HOUSING

Mr. Chairperson (Gerry McAlpine): This section of the Committee of Supply will now begin considering the Estimates of the Department of Housing. Does the honourable Minister of Housing have an opening statement?

Hon. Jack Reimer (Minister of Housing): It is indeed a pleasure to open up the Estimates for the Department of Housing, and I am pleased to present the 1996-97 spending Estimates for Manitoba Housing.

The Department of Housing has a threefold mandate: One, to enhance the affordability and accessibility to a suitable and adequate supply of housing for Manitobans, particularly those of low and moderate incomes and those with specialized needs; two, to maintain and improve the quality of the existing aging housing stock; and, three, to facilitate the housing market while otherwise limiting interventionist measures to situations, that it is deemed essential to the public interest.

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In attempting to meet its primary mandate in ensuring that the housing needs of Manitobans are met, the Department of Housing has subsidized close to 21,000 units over the course of its history. This portfolio includes housing for the elderly, for families and nonelderly single individuals, as well as crisis shelters for victims of family violence and housing for individuals and groups with special needs.

The major portion of the subsidized housing stock is directly owned by Manitoba Housing. However, the portfolio also includes projects that are owned and/or managed by private, nonprofit organizations which have been financed through Manitoba Housing. In addition to the housing projects which have been developed by or with the assistance of Manitoba Housing, the department's shelter allowance programs also subsidize a monthly average of 4,500 elderly and family renters in private rental accommodations throughout the province.

Since their implementation in the early 1980s, over 95,000 Manitoba renters have benefited from the shelter allowance programs. In spite of ongoing activities to provide housing and housing subsidies, there is a continuing need for housing assistance in Manitoba. Of the 380,000 households in this province, it is estimated that almost 11 percent are in the core housing need. That represents roughly 41,000 households who are unable to obtain suitable and adequate housing at average market rents without spending more than 30 percent of their household income on shelter.

Over two-thirds of these households and needs are located in Winnipeg, and nearly 70 percent of these households in need are renters. The largest client group in need is family households, and for two-thirds of these households, affordability is their only housing problem. Our ability to meet this continuing housing need has been significantly reduced in recent years. This has been driven primarily by the actions of our major funding partner in social housing, the federal government. The housing sector has become one which is recognized as falling under the jurisdiction of province in the constitutional contents. However, traditionally, the federal government has exercised its spending power to create, in effect, a national housing policy. This resulted in a federal presence in the development of social housing, both unilaterally and in cost-sharing arrangements with provinces and in market housing through the provision of mortgage insurance. This has resulted in over 652,000 units of subsidized housing in Canada.

The federal government began restricting its commitment to new social housing expenditures in the late 1980s, culminating in 1993 when it cancelled agreements respecting delivery of new social housing. In the 1996 federal budget, the government stated its intention to phase out its remaining role in social housing, except for housing on Indian reserves. In order to accomplish this, the federal minister responsible for the Canada Mortgage and Housing Corporation is proposing to transfer the management of the existing federal social housing portfolio and its budget to the provinces and territories. Primary indications are that the proposal will include a cap on federal expenditures. While the proposal has not yet been fully articulated, it clearly represents a long-term staged withdrawal of the federal government from the provisions of social housing to needy Canadians.

Over the next year, Manitoba faces a significant challenge in dealing with this federal proposal. It is important to safeguard the province's ongoing involvement in the management and the operation of the housing portfolio and our commitment to the people of this province to ensure affordability and accessibility of suitable and adequate housing for Manitobans. The last 30 years have witnessed a major investment on the part of our government and taxpayers of this province. Manitoba housing projects are important assets which provide affordable accommodation to many needy households.

Both the maintenance and management of these assets is an integral part of the department's mandate. In terms of management, the approximately 100 local housing authorities were disbanded in 1992, and the property management function for the provincial housing portfolio was consolidated under the auspices of the Manitoba Housing Authority or the MHA. The mission of the MHA has been to maintain adequate and affordable accommodation for individuals and families of low to moderate income who would not normally be able to afford such housing at market rates. Considerable progress has been made since its establishment.

By standardizing operating practices and procedures, Manitobans have fair and equitable access and treatment in all communities throughout the province. Initiatives have been undertaken to enhance the efficiency of tenancy processing, rent calculation and collection, and arrears control functions. The MHA is faced by challenges and problems that are not unlike those facing any large, diverse property management entity, to operate in an efficient and cost-effective manner that generates sufficient financial resources so that units can be maintained at an acceptable standard.

In terms of maintenance of the stock, it should be remembered that the bulk of the Manitoba Housing portfolio, amounting to almost two-thirds of the units, were developed prior to 1978. Given that these units are greater than 20 years of age, reinvestment is now necessary to maintain the fiscal integrity and condition of the portfolio.

