Human Resources Committee on Oct. 4th, 2011

[Marie-Claude Morin, NDP, Saint-Hyacinthe—Bagot, QC]

Do the provinces, which must manage all these funds from the federal government, and the recipients feel that these amounts are sufficient to meet the needs of all the provinces and territories?

[Karen Kinsley]

Certainly all provinces and territories--so it was unanimous--signed on to the framework, which was announced in July of this year. That's indicative of provincial and territorial support for the terms and conditions of the funding, as well as the process, going forward.

[Marie-Claude Morin, NDP, Saint-Hyacinthe—Bagot, QC]

Just out of curiosity, I would like to know when this and the other programs were last indexed.

[Karen Kinsley]

Thank you.

The amount of funding that is currently the subject of this agreement was set in September 2008. It was for five years, and the total envelope was $1.9 billion.

[Marie-Claude Morin, NDP, Saint-Hyacinthe—Bagot, QC]

Will the funding given to the provinces be adjusted in light of the current housing crisis and the ever-increasing need for affordable housing programs? This crisis is affecting all Canadian communities, but it is hitting first nations communities particularly hard. Can a modification be made?

[Karen Kinsley]

Perhaps I would like to speak to, as you mentioned, this most recent economic downturn. I mentioned in my comments that part of Canada's economic action plan was in fact targeted to the very question of creating more affordable housing for those in need. In addition to the $1.9 billion I referred to for the regular, if I could call it, programming, the federal government gave us a further $2 billion over two years, targeted at building new affordable housing or renovating the existing social housing. In that two-year time period, a further 14,000 projects are being created. It was very much recognized that the need was there, and an opportunity through housing construction and the employment it creates, to stimulate the economy during that period.

With respect to housing on reserves, as I mentioned, we do this jointly with Aboriginal Affairs and Northern Development Canada. About $400 million a year is spent. We spend about half of that. That amount builds approximately 700 units a year, and renovates about 1,000 units a year on reserves.

We are also looking at other ways to try to deal with some of the backlog of housing on reserves. In fact, the First Nations Market Housing Fund was created a few years ago, which we manage. It is targeted to create market housing in those communities that can support it as a way to expand housing supply, not just affordable housing, but market housing as well.

[The Chair, Conservative, Ed Komarnicki]

We will move to the next line of questioning.

Mr. McColeman.

[Phil McColeman, Conservative, Brant, ON]

Thank you, Chair.

Thank you for taking time to come and explain CMHC to us in today's version.

I do have to make a bit of a disclaimer. I was president of the Ontario Home Builders in the mid-1990s, and had occasion on the opposite side—the lobbying side—of small entrepreneurs and business people in the construction industry, to make many visits to the CMHC to discuss the issues that the business side of housing had in those days.

The one number I'm looking for, and I don't know whether you've mentioned it and I missed it, is on slide 6. It says that you deliver federal investment in housing, supporting 615,000 households in existing social housing. Is there a dollar amount that you said along with that?

[Karen Kinsley]

It is $1.7 billion per annum.

[Phil McColeman, Conservative, Brant, ON]

It is $1.7 billion, okay.

One of the things I can recall that CMHC did in those days—in the mid-1990s—was it also had a group that worked on research looking at improving standards for building codes, and doing the technical research around improving housing and construction standards. Does that capacity still exist, and to what degree does it exist today?

[Karen Kinsley]

Yes, it still exists.

To be clear, we don't do testing of materials. That is not our role. That would be the National Research Council, and it always has been. But what we do through our research is try to provide the industry—builders and developers—with state-of-the-art best practices when it comes to the built form of housing. We do technical research, primarily lately in the area of sustainable housing and energy efficiency. That is the current focus. But we have done work in areas of indoor air quality and some of the technical issues associated with construction.

Yes, we are still involved in that.

[Phil McColeman, Conservative, Brant, ON]

You may not know this, but maybe you could provide it. What would be the total appropriations for that part of your business?

[Karen Kinsley]

It's approximately $33 million a year.

[Phil McColeman, Conservative, Brant, ON]

Thirty-three million dollars are spent on that.

[Karen Kinsley]

I am just going to double-check that as we speak.

