Thank you, Mr. Chair. It's a pleasure to be here.
We welcome the opportunity to contribute to the committee's study of poverty reduction strategies.
We note that housing is one of the four main areas the committee is focusing on, and for good reason. Research has shown that good housing provides the stability from which families and individuals can leverage better social and economic outcomes—better health, better education and better employment prospects. In short, it can help break the cycle of poverty for low-income households.
Conversely, high housing costs can contribute to poverty. Nationally, we estimate that about 1.8 million Canadian households are currently in core housing need, spending 30% or more of their pre-tax income on housing. That means less money is available for other necessities like food, health care, and education. This makes it harder for families to stay healthy and to support their children's education and development, thus perpetuating the cycle of poverty from generation to generation.
As Canada's national housing agency, CMHC has an important role to play in reducing poverty through better housing. As Evan Siddall, our president, said when he appeared before the committee last April, helping Canadians meet their housing needs is our raison d'être.
One way we do this is by working with the provinces, territories, indigenous communities, and other stakeholders to ensure that vulnerable Canadians have a place to call home. Each year CMHC provides federal funding of approximately $2 billion to help meet the housing needs of low-income families, seniors, people with disabilities, indigenous people, and victims of family violence, among others. Most of this funding is used to support more than 500,000 Canadian households living in existing social housing units across the country, including in first nations communities.
Significant federal funding is also provided through the investment in affordable housing, a collaborative initiative with the provinces and territories. Provinces and territories match federal funding and are responsible for program design and delivery in their jurisdictions.
CMHC also provides funding to help improve living conditions on reserves by building new social housing units, renovating existing homes, and building capacity within first nations communities.
As the committee knows, budget 2016 included a significant boost to this annual funding, providing for $2.2 billion in new investments over two years to give Canadians greater access to affordable housing. The government has made it clear that housing is an important component of its overall approach to strengthening the middle class, promoting inclusive growth for Canadians, and helping to lift more people out of poverty. Most of this new funding is flowing through CMHC and is being used to address pressing housing needs in the short term: for example, federal spending under the investment in affordable housing has been more than doubled, with an additional $504 million over two years to support new construction and renovation of affordable housing, as well as measures to foster safe, independent living, and housing affordability.
Budget 2016 also provided more than $200 million to build, repair, and adapt affordable housing for Canada's growing senior population, allowing them to stay in their homes. Nearly $90 million is earmarked to build or renovate shelters for victims of domestic violence. Close to $574 million is being invested to renovate and retrofit existing social housing units, making them more affordable to operate and reducing their impact on the environment. Some $554 million is being invested in improving housing and living conditions in first nations communities. The immediate housing needs of people living in the north and in Inuit communities is also being addressed, with new funding commitments totalling $178 million. Up to $30 million is available to help preserve affordability for low-income households living in federally administered social housing where long-term operating agreements are expiring.
Budget 2016 also included two new initiatives aimed at supporting the construction of affordable rental housing, an important option for many Canadian households. The $200 million affordable rental innovation fund was launched by CMHC in September 2016, and offers financial support for ideas and new funding models and innovative building techniques that spur the rental housing sector. The fund is expected to help create up to 4,000 new affordable housing units over the next five years.
CMHC is also finalizing the design of a new affordable rental housing financing initiative, which will provide up to $2.5 billion in low-cost loans to municipalities and housing developers during the earliest and riskiest phases of development. Further details will be announced in the near future.
Importantly, the budget committed the government to consult Canadians and housing stakeholders on a national housing strategy. In our role as housing policy advisers to the government, CMHC has been supporting our minister, the Honourable Jean-Yves Duclos, in this process.
Last summer and fall, we led a national conversation on housing, reaching out to Canadians and a broad range of stakeholders to help identify innovative new ways to improve housing outcomes for Canadians. The consultations confirmed that this is a top-of-mind issue for many Canadians. A number of clear messages emerged. Canadians want better housing outcomes, especially for those who need the most help. They told us that housing solutions need to be people-focused, so that individuals and families have access to jobs, schools and supports in order to participate in their communities and help improve their life opportunities.
CMHC continues to support Minister Duclos in the development of the national housing strategy for release later this year. Among other objectives, the strategy will help guide and promote greater alignment among policy areas, including poverty reduction, and among various orders of government and other participants in the housing sector.
That concludes my opening remarks, Mr. Chair. Thank you again for the opportunity to be here. My colleague and I would be pleased to answer any questions from the committee.