Human Resources Committee on March 26th, 2015

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

Thanks very much.

Mr. Murphy, we had a good meeting yesterday with the health care co-ops, and earlier Mr. Johal from the Mowat Centre indicated that one of the greatest challenges is trying to get the data and information on which to base any kind of investment decision. But I was impressed yesterday with the amount of data that was shared. Some of it was anecdotal, but there were a lot of numbers as well on some of the successes they've had.

Does the co-op drive that? I'm just wondering why they've done so well, but he had indicated that in other areas, there's been less success and that we're not seeing that same commitment to mining the data and getting the information that's needed to justify these investments. Nonetheless, it it seemed that they had a lot of information yesterday.

[Shawn Murphy]

Yes, definitely.

Where we're seeing the difficulty with the data is across the board at the federal level especially. As you're well aware, most cooperatives are incorporated at the provincial level. There are only about 80 or 90 co-ops that fall under the federal act; everything else is at the provincial level.

Some of the provincial governments—Quebec being one of the leaders—have gone to a great amount time and energy to encourage the sector within the province to be collecting this data and to basically to be developing the needs assessment on the ground to figure out where the holes are. Then they go to the co-op sector and say, “With your help we've identified these holes. Can we develop co-ops to fill them?”

Quebec is actually working on a pilot project right now with mining companies in the north, trying to see if they could possibly bring co-ops in to work with the mines to provide the exterior services to the mines—the housecleaning and transportation needs, and stuff—as a way to reduce costs. That is more revenue into the coffers in the province.

Other provinces are slowly coming on board as well. I know that Manitoba is in the process of looking at the development of a provincial co-op development strategy, which, from my indication, is supposed to be signed shortly. So some provinces are much more avant-garde, let's say.

However, at the federal level we're still trying to play catch-up, so it's hard to get a national picture of where the needs and the holes are. But we're hoping that with these federations, such as the health care one that we saw yesterday, and other federations, we can start to work with them and encourage them to get this data so that we can make informed decisions.

[The Chair, Conservative, Phil McColeman]

Thank you.

Mr. Mayes.

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

Thank you to our guests today.

First, I'd like to ask Mr. Richter about one of the issues I've been thinking about. You mentioned that we've dug a hole here as far as homelessness and affordable housing are concerned. I guess the question is, why is there the demand? Then, how can we provide that and yet take forward some of the market-based housing that I think are outcomes, such as pride of ownership, responsibility, financial stake, and that type of thing?

At a construction group we talked about how, as you said, governments could throw in the land, and maybe local governments could come up with the DCC costs and some of the...because 45% of the cost of a house is basically taxes and charges by government, believe it or not. As well, the other thing is interest charges, where government can come along and maybe say that they will have the capital available at no interest, and encourage that.

But ultimately, in my experience as a person who has been in the housing market, what I have found is that people who have a sense of ownership, who take pride in it and have a stake in taking care of it...because what kills you is the O and M after it's built and in place.

I guess what I'm saying is this. Can you see some sort of structure where you can provide that affordable housing to the homeless and yet still have some of those outcomes, so that you would be assured that the investment will be protected and that you will see a sunset on the need?

[Tim Richter]

There are a few points in there, with the first question being, how did we get here? We can trace the rise of modern mass homelessness in Canada to the withdrawal of the federal government. Over the course of probably 25 to 30 years, there's been about a 46% reduction in federal investment in affordable housing. There's a direct correlation between the withdrawal of that funding and the rise of modern mass homelessness. A 46% reduction in housing investment over the last 25 years is, I think, a significant piece of it. There are all kinds of other large factors, but that is probably the biggest one.

With the second point you've made about the operating and maintenance costs, how do we make sure that these buildings are well taken care of? I'll tell you from experience that nobody is happier to be in an apartment than somebody's who been in a cardboard box. There will be pride in ownership and pride in possession. The vast majority of those who get in do not want to lose that housing that they've gained and will tend to take care of it.

The third point is that it's important that we figure out.... One of the primary challenges in non-profit housing development is that you need to have non-profit operators that are good at their job. We need to make sure that they can maintain the buildings well and cost effectively.

You must have developers that are prepared to take the financial risk. Most charities and non-profits are scared to death of taking on debt. We need to find a way to make it easier for them to do so or to be be comfortable doing so, or find among the non-profits those that are willing to do it. Others are not prepared to take the operating risk of having people in that need.

Mr. Butt referred to the housing first program. One of the important things we learned from housing people through the housing first programs in Alberta and from at home/chez soi project is how important those supports to that housing are, especially for those with the most complex needs. This is not just about the capital infrastructure and the financial mechanism.

There's absolutely no rocket science to building apartments or houses and financing them. There's no mystery in it; it's how we bring the money together in a creative way. The important part in dealing with people, especially those with complex needs, is the supports that can be provided. That's where the HPS program has been quite valuable and their provincial support as well.

[The Chair, Conservative, Phil McColeman]

Thank you very much.

That ends round one. Now we go to round two.

Madam Morin.

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

Thank you, Mr. Chair.

My first question is for Mr. Richter.

First, I would like to highlight your work on fighting homelessness. I know it isn't an easy cause to sell. I worked in the community for a long time, and I still work with organizations in my riding that work in homelessness. I tip my hat to you.