For the last four-year period, maintenance and repair expenses and modernization and improvement costs for the portfolio have averaged almost $22 million per year. This funding level will be sustained in 1996-97. In order to attempt to deal with the maintenance requirements of the aging assets, much additional work associated with the age of the housing stock remains to be done. By reviewing and prioritizing maintenance requirements on a regular basis and by formulating short-term and long-term maintenance plans, this department will continue to control expenditures while at the same time addressing the highest priority items.

As I said before, these housing projects are important assets which provide affordable accommodations to many Manitobans. Rental revenue based on tenant income is not sufficient to cover the operating and the maintenance cost of these housing projects, and the federal and provincial governments continue to cost-share the subsidy required to provide this housing for Manitobans with low or limited incomes.

In addition to our concern for the fiscal housing stock, Manitoba Housing acknowledges the importance of its social responsibility to its tenants in its housing projects. When major maintenance programs are under consideration, the tenants are permitted a voice in their project environment and, where possible, the formation of tenant associations within housing projects is encouraged. In fact, to encourage pride and involvement and management of their housing projects, tenants have been encouraged to organize and form tenant associations.

There are now 10 family and 34 elderly tenant associations active in Winnipeg, and 40 tenant associations active in rural communities throughout Manitoba. These associations represent the concerns and needs of the tenants within the project, and they are instrumental in identifying services which may be beneficial to the tenant population.

Through their activities, tenants have participated in the establishment of community centres and larger family projects. As well, clothing depots and food banks now operate in certain projects where they have been identified as a need. To provide services to family tenants, programs for children and moms and tots programs are active in a few projects, and there are six daycare centres operating in Winnipeg projects.

Services to elderly tenants are also provided to Manitoba Housing through noon meal programs where space and facilities exist. As well, congregant meal programs, yet operated independently of Manitoba Housing, have been given access to the kitchen facilities in elderly projects in rural Manitoba communities to provide meal services to our elderly tenants in those buildings.

Health clinics have been established in two Winnipeg projects on a test basis to determine if the operation of such facilities would be viable for elderly tenants. In rural Manitoba, space and certain elderly projects have been made available to home care workers to facilitate their provision for service to residents in the buildings.

Finally, the tenant resource program, available in a number of elderly projects, works with individual tenants to identify their service or care needs and refer them to the appropriate resource, whether it is in a government department or a social agency to provide the tenant with the necessary service.

There is a continuing challenge in many Manitoba housing projects of meeting the changing needs of our aging elderly tenants. The department has received a number of inquiries regarding the need for assisted living services in some buildings, and we will be examining this need in relation to our elderly housing projects and tenants.

Over the next fiscal year, this department will continue to strive for operational efficiencies in the management of the social housing portfolio throughout the province by meeting the continuing challenge of maintaining an aging housing stock in light of the decreasing federal involvement in the portfolio.

At the same time the department recognizes that housing in an integral part of the social and economic development of this province and that adequate and affordable housing has a fundamental influence on the health and the well-being of individuals and of the community as a whole. It is our intent that, through our ongoing commitment to housing activities, this department will continue to address the challenges of ensuring access to an adequate standard of housing and equity in housing opportunities for all Manitobans. Thank you.

Mr. Chairperson: We thank the Minister of Housing for those comments. Does the official opposition critic, the honourable member for Radisson, have any opening statements?

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Ms. Marianne Cerilli (Radisson): I would like to make a few comments and then get right into the question. Just in listening to the minister's opening comments, I have trouble believing what he is saying. I have trouble believing that this government really has a commitment to social housing, given the events that we have seen unfold over the last while with respect to 390 Behnke Road especially, and also with the way they have been dealing with the management of social housing in the province. I have not heard this government making a very strong case in the face of the federal government's backing out of their commitment to social housing and to low-income Canadians, so it is going to be interesting, these Estimates, to see if the minister can convince me otherwise, can convince me that they have made a case and they really do believe in social housing and public housing as an integral part of--I think the kind of society we have had in Canada and I think that the minister should be very critical of the federal government for walking away from a commitment to low-income Canadians.

I made a statement in the House today about the Habitat II conference in Istanbul this month, in Turkey, where they are looking at the need for attention to urbanization and housing internationally and how this is not a problem unique to Canada, to Manitoba. But I know that there were I think 64 recommendations after Habitat I, which was in Vancouver and there have been a number of other international agreements, and yet we have governments that seem to be thinking that they can have the market provide for the housing needs of low-income Canadians.

We are seeing a lot of really frightening trends occurring in the area of urban development and housing, and when you put them all together you get a very bleak picture for the future. We are seeing a huge disparity growing between the haves and the have-nots, and one area where that is becoming increasingly apparent is in the area of housing. You have low-income Canadians that are paying a greater and greater percentage of their income for housing and the upper quintile, the highest quintile, they are paying less. It is now only seven-odd percent of income that goes to housing for those of the highest income in our country, and that is a very disturbing trend. When you combine that with the increase in life expectancy and the growing number of seniors and the fact that the fewer number of young people are not going to be there to purchase the homes that those aging baby boomers have had, we are going to see some real difficulties in the market for housing.

There is also a growing trend in the city of Winnipeg, and it is interesting that the minister has just completed the Estimates on Urban Affairs with references to their so-called Capital Region Strategy which is supposed to be about sustainable development principles, yet what this government continues to do is pave the way through infrastructure, highways, roads, water treatment facilities, for those that have the means to move out of Winnipeg at the expense of those who are living in the main urban centre of Winnipeg. That is just exacerbating the problem that I referred to earlier with this gap that is growing between the different income levels in our province. So what we are seeing in Winnipeg is a tax deficit in terms of the number of people who have higher income moving out of the city, and this is having a direct effect on the property taxes paid by those in the city of Winnipeg. The entire way that the tax system is working which makes it a detriment for people to maintain their homes, they feel that then they are assessed at a higher level, and this is costing the City of Winnipeg greatly because they are then having less assessed property tax that is going to supply the revenue for the infrastructure that we so desperately need.

There are trends and implications that has for the availability of public transit which, again, has implications for the quality of life enjoyed by lower-income Manitobans and Winnipeggers as opposed to higher income. I think that we need to start looking more seriously at what is happening with the housing provision for low-income people, and for a lot of people that may own their own home and are middle-income earners, the drop in the price of housing, the fact that many people now if they sold their home which they purchased within the last 10 years or so, 15 years, would lose money. That has serious implications. We know that the majority of us, all our wealth is put into our homes, and this has huge implications for retirement and for the security of citizens.

I guess in terms of the time that we have for the Estimates on Housing I am going to try and deal with a variety of issues, but I am wanting to give special attention, as I think the minister has referenced in his comments, to what is happening with the federal government and the implications that is going to have for Manitoba not only of them walking away from their funding of new social housing but also the offer that they have given to the provinces for taking over the aging stock of social housing. Also, as I understand it, they are walking away from their historical role of assisting with mortgages and mortgage insurance. That is something that I am wanting to find out a little bit more about as well from the minister, and I am very interested in seeing how Manitoba is approaching the consultations that the federal government is currently involved in. I am quite concerned with what I have heard about the time frame that they are looking at this and that we do not have a lot of time.

I know that when we last had Estimates about a year ago there was supposed to have been an all-ministers' conference of Housing ministers from all across the country, and that never happened, and that the federal government has in turn tried to broker individually with each province. We are going to have a very different and inequitable system of social housing across this country with each province going off in its own direction. We have the Housing portfolio, a good example of how we are getting a Charlottetown Accord by the back door with the way the federal government is dealing with the budget.

I think I am just going to leave it at that and try and get right into some questions then and allow the minister to call his staff to the table.

Mr. Chairperson: We thank the honourable member for those comments.

Under Manitoba practice, debate of the Minister's Salary is traditionally the last item considered for the Estimates of the department. Accordingly we shall defer consideration of this item and now proceed with the consideration of the next line.

Before we do, we invite the minister's staff to join us at the table, and we ask the minister to introduce his staff that will be present when the minister is ready and the staff get to the table, if the minister would, please.

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Mr. Reimer: Mr. Chairperson, I will introduce the people that have joined us here at the table. To my immediate left is the Deputy Minister Bill Kinnear. Next to him is Mr. Ron Fallis. The fellow there with the glasses and the wonderful tie is Ken Cassin, and Gary Julius with the other green tie.

Mr. Chairperson: We thank the minister for that. We will now proceed with the line 30.1. Administration and Finance (b) Executive Support (1) Salaries and Employee Benefits on page 87 of the Estimates book. Shall the item pass?

Ms. Cerilli: I guess I am going to start off by just by taking more of an issue-based approach to this rather than sort of a managerial kind of approach to this. I am going to deal with this in terms of themes and start right off in asking some questions about the federal consultation because, as I understand it, it is the deputy ministers that got together in March, deputy ministers from across the country. I am wondering, we were in a transition period not too long ago of getting a new deputy minister. I welcome Mr. Kinnear. I am just wondering, was it the new deputy minister that went to that meeting or was that prior to the change?

Mr. Reimer: The member for Radisson, I have got to compliment her in her astuteness of what is happening with the housing industry and the housing market, if you want to call it, regarding public housing in Canada.

There has been a tremendous change and tremendous upheaval just in the last short while because of the fact that the federal government has come out with this new directive and change of venue, if you want to call it, regarding their responsibility for social housing. This came upon us very sudden and very fast in the sense of a letter that was faxed to myself . I believe it was back in March, yes, about the early part of March. It was followed up very, very rapidly and, in the letter, I can mention to the member that there was the direct quote, as she mentioned, of the downloading and the offloading to the provincial government for the responsibility. It was followed up very, very shortly, in fact I believe it was not even a day or two later, by a phone call from the minister herself, Minister Marleau, asking for, more or less informing me of the direction that the government was taking regarding its social responsibilities and also to the fact that she was wanting to set up a meeting with her officials and officials here in Manitoba of how to proceed and begin this process. It was like a one-two-three punch that came about within a three- or four-day period.

We decided that this was not the best approach to take at the time and so we initiated through the deputy minister a contact to the other deputies across Canada to see whether this was a common approach that was being initiated by the federal government. It was pointed out that this was indeed what the federal government was trying to do with all provincial governments, was sort of like a divide-and-conquer and make-your-own-deal, a Monty Hall type of program here. So we were very concerned about this type of approach. So there was a meeting called and our deputy took the lead on organizing a meeting with the deputies down East to purview and to sort of consolidate a coming together of minds as to which was the best way to approach this situation that the federal government has sort of dumped on our laps.

A meeting was held, and it was more or less the general consensus that we would try to get a better understanding and a better definition from the federal government as to what they were proposing and how they were proposing to unload their responsibility, but at the same time a sharing of ideas with the other provinces as to what was happening so that they were not playing one against the other. It is in that type of stage of development right now.

There have been no overtures by this government to the federal government that we are willing to carte blanche accept their position. We have made it known that we are willing to sit down and talk and discuss what and where they are coming at in their proposals.

The member for Radisson (Ms. Cerilli) was right when she alluded to the fact that there was a meeting that was supposed to be held with Housing ministers across Canada last fall. It was abruptly just cancelled by the federal government. We have had no overtures since then that there is going to be another meeting. We have sent our regrets to the fact to the federal minister stating that we were disappointed that this was cancelled.

We are trying to make any type of effort of contact and overtures to our federal counterparts of our displeasure as to the way they are handling and the direction that they are taking our housing stock here in Manitoba. But as pointed out, I should state to the member that it was Manitoba that took the lead to formulate a united front and approach with the other provinces in approaching the federal minister regarding this downloading.

Ms. Cerilli: I asked a very short question. The minister gave me a very long answer and did not answer if it was Mr. Kinnear that went or not, because I was just sort of trying to get a sense of--and I am assuming that he is going to be the one that is following through anyway.

I am wondering where to start with this. I mean, it is quite a dramatic step. I will let the minister know that I was at the Canadian Housing and Renewal Association conference in Vancouver a couple of weeks ago, and it was a good chance to talk to some deputies from other provinces. There were lots of folks there who had a lot of different ideas about this. Some people were cheerleading for the federal government and saying, oh, this was a wonderful opportunity.

We have provinces like New Brunswick that are going great guns, and they want to by December have an offer accepted and have, for the next fiscal year, a proposal to implement, is what I have heard. Northwest Territories is set to sell off individual housing units. Ontario had made a big commitment during the election to get out of the business of social housing, and one of the first things they did was cancel all the projects that were on the books from the federal government, and they are looking at how they can also sell off housing stock. They are finding it is not as easy as they had thought it was.

The minister has said that Manitoba's DM had tried to create a united front, but I do not think that has happened, that we have very much a piecemeal approach across the country. I know that Ontario has proposed a way that there can be a nongovernmental agency that will take over the management and administration. I am wondering how the government has responded. I am sure that they have had to do a report for CMHC, and I am wondering if that report is available. I would like to see what they have done. They must have had to go through an assessment to look exactly at how much the province would require. As I understand it, the negotiations would be mainly about finances. The CMHC is looking at getting rid of as many staff as possible and that the province would get a capped amount for maintenance, for administration, that there would be money for additional staffing, and that there would also be a fund for interest and inflation, but that would also be capped.

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I am wondering what kind of assessment has been done. The minister has said that they have outright said no, that they do not want to accept this, but I know that CMHC has prepared this consultation document, and there are a number of specific questions outlined in here. I am wondering if the minister and his department have prepared a document that would have responded to these questions, and I am going to get into those in some detail.

I might as well just end there and see what is it that Manitoba has done other than having the deputy minister attend this meeting. What have they done to do an overview of our social housing situation here? Because if the minister is suggesting that Manitoba could simply say no and CMHC would continue business as usual--I am not sure if that is an option, if Manitoba wants CMHC to continue its role in administration that it has had now. As I understand it, CMHC basically just wants to write cheques and have the provincial level administer it. So I would like some response to those specific questions, especially with respect to what has been prepared in Manitoba and if there has been a written response to this document.

