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2 février 2005
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HANSARD

NOVA SCOTIA HOUSE OF ASSEMBLY

COMMITTEE

ON

PUBLIC ACCOUNTS

Wednesday, February 2, 2005

LEGISLATIVE CHAMBER

Department of Community Services

Affordable Housing

Printed and Published by Nova Scotia Hansard Reporting Services

PUBLIC ACCOUNTS COMMITTEE

Mr. Graham Steele (Chairman)

Mr. James DeWolfe (Vice-Chairman)

Mr. Mark Parent

Mr. Gary Hines

Ms. Maureen MacDonald

Mr. David Wilson (Sackville-Cobequid)

Mr. Daniel Graham

Mr. David Wilson (Glace Bay)

Ms. Diana Whalen

In Attendance:

Ms. Mora Stevens

Legislative Committee Coordinator

Mr. Roy Salmon

Auditor General

WITNESSES

Department of Community Services

Ms. Marian Tyson

Deputy Minister

Mr. George Hudson

Executive Director of Finance

Mr. Harold Dillon

Senior Director

Employment Support and Income Assistance (ESIA) & Housing

[Page 1]

HALIFAX, WEDNESDAY, FEBRUARY 2, 2005

STANDING COMMITTEE ON PUBLIC ACCOUNTS

9:00 A.M.

CHAIRMAN

Mr. Graham Steele

VICE-CHAIRMAN

Mr. James DeWolfe

MR. CHAIRMAN (Mr. James DeWolfe): Good morning, ladies and gentlemen. This morning our witnesses are senior staff from the Department of Community Services. This morning's topic will be affordable housing, as we continue on issues that came out of the Auditor General's Report. I will begin with the introduction of our members, beginning with the NDP.

[The committee members introduced themselves.]

MR. CHAIRMAN: I'll recognize Ms. Marian Tyson, Deputy Minister, to introduce her staff.

MS. MARIAN TYSON: I'm pleased to be here with two representatives of the department to provide information to the committee and answer questions about the Affordable Housing Program. To my right, your left, is Harold Dillon, who is the Senior Director of Housing, and Employment Support and Income Assistance. Harold has extensive knowledge in the area of housing. He is the former Director of Housing for the Central Region. Harold played a key role in the development of the Affordable Housing Program.

To my left and your right, George Hudson is with me this morning. He is the department's Executive Director of Finance and Administration. George has been in his position for about the past 10 years, and George's division assumed responsibility for the Housing budget when Housing Services merged with Community Services in 2001. I'm going to give you an overview of the Affordable Housing Program and where we are. My two colleagues will be able to answer any detailed questions that you may have about the program or any aspect of the program.

1

[Page 2]

The Canada-Nova Scotia Affordable Housing Agreement was signed in September 2002. Under the agreement, the federal government agreed to provide $18.63 million to Nova Scotia to be matched by the province and any of its housing partners, which could include private, non-profit or municipal contributions. That could be in-kind contributions, land, servicing, et cetera. In total $37.26 million in funding has been committed over a five-year period for the creation and the renovation of affordable housing units for low- to moderate-income earners in the province.

During the first year of the agreement, efforts in the department were focused on doing some research, consulting Nova Scotians and shaping the program to ensure that it met the needs of Nova Scotians to the extent that we were able to make that happen. The following objectives were determined: to add to and sustain the supply of safe, affordable, appropriate and sustainable housing; to target resources where they were most needed; and to create or repair up to 1,500 units of affordable housing. We were actually looking at from 850 to 1,500 units. I guess we explained the last time we were here the number would then be dependent upon the condition they were in and the people we were targeting. A decision was made to target the lowest income earners and put the money where it was most needed, which would mean that we would be closer to the 850 than to the 1,500.

Nova Scotia has a unique housing profile, and there were a number of characteristics that needed to be considered in determining the program framework. For example, Nova Scotia has one of the oldest housing stocks in the country and has the highest or among the highest percentage of home ownership in the country. I believe Newfoundland is similar to Nova Scotia in those respects. Low-income earners in Nova Scotia tend to be renters, and of course that would not be surprising to any people here. Housing clients include seniors, low- to moderate-income earners, income assistance recipients and people with special needs.

As a result of input received from housing stakeholders, through consultations across the province, and research conducted by the department, a program was designed for Nova Scotia that addressed the unique housing needs of Nova Scotia. Four program areas were identified: new rental housing and rental preservation, those were two separate pieces of the program; home ownership preservation; and new home ownership. So once this framework was in place, the department then was in a position to roll out the program in a comprehensive way.

The New Rental Housing Initiative covers both new construction and conversion, and is directed at the non-profit and private sector developers, including the Nova Scotia Housing Development Corporation. Under this part of the agreement, projects are eligible to receive up to $25,000 per unit in up front capital funding, with an additional $25,000 per unit available in rent supplement funding. Rent levels are set at or below average market rents, and must remain affordable for 15 years.

[Page 3]

To date the province has announced more than 193 units, representing a total project value of more than $13 million under the new rent initiative. These units address an identified need for affordable housing for seniors, people with disabilities, small families and non-elderly singles throughout the province. Projects are currently located in Middleton, Westville, Debert, Chester, Sydney Mines, New Minas, Truro and Halifax. The department expects to be in a position to announce approximately 300 additional new rental units under this initiative prior to the end of this fiscal year. We will see announcements coming out on a regular basis, as I think you have been seeing recently.

The second program area is the Rental Housing Preservation Program, which targets units at risk of being lost from the current housing stock or units requiring major repairs. This program is similar to the new rental initiative, in terms of funding and rent levels. However, it is only available to non-profit developers and the Nova Scotia Housing Development Corporation.

For this part of the program, the department has been actively promoting this initiative with non-profit groups to attempt to identify potential projects throughout the province, while the Housing Development Corporation is investigating projects specifically for mental health consumers and non-elderly singles. In 2005, several projects are expected to be announced under the Rental Housing Preservation Program.

The Home Ownership Preservation Program prevents the loss of housing stock by providing assistance for major repairs or renovations to ensure homes meet minimum health and safety standards. Assistance of up to $50,000 is provided in the form of a 10-year forgivable loan to homeowners who meet Household Income Limits criteria. That's the so-called HILs standard.

To date, the department has announced $3.3 million in funding for 114 homes throughout the province and expects to assist an additional 99 homeowners in 2005-06 and 69 homeowners in 2006-07. The average amount of funding provided to homeowners under this part of the program is $34,000.

The fourth program area is the New Home Ownership Program, which is designed to create a healthy mix of housing by building modest new homes in urban areas of revitalization. It encourages moderate-income households to remain in the community by providing up to $50,000 in assistance in the form of a 10-year forgivable mortgage. This program area is directed at non-profit developers and targets qualifying home buyers. Applicants must fall within a specified income range and the amount of assistance provided is based on income or a market adjustment.

[Page 4]

This program represents only a small proportion of the Affordable Housing Program, only 5 per cent of the total funding available or $1.4 million to be spent on this program area.

So far, six semi-detached units have been constructed in Halifax with an additional five units approved for Dartmouth through Habitat for Humanity. The department expects to create about 30 modest homes, in total, throughout the period of the agreement and is currently considering projects in Spryfield and in the north end of Dartmouth.

So to recap then, to date, in just over two years, the department has announced $11.55 million in funding for 313 units under the Affordable Housing Agreement. If you look at our proposed projected expenditures over the five-year term of the agreement, which is included in the slides that were handed out earlier, you will see a chart. If you look at that you can see that we are right on track. Looking ahead, we expect to commit all of the available funding under this agreement by March 31, 2006 and to create the targeted number of units, and to expend the funds by March 31, 2007, which would meet the requirements then of the federal government.

In the coming weeks, we plan to announce another 150 new affordable housing units and staff will begin the review process of submissions from the second proposal call. We are

also looking forward to the announcement of the second phase of the Affordable Housing Agreement with our federal partner, which was planned for the third week in January but was postponed due to the severe snowstorm.

[9:15 a.m.]

In closing, I would like to thank you for the opportunity to speak to you this morning on the Affordable Housing Program. We look forward to providing you with additional information in response to any questions that you may have. Thank you.

MR. CHAIRMAN: Thank you, Ms. Tyson. I should have mentioned earlier that the Auditor General, Roy Salmon, is with us, as usual, today. Good morning, Roy. Also, Mora Stevens, Clerk for the Public Accounts Committee, along with Rhonda Neatt, from Hansard. I want to welcome everyone here today.

We will begin, as usual, 20-minute rounds, starting with the NDP. We will start with Maureen MacDonald.

MS. MAUREEN MACDONALD: Good morning and thank you for your presentation. I have a couple of fairly short questions. The first I have is, can you tell us of the 193 units that have been announced under the New Rental Housing Initiative, how many of those units actually have families or individuals living in them right now? How many units of housing are currently occupied as a result of the agreement from two and a half years ago?

MS. TYSON: I'm going to ask Harold Dillon to respond to that question.

[Page 5]

MR. HAROLD DILLON: Thanks, Deputy. How many actually have people living in them? I don't have the number right off the top of my head. I am quickly scanning down through a list of projects that have been approved and doing a quick mental count of the ones that I know are finished and occupied. Projects like the units in Halifax, Middleton, there is a project in Westville - I understand it's finished. The one in Truro, I'm not sure of the status of that, although it's under construction. It's probably not finished yet. It's a larger project. Northwood is under construction. So there are probably . . .

MS. MAUREEN MACDONALD: There are 18. I can more or less answer that question for you as you run through. I think there are probably 18, given the list you've given, the six units on Creighton Street and the 12 units in Middleton.

MR. DILLON: There are 15 in Middleton and four in Westville. So there are probably something in the area of 30, potentially, that are occupied under the new rental.

MS. MAUREEN MACDONALD: So, essentially, we are looking at a lot of announcements that have been made, which we certainly welcome, but not a lot of units that are up and running, in terms of providing affordable housing at this time. Is that a fair statement?

MR. DILLON: Yes, and that's probably typical. The lead time from the time a project is approved until a developer gets their permits, constructs the building, does the lease up, it's typically anywhere from eight months to 14 months. So it won't be unusual for the actual occupancy of these buildings to lag as much as eight months to a year behind the actual approval of projects for the new rental, where you're starting from scratch.

MS. MAUREEN MACDONALD: My perception is that other provinces have not taken such a long time to implement their Affordable Housing Agreements with the federal government, when you look at provinces like British Columbia, for example, who added a fairly significant degree of affordable housing stock in a short period of time. I'm wondering why it is that our process is so extraordinarily slow when our need is so extraordinarily great.

MS. TYSON: Is that question being directed at Mr. Dillon?

MS. MAUREEN MACDONALD: Anybody.

MS. TYSON: I can comment, Ms. MacDonald, that in my discussions with my colleagues at the federal-provincial table, I believe Quebec is well ahead but, generally, I think we are on track with other provinces. That is my understanding and in discussions with the federal government, that's my understanding, but I can't be more specific than that. I don't know if Mr. Dillon is able to be more specific than that.

[Page 6]

I think we had a projected ramp-up time and I believe we were slow getting started. That was planned due to the consultations and the planning process. Should we put our money in moderate income level housing or should we aim for the lower income level? What do the stakeholders think? What information can we gather about Nova Scotia? That meant that that work was done first at the early stage and I believe you're seeing more announcements now coming more quickly together.

You'll see a curve in those slides. We are approaching the peak and then we'll tail off toward the end of Phase I of the agreement. So I think we're on track. I don't think we're unusually slow or slower than other provinces, generally speaking.

MR. DILLON: If I can add to that. The Province of Quebec has been off the mark very quickly on most social programs, I suppose, but particularly this one. They had a program already underway in the province so they simply took the federal money and added to their own program and carried on. They signed on early and are likely to finish up early, way ahead of any other province.

B.C. also had a similar program underway and when this Affordable Housing Program came along, they simply piggybacked onto it and they got into the delivery very, very quickly. Those two provinces, I think, are exceptions, generally speaking. The rest of the provinces are more or less matching Nova Scotia's ramp-up period and pace of getting the program delivered. Some provinces are behind us in delivery, some are slightly ahead of us, but we're sort of in the middle of that other pack.

A similar situation occurs for the second agreement. As you may have realized, Quebec signed the second phase of the agreement almost immediately and B.C. very shortly followed. The rest of the provinces are now slowly lining up to sign the second part so the second phase is following a similar pattern to the first phase.

MS. MAUREEN MACDONALD: The last question I have before I turn it over to my colleague is, can you tell us what the division is or how it breaks out between expenditures in the private sector delivery of the new rental initiative, and public sector delivery? You've indicated that $13 million has been allocated and there have been announcements for this program and that it can be delivered in a variety of ways. How, in fact, is that $3 million broken out between private sector delivery or not-for-profit delivery and private sector?

MR. DILLON: You're speaking of the new rental program?

MS. MAUREEN MACDONALD: Yes, the new rental initiative.

[Page 7]

MR. DILLON: So if the number is $13 million roughly, I think that's noted to be the total of the commitments made under provincial and federal money towards activity. We've done a rough tally of the actual value of all those projects that are going to be built and it's something, probably, in excess of $20 million. In addition to the contributions being made, the federal-provincial contributions, because they're an effective form of subsidy - let's call it that - the owners of those properties, both non-profit groups and private sector groups are also putting an extra $10 million, or maybe even more, capital of their own. The overall value of those projects - we didn't put this in our speaking notes - is a number that will vary over time. It's something in the order of $20 million or $20 million-plus.

In terms of how many of those groups are private and how many are non-profit, it's a mixture at the moment. Some of the larger projects like Northwood, in Halifax, are non-profit corporations. At the head of it - although I think they have a private developer actually building the building for them so how you would describe that one - is a mix of non-profit and private investment, I'm not sure how you would propose to do that. The Middleton one is our own and so on.

MS. MAUREEN MACDONALD: Can I just interject for a moment? I basically understand that the construction will be done in the private sector, I really don't know of any construction that doesn't occur in that way, that's how we build our schools. What I'm looking for is the owning and operation of the housing at the end of the day, the actual physical asset of the new housing that's constructed and created. What is the proportion of that that's in the private sector and what is the proportion of those expenditures that are in either public sector or not-for-profit institutions?

MR. DILLON: I can get you that number. Right now, in a quick rule of thumb, it's probably about half and half.

MS. MAUREEN MACDONALD: Okay. I would very much welcome receiving that information.

MR. CHAIRMAN: It's agreed that the undertaking will be to provide those figures to the clerk, please.

MR. DILLON: Sure.

MR. CHAIRMAN: The honourable member for Sackville-Cobequid.

MR. DAVID WILSON (Sackville-Cobequid): The need for affordable housing is greater now than it was 10 years ago in our province. Thousands, if not tens of thousands of Nova Scotians are at risk of homelessness should their income drop or an event take place that takes away from their monthly income.

[Page 8]

The Stats Canada census report, which I'm sure your department has looked over, indicates that the shelter cost to income ratio has been rising across the country, not only here in Nova Scotia, at an alarming percentage. They state that if you're paying 30 per cent or more for your housing or shelter, those are the core people at risk of possibly being homeless, losing their homes, or being at risk.

With the stats they did survey Nova Scotia but it was in HRM. I'm sure if they would have checked throughout the province, the same percentages would be seen in each of our communities, not only here in Halifax. In that report it was indicated that about 43 per cent of seniors who rent in HRM pay over 30 per cent of their income on shelter and 47 per cent of families with children pay over 30 per cent for their income costs. These are alarming percentages and the figures in Halifax would work out to about 15,000 residents here, in Halifax, alone who would be at risk.

With the agreements that we've signed with these private and many of them are for-profit developers, I understand that the contract you have with these developers is that they have to provide rent at or below the average market for 10 years. My concern with that is what happens after 10 years? Are we going to be sitting here fighting with developers on hopefully maintaining an affordable rent for people who are living in these new developments?

For the government, the shelter allowance today ranges from $235 for a single to $600 for a family. The average cost for a two-bedroom apartment in Halifax has risen about 21 per cent over the last 10 years and I think the average is about $721. Our shelter allowance doesn't reflect what your department is putting on private developers when it comes to affordable housing. Can you maybe enlighten us on if you are looking at our own departments for providing affordable housing, especially to those who need the shelter allowance? Those are our most vulnerable residents here, in Nova Scotia. Can you maybe enlighten us on what is happening around our shelter allowance and are we going to consider ourselves as a group that has to provide affordable housing for our residents?

MS. TYSON: I can say that the department is well aware of the statistics that you're referring to. One comment that I would make is that this particular area is a little different in that there may be as many as 50,000 people or families - there are a lot of people attending university and those people are included in the statistics, it's our understanding, and most people attending university are low income, don't have very much money at that stage in their lives. We have currently asked and are awaiting a breakout to see - we're going to try to analyze the impact of the university on the situation in this particular area. That's one thing that we're doing.

[9:30 a.m.]

[Page 9]

When you refer to the shelter rates that we pay, yes, the shelter rates are examined in the department along with all of the other pressure areas in preparation for the budget, and that's part of the budget process. Those pressures and needs will be up to government to look at throughout that process.

MR. DAVID WILSON (Sackville-Cobequid): Is your department indicating to government or to Cabinet that this is an area we need to look at? I looked at the paper today on rents available around this area, and it's astounding, the price. I wouldn't want to have to rent my own place today. I have a brand-new apartment building going up across from my constituency office. I called the other day to find out how much the rent was, and a two-bedroom is going for $1,000 a month. Definitely, we need to take the initiative to look at providing more assistance, especially to our most vulnerable. I think those on assistance are those who we really need to take care of.