In your presentation, you mentioned some concrete things that the government could do to help you, such as giving tax credits for affordable housing projects, loan guarantees, land and things like that. Given that it is very difficult to measure homelessness and establish quantitative results, do you think social impact bonds could still support your cause?

[Tim Richter]

One of the benefits of social impact bonds is that they can create a discipline, as you say, around the expected outcome. You're exactly right.

Today, we can track every cow from birth to burger in Alberta but we can't tell you how many people experience homelessness in Canada, what happens to them when they're in the system, and what happens to them when they leave. We can do that in every other field; there is no reason why we can't do it for homelessness. We've begun to use systems here in Alberta called homeless management information systems. We should be able to track everybody. We know who they are and what they need. We have to move them into the system, track what happens to them, and understand what happens to them when they leave the system. But in social services, that data and those data systems are very poor.

A good example of a decent system that's not functioning as best as it could is the federal homeless individuals and families information system. That system collects data on people who are in federally funded programs, but it's very difficult on the ground, in agencies, to have knowledge of who those people are and how they move through the system. Information goes up but it doesn't flow across, so we can't actually track people through the system of care.

Until you're able to track that data and know for a fact.... For example, to prove success on a social impact bond for homelessness, you have to prove that a person is housed and has stayed housed for a year, and define how their use of the public system has been reduced. But today, without a homeless management information system, we can't track whether or not that person falls back into homelessness. In my view, you have to have a system-wide coordinated data system.

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

Thank you.

A coordinated data system is an interesting idea, but how could it be applied?

[Tim Richter]

The Americans have been using these for years. They are called the homeless management information systems. There's off-the-shelf technology; it's actually pretty straightforward. But it's a question of how you engage all of the different funders, all of the different agencies in building a standard system.

To me, frankly, the key to ending homelessness is having a coordinated homelessness system of care. It means having a homeless management information system that is the IT infrastructure of that whole system; a system that can track people coming in, understand who they are and what they need, understand what happens to them in the system, and show what happens as they move successfully to permanent housing; a system that can track the performance of those programs—we can't really do that today—and do performance management quality assurance with the programs in the system.

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

Do I have any time left, Mr. Chair?

[The Chair, Conservative, Phil McColeman]

About a minute.

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

Mr. Richter, you said that you can't do it. Why?

[Tim Richter]

It absolutely can be done. There are good examples of homeless management information systems. There are over 300 communities in the U.S. today that have them. Edmonton and seven cities in Alberta, including Calgary, have management information systems in place. There are variations of it; in Toronto, there's a shelter information system.

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

Thank you very much.

[The Chair, Conservative, Phil McColeman]

Thank you.

We now move on to Mr. Boughen.

[Ray Boughen, Conservative, Palliser, SK]

Thank you, Chair.

Welcome to our guests who are giving of their time to spend with us today.

I have a couple of questions.

First of all, Tim, your presentation centred on the idea of affordable housing. There was one statement I believe I caught in which you talked about $160 million that would create 400 units of housing. Is that a standard three bedroom house we're talking about, a two bedroom house, a bungalow?

[Tim Richter]

I think that referred to the low income housing tax credit where a $150-million investment in tax credits could create over 4,800 units. Those type of units vary in form, but they would most likely be rental housing in a kind of apartment format.

[Ray Boughen, Conservative, Palliser, SK]

Would you expand a bit about the tax credit? I'm thinking that if it's low-cost housing, the people who are buying the housing are not particularly flush with coin. So how big a tax credit are they going to realize? If their income is pretty minimal, the tax credit isn't going to help them a whole heck of a lot. What would you say?

[Tim Richter]

No, it's a tax credit to the investor, to the private equity that is put into the construction of the building. The people in the building would pay affordable rent. It's not a tax credit to the renter, it's a tax credit to the investor, a high net worth individual, for example.

[Ray Boughen, Conservative, Palliser, SK]

Okay, good, thank you.

Shawn, to what you were saying about the social finance and federated co-ops, first, what is the difference between Federated Co-operatives and the standard co-op?

[Shawn Murphy]

Federated itself is a federation, so its members are other co-ops. I think there are 260-member co-ops that form the federation. But there is no difference except it's large, it's big. Last year, they brought in revenues of $10 billion.

It still has the cooperative structure; it still lives by the co-op principles. It's just the biggest one compared to a smaller, let's say, farmer market co-op of maybe 12 farmers who've come together to sell their produce. It's still the same thing, just different in size and scope.

[Ray Boughen, Conservative, Palliser, SK]

So does each federation get one vote? Like, each member has one vote whether you have $10,000 in there or $500?

[Shawn Murphy]

Again, it's up to each individual cooperative how it wants to structure its voting system. I believe with federated co-ops, the way they work is that the 260 members each have one vote around the table at the federation. But those individual co-ops have their owning voting system within, so there are levels of democracy, to say the least.

[Ray Boughen, Conservative, Palliser, SK]

Okay, that's good.

What do you see as the answer to housing, in your point of view? Is there a role for co-ops to play in the housing market on a big scale? I know there are some co-ops that are involved in housing on a smaller scale and individually. Is there a place in the great scheme of things for the federated co-op to get into the housing market?