[Phil McColeman, Conservative, Brant, ON]

I'm curious to know in a little more detail the breakdown, in terms of your commercial business, of the CMHC mortgage insurance business. You mentioned in your slide presentation that 45% of your business is high-ratio, insured business in underserved or not served areas of the country. What areas of the country would they be?

[Karen Kinsley]

They're primarily rural and remote areas. Our competitors tend to target major urban centres. If you think of places like Fort McMurray, as an example, or some single industry towns, or even rural parts of provinces, they tend to be the areas that don't get attention from the private sector.

[Phil McColeman, Conservative, Brant, ON]

In terms of access to the CMHC offerings and the products you provide in your insurance portfolio, how are they generally accessed by consumers?

[Karen Kinsley]

They would go through a financial institution. At the point in time that consumers are looking to purchase a home, they would go to a financial institution. They can either do that directly, or they could use a mortgage broker to facilitate that conversation. They would then make the application to the lender, saying that they want to purchase a particular home. If it needs mortgage insurance, it is then incumbent upon the lender to forward that either to us or to our competitors for adjudication.

[Phil McColeman, Conservative, Brant, ON]

I will move on to another subject matter, and that is the provision of social housing in this country.

As we know, there are various models. Provinces obviously have the jurisdiction to decide how they're going to do it. I know, certainly from having some experience in the industry, as I said, that there are various other models that seem to hold a lot of promise in some communities. I'd cite the Habitat for Humanity model of providing housing and ownership along with assistance to provide for those in need of housing.

Does CMHC ever do a review of our social housing model in this country to determine whether it's in the best interest to hold social housing long term, or could that be developed into an ownership model, as well, for those people who occupy social housing units?

[Karen Kinsley]

Thank you. There was a fair amount in that question.

Yes, we absolutely do. We actually have a collection on our website of what we would call best practices or approaches that are being used by jurisdictions, be they provinces, municipalities, or communities across the country. Habitat for Humanity is one of those models. CMHC in fact is the founder and key sponsor of Habitat for Humanity in aboriginal communities. So we definitely see that these models in different circumstances work extremely well.

The broader issue about people in social housing being owners is that I think we have to be a bit careful, having learned from or seen from some of the experiences elsewhere that not all people are meant for home ownership. We want to make sure that we don't stretch people beyond the point where they're able to support that. In CMHC's case, we support a continuum of housing, be it rental housing or home ownership, and the tenure option is really based on the capability of the individual to support it. There are certainly elements of home ownership in the social housing portfolio today, but I would say to you that the largest share of it is rental housing.

[The Chair, Conservative, Ed Komarnicki]

Thank you. Your time is well up.

We're going to move to the next round.

Actually, Mr. Cuzner would like to switch positions with the New Democratic Party, which I'm inclined to say is fine. Unless somebody has any strong objections to it, go ahead.

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

Let me first thank Madame Hughes and the NDP for allowing the switch here. I've got something I have to get to, and I won't make it a practice or a habit, but thanks very much for doing this today.

Thank you for your presentation. You had mentioned Fort McMurray. I was back and forth from Fort McMurray for about nine years, and I know affordable housing in Fort McMurray is considerably different from affordable housing in Cape Breton. I wish I had invested in some affordable housing in Fort McMurray back in the day.

There are two programs I want to talk about: the affordable housing initiative and the RRAP program. If there's one program that really accomplishes a great deal in my community, it's the RRAP program that's administered through Cape Breton Island Housing Authority, the Nova Scotia housing authority in my community.

Over the course of the past summer, the funding for those two programs had lapsed, and the government has decided to continue to support those two initiatives. Whereas they ran separate programs before, I understand now that the money has been pooled. Could you give me an indication as to the pooling of the money? What's being attributed to each or what's being allocated to each of the programs, those two aspects?

[Karen Kinsley]

Under this new framework I talked about, which was announced in July of this year, in fact the existing levels of funding for both the affordable housing program and the RRAP program for each jurisdiction have been rolled into one pool of money. So the amounts of funding have not changed from prior years, nor has the allocation of those funds by jurisdiction changed.

So in the case of Nova Scotia, they now have the ability to take the combined funding of RRAP and AHI and determine, based on their priorities, how they best wish to spend that locally.

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

The level of funding is similar?