I understand, yes, we have an increase in students here in Halifax, but I don't think, myself, that Stats Canada is surveying only students. I believe this number truly reflects the residents who are here to stay, not just students. With the increase of tuition, I beg to differ that the students you see in university today are probably better off than you might have seen 10 years ago. You need to have a better income, your family needs to have a better income to attend university.

Another area that I've been hearing a lot from, especially in my constituency, and I know it's throughout the province, is our seniors and the affordability and availability of seniors' residences, seniors' apartments or assistance for these people. One example is I'm working on a case in my constituency, an elderly lady has applied for seniors' housing in my community, we have three complexes, and has been placed on a waiting list. She applied last Summer and has been told that she has from a year at the earliest to three years on this waiting list.

What are you doing around the needs for our seniors in our communities, many who live in our communities, most have lived there their whole lives, have roots there, families there, want to stay there, and are finding themselves pondering leaving the community to go to other parts of the province, maybe less desirable parts of the city or the province, where they can find cheaper rent? What are you doing to address the seniors' needs? In the announcements that we have made to date, are there any announcements designated as targeted towards our seniors, hopefully to keep them in our communities?

MS. TYSON: I'll comment that we're doing a number of things to assist seniors. I pointed out in the rental preservation part of the program, we're promoting that initiative with a view to attract non-profit groups to come forward with proposals specifically for non-elderly singles, seniors, mental health consumers. In addition, the Affordable Housing Agreement itself is enabling us to not only build new rental units, but repair existing rental units and individual homes. In Nova Scotia quite a few seniors do want to remain in their

[Page 10]

own homes, and they're only able to do so if the homes are safe and in good repair. We have targeted a fair amount under Phase I, we anticipate that we will target a fair amount under Phase II and, in addition, the department has been able to put in significant additional funds this current year. So we expect to do a lot of work in home repair, in particular for our senior population, through those efforts.

I think it's a combination of attempting to do what we can to keep those seniors who wish to live in their own homes, that's a high percentage, and throughout Nova Scotia, and also make sure that there are rental units available for seniors in all parts of the province and in particular in the metro area where I think there is more pressure for all categories of lower to middle-income residents.

MR. DILLON: Could I add to that? Perhaps just to get back to Maureen's question, I did a quick tally of our units approved to date under the new rental program. Of about 200 units approved to date, 138 are in the non-profit sector, and the balance of 60-odd are in the profit sector. So about two-thirds or better of the program to date are in a non-profit sector of one sort or another using community groups, community agencies and so on. I may have to check with my staff to give you the definitive answer, which I will give you, but just for the tenor of today's meeting, it's about two-thirds/one-third or 70/30, something like that.

Seniors' housing in metro, there are about 2,300 units of public housing in the seniors' portfolio, managed by the Metropolitan Regional Housing Authority. They have a turnover, annually, of about 10 per cent to 12 per cent in the portfolio. The natural yield every year is something in the area of 200 to 300 units, just through natural turnover. They had a waiting list last year, according to my stats for seniors in metro, of 310. So the waiting list, to some extent, matched the annual turnover. So in most cases the anticipated waiting time would be in the order of a year.

One of the variables, of course, is seniors may want to be particular about which project they may want to go to, and if a particular project does not have turnover and that's where they want to go, the authority has a system that allows them to stay on the waiting list longer, even though they may be offered units somewhere else and decline them.

MR. CHAIRMAN: Excuse me, I'm going to have to rein you in there. We're past the time allotment. We'll move to the Liberal Party, and perhaps we can come back to that, Mr. Dillon.

Mr. Steele - sorry, Graham.

MR. DANIEL GRAHAM: I don't know how often that mistake has been made. I'll try not to comment in the absence of the chairman and out of respect for the chairman of this committee.

[Page 11]

[Page 12]

Thank you for coming. This is an issue that continues to be of great concern. I think the broader question of housing is a matter that is fortunately receiving more attention. It's one that continues to be a concern across the province. It's of particular concern for my constituents in Halifax Citadel. The issue of homelessness is often, and sometimes inaccurately, associated with people who are on the street. The people who are most visible with respect to that on-the-street question are often people who live in or spend their time in my constituency of Halifax Citadel.

So it's a matter of real concern to my constituents, and the affordable housing question is one of many. It's perhaps the most visible of the initiatives that have been promised. There was great hope back in September 2002, when the federal government came to the Airport Hotel and, with the provincial government, said that there was going to be approximately $37 million for affordable housing.

I'd like to get a clearer sense of what it is that's being spent and what else is perhaps lumped into that $37 million. Perhaps the easiest way to do that is to go to the slide that you've provided us on Page 5, which has the graphs indicating expenditures planned. My first simple question is whether or not that is provincial and federal funding, or whether that is for federal funding?

MR. DILLON: Combined.

MR. GRAHAM: Ms. Tyson, you indicated that the amount would be paid in full. My understanding is that this is a five-year agreement. I may be bad with my math, but when you add the first four bars, which bring us to the end of that five-year cycle or close to the end of it, I would assume, or within six months of it, particularly considering that there's only $1.4 million more, with my challenges with carry-overs and adding, that still doesn't add up to $37 million. I'm wondering if you could clear that up?

MS. TYSON: I think we're talking about rent supplements, which will continue over a number of years. Mr. Dillon, could you add to that?

MR. DILLON: If you take the final bar, which was $1.4 million on the top of it, that is a stream of rent supplement payments that will be made to support clients during the 10- to 15-year period when the housing retains affordability. That will be expended by the province on an annual basis to support those rent supplements.

MR. GRAHAM: But this is a five-year agreement and the agreement was that within the five-year time frame there would be $37 million spent. Are you saying that . . .

MR. DILLON: Committed.

MR. GRAHAM: Committed?

[Page 13]

MR. DILLON: All of the federal money has to be spent, and the province's money can either be spent or a stream of rent supplements over a designated period. That's a provision in the agreement.

MR. GRAHAM: So you could commit to spend $1 million over the next 18 years, and you'd satisfy the terms of this agreement?

MR. DILLON: Ten years.

MR. GRAHAM: Theoretically.

MR. DILLON: It's a stream of payment, presently valued on 10 years, for some of the new rental units where there's a supplement.

MR. GRAHAM: I'm curious because, and this is an issue of expectations, and there has been, I'll be square about this, the potential that expectations have been created and then there's a potential letdown. At the worst there may have been some puffery around the size of the commitment that the province was making to this. I'm not attributing that to anyone in particular, but I think it's important to check what may be on the record with respect to what's expected to be spent on this. I'm dealing still with the question of overall dollars.

I refer to the testimony on the last occasion when, certainly, Deputy Minister Tyson was here, and in particular to Page 6, I believe it is, of the materials that we have. Ms. Tyson remarked that "The department is still finalizing its research but intends to take full advantage of this program so that over the course of the program, which ends in 2007, we will expect to have taken full advantage of it between the partners of the province and the province, to have expended the $18.6 million." Now, a plain reading of that would suggest that the $18.6 million was to be spent in the five years.

MS. TYSON: I see that, Mr. Graham, and either my comment was loosely worded or at that point we had not received agreement from the federal government in order to utilize rent supplements. There was some negotiation on that point and some discussion on that point. It wasn't immediately apparent that we could do that.

Staff believed that that is an excellent way, though, to utilize the province's share of the funding because it does guarantee a supplement and it does guarantee a lower rent for people over a long period of time, as opposed to asking landlords to do that, if the money were to be paid up front and either having to expend a lot of money checking or following up on that, or relying upon landlords totally to stick to that over the long term.

[Page 14]

So I'm not sure exactly when the federal government agreed that we could use rent supplements. My recollection is that one of the other provinces was able to convince them that this was a positive thing to do. Nova Scotia found out about that and jumped in at that point.

I apologize if - and, again, I don't recall whether my comment meant that we were going to be taking full advantage, that I loosely worded it, or whether we, at that point, had not reached the agreement with respect to the rent supplements, in which case we would have had to expend the money if we couldn't carry it over a period of years.

MR. GRAHAM: Can you provide to this committee the documentation supporting the discussions and/or agreement around extending it out beyond the five-year period?

MS. TYSON: We'll provide whatever we have, yes.

MR. GRAHAM: Okay.

MR. DILLON: In fact, if I can add to it, if you go to the original agreement - and I think you probably have a copy of it in your file - there is, in Schedule B or C, at the back, a clause that allows for the province's contributions under the agreement to be a stream of rent supplement payments, present value over time. So it's allowed in the agreement. We eventually discovered it was actually permitted in the fine print in the agreement.

I don't want to do a revision of history there but I think the comment in Hansard was around the lines that we intended to fully draw the federal money - and it says $18.63 million. In other words, we don't intend to allow any of the federal money to be returned to the feds unspent. I think even at that early stage, which was about a year ago, we were anticipating that the province's stream could be in either capital or rent supplement, but it's clearly in the agreement the federal portion can only be in capital, it cannot be in rent supplement.

MR. GRAHAM: Okay. The short strokes, however, are that the agreement was originally intended for five years. We use the word "spend" and I'd like to come back to the whole notion of whether we are spending money or whether we are providing contributions in some other fashion. But over the five-year period, now, when we are, I expect, drawing down the $18 million of capital, cash, from the federal government, how much provincial cash is going in?

[9:45 a.m.]

MS. TYSON: That would be provincial and partner, Mr. Graham. There are not a lot of partner contributions but there are some.

[Page 15]

MR. DILLON: Our current funding target would suggest out of the provincial required contribution, which is $18.63 million, about half of that will be actually expended before the end of March, 2007 and the other half will be spent in the following eight to ten years in rent supplements. So we are going to spend about $18.63 million federal money, about $9.5 million provincial money by, say, March 31, 2007 yardstick, and about another $9 million, $9.5 million will flow in rent supplement payments for rental units that have been constructed in the intervening period, and we'll have subsidized rents for 10 years.

At the end of the day, the expenditure will have the same impact, whether we provide it as a capital contribution, now, and therefore reduce the mortgage cost and therefore reduce the rent cost, or whether we contribute as a rent supplement through the eight-to 10-year period.

From the province's perspective, the advantage that gives us by doing rent supplement is, we are actually able then to ensure that the people who are actually being housed and gaining the subsidy support are, in fact, low-income people. So we will be doing income testing and various things to ensure that the provincial expenditure targets where government has decided it should be targeted, low-income individuals.

MR. GRAHAM: I appreciate that. There is a limited amount of time that we have in today's discussion so if it's possible - and I don't want to usurp the role of the chairman to restrict the answers to the questions that are being asked - and I appreciate that the elucidation really helps us understand it more fully, but there are specific things that I think are important to understand.

The $18 million that was said to be promised over the first five years now appears to be $9 million, plus $9 million to be streamed out over a period of time after that five-year program. Can we assume that that $9 million that was $18 million is all cash or does that include, in part, contributions?

MR. DILLON: The $9 million over time?

MR. GRAHAM: No, the $9 million in the five years.

MR. DILLON: The $9 million in the first five years is probably 95 per cent cash. There will be some provincial land, perhaps, become part of the contribution at market value but for the most part, the vast majority of that $9.5 million will be provincial subsidy.

MR. GRAHAM: How much of it would be coming from partnerships?

MR. DILLON: To date, the percentage from partnerships has been very small, probably less than 10 per cent, so something in the order of 5 to 10 per cent at the upper end.

[Page 16]

MR. GRAHAM: Who does that partnership come from? Private sector?

MR. DILLON: It can be private sector or non-profit groups who might have land that is free and clear, that can be considered an equity contribution. It can be in kind contributions from municipal units, some tax incentives and so on but, to date, they haven't amounted to a significant impact, financially, on the contributions.

MR. GRAHAM: Okay.

MR. DILLON: Some of them might be over and above the $9.5 million. There are cases where the contributions of others, in fact, are over and above, not in place of.

MR. GRAHAM: So in terms of what gets booked on the budget as a line item expenditure for the provincial government, how much money over that five years is actually booked as an expenditure?

MR. DILLON: Will be booked by the end of that term?

MR. GRAHAM: Well, yes, that we do forecasts right now.

MR. DILLON: That's a challenging question.

MR. GRAHAM: It's the same one that I asked when you were here before. I know you weren't here before but when this issue was before this committee.

MR. DILLON: I was probably here but - it will be - I'm not sure, somewhere in the magnitude of $9 million. It might have up to $0.5 million of variance based on in kind or other contributions. But I would say looking out another two and half years, it will be in the order of $9 million, contributions on the books of the province.

MR. GRAHAM: When the headlines flashed originally on this program it said that 1,500 units were being built and perhaps the fine print then that didn't get printed was that it in fact said, up to 1,500 units. That certainly was a point that, Ms. Tyson, you made when you came before the committee and we talked about the potential speed or the lack of speed associated with the development of the 1,500 units. It brings me back to the question of our expectations for the number of units.

In the five-year span that we have anticipated for this agreement, how many units do you expect to have completed?

MS. TYSON: I can't tell you an exact number. I can tell you it will be much closer to the 850 figure than the 1,500 figure because we are targeting the most in need and that costs more per unit.

[Page 17]

MR. GRAHAM: You must have some idea. We're now halfway into the program.

MS. TYSON: It does vary depending upon the type of proposal that comes forward. I don't want to be specific as to a number but it will be more than 850 but not close to 1,500; 900, 950, 1,000 approximately in that range.

MR. GRAHAM: The adjustment of the 850 to 1,500, that figure, I know, has been thrown around on a couple of occasions. At what point in time do you recall having created this bottom expectation of 850? Can you tell us briefly what the rationale was around, again, reducing people's expectations?

MS. TYSON: I think Mr. Dillon has the specific information on that.

MR. DILLON: When the agreement was signed in September 2002, we estimated the number at 1,500 based on two variables that have since changed. One was the fact that the initial program laid out that delivery of the program had to be, in the case of the preservation side, for units that could not be repaired under the RRAP program. Under the RRAP program at the time, which is the federal-provincial repair program, the grant limits for homeowners was set at $12,000 per unit and the grant level for apartments or rental stuff was $16,000 per unit. Based on the assumption that we would then be able to apply this program to any projects that required more investment than that, we projected a number in those two categories. Shortly after this agreement was signed or within a few months of this agreement being signed, CMHC changed the grant repair limits for the RRAP program to $16,000 for families and $24,000 for rental units. That effectively raised the lower threshold of investment in those projects significantly for this program, therefore increased the average price that we would have to invest in this program, to bring those units into the program. That, in effect, seriously eroded the number of units we would be able to help, that was a significant factor.

The second factor, of course, was introducing the Rent Supplement Program, where government made a decision to aim for a lower target which meant more subsidies going to lower income people.

MR. GRAHAM: You can appreciate the challenges associated with people on face value accepting that extended explanation, when there was an expectation created of up to 1,500 units and that it would happen within five years. What we find when you begin to drill down is that, in fact, over that five years the provincial government - because the fine print allows them to push out some of their investment - is only committing $9 million, instead of $18 million over the five-year period, and the number of units that are going to be built is in the range of - not just built but renovated as well - 900 to 1,000, instead of something closer to 1,500.

[Page 18]

For those people who are concerned about affordable housing, they sit back and say this is an issue of priorities, we have an urgent concern and the government obviously isn't prepared to invest in something to ensure that the unit number is higher and to invest the money up front so that the $18 million is actually paid at the front end instead of at the back end. So for those people who say that there was some puffery at the front saying 1,500 units, $18 million over five years but find out that it's $9 million and 900 to 1,000 units over that five year period, surely they have some questions that need to be answered about whether indeed this is a priority and whether affordable housing, in looking at the spirit of this legislation and not the fine print, was the more important step to take.

MS. TYSON: Mr. Graham, it certainly is a priority for the department, I can assure you of that. I'll comment that it's a lot of money, $37 million-plus sounds like a lot of money and there was a great deal of excitement when that was announced because the federal government had not been in the housing business for 10 years, they hadn't put any money in. It was very good to see them come along and put money in, it was the best thing that happened to housing for a long time, that the federal government has become more interested. But $37 million, more money is needed to address the Nova Scotia situation.

I believe we spend approximately $350 million per year on housing out of the Department of Community Services budget. So when you compare that you will see that $37 million, although it is a lot of money, it's not going to totally solve the housing problem.

We've always referred to 850 to 1,500 units and that's dependent upon how deep we go. Sure, we could have either built or renovated 1,500 units but we would not be helping the people who need it the most if we did that. I believe it was early in 2004, that Minister Morse and Minister Regan jointly announced the first RFP and we were talking about reaching those in the greatest need and that it would be closer to the 850 units. So that was a decision made, to spend the money where it's most needed, as opposed to helping those closer to the middle income level. And it's a great first step but it's only a first step and we look forward to working with our federal and other partners in future with Phase II and in order to do more . . .

MR. CHAIRMAN: Thank you. I have to call it quits for this round and we'll go to the PC caucus.

The honourable member for Kings North.

MR. MARK PARENT: Thank you, very much for being here. I've had opportunity on the Standing Committee of Community Services to ask you questions about this exciting program and as you said, it's really exciting to see the federal government, after about 10 years of not dealing with what is an urgent social problem, finally coming up and helping. My questions are fairly specific to my riding because I've had a chance to ask you about the larger issues but I may reserve the right to come back to them.

[Page 19]

I've been interested and somewhat concerned, as the MLA for Kings North, in the County of Kings, at the high waiting list that we have for affordable housing in Kings County. I've been told by my workers who are there and I believe them, because actually a few of them are out on sick leave now because of stress, that the high waiting list in Kings County is the highest per capita. Now I don't know if that's true so my question to you is, do you have a breakdown of waiting lists on a regional basis?

MS. TYSON: Mr. Dillon is just looking to see if we have that specific information with us.

MR. DILLON: I do have some data on waiting lists by seniors or families, by sort of region or regional authority. Families or seniors, Mr. Parent, or either?

MR. PARENT: Both if you could put them together.

MR. DILLON: The family waiting list in the Annapolis Valley region, which would cover probably from West Hants through to Digby is 366 families on the waiting list last year and for seniors, 208 on the waiting list. There are about 60 non-elderly singles on the waiting list.

MR. PARENT: Can you tell me how that compares - maybe you can't do it this morning - on a per capita basis with other regions in the province?

[10:00 a.m.]

MR. DILLON: I don't know on a per capita, I would have to look at the whole population of the region. Anecdotally I sense that the Valley area has a higher than normal - for the rest of the province - demand for family units and is probably lower overall for seniors' units, in terms of general demand and waiting lists. The family unit side has been recognized as a fairly significant waiting list. One of the driving forces for that is over the years, the 30-year intervening period from 1970 to 1994, when public housing was being built, there were very few public housing units built in the entire Valley region. The Valley region at the time was probably more prosperous, maybe, than the rest of the province, in some areas, and so a large family unit portfolio didn't get constructed in that area. So your waiting list is oftentimes a consequence of the size of the portfolio.

MR. PARENT: Thank you very much. That's what I'm experiencing on the ground as an MLA for the area. I'm sympathetic to the people in the regional office. One way of compensating for that would be rent supplements, and I'm wondering if you've looked at that. The time to get new construction approved, to go through all the necessary procedures, as you mentioned, as the deputy minister mentioned, can be seven months to a year and a half, I guess. Are rent supplements a good way of compensating in areas such as mine where perhaps there is a greater need, or do they detract from the general program per se?

[Page 20]

MR. DILLON: The rent supplements are indeed, as a programmatic idea, a very good way of meeting demand for housing for low-income individuals. One of the attractive features - there are a couple of attractive features of rent supplement - is its portability, i.e. it offers the client or the tenant or the applicant or the resident a choice of where they want to live, in some cases. So they can potentially apply to a rent supplement unit in any rental property anywhere, if a program existed like that. So it has portability and it offers choice.

The other thing is it's not permanent, so if the need goes away, the rent supplement goes away. So you haven't invested a large amount of capital into a project that may eventually not necessarily be needed and you've got an investment that becomes unnecessary. So, rent supplements, in some quarters, is a very good program.

We have a federal-provincial rent supplement program that operated, developing new rent supplement units up to, again, 1993. There is no new rent supplement program, federally-provincially funded, exempting the elements of the Affordable Housing Program, and so the number of rent supplement units we have available in the province, which number about 700 or 800 at the moment, under the old Public Housing Program, are pretty well all utilized. They are existing in places, mostly in urban centres like HRM. There are some in Industrial Cape Breton, there are some in the Valley. As those units get freed up, the landlord no longer wants them, the tenant moves out, and so on occasion we have those freed up and we redistribute them to where they would do the most good. Some of those could possibly be freed up in the future and go to the Valley area.

MR. PARENT: You have to appreciate that I'm representing my constituents when I bring these issues to you. The home repair program is a program, again, that's an excellent program, one that my constituents use, and one that we could use more fully. I'm wondering how you see that program fitting into the mix of affordable housing? I ask that against the basis that my understanding is that we have, in Nova Scotia, a double-edged sword, as you will, we have the highest percentage of homeowners in the country, and yet many of their homes are in need of repair. This program, to me at least, is an excellent program. I'm just wondering if you could give us a bit of information about it, and how it fits in the mix?

MR. DILLON: In the home ownership repair area, of course we have a whole array of programs and I'll focus perhaps primarily on the Affordable Housing Program piece of it, but as many of the members would be aware, we have historical federal-provincial programs, like in the case of the province, PHERP, the Provincial Housing Emergency Repair Program, and the Senior Citizens Assistance Programs, and those provide small-level, $3,000 to $5,000 repair grants to seniors and families, literally right across the province. The vast majority of that expenditure occurs in the rural areas, including parts of rural Kings County and urban Kings County.

[Page 21]

With the Home Preservation and Affordable Housing Programs, one of the challenges we faced is the federal government made a very strict stipulation that no more than 25 per cent of their funding under the Affordable Housing Program could go to homeowners. In fact, they started from a zero contribution and conceded, eventually, to go to 25 per cent. So we are using quite a bit of the Affordable Housing money for the home preservation side, and it's a very popular and successful program in the regions.

It does not come without its challenges. Many of the housing units we encounter are in very difficult condition, required quite a bit of extensive work to bring them up to a livable standard or a 15-year sustainable standard, and as Deputy Minister Tyson indicated, we're spending on average about $34,000 per unit for any of those units that we tackle under the Home Preservation Program. So it's been very successful. It's addressed a lot of units that heretofore we haven't been able to find a way to sustain those units and make them safe, warm and dry for the families that are living there, but it's been a very successful program in targeting that area.

MR. PARENT: I just want to put in my affirmative vote for it, because every constituent of mine has found it - and I want to thank you for going to bat, to helping tailor the federal program more fully to the provincial needs. This is one of the frustrations that I have, and I'm sure you have, these federal programs tend to be tailored to the larger population centres of Ontario and don't take into the mix, oftentimes, the unique sort of factors, and one of them we have here is a high percentage of home ownership versus say metropolitan areas like Vancouver and Toronto. So I want to thank you for doing that.

Talking about the federal sort of, at times, inability to tailor programs to specific regions, I understand that you lowered your estimates on units from 1,500, partly because the federal government changed their grant repair monies after you signed the agreement. Is this true, and if so, why did they change their grant repair monies, and why didn't they make you aware of these changes in time for you to do more adequate forecasting?

MR. DILLON: Timing is everything, of course. In 2001-02, CMHC, our federal partner, undertook a major evaluation of the whole slate of RRAP programs, all of the federal-provincial home repair programs, and that evaluation was completed probably late 2002, early 2003. They had, the previous year, of course, announced the Affordable Housing Program and the rules that would govern it. So there was perhaps a year to 18 months of overlap between the time they announced the rules under the Affordable Housing Program and they announced the results of their evaluation and the resulting changes to the RRAP program.

All of the provinces, I think, across the country and all of the community groups were advocating very strongly to CMHC that they raise the grant level amounts under the RRAP program, remove the sliding scale around eligibility based on income, and a variety of other

[Page 22]

administrative and bureaucratic things that were getting in the way of delivery of the program.

So we were very pleased to see them change the RRAP program, but on the other hand when that was announced, it did mean that we had to rethink the Affordable Housing Program which had already had its rules set and how that might impact on our numbers. Shortly after that, we started talking about a range between 850 and 1,500, because the impact of those RRAP changes really had to be calculated to how they would actually start to affect our average contributions under Affordable Housing. So that's the connection.

MR. PARENT: So the information of the changes of the federal government came in after we'd initially made our forecast of 1,500?

MR. DILLON: Yes, those announcements came in after the agreement was announced, the Affordable Housing Program, and I think after it was signed. The full impact, it took us a few months to try to figure out what the full impact would be. Again, the impact is not only on the home preservation but any rental preservation units as well because on the rental preservation side, the bar got raised dramatically as well.

The other thing that lowered, of course, the unit count was the decision of our minister to implement a rent supplement element to this program in order to enable us to drive the rents even lower. CMHC's yardstick was simply to get rents at or below market and they were quite committed to be at average market. Our government and our minister made the decision to aim for a lower bar. That cost us more money on a per unit basis but we felt we really did want to target low-income and needy Nova Scotians. So that has also served to lower the number.

MR. PARENT: So just to get this straight, the federal government puts a program in place, it's signed with the province and then they change some of the elements of that program after the signing of the agreement?

MR. DILLON: No, they didn't change the Affordable Housing Program, they changed the RRAP program which is referenced in the Affordable Housing Program Agreement that grants for home repairs or rental repairs would be for units that do not quality for RRAP. So by raising the assistance level in RRAP they effectively then raised the lower threshold where you could invest in the Affordable Housing Program. So I guess it raised the average cost of the investment we're going to have to make in every unit.

MR. PARENT: Okay, that makes it clear.

Co-op housing, I can't let the opportunity go without just a word about co-op housing. I know my colleague has some questions. How much time do we have, Mr. Chairman?

[Page 23]

MR. CHAIRMAN: You have about seven minutes.

MR. PARENT: Okay, well, I'll just make a brief comment on co-op and then turn it over to my colleague.

