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2003 April Report of the Auditor General of Canada
Appendix B—Complexity of housing programs—Indian and Northern Affairs Canada and Canada Mortgage and Housing Corporation
|
Indian and Northern Affairs Canada |
Canada Mortgage and | |||||
|---|---|---|---|---|---|---|
|
Policy/Program1 |
1983 policy |
1996 policy |
Ministerial loan guarantee |
Section 95: two percent program |
Section 95: "deep subsidy" program |
Residential Rehabilitation Assistance Program (RRAP) |
|
Number of First Nations or units serviced |
About 146 First Nations (at 31 March 2001)2 |
About 400 First Nations (at 31 March 2001) |
591 First Nations (since inception of the program in 1966) |
About 18,000 units |
About 4,000 units |
About 9,577 units (from 1992 to 2001) |
|
Key Features |
Construction: Subsidy between $19,000 and $45,000 per unit, depending on location. Renovation: Subsidy averaging $6,000 per unit. Funding Allocation: Funding is allocated mostly on the basis of population. Core budget set in the early 1990s. |
Level and allocation of funding remain unchanged, however, funding can be used to support a broad range of housing activity, including construction, renovation, insurance, and maintenance. |
The Minister guarantees repayment of a loan to an approved lender under the National Housing Act in the event of default by a First Nation or an individual. In the event of reimbursement to a lender, the Department recovers funds from the First Nation. |
Subsidy is provided monthly over the duration of the loan to reduce the interest rate on housing capital costs to two percent. Rent is charged on a rent-to-income scale, up to a maximum. |
Deep subsidy is provided monthly over the duration of the loan to cover the difference between loan payments and project operating benchmarks and minimum revenue contribution. Minimum revenue contribution is required (funded through collection of rent, other First Nations funds, or from Department's Social Assistance Program if occupant is a social assistance recipient). |
Financial assistance is provided to repair substandard homes to a minimum level of health and safety or improve accessibility for disabled persons. Assistance has forgivable and repayable portions, depending on cost of eligible repairs, household income, and location of First Nation. Maximum forgivable assistance ranges from $12,000 to $18,000. |
|
Eligibility |
All First Nations not under the 1996 housing policy. |
- Development of housing programs and policies to respond to local needs and opportunities. - Development of multi-year housing plans that set out specific tasks and identify required resources. |
- Housing projects must be viable. - For individual loans, satisfactory financial reputation and ability to repay loan. - First Nation must be well managed and operating without a significant deficit, have a satisfactory record of meeting financial obligations, and have a satisfactory previous record for completing housing projects. |
New Projects: Existing Projects: |
New Projects: - Eligible for a Ministerial Loan Guarantee from the Department. - Current projects operating in accordance with project operating agreements. Existing Projects: |
First Nations or individual homeowners with a limited income whose house is older than five years and lacks basic facilities or is in need of major repair. |
|
Delivery requirement3 |
Annual comprehensive funding arrangements Construction: Prepare and carry out project implementation plans, including scope, schedule, and costs. - Compliance with code requirements. Renovation: Similar requirements defined. Multi-year block funding arrangements Construction: Prepare and carry out approved capital plan, including scope, schedule, and costs. - Compliance with applicable regulatory requirements. Renovation: No requirements defined. |
Annual comprehensive funding arrangements Construction: Prepare and carry out project implementation plans, including scope, schedule, and costs. - Compliance with code requirements. Renovation: Similar requirements defined. Multi-year block funding arrangements Construction: Prepare and carry out approved capital plan, including scope, schedule, and costs. - Compliance with applicable regulatory requirements. Renovation: No requirements defined. |
- Loans will be used for housing. - Environmental assessment of subject property. - Formal commitment by First Nation to reimburse Department in event of guarantee payout. |
New projects: Ongoing subsidies: - Annual verification of tenant income. - Loan payments in full and on time. - Funding of replacement reserve. - Allocation of units to maintain viability of project and program objectives. - Client visits and cyclical inspections periodically undertaken by CMHC. |
New projects: Ongoing subsidies: - Funding of minimum revenue contribution, replacement reserve, and operating reserve. - Use of client selection criteria. - Client visits and cyclical inspections periodically undertaken by CMHC. |
- Complete all mandatory repairs to property to provide minimum levels of health and safety and extend useful life to a minimum of 15 years. - Adopt occupancy and building maintenance standards acceptable to CMHC. |
|
Reporting requirements |
- Five-year Capital Plan (updated annually). - Housing Conditions Annual Report. - Housing Totals Annual Report. - Certificate of Completion for new construction.4 |
- Five-year Capital Plan (updated annually). - Housing Conditions Annual Report. - Housing Totals Annual Report. - Certificate of Completion for new construction. - Annual Update to Community Housing Plan. |
Lenders are required to submit the following reports to the Department: - Guaranteed Loans Terms and Conditions Report. - Yearly Status Report of Guaranteed Loans. |
- Annual Project Data Reports. - Annual audited financial statements (including confirmation that verification of incomes has been performed). |
- Audited statement of final capital costs when construction is completed. - Annual audited financial statements. |
- Inspections or invoices for work completed prior to CMHC payment. - Final inspection report. |
Notes:
1. Departmental and CMHC programs are not mutually exclusive. For instance, First Nations can use departmental subsidies in support of CMHC section 95 projects. Section 95 projects also require the support of departmental ministerial loan guarantees. However, CMHC RRAP subsidies cannot be used to support the renovation of section 95 units.
2. The figure was derived from the number of First Nations that reported on housing conditions to the Department in 2001.
3. The interpretation and enforcement of some delivery requirements vary from region to region. There is one type of annual funding arrangement and four types of multi-year block funding arrangements (Alternative Funding Arrangements, