Human Resources Committee on Oct. 4th, 2011

[The Chair, Conservative, Ed Komarnicki]

Okay.

Mr. Mayes.

[Colin Mayes, Conservative, Okanagan—Shuswap, BC]

Thank you, Mr. Chair.

I just have one question. I'm going to share my time with Mr. McColeman.

I did an announcement on behalf of the minister in one of the northern communities to do with the aboriginal community. One of the things the housing manager for the band brought to my attention was the challenges they are having with CMHC with regard to reserve housing and post-treaty mortgages on housing. What happened is that they had exhausted their ability to build houses on reserve land. They had settled their treaty and they had treaty lands, yet they couldn't access CMHC financing.

Could you comment on that? What is the problem in the act, and is there any effort to change that?

[Karen Kinsley]

This would actually be better addressed to Aboriginal Affairs and Northern Development Canada. They deal with all of the treaty aspects with respect to first nations. We just deliver housing services on reserve.

The big issue on reserve with respect to the provision of market housing is the ownership and tenure of the land and the ability to pledge that as security. It's probably a little more complicated, but the Department of Aboriginal Affairs and Northern Development could give you a much more fulsome description of the treaty process and the consequential implications of that.

[Colin Mayes, Conservative, Okanagan—Shuswap, BC]

Yes, I can understand. Because normally the band thinks as a collective unit rather an individual unit, so the band is the one that's securing the—

[Karen Kinsley]

It's the owner in common.

[Colin Mayes, Conservative, Okanagan—Shuswap, BC]

Okay, I'll turn it over to Mr. McColeman.

[Phil McColeman, Conservative, Brant, ON]

Thank you.

This question relates to a specific type of housing, and it's student housing. I know CMHC gets involved in that. I don't know the specifics of the program—and again, if it's too specific and someone has to get back to us, that's fine.

We as a government, through the economic action plan, did some precedent-setting investments in post-secondary institutions that we've never done before, but part of what we funded did not include student housing.

A number of universities are experiencing growth, and they cannot provide enough housing for the students, particularly first-year students. The private sector is available to partner on some of this work—actually, this came to me through a senior manager at the Royal Bank—but the program that currently exists with CMHC limits the participation of CMHC to on-campus housing. It limits it to buildings that would be built, obviously, on campus.

That's a pretty severe limitation to that program, given today's desire by entrepreneurs in the private sector to be involved in providing that type of housing that universities need, particularly under 3P partnerships.

Are you aware that? Has CMHC ever contemplated any change to the guidelines as they currently exist to allow that to happen?

[Karen Kinsley]

Thank you. Yes, I am aware of that.

The answer depends in part on the type of student housing we are talking about. We limit what you might consider typical student resident housing to housing on campus. Think of that as quads with a common kitchen.

Basically what we do, through mortgage loan insurance, is facilitate the financing of the construction of these facilities, again on a commercial basis. We find that accommodation is generally unique to students and unique to university communities. However, if you're gong off campus, student housing can take many forms. It can be rental housing generally; it can be secondary suites in an existing home. Provided it is not that quad and common kitchen structure, we provide financing for that. We consider it to be rental housing off campus.

The place where there's the issue is if you're trying to build off campus, purpose-built—by that, I mean designed—student housing. The problem we find with that is if there is an issue, heaven forbid, it can be very difficult off campus, in a general community, to actually realize on that for purposes of other use.

So we do student housing of different types off campus in the rental sector, and for very specific, purpose-built housing of a specific configuration, we do it only on campus.

[The Chair, Conservative, Ed Komarnicki]

Your time is up, Mr. McColeman.

We'll move to Ms. Crowder to complete the round.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

Thank you.

Are you involved in the social housing operating agreements?

[Karen Kinsley]

Yes, we are.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

So you're aware, of course, that many of those agreements are starting to expire. According to the Canadian Housing and Renewal Association, in 2009 more than $200 million was reduced from the federal and provincial governments as a result of the expiration of these agreements.

They also did a study in 2006, and they found that at least one-third of the total social housing stock, roughly 220,000 units, either needed serious repairs or generated insufficient revenues to be viable once the subsidies expired. They gave an example of the Métis Urban Housing Corporation, which actually had to sell units because they couldn't continue to operate them.

Is there any plan to reinvest the money being saved off the social housing operating agreements back into social housing?

[Karen Kinsley]

Thank you for the question.

We're very aware, obviously, of when the specific terms of the agreements expire. We have struck a federal-provincial working committee, which has actually been under way for about a year now, to look at the viability of these projects when the agreements expire.

The whole notion, when the programs were designed, was that when the mortgage was fully paid off--i.e., at the end of the operating agreements--the projects, with the low rent they were collecting and not having to pay the mortgage any longer, would be able to be self-sufficient going forward. That was the theory of the program design.

What we're looking at, and this is the point that I think CHRA is making, is that some projects and some programs work better in that regard than others. They prepared a report called “Was Chicken Little Right? Is the Sky Falling?”, and they concluded that in fact non-profit housing and co-op housing are in pretty good shape at the end of their agreements, whereas public housing is less so with its 100% concentration in low-income housing.

The working group that's been put together, and that includes all jurisdictions, is looking jurisdictionally at the portfolio of housing that's out there. They're looking at the portion of the portfolio that will in fact be financially viable, as was hoped at the outset of the program design, and that can continue on post the agreement expiry, and looking at which projects may need some reinvestment, followed by how that reinvestment might occur.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

When do you expect that working group to come out with its recommendations?

[Karen Kinsley]

There has been no time set at this point. It's still a piece of work that's under way.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

Okay.

Just quickly, on the affordable housing framework agreement, I have two comments. First, were the provinces actually able to negotiate,or were they given a done deal and told to take it or leave it?

Second, in the framework agreement, does it include reporting measures back to the federal government about the numbers of housing units built and the amounts financed?

[Karen Kinsley]

Yes, I can guarantee you, given that both of us were involved in the negotiations, they had a lot of input. Yes, it very much was a negotiated agreement among all jurisdictions. It was negotiated together. So yes, there was full input by all jurisdictions.

On the second point, absolutely there are accountability requirements to report to the federal government. We've gone one step further and said we're not just interested in the outputs, which are the number of units produced, but we'd also like to see a measure of outcome on how many people with core housing need have been served.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

Do I have time left, Mr. Chair?

[The Chair, Conservative, Ed Komarnicki]

You have a little over a minute.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

Carol has another question.

[The Chair, Conservative, Ed Komarnicki]

Sure.

[Carol Hughes, NDP, Algoma—Manitoulin—Kapuskasing, ON]

Thanks.

I don't think you answered the question earlier with respect to.... You said that $69 billion was the amount of risky mortgages you took on. Was there a risk to the taxpayers at all?

[Karen Kinsley]

No.

[Carol Hughes, NDP, Algoma—Manitoulin—Kapuskasing, ON]

There was none at all.

[Karen Kinsley]

No. The risks, and I would say they're not risky mortgages, that underlie.... Those mortgages were already insured through our mortgage insurance programs or through the private sector. There was no additional risk that the Government of Canada incurred by purchasing those mortgages.