The co-op experience I have, that I'm aware of, in Kentville is an excellent experience. I know from what I hear that it is not always the case in other co-op units. But one of the things that the co-op program does is it provides a sense of ownership, which I think is so incredibly important, in terms of helping people to have some sense of pride in where they're living and some sense of investment in taking care of that property. It's very dramatic in Kentville. One side of the street is affordable housing where it is simply provided for people and the other side is affordable housing through the co-op program where there is a sense of ownership. You just walk down the street and you can see the difference in terms of the upkeep of the properties and the sense of pride in their community that they have.

I guess I don't have time, really, for a response because I don't want to steal time from my colleague for questions but I would - he's saying that I can get a response. So can you tell me how the co-op programs fit in terms of construction of affordable housing?

MR. DILLON: I would say, in whole, across the country and in Nova Scotia, the Co-op Housing Program has been relatively successful but there are pockets of areas where it has not been as successful as others. The co-op housing is built on the premise that the co-op group will own, occupy, manage and take responsibility for all their own housing, an important tenet of the membership bases and mix of incomes. So you get co-op projects with people on higher incomes, moderate incomes and low incomes. The general notion is, they will all work collectively to keep the housing safe, warm, dry, well-maintained and so on.

In a great many of the co-ops, that model works excellently. They have a great democratic process, they have wonderful boards, they have contributions being made by members, not only in maintaining and looking after their housing, but looking after each other and so on. Some of the co-ops, it hasn't quite worked that way. Over time, changes of membership, changes of neighbourhood, changes of any number of factors have led some co-ops not to operate as well as the more successful ones.

We have what we call projects in difficulty around the province that aren't working quite so well and we are working with those groups and the Co-operative Housing Federation of Canada to try to ensure those projects survive and get maintained as viable housing. But for the most part, the co-ops that are around the province operate very well and are a very successful, mixed-income form of housing.

MR. PARENT: Thank you. I will turn it over to my colleague.

[Page 24]

MR. CHAIRMAN: Mr. Hines.

MR. GARY HINES: Thank you for coming in today on this very important topic. One of the questions that I want to ask is a little bit of history. Before 2002, the federal-provincial agreement was signed, how did the housing projects get funded at that point in time? What was the mechanism in place at that time?

MR. DILLON: Well, prior to the signing of the agreement in 2002, there were virtually no new traditional federal-provincial social housing units being built anywhere in the province, or virtually anywhere in the country.

[10:15 a.m.]

CMHC, under the direction of the federal Treasury Board, I understand, in 1993 placed a moratorium on the federal support of any new social housing units effective the budget, I guess in 1993 or early 1994. They subsequently also then froze the federal contributions to all the existing social housing portfolio in, I believe, 1995. So from 1995 right up to the federal government getting back into the game in 2002, there were no social housing or affordable housing units being built and subsidized in the Province of Nova Scotia, in the area of what we call traditional social housing units. Now, there may have been some nursing homes or some other forms of housing being built where there was a special need, but in terms of conventional social housing, none was being built.

MR. HINES: Who was responsible for the selection of the Canada-Nova Scotia Affordable Housing Agreement projects? Was the province responsible for the selection of the projects under this agreement?

MR. DILLON: Yes, the province is the active partner, let's call it that, in the agreement we have with the federal government. We are the active partner. We have to provide CMHC with regular reports on our progress, commitments and so on. But in terms of determining need, reviewing criteria, settling on where projects should go and so on, it's the province that makes all of those decisions.

MR. HINES: As one of those partners, how does the annual audit and performance report on the housing fund work within your department? How do you audit your performance?

MR. DILLON: Audit the performance with respect to selection, funding or . . .

MR. HINES: Well, with respect to the projects that have been delivered. Do you audit your performance in terms of success or failure, or perhaps just a stability - do you do a yearly review and an auditing process would indicate that, so that you can determine whether you have to make changes?

[Page 25]

MR. DILLON: Well, we have a staff who would be reviewing the progress we're making on an ongoing basis and making changes based on the experience we have and the things we learn as we go along. So there would be regular learning, experience and change as we go along. Things we learn from the first request for proposals, we changed in the second request for proposals. Advice we got from non-profit groups and submitters to the first proposal, we learned things from that and we changed our process in some areas.

We have laid out criteria for receiving and reviewing programs and weighing them, one against the other. We have engaged the municipalities in some of that discussion. We have engaged the Home Builders' Association in some of that discussion. Non-profit groups such as the Affordable Housing Association of Nova Scotia have helped us through some of the selection process. So we have been refining the process to ensure that there is a balance, fairness and so on in all of those processes.

We have also learned from some of the projects that we have approved, the difficulties that the projects face even after they get approval in trying to get out and get delivered. We are adjusting some of our forecast on expenditures and timing, in response to what is happening on the ground, particularly in the area of lead time for developers and non-profit groups to actually get projects up and going. We are learning all the time.

From an overall audit and evaluation point of view, we are required at the end of the program - which would be the 2006-07 period - to provide a report back to CMHC, effectively, a full evaluation of the program. I expect at that time there will be a fairly thorough analysis of the entire delivery, the entire funding in all of the experience we learned from it.

MR. CHAIRMAN: Thank you. The time has expired. We will now move to the NDP. I believe Dave Wilson is going to begin and we will have 10 minute rounds.

MR. DAVID WILSON (Sackville-Cobequid): You had made mention earlier to a question I addressed to you about wait times. You acknowledged there were about 310 seniors on the waiting list here in HRM. Do you track wait times, not only for seniors, but throughout the province, in different geographic areas of the province, on what the time is for these families that are waiting to enter into provincial housing or affordable housing units?

MR. DILLON: Yes, we track the overall waiting list. We track chronic vacancy lists, we track vacancies as a general factor. We track several factors on the public housing portfolio for a couple of reasons. Number one, so that we can have a sense of where the demand is that is not being met so that we can ensure that the public housing portfolio is being as fully utilized as possible and that the types of households that are in the greatest need are the ones that are being housed.

[Page 26]

Now notwithstanding all of that, although we have about 12,000 public housing units around the province that we have the ability to house people in, the waiting list at any given time across the province can be something in the order of 3,000 names - families, seniors and so on - so it is always a challenge because oftentimes the names and families that are on the waiting list aren't in the areas where the units are most readily available. That's a more recently developing phenomenon as the population of the province, demographically, has been shifting. You have declining populations in some areas, growing populations in others. Unfortunately - we often wish we could - the public housing units can't be simply picked up and moved where the demand is but it is something that is on our radar now that we are trying to deal with, trying to figure out what our strategy should be to make the most effective use of that social housing portfolio.

MR. DAVID WILSON (Sackville-Cobequid): So if you have that information, we have been trying to get that. Our staff have been told by your department that you do not track this so could you provide this committee with those wait times, not to divulge any names, but the wait times and the areas that are needed?

MS. TYSON: We'll provide any information we have on wait times, you would have to appreciate that it would be at whatever time they did that assessment.

MR. DAVID WILSON (Sackville-Cobequid): Oh no, that's fine. I think it would be helpful, especially to look at what areas are affected and what wait times are being seen in different parts of the province. With this affordable housing agreement that we saw, the province isn't investing in publicly-owned housing. What is going to happen if the supplement dries up? Why would you not invest in public housing stock, or increase, or have you? Could you tell us how many units are going to be available after this affordable agreement matures, that is going to increase our stock in public housing?

MS. TYSON: Do you mean additional government-owned units?

MR. DAVID WILSON (Sackville-Cobequid): Government-owned, that the province is actually going to own at the end of this agreement.

MR. DILLON: To start off with, it would be in the rental market only and not on the ownership side, obviously. So, you know, 30 per cent of the units are on the ownership side. They would be out of our area. It's difficult to say, we haven't delivered the program fully yet, but I would expect at the end of the program, based on what we have in the hopper now or are envisaging, the province could be the long-term owner of something in the order of 200 or more of the rental units if all the things line up the way we are currently thinking.

We also are working, particularly on the rental preservation side, with non-profit groups that they would be the owners. There seems to be some preference in some communities that non-profit community agencies be the effective owners rather than the

[Page 27]

department, through the housing authorities. So we will be working with non-profit groups to first of all make sure the units are in the ground, on the ground, and in a public or non-profit agency so that there is some security in terms of the long term. Whether the mix will be between the Housing Development Corporation owning them, or the province, or whether it will be non-profit agencies, it may vary by community and by the nature of the client being housed. Special needs clients, mental health consumers and so on are more likely to be owned by non-profit agencies, particularly vulnerable Nova Scotians and special needs supportive housing situations will be more likely to be owned by non-profit agencies. More conventional family or senior units may be owned by the province.

MR. DAVID WILSON (Sackville-Cobequid): But to date, the majority of the announcements we've seen are through private developers. In our view, I think it would have been more beneficial for the province to get into actually building and purchasing affordable housing instead of lining the pockets of private developers. To date, we are halfway through this agreement, we have only about 30 units that are built and occupied at this time. We won't be at the 1,500 number for units, we'll be closer to the 850 and the province really isn't matching the federal dollars to build affordable housing. They're really just actually paying to sustain affordable housing for 10 years.