Mr. Reimer: It should be pointed out that, as the member has indicated, it is a relatively quick response that the federal government is looking at in the sense that they were wanting to finalize this in a very expeditious manner. What we have at issue, we have not responded in a formal manner back to the federal government in the sense of setting up a negotiation format yet. One of the things that we are concerned about is that we do not know the ground rules; we do not know the format that the federal government is coming forth. It is the opinion that to respond and to set up a negotiation, if you want to call it, at this time is premature because we still have to get an evaluation on our end and on our properties. I guess it is the realization of whether it warrants in the best interest of Manitoba Housing to pursue a new arrangement with the federal government when we do not know the parameters and we do not know the consolidated information that they have said that they wanted. It is best that we know the ground rules before we set up parameters of evaluation to come forth with MH to try and make a deal.

The member is right. The federal government is more or less trying to get out of it and just be a cheque writer at the end of every day--pardon me, every year. We are very, very concerned by the fact that once there is block funding, it is the easiest way to pull back and just say, while there is a 10 percent reduction next year or a 5 percent reduction next year, and then this is just passed down to the provincial level.

The member should also note that over the next two years or so the federal government has indicated, and I believe the number is--now I am trying to go back to memory--I think it is a total of around $230 million that is going to be cut out of the budget anyway for Manitoba--pardon, not for Manitoba Housing, but for federal housing. We do not know what our portion of that will be, so that is going to put additional pressure on our budgetary process as to the priorities and evaluation of where funding should end up for Manitoba Housing. So there is a fair amount of variables that have to come into play and be recognized as legitimate before a formal response can be made to the federal government, plus the fact that they have not given us the clear rules of the game yet. In fact, it is also the option for the federal government that has given this to the province. It is not a fait accompli; in the wording of the letter and in the indications of correspondence, it is an option that the federal government has put forth. That is just another factor. In essence, they cannot force us to take their stock, but it is worthy of analysis. Whether it is of benefit to Manitoba, we have not made that decision yet.

Ms. Cerilli: I will just ask a few straightforward questions then. (1) Does the minister buy the duplication-of-services argument? (2) Does he believe that the federal government should still fund new social housing? (3) If he does not think that the federal government should be funding new social housing in Manitoba, because in the past there has been the argument, hey, no, we have a vacancy rate; maybe we do not need new social housing. Even the minister today was trying to use the vacancy rate to justify tearing down old Behnke Road there. I am wondering if the minister thinks that the market can supply housing for low-income Manitobans.

So those are three questions. Does the minister think that the market can provide decent, affordable and safe housing for low-income people?

Mr. Reimer: One of the mandates as pointed out in my speaking notes that I just went through was the fact that the Manitoba government is committed to provide affordable housing to people that are in that category of need or find that there is that responsibility that the government should be there for those people. That need will continue. There will always be the need for people in need to have housing. Our government commitment is there, and it will continue to be there.

Ms. Cerilli: The minister did not answer my questions. Does he believe, first of all, that the federal government should be funding new social housing? We have gone through this last year, and it was under Mr. Mulroney that they first started reducing the amount of funding for social housing. In 1994 they eliminated all the money for new construction. So does the minister think that the federal government should still have a program to fund new social housing, whether it is public housing or programs for sponsored housing with community organizations?

Mr. Reimer: It should be pointed out, and I believe the member is aware of it, that it was the federal government itself that originally and initially was the provider of the housing program. In setting up the program, a lot of the housing agreements--some of them were in a 50-50 sharing; most of them were in a 75-25, I believe. Then there are even housing projects where we as a provincial government participate to 12.5 percent, where we also get into an arrangement with the City of Winnipeg and the federal government for housing. So the relationship of who is involved with housing and where the money comes from has always been in a partnership with the other levels of government.

For the provincial government to take on the sole responsibility of providing social housing or affordable public housing, I should say, public housing, our budget and the administration of our budget are something that we could not take on as a sole responsibility. There is room for partnerships, and if partnerships are available, we will explore every option that way. But, to take on the sole responsibility of being the provider of public housing in itself for Manitoba, with the Manitoba government, we are not in the position to do that as a fully funded entity within our budgetary process right now. For new housing, I should point out, yes.

Ms. Cerilli: So the minister said that Manitoba would not be able to fund, without a federal partner, new social housing.

Mr. Reimer: That is correct.

Ms. Cerilli: So I am assuming then you think the federal government should continue to play that role of initiating new social housing by being a funding partner.

Mr. Reimer: I would think that we would look at any partner that is interested in a relationship, whether it is the federal government or private initiatives or municipal initiatives where there is cost sharing or some sort of arrangement that can be made out to lessen the load, if you want to call it. Whether it is the federal government or private individuals or municipalities, these are some of the things that we would welcome to look as initiatives for providing social housing, public housing.

