to build the capacity of First Nations.
• CMHC also undertakes on-reserve capacity development activities with an annual budget  of $2M. Activities include the Housing Quality Matters series of information and training sessions, available to on-reserve, off-reserve and northern First Nations and Aboriginal peoples, as well as support for First Nations housing-focused organizations.

In terms of mechanisms for federal‑provincial‑territorial cooperation, the Government of Canada uses a number of mechanisms, demonstrated in such initiatives as the Homelessness Partnership Strategy and the federal-provincial-territorial housing agreements. Through such initiatives, the federal government provides significant financial assistance to provinces and territories to achieve better housing outcomes for Aboriginal people off reserve.

With respect to the establishment of target dates, the Government of Canada has already set April 2008 for the FNMHF to begin operations. Furthermore, the Government has established a goal for the FNMHF to provide up the 25,000 market-based homes over the next 10 years.