GN staff housing policy threatens public services

The future of Nunavut’s government may be at stake with the recent announcements about raising their employees’ rents to “economic rates” over the next five to 10 years.

The Government of Nunavut is in a financial crisis.

The housing part of the GN’s money problems was generated by the governments of Canada, the Northwest Territories and the Office of the Interim Commissioner wrestling with the problem of creating enough housing to staff government jobs in “decentralized communities.”

The required housing was hugely expensive to generate on short notice. In the end, private financing was generated by the GN concluding leases with northern developers. That made sense since the benefits were intended to flow somehow to northern landlords and re-circulate in the Nunavut economy.

Some units were actually built for sale in the decentralized communities, but, unfortunately for the GN, did not sell. The building costs were astonishingly high and GN recruits living in the communities were not assured that they could turn around and sell them for the high prices for which they were built. The quality of the units was doubtful in many communities, and recent maintenance problems have proven that early GN employees were wise to be wary about house purchases for work assignments that had horizons of only several years.

Guaranteed house buy-back programs for staff who purchase housing and later leave the community due to transfer were not offered to GN staff, as was necessary in the NWT for many years to develop true housing markets in small communities.

The current plan to get out of housing leases and charge GN employees “market-level rents” is seen as a way to both reduce GN housing costs and normalize the housing market in Nunavut. If nothing else, the GN wants to stop over-heating Nunavut’s housing markets.

Will the GN’s good intentions produce results?

Housing markets are a balance between supply and demand. The GN housing policy says that, by increasing rents charged to staff, it will work towards encouraging staff to own their own homes, which in turn will encourage more construction of private housing and eventually moderate the rents charged by the current property owners.

While the GN intent is good and the final outcome may eventually be successful, can the government itself and the people of Nunavut stand the pain of disruption to the shaky GN staffing and retention situation in the meantime?

I have several more questions.

* Are strategies in place to carry the GN through the uncertainty that is building in an already demoralized public service?
* Is the housing corporation worried about how to supply certified accounting professionals required by the Auditor-Generals criticisms about slow progress towards financial accountability? Qualified, experienced, finance staff is in short supply across Canada.
* Is the president of the housing corporation talking to the minister of human resources about how to retain the needed employees for all GN jobs, at the same time as it is about to lose a whole generation of senior employees rapidly approaching retirement in the next five years?
* Has the premier asked his minister of human resources to coordinate a staffing supply and demand projection for all departments that indicates it has strong enough salaries, benefits as well as staff morale to maintain current staffing — and then include the housing-imposed stresses it is currently generating?
* Does the president of the housing corporation have plans to pay the enormous costs to re-staff each single open position in the GN that would be generated by a flight of current staff?

Even if these conditions have been met, there is a crucial oversight in the plan: The GN housing policy will not grow the supply of housing in Iqaluit.

Incentives to get out of government staff housing are not the problem. Interest in private ownership has been red-hot since 1999. Pre-approved mortgages have piled up, gathering dust at the banks, for lack of homes — at any price. Does anybody reading this not have several friends waiting to buy anything that comes onto the market? Does any reader not have a personal story about potential buyers lining up to bid on houses coming on the market six months in advance?

There is an urgent need for a far greater supply of privately-owned units at a range of prices.

Filling that need requires all levels of government to work with developers to open up whole sub-divisions, to build large-scale apartment-style developments every year until the land and housing supply are close to normal. We don’t need 30 to 60 land lots. Iqaluit needs 300 to 400 units for sale at a range of prices right now.

Nunavut needs a housing summit led by the premier, the federal ministers responsible for Indian and Northern Affairs and housing, the city of Iqaluit’s mayor and council — and must include northern developers and invited developers from the South who are familiar with opening regulated sub-divisions without public tax incentives.