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Ms. Cerilli: So, again, does the minister think that the federal government should maintain its responsibility for funding new social housing?

Mr. Reimer: The federal government made a decision that they are not going to do it, and I believe that is their decision. Whether they change or not, I guess it is up to the federal government to make that decision. We continued to show our displeasure when they pulled out of the market in 1993, I believe it was, and we have indicated that we are not happy with the way they are unloading this present situation. So the federal government is abdicating its responsibility, and we have made our feelings known to them, not only through my department, as minister, but I believe my cohorts also had correspondence to the federal government outlining their displeasure.

Ms. Cerilli: Well, the minister is not giving me much confidence. He is not saying they should be maintaining their role in funding new social housing, and I am wondering why he is not saying that. I mean, this government seems to go to Ottawa on what are to us issues that are not the most pressing. On the gun control bill there were ministers off to Ottawa; on the Young Offenders Act, there were ministers off to Ottawa. Then, when we have major cutbacks in health care, major cutbacks in income assistance programs, in post-secondary education, and in social housing, it does not seem there is very much public outcry from this government, and now the minister is even hesitant in even saying he thinks the government federally should be maintaining this role. So I do not understand why, if you feel so strongly, you are not (a) more public about it, and (b) saying even now that they should be maintaining that role as a funder for new social housing. I wonder if you can explain that.

Mr. Reimer: I think I have been trying to allude to the fact that we are very, very concerned that the responsibilities and the offloading are being put back onto the provincial level.

The federal government has made it abundantly clear that they are not going to be involved with social housing anymore. When the decision was made there was an outcry and there were directives that came from, I am sure, not only our department here in Manitoba but all departments across Canada indicating their displeasure with the fact that the federal government has felt that the responsibility for housing is being put back onto the provincial level, whereas initially it was initiated by the federal government for housing. We will carry this concern forward that for the best interests of Manitobans that public housing is a very high priority and we place a fair amount of, a great deal of importance that public housing remains as a very strong alternative for people that are of need in that particular situation.

Ms. Cerilli: I am going to ask some questions about specific numbers then, because I think last year in Estimates the minister said that the cutback that was announced in 1994, $270 million over three years, was going to hit Manitoba at $5 million a year approximately, and I appreciate the minister sending me the schedule for the financing of modernization improvement in Manitoba. I figured out that the federal government this year is contributing almost $3 million to the modernization improvement. That is just for the public housing.

I am wondering if other than, unlike what the minister has said, where the federal devolution of responsibility for the administration and management of all the housing, if that was signed in an agreement, would it not mean that the federal government had to maintain the agreed-to funding? If we got into an arrangement with the federal government where we were not going budget year by budget year, and maybe that is the way these agreements would work, but as I understand it, it would be an agreement that they would maintain a certain proportion of the funding, because I am wondering if it would lock them into a certain level of funding, whereas the way that they are budgeting now, with reductions every year, allows them to slowly erode their financial commitment to maintaining the social housing.

I am wondering if it was an agreement that was signed with them that would have been, I do not know if these agreements would be until the end of the mortgage or if that would mean that they would be committed to a certain level of funding that could be predetermined by the Province of Manitoba so that we had an assurance that they would be committed to maintaining a certain percentage of the operating costs of these properties.

So I would like some clarification on that, and maybe the minister could also inform me of the breakdown. I mean, I have gone through the annual reports and that, and I just want a clarification on the breakdown in the different categories of the amount of money coming from the federal government. You know, there is the subsidy of some of the units, there is the mortgage payments on the sponsored housing, there is the mortgage payments on the public housing and the modernization and improvement money, and then there is the maintenance money. Those are sort of the budget areas that I am mostly dealing with. They seem to be the largest cost areas. I have the most recent annual report with me and I am wondering if the minister could direct me to those figures.

Mr. Reimer: The agreements that the member is referring to would run as long as the mortgage is held on that particular piece of property. The calculation of the amounts that the federal government reimburses or is responsible for is calculated sort of like at the end of the day in a sense of when the rent is brought in as a source of revenue and then the losses are calculated at that particular time. That is when the determination of the federal responsibility is calculated. It is not on an ongoing basis in the sense that it is a certain percentage. It is all brought into focus because of the variables in the variation in rental income or rent income that comes in that is charged back against that particular unit or units.

