A $40-million glimmer of hope for the homeless

Peter Scott, the president of the Nunavut Housing Corp., confirmed this week that Nunavut will likely get 160 new social housing units over the next two years under an Industry Canada funding agreement announced Oct. 5 in Rankin Inlet.

Under that deal, Ottawa and Nunavut will each put up $20 million throughout the 2004-05 and 2005-06 fiscal years – producing $40 million in spending on social housing over that two-year period.

Steve Mahoney, the federal cabinet minister in charge of the Canada Mortgage and Housing Corp., said at the time that Nunavut could build up to 400 units with the money.

But Scott says that figure is too high.

“What we had put in that proposal was based on a cost of about $250,000 per unit as an average. This would produce 160 social housing units, and that was it,” Scott said.

Scott did say, however, that new building technologies could bring the housing corporation’s construction costs down, and the number of new units could rise to 200.

“We’ve been doing stick-built construction for decades, but there are other technologies that are out there and if we can bring those costs down to $200,000 a unit, then we could deliver up to 200 units over the two-year period,” he said.

On the other hand, Scott said, the corporation may put more insulation into the units, or employ designs that are friendlier to elders or handicapped people – factors that could drive up their costs.

“If we have to go from an R-20 wall to an R-50 wall, this may drive our costs up, so we may not achieve any savings up front on the capital side. I think we’ll stick to the 160 figure until we see what our costs are.”

Contrary to what Mahoney suggested at the Oct. 5 press conference, there will be no private money involved in the deal, and no attempt to use the money for home ownership or mortgage assistance programs.

“It’s purely social houses. We have not had any discussions about partnering with the private sector or trying to leverage private sector dollars outside of this agreement. We have not had any of those discussions at all,” Scott said.

Scott said that in Nunavut, no private housing developers are willing to go into communities like Clyde River.

“You look around Nunavut, and it’s just not going to happen here, not in the very near future, I’ll tell you.”

As for how the new units will be divided up among Nunavut communities, that’s up to the legislative assembly to decide.

“The actual community allocations will go to the House for discussion. It’s been approved by Financial Management Board [the cabinet] but it will go forward into committee of the whole once we get approval for the capital budget,” Scott said.

The legislative assembly has yet to vote on Nunavut’s $10-million contribution to the plan for the 2004-05 fiscal year. MLAs will be asked to do that during the capital budget session that starts in Iqaluit next week.

“It is not legally approved by the House yet,” Scott said.

He also said that although the $20-million contribution from Ottawa is “fabulous” news, there is no extra operation and maintenance money attached to it.

“The downside is that there’s no O&M attached to this. So it’s going to create over the long-term an ongoing problem for this government and future governments, a continual drain on O&M to continue to maintain those units.”

By the year 2037, the CMHC’s annual O&M grant to Nunavut will have gradually shrunk to zero.

The other downside is that the new money, welcome though it may be, does not indicate that Ottawa is getting back into social housing construction in Nunavut permanently.

“It’s just a one-shot deal at this point,” Scott said.