We fulfill our mandate through the provision of mortgage loan insurance products, affordable housing programs, research, and the sharing of expertise.
As you are aware, INAC has the lead role with respect to on-reserve housing policy. The department is a key participant in the pursuit of healthy and sustainable communities and the broader economic and social development objectives. As a result, INAC is one of CMHC's key partners in delivering housing programs, our products, and the services to first nations across this country.
First nation communities themselves, however, are also critical partners for CMHC. With the assistance of our various programs, first nations decide whether or not they will participate in a specific CMHC housing program or initiative. In other words, is the initiative the appropriate tool for that specific community's needs?
The first nation largely determines the physical design of a project that will be built. They decide, once built or renovated, who from the community has access to the low-income housing. The first nation also manages the actual construction or renovation under our programs and is responsible for the ongoing maintenance of the homes constructed. Even in the context of allocations, CMHC works hand in hand with first nations organizations, such as the Assembly of First Nations, to determine the priorities and to ensure that the limited resources flow where they can best have an impact.
At CMHC we are also keenly aware that the need for suitable and affordable housing for first nations people is enormous. We estimate that 22% of first nations members live in inadequate housing on reserve. Another 10% face overcrowding.
It's important to understand, however, that there are success stories from which all those involved in aboriginal housing are learning. CMHC works hard to effectively manage the resources we have and to maximize the benefits on the ground while respecting the autonomy and the choices made by first nations.
CMHC's strategy in approaching the challenge of housing for first nations people can be described as a three-pronged approach: first, delivery of our assisted housing programs; second, our work in aboriginal capacity development; and third, our facilitation of market-based solutions on reserve.
With respect to assisted housing, the federal government, through CMHC, supports, as I believe you know, some 626,000 existing social housing units in Canada at a cost of over $1.7 billion annually. Within this off-reserve portfolio, an estimated $156 million is spent annually in support of projects specifically targeted to aboriginal peoples. In addition, the federal government, through CMHC, supports new affordable housing supply through a $1 billion affordable housing initiative. Another $128 million in annual federal funding is provided for CMHC's suite of renovation assistance programs. These programs, which generally apply to all Canadians, also help advance housing for aboriginal peoples.
Off reserve and in the north, much of the funding CMHC receives for housing is administered by the provinces and territories. Through CMHC, there are also a number of specialized housing programs and initiatives specifically targeted to first nations on-reserve communities. In 2007 CMHC spent approximately $134 million on these housing initiatives. The on-reserve non-profit housing program assists first nations in buying, building, renovating, and administering suitable and affordable rental housing on reserve. This has resulted in, on average, around 1,000 additional units of social housing on reserve each year.
CMHC provides a subsidy to the project to assist with its financing and ongoing operation. The accountability regime also helps to ensure that housing built under this program is well built and well maintained. Specifically, CMHC requires that the first nation confirm that all units constructed conform to a minimum standard under the National Building Code of Canada. The program funding also includes a provision for the ongoing maintenance of units as well as an allocation for a replacement reserve fund to cover the replacement costs of worn-out capital items. This helps first nations keep the homes maintained over time.
CMHC renovation programs repair existing units, convert non-residential spaces into housing, and provide home adaptation funding in support of seniors. Approximately 1,000 housing units are repaired under these programs annually.
Such programming also supports the construction and renovation of the shelter network for victims of family violence across this country.
In addition to the specific program funding that I've outlined, CMHC also plays a very significant role in supporting first nations as they build their housing capacity. This is where the future lies, as without the housing capacity, many communities don't have the skills locally to maintain what they have and, equally important, to plan for future successes.
For example, I spoke a bit earlier about the new construction program. Thanks to the training and support the CMHC can provide, it often becomes the job of trained members of the first nation community itself to inspect a project during construction and ensure it is built to code, as well as for the ongoing maintenance of the on-reserve housing. In fact, more than 90% of the inspections undertaken during the delivery of CMHC programs are undertaken by aboriginal inspectors themselves.
Through our housing quality initiative, we work with individual first nations to help them build the capacity to prevent, remediate, and manage mould and related housing air quality problems. For example, we have entered into multi-year agreements with 43 band councils under which we are working to build the skills and the knowledge of their members. We offer a series of training modules tailored for the various audiences, covering an array of topics, including air quality, building practices, and renovation techniques.
Specifically with regard to mould, during the fall of 2007 a committee consisting of CMHC, INAC, Health Canada, and the Assembly of First Nations consulted with first nations organizations involved in housing regarding a draft national strategy to address mould in housing on reserve. That committee is making progress toward the implementation of that strategy during 2008. However, I will leave it to my colleague at INAC to speak today of the details of that strategy, as INAC is the lead agency and I know we are short on time.
CMHC has also helped support and develop two critically important national aboriginal associations, the First Nations National Building Officers Association--we call it FNNBOA--and the First Nations Housing Managers' Association.
FNNBOA is leading the way for other organizations, frankly, both on and off reserve when it comes to certification programs and ensuring the professionalism and maintenance of the skills in the sector. CMHC supported the development of FNNBOA through funding to help launch and establish the organization and help them develop their websites and attend events to promote their association.
The First Nations Housing Managers' Association was created to promote and enhance the professional development of housing managers on reserve. This emerging association has for its objectives the creation of a central professional network for sharing best practices. Similar to FNNBOA, CMHC has funded the initial conceptualization and development of the core organization with the intent that it become self-sustaining over the longer term. Partners again, such as INAC and Health Canada, have also participated in support of these very important organizations.
In addition to the assistance programs and the capacity developments for support that I've already spoken of, a third area of focus for CMHC is to facilitate market-based solutions on reserve in a manner that respects the underlying communal ownership of the land. Market solutions are not for every first nation and not for every member of a given first nation. However, it is about the choice and the opportunity. We believe that the more we can do to facilitate market solutions for those who can afford them, the more first nations communities can take advantage of the economic benefits of housing that most other Canadians take for granted.
The Assembly of First Nations estimates that about 30% of first nations housing needs on reserve could actually be addressed through market-based housing.
CMHC has been very active in the search for ways to facilitate private sector lending on reserve. We've been proactive in explaining market concepts, sharing success stories, and showing how our mortgage insurance products can assist.
The most recent innovation in this regard, and the one that has the potential to most fundamentally change housing finance on reserve, is the new first nations market housing fund. Earlier this month, the start of the operations of the new $300 million fund was announced by the minister of INAC, the minister responsible for CMHC, Chief John Beaucage, the new chair of the first nations fund, along with the Assembly of First Nations.
This fund will guarantee, on behalf of a first nation, private sector loans made to their members on reserve for market-based housing. The development of this fund is extremely significant for first nations people living on reserve. It represents an innovative new tool that can give eligible first nations members the opportunity to build, buy, or renovate their own homes on reserve. It is estimated that over the next 10 years, the fund will facilitate financing for up to 25,000 homes on reserve.
Over the last year, CMHC, INAC, and the Assembly of First Nations have sought the advice and input from first nations leaders, experts, organizations, members, as well as the Canadian financial community, on the design of the fund.
While the new tool is vital to improving living conditions of first nations communities, I really want to emphasize that it is also important to understand that by no means is it a complete solution, and it will not solve all the housing challenges that first nations people face. Tools like CMHC's aboriginal programs, the assisted programs, and capacity development support remain of critical importance.
As we look to the future, CMHC remains committed to continuing to deliver our programs as efficiently and effectively as possible. In terms of aboriginal capacity development, our focus remains on supporting housing quality, including mould avoidance and remediation, supporting the understanding of market solutions, and working towards building sustainable aboriginal organizations. Finally, we want to continue to facilitate market solutions for first nations communities.
Thank you again for the opportunity to meet with you today. I look forward to any questions and clarifications I can offer this afternoon.