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A good example is on page 33 of the annual report. Just for quick comparison, there is a calculation of the total revenue, and from that revenue the administration is taken off, the property operating amount, the grants in lieu of taxes are taken off, the amortization and interest are taken off, the insurance is taken off. It comes up with the operating loss. The operating loss for this particular one that I am looking at is approximately $38 million, and then you take off the federal subsidies. It is then calculated on that, which comes to approximately just over $22 million. The formula is then calculated on a certain percentage of the loss, and then the net housing operation is the final figure, which is approximately $15 million. So that gives you a bit of an idea of how the federal subsidy is calculated. The expenditures are taken off the revenue, and the revenue does not equal the amount of rental revenue, so it is working at a loss. That is where the federal government comes in to pick up its share.

Ms. Cerilli: If I am understanding this correctly, what the minister is saying is the amount of money from the federal government is not calculated until after you know how much you are going to get from the rental revenue. Is that correct?

Mr. Reimer: Plus the loss. Not just the revenue, but the losses also. The revenue is brought forth as a number, and then the operating losses are charged against that revenue. Then you come to your final figure of the total operating loss. That is when the federal formula is kicked in and applied against that loss.

Ms. Cerilli: The minister is using the word “loss.” I am wondering, does that mean cost? I mean, administration, property operating, taxes--those are all the costs.

Mr. Reimer: I guess I am using terminologies in a different way, but the gross costs that are charged against a unit are taken away from the rental revenue, and then you come up with your operating loss. It is that loss that we charge a portion of to the federal government, and they reimburse us.

Ms. Cerilli: I understand what the minister is saying now because that is where we got into difficulty the other year when they had promised if the rent geared to income was increased that that money would come back to the province, but they were able to keep that, as I understand it. So, because of the way that this has worked, it made it easier for them to do that.

From that page 33, from the '94-95 annual report, how can we get a clear indication of what is the actual operating cost for operating all of the public housing managed by the Manitoba Housing Authority for the province? Is that the $83-million figure?

Mr. Reimer: If we look on that page at the 1995 total and we see the $102,611,000, that is the total cost of expenditures for public housing in 1995. We took in just over $57 million, so it shows a--

Ms. Cerilli: Yes, I understand.

Mr. Reimer: I should point out, too, that the $102 million, that is just the projects owned by MHRC. There are other buildings with which we are in sponsorship that would also come into effect. That might be on the report there, too.

Ms. Cerilli: As I understand this chart, the third column, 1995 Total is the addition of Schedule B and Schedule C, Schedule C being the sponsored but managed properties. Maybe there still are additional properties that are sponsored and there is some involvement of CMHC and the Manitoba Housing Renewal Corporation in the mortgage, but they are all operated and managed by community agencies, seniors groups, aboriginal groups. I think I am getting a clear picture of how the federal government finances these buildings because I thought it was strictly 25 percent. I thought it was 25 percent of the costs.

Mr. Reimer: I should point out, we were talking about page 33 before. We can look at a different page also and see that there is additional cost that is recaptured, and that is on page 51, where we have the private, nonprofit operations, where you see there, too, that there is a federal subsidy of just over $9 million in regard to this portion of the public housing. You see, those people there would own their own buildings, so there is a lot of money there.

But as to the formula, I would have to find out exactly whether it is a set formula or a sliding formula.

Ms. Cerilli: What I am really getting at in all of this is to understand, and maybe the minister has alluded to this already when he said the federal government has not put forward any criteria, but what I am trying to get an understanding of is what they are proposing the formula for the agreement would be, the formula for the financial agreement, and if they would continue in this sort of vein of basing it on the operating costs or if they would be committed to a percentage or how it would work, if there is any indication from the federal government of how these management and financing agreements would work and if you actually signed an agreement and a legal document with them that locked them into a certain amount of funding, if that may not secure more funding from the federal government than if we continue on in this process of just them budgeting year after year and being able to reduce the amount of transfer payments that come for social housing.

Mr. Reimer: That is an interesting point that the member raises, because under the existing agreements right now, there is a formula that is locked in, even though it may be different for various projects because of the time that they were built and the precentage rise.

The member is correct in stating that what the federal government is looking at now is a standardization, if you want to call it, of--we are not too sure. I should not speculate too far into what the federal government is proposing, but what they are saying is a lot of the existing formulas and the funding that is flowing now, the way it seems to be interpreted is this would change with a new arrangement with the federal government.

We are very, very concerned that if that does change, we do not know what the impact would be as to not only the existing fundings that we are receiving now but also future fundings that could be, as the member mentioned, just capped or cut or moved to a different type of percentage.

I would also include in our indications that the federal government is saying that they are looking at using '95-96 as a benchmark and then looking at a cap. Our concern would naturally be whether those '95-96 calculations or funding formula would be adequate down the road two or five or 10 years because, as the member knows, things change, governments change, ideas change, and we may be faced with very dramatic funding that we can or cannot handle.

