I am informed by the Department of Finance and Canada Mortgage Housing Corporation as follows:
a), b) & c) With regard to the Barrett commission's recommendations on using the tax system to deliver assistance in this circumstance, a careful review has raised a number of policy concerns. For example, since the federal tax system in nationally based, it would be difficult to provide tax assistance to owners of water damaged dwellings in B.C., while excluding individuals in similar circumstances in other parts of the country. It would also be difficult to provide a tax subsidy for unexpected repair costs arising from a particular cause but not others such as fires, floods, earthquakes, et cetera. Because of these policy concerns, the tax system was not used to provide relief for those affected by the recent natural disasters in Ontario, Quebec and Manitoba.
d) On July 13, 1998, the Government of British Columbia introduced legislation responding to 47 of the recommendations of the Barrett commission. British Columbia noted that discussions are underway with the federal government, local government, financial institutions and building professions on another 26 recommendations, and the other 9 recommendations are subjects to further analysis.
Two bills, the Homeowner Protection Act and the Strata Property Act, were introduced on July 13, 1998, and will make warranty protection in new homes mandatory; require residential builders to be licensed and meet standards; establish an industry funded home protection office; and, increase access to information and ensure that owners and strata corporation can effectively respond to construction problems if they should occur.
The Government of British Columbia will commit $75 million as bridge financing for an industry funded reconstruction program that will provide no interest loans to owners for repairs. Priority will be given to those most in need who have exhausted all other financing options. The provincial contribution will be paid back over time through a special assessment on residential builders.
On July 17, 1998. the Minister of Public Works and Government Services of Canada advised the Honourable Jenny Kwan that Canada Mortgage Housing Corporation, CMHC, has been authorized to enter into negotiations with the B.C. government on the terms and conditions for a matching mortgage insurance fund, MIF, investment in the reconstruction program of up to $75 million for bridge financing. The minister also confirmed that CMHC mortgage loan insurance is available to enable owners of water damaged homes to fund repairs by way of existing, refinanced or second mortgages. Within its responsibility to manage the MIF in a prudent manner, CMHC will encourage early discussion and flexibility in applying CMHC mortgage options. CMHC will also continue to work with the industry and others to undertake research and transfer information of use to housing professionals. Since 1996 CMHC has committed approximately $1 million to this area.
The Minister of Public Works and Government Services of Canada advised the provincial minister that the delivery of assistance ot condominium owners through the tax system raises a number of public policy concerns. Since the federal tax system is national in scope it would be difficult to limit assistance to owners of water damaged homes in B.C.. It would also be difficult to provide tax subsidies for unexpected repairs arising from one cause, i.e. poor design and construction of homes, but not others such as floods and earthquakes.
The Minister of Public Works and Government Services of Canada noted that it would not be possible to increase British Columbia's share of the national budget for the residential rehabilitation assistance program, RRAP, because it would require funding to other jurisdictions to be reduced. Federal RRAP funding is allocated on a fair share basis among the provinces and territories.