You had mentioned that the federal government has gotten out of housing in the past, have frozen any agreements that they've made with provinces and different housing developments. Our commitment to affordable housing depends on the federal government. What happens if the federal government walks away from the table again? Where are we going to be in 10 years? Where is our commitment to affordable housing in our province when we depend solely on the federal government?

MS. TYSON: All indications are that the federal government has now recognized the need to be involved. They have launched Phase II of the Affordable Housing Agreement and Nova Scotia expects to be one of the early provinces to sign that agreement. We do see a continuing trend on the part of the federal government for what they are referring to as a housing strategy for the country. We're very optimistic that they have recognized the need to invest federal dollars in housing, generally, and we're very much looking forward to working with them.

MR. DAVID WILSON (Sackville-Cobequid): I think at the moment they are definitely involved with this and promoting the idea of being involved in housing throughout the country but, like us, they're in a vulnerable state being a minority government. What happens if another government comes in and finds that there is a need somewhere else and they do cancel it? I think by placing so much of our dependency on them, it risks losing a lot of what we've worked for up to now, with providing affordable housing in our province. It seems like a game of Russian roulette. With the announcement we've seen to date, could you tell me a number of those units that have seen their way to Cape Breton?

[Page 28]

MR. DILLON: On the home preservation side a significant number of the units are in Cape Breton. In the new rental announced to date, I think there were two projects in the hopper for Cape Breton, one of which has been announced in Sydney Mines and the second project is currently on hold, the developer has had some second thoughts. It's a community-based development group and they've had some second thoughts so it's on hold.

I'm quickly scanning down through a list here. I think those are the only two submissions we got with respect to the proposal call we submitted.

Cape Breton represents - and I'm from there myself - a significantly different perspective than much of the rest of the province, largely because of the declining population and the aging of the population there's a large housing stock there now. There's not a lot of demand for new housing stock but the housing stock that's there now needs work in terms of repairs. Its progress through the program has taken a little different profile maybe than some of the other areas of the province. There may be other areas of the province where that is the situation as well.

MR. DAVID WILSON (Sackville-Cobequid): I understand the population is declining in those areas but the people leaving are the people looking for other jobs, who may have a trade and that. The ones who are staying are the ones in need of affordable housing. I believe that there's a lot of public housing that is just boarded up in Cape Breton and the other question is, what condition is our public housing in today? What kind of maintenance do we need to do to our stock today, not additional stock?

MR. DILLON: I can tell you in broad strokes. We spend about $18 million a year maintaining and modernizing the public housing stock across the province and that's on a yearly basis. About $14 million to $15 million of that goes into routine maintenance right across the province for the entire 12,000-unit portfolio, and about $4 million to $5 million a year is spent on what we call modernization; that means bringing in new elements, new upgrading to those buildings, features that the buildings didn't have when they were built.

With respect to isolated pockets - maybe boarded up is too strong a word - of buildings where there are chronic vacancies, difficulty getting enough tenants to fill them, there are pockets of that, including in parts of industrial Cape Breton. I believe there are three or four projects in the area within 50 miles of Sydney that are chronically vacant, maybe as much as 50 per cent. We are really looking at how we could make mixed use of those buildings, whether there are some other options to ensure that the investment continues to be valued and so on.

[10:30 a.m.]

MR. CHAIRMAN: We'll have to leave it at that and perhaps address that issue on the closing comments. We will now move to the Liberal caucus.

[Page 29]

The honourable member for Halifax Citadel.

MR. GRAHAM: One brief matter, to pick up on a matter that we left with, but let me just provide the preface. On September 13, 2002, Minister Christie appeared with Minister Collenette and announced that there would be up to 1,500 affordable units constructed or renovated. In January 2004, the same Minister Christie said publicly - and it was tabled before this House - that the province was no longer able to get involved in programs with the federal government that involved matching funding.

For those people who have some question about the sincerity of being committed to this program, they may look at what has happened under this initiative and say, Minister Christie and/or the government saved face under this agreement by relying on the fine print and extending the money out. They would also point to the fact that the units being built aren't in keeping with the spirit of what was originally announced.

Ms. Tyson, you said, I think, at one point in one of your last answers that it was always 850 to 1,500 units. I'm not sure if I heard you correctly with that because I've gone back to the original press releases and I've gone back to your testimony when you appeared before this committee before, and there was never a mention of this 850 figure. I just want to be clear on whether or not you believe this 850 to 1,500 figure was something that was from the beginning or whether it appeared as a target partway through the agreement?

MS. TYSON: I can't say that it was from the very initial outset that figure appeared but it has been for a very long time a range with an intention that we would not need to go below 850 units. Initially the thought was that it could be up to 1,500 and it could have been up to 1,500 depending upon how much money was put into each individual project. But the more repairs, for example, that a unit needs, the more money it takes and if you have to put twice as much money into one particular unit, then instead of doing two units you can only do one. So that 850 to 1,500 units has been spoken about, to my recollection, for quite a long time and it has always been understood that there would be a range, depending upon the proposals that come in and so on.

MR. CHAIRMAN: Diana Whalen, you're going to continue.

MS. DIANA WHALEN: I have a couple of questions and there's not much time. I think the big thing that we've learned here today is that half the money is being saved or put towards future rent subsidies. I think just to cut to the chase, half the number of units that we were originally expecting are now going to be improved or built. We've gone from 1,500 to maybe 900 or 850 and you've cut half the money to go for 10 years into the future for rent subsidies. I think that is really misleading to the public and members of the Legislature.

[Page 30]

I'm looking at extra information that you provided to us in April 2004, which was given as additional information required. It talks very clearly about your four programs, just as you did in your preamble. The four programs talk about new housing and restored housing and it talks about new rental and improved rental, fixing up existing rental. You do not indicate that 50 per cent of the money that you have committed toward this program is now going to go into the future for rent subsidies which may be very needed, and may be very useful, but they don't provide any lasting infrastructure for Nova Scotia. I think that that has been entirely misleading, even in your opening statements today. Very misleading to us.

It's not a small percentage, it's half of the money that you have that's being committed towards this program. I just really feel that this has been a slight to the homeless, to the people who need help right now, that we haven't fixed up our existing housing stock which would exactly qualify, our non-profit housing. We have many empty units because they're not fixed up, they're not habitable right now. I've heard that from Cape Breton members, I've heard that all across the province and that would be an immediate place to go.

The speed at which this program has unfolded has also been very disappointing for everybody involved, I'm sure for government as well, very disappointing speed. You indicate this morning that the first year was spent looking at the needs, well, surely there was a department that looked at housing prior to this program coming into place, the gaps and the need assessment should have been done well before money became available. So, I'm very disappointed in some of those things today. I wonder, if you'd like to, you could certainly comment on the $9.5 million or $9 million going into future rent subsidies.

MS. TYSON: I disagree that there's been any misleading of this committee or the public at all, and certainly there has been no intention whatsoever to be other than straightforward. The speed, I don't understand the continued comments on that. The projects here and in other jurisdictions take time to ramp up, and we are on track. In respect to the rent supplements, this is considered, by staff and by others, to be a very good way to commit dollars for a longer period of time in order to help people for a longer period of time and guarantee that help.

MS. WHALEN: If I might, if we build public housing units or we help to support the building of co-ops, we have home ownership and we have ownership that can go on for 50 years in those units. So how can you compare 50 years or longer - I hope my house stands 100 years. Those are long-term investments in bricks and mortar that keep people housed.

MS. TYSON: Yes, that's very true, and there's always a balancing, how much money will be committed to building new units - they're very expensive - or how much money will be committed to helping individuals in terms of helping them with their rent today. You can help a lot more people . . .

[Page 31]

MS. WHALEN: We'll have a crash in 10 years' time when your subsidy money expires and all those people are left helpless then. We wouldn't have built that community capacity we love to talk about. I just fundamentally differ with you on whether that is the best way to spend the money. I think it's very important that the public realize that half of this that has been touted in a flurry of announcements and excitement about new housing is not in fact going to be anything we see in our community, it will be subsidies for the existing homes that are out there or units that are out there. I just think that that really is not only misleading but it lets down the people who desperately need to get housing over their head and would like to be part of the ownership of those units, too, through co-op or through other ways where they could contribute what they can. I think that's terrible.

I wanted to make note of the homelessness in HRM. In terms of where the money is going from this program, 23 per cent, as I understood, was allocated to HRM. Can you confirm that? That's been printed, so I'm taking it from printed reports. Maybe you'd like to say that. We are 40 per cent of the population.

MS. TYSON: I'll just comment that we've advised HRM orally and in writing that HRM is about 40 per cent of the population and approximately 40 per cent of the money is going into HRM. We've advised them over and over again.

MS. WHALEN: Are we getting all the rent subsidies since we have most of the rental units?

MR. DILLON: You're getting by far the most, about 500 out of 700 rent subs are in HRM.