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As has been indicated to myself, we are not privy to those details at this moment. We are very concerned, as I mentioned earlier, that we get the playing rules or the level of concern that we have before we make any type of commitments to the federal government. We have asked for additional information, but they have not responded to date, the federal government. They have not given us that type of information that we are asking for. There are legitimate concerns and questions that we as a department have started to ask, just as the member for Radisson has asked. It is not an uncommon thing. I think all provinces are going through the same thing.

Ms. Cerilli: Well, there are some provinces that are jumping on the federal bandwagon and have indicated that they are moving quickly on this. [interjection] The minister says they are not very smart. I mean, it seems to me that if there is going to be a cap and there is going to be no guarantee that they would be locked into a certain amount of dollars to ensure that there is going to be retained a certain percentage of the operating costs for these housing complexes, then it is a way for them to continue to reduce the amount of funding, so if they could sign an agreement with the provincial government and then the next year say, well, we are cutting the money for CMHC, and that would be reduced, that does not seem like it would--I cannot understand how that kind of an agreement, how they could expect the provinces to want to go forward with that.

Mr. Reimer: It should be pointed out that the reason maybe that it has been indicated to me that some of provinces are looking at it in a more aggressive manner is the fact that their social housing may not be of the magnitude that we have here in Manitoba, plus the fact that I believe she is alluding to New Brunswick. While in New Brunswick, government is the name of the game, and they seem to jump on any type of federal initiatives first off the mark. Now whether that is good or bad I could not speculate too far, but other than the fact that their housing stock may not be of a nature in the amount that we have here in Manitoba.

Our commitment to it is an interpretation maybe in a different venue than what New Brunswick has got before them so they may be easily swayed, if you want to call it, by the federal government's musings, so we will just leave it at that.

Ms. Cerilli: So this booklet then, put out by CMHC, it is called Consultation on the Public Housing Program, Fall 19--oh, this is '90. I thought this was '96. I was looking at this all the time thinking it said '96, so this is quite out of date then and must have been prepared when they were first starting to reduce the amount of funding for social housing but I think it has some key questions.

One of the concerns that I had about this is it is already there in black and white alluding to, sort of, private offloading. I am wondering if that is one of the things that the minister and the Department of Housing in Manitoba gets the sense of what the federal government is encouraging, that they see that continuing to fund aging housing stock is only going to increase in costs and financial commitment, and if they are sort of suggesting that one of the ways of dealing with this is to try and find ways of selling off or privatizing any part of social housing.

Mr. Reimer: I guess, there is always room for innovative ways for looking at social housing with the view of still being there to provide for it in some other way, whether it is in the actual bricks and mortar of a housing and the physical aspect of building a residence or an apartment block or whatever it is for public housing. The member is right. There is a concern but the fact that there is a lot of public housing that is coming of an age where the maintenance and repair on it is growing at an ever rising amount, plus the fact that there is concern for providing for the safety and security of the individuals that are in these units.

There are a lot of alternatives that I feel we can look at in providing social housing or public housing and that is in the area of rent subsidization. This is something that I feel the federal government, if they are in a serious position of downloading and offloading their responsibility for a building program or an expansion program of a public housing project, that that possibly is a strong alternative to still provide affordable accommodations in the market. At the same time, it is still the utilization of monies that have shown a commitment to public housing and it may free up money that, instead of going into maintenance and repair on an aging stock, can be redirected into a rental subsidy program where there are the accommodations and the dispersement of people into apartments or homes that are in the private sector or in the nonprofit sector, private nonprofit sector on a subsidy basis, a rent subsidy basis and at that time still being there to provide for these type of individuals.

I think there is room for a lot of innovative approaches and co-operation and partnerships within housing. I think we have to be open to look at this because of the fact that, as the member mentioned, the idea of building new public housing, the monies are not there on the federal basis, the municipalities are being faced with some severe choices for their direction and the priorities of their funding and spending, just as we in a provincial government have to go through an analysis as to where the monies are going, but at the same time I think it opens up a very innovative way of looking at other areas of trying to provide for public housing.

Ms. Cerilli: I am wondering if the minister has found one of those innovative ways and we are seeing that exemplified on Behnke Road. One of the things I am wanting to ask the minister if he will table--we are going to break soon--I am wondering if he will table the document he referred to in Question Period today in terms of the vacancy rates for this year. I agree that I had been referencing the '94 year, because that is the only one I have.

The other thing I am wondering is, if the mortgages were paid off on those kind of complexes, the public housing, how close would the rent-geared-to-income be to paying all the operating costs? So two questions. Will you table what you referenced today in Question Period and would those properties carry themselves as low-income, paid-for properties?

Mr. Reimer: Yes, I see that we are just about running out of time, but I can get those information tables for the member. We will try to get them for her in a very short while if not as soon as possible on those figures, those vacancy figures and the occupancy figures.

Mr. Chairperson: Order, please. The hour now being 5:30, the committee will recess.