MS. WHALEN: Well, as an HRM MLA I'd like to say we'd like to have more units that people could go to. I, like my colleagues, receive calls every day from people who can't afford the rents that are out there in the city. I think they want places where they can contribute and hold their head high and be part of the ownership. I would challenge you to look at some other options that are out there.

On that homelessness survey that was done by HRM in June 2003, they found on a single night in June 2003, 269 people living on the streets and of the people who were defined as homeless who had nowhere to go that evening, 35 of them were children. The condition in HRM is more acute because we are a place where people come to, looking for jobs, looking for a chance to establish themselves. I would say we have the bulk of the provincial homelessness as well. I think that it needs an extra attention to this city and to keep HRM from being really a disgrace in terms of the way we treat our people.

MS. TYSON: We are now tracking occupancy in all of our shelters, and we do have statistics for January, which I would be happy to provide this committee.

[Page 32]

MR. CHAIRMAN: Thank you.

MS. WHALEN: Maybe you could provide that after. Has our time lapsed?

MR. CHAIRMAN: You have about 30 seconds.

MS. WHALEN: I'd like to ask you about the letter that Peter Christie - well, it was actually tabled in the House, it was a letter from Peter Christie to Ralph Goodale, suggesting that we would no longer participate in any cost-shared arrangements with the federal government. I assume as a deputy minister that you have heard of that letter, and I would like to know what impact that has on the affordable housing, or a response within your area?

MR. CHAIRMAN: A five-second answer.

MS. TYSON: I'd be happy to look into that and get back to you.

MR. CHAIRMAN: We'll turn to the Progressive Conservative caucus.

Mr. Hines.

MR. HINES: Mr. Chairman, I'm going to go back to the auditing process, because I was leading up to a question by asking the first one. Would it be correct to suggest that your auditing process could determine greater expenditures in specific areas that would affect the actual number of projects and the final analysis as you go along? Would there not be something that, yearly, could affect the numbers?

MR. DILLON: By all means, this particular program, in the new rental side, the pattern of expenditures per unit is almost automatic. Most of the proposals that come forward need virtually the full maximum available under the program in order to achieve the target of low-income individuals in those particular communities. So, for the rental side of the program, which is about three-quarters of the program, the investment we have to make on a per unit basis is almost predictable, they'll want $25,000 per unit in capital and they'll want close to $25,000 per unit in rent subsidies for many of the units in order to achieve the targets that we have aimed for the program.

On the ownership side, on the other hand, the numbers can vary dramatically. In the first year or so of delivery, the regional operations people aimed for the units that needed the greatest assistance and therefore needed the largest investments. Over time we've seen those numbers, amounts of investment, start to decline. So we expect, in the final year, year and a half of delivery, the average investment in the ownership side will decline, and therefore we will in fact increase the number of units in that particular area.

[Page 33]

MR. HINES: Would it be fair to say that keeping people in their own homes would be an objective of your programs?

MR. DILLON: Without question. By far the most economical way for government to invest in housing is by keeping people in their own homes.

MR. HINES: Another issue that I have that comes up constantly in my jurisdiction is the difference between availability and affordability for housing. Now, one of the problems that we have, I have a couple of contractors who would like to build housing for seniors, but unfortunately they can't designate those facilities specifically to seniors so therefore they're not being built. Is there any movement to allow us some flexibility there, so that we can look after seniors in our communities, in terms of creating housing, not necessarily affordable but available?

MS. TYSON: This matter was brought to our attention, and we are seeking legal advice on that question. So we'll be able to get back to you, I hope very shortly. What we have asked is whether it's possible legally to create seniors-only buildings.

MR. HINES: I thank you for that, because it was my question. Mr. Chairman, I'll pass to my colleague.

MR. CHAIRMAN: The honourable member for Kings North.

MR. PARENT: I want to follow up on rent subsidies, because I remember reading in the ChronicleHerald, you have those little columns about so many years in the past, and 15 years ago this was being discussed. I remember reading a comment by Walter Fitzgerald, who was musing about new units versus rent subsidies, and which would be the most valuable way to go to get your biggest bang for your buck. I think it's really a mixture, and that's what I suspect you're trying to arrive at. There is a place for rent subsidies, is there not, in the sense that when you have a population that moves and you have areas depopulating and other areas populating fast, you can respond faster with rental subsidies to the needs if you have that within your portfolio of options for affordable housing, is that fair to say?

MS. TYSON: That's very fair. We really do need a mixture. We've had some bad experience with locating all low-income units in one place, and we would prefer to avoid creating what are sometimes referred to as ghettos. We would like more of a mixed population. In addition, the rent supplements, as Mr. Dillon has pointed out, enables people to move, it gives more flexibility, it enables us to help more people more quickly, and it is considered, not only by Nova Scotia but other jurisdictions, as a very valuable part of a province's affordable housing initiatives.

[Page 34]

MR. PARENT: Certainly, my constituents have said to me, can this part of the program be increased because of the fact that, as you say, we've got the lead time in building new units, and, as you say, you put a new unit here, the population may shift, all of a sudden you're stuck with a unit where the population doesn't actually want to use that unit to its fullest capacity. I guess it's a mix, as in everything, there's a balance, and I just think that's important.

[10:45 a.m.]

I do want to come back, because my colleague hammered it home again but I thought we had clarified this, that the change from 1,500 units was the result of a changed variable, that the federal government came within the larger agreement which then meant that we could do fewer units but we put more money into it. The money didn't change but the amount of units changed because of that. Is that not what was said or did I misunderstand?

MS. TYSON: That was one factor, as Mr. Dillon explained in great detail, but the other factor was a very distinct policy decision to target the people most in need. That was something of a shift from just helping any low-to-moderate income to really targeting the low income.

MR. PARENT: Which would mean that we would have to put more money into each unit.

MS. TYSON: Yes. And that was a very distinct decision made which altered the course of the department's programming.

MR. PARENT: Okay, so helping those who are most in need. I want to ask a question about the non-profit sector and I was pleased to hear that two-thirds are being overseen by the non-profit sector. In my area, for example, the Interchurch Housing Society has been in existence since back in 1970 when I was at Acadia as a student and has done wonderful work so it's not really a question so much as just a comment on how pleased I was to hear that the vast majority of the units are being administered in that fashion. I guess the question would be, do you see that continuing in the future, that the non-profit would play a very significant role? I personally, coming from the non-profit sector, see it as providing oftentimes the most bang for the buck.

MS. TYSON: We certainly see that continuing Mr. Parent and we are encouraging and supporting the non-profit organizations to the extent that we can and we are attempting to understand new ways in which we can support them so that they can continue to address the needs of the community and help us determine the needs of the community. It's a very valuable resource in Nova Scotia. We don't anticipate any reduction in their involvement.

[Page 35]

MR. PARENT: Good. I'm glad to hear that and I was very pleased to hear the two-thirds. I don't want to go on too long because I've had a chance to ask you these questions in the past. Just in conclusion, I want to state that any criticism I may have had of the federal government changing some sort of rules or any criticisms really pale in the light of the excitement that now we are creating, we are building, we are financing, we are helping with affordable housing in a way that hasn't been done in over a decade in this province. So while we all want to do more and we all want to do what we do better, I guess I just want to go on the record and say how excited I am that something is being done and it's a massive project and more power to you and all the best and anything I can do to help, let me know.

MS. TYSON: Thank you very much.

MR. CHAIRMAN: No more questions? Very well.

On behalf of the committee, I want to thank you, Ms. Tyson, your staff for coming and, as usual, we allow five minutes for closing remarks. I welcome all of you to jump in on that, if you would like. I will turn to you, Ms. Tyson.

MS. TYSON: Thank you, Mr. Chairman. I just want to close by saying that overall again the department and the staff in the department and in the housing area are very pleased and excited with the new federal initiatives and in addition, with the additional provincial money that was made available this year, and they are working very hard to identify where the needs are and to bring that information to the attention of Mr. Dillon and myself so that monies can be targeted where they are most needed. I feel that we have done that and we are doing that successfully. It is our intention to continue to work with the federal government and partners to address the needs in a variety of ways as best we can. I wish to thank the committee for having the opportunity to provide some information and offer to provide any additional information that we may have in the department that may be of interest or use to the committee. We have made a list of the items that have been requested today. I would also invite the committee members to please do not hesitate to give me or Mr. Dillon a call, or if there are any financial questions, Mr. Hudson a call. We will provide information or do whatever we can to answer your questions on any of the topics today or any other topics in regard to housing. Thank you.

MR. CHAIRMAN: Thank you very much. Mr. Hudson, you got off easy today. We will get you on the hot seat one day in the future, I'm sure.

The next meeting is here in the Chamber next week with the Department of Finance as we investigate government financial reporting. That will be at 9:00 a.m. next Wednesday. Without further ado, the meeting is adjourned.

[The committee adjourned at 10:50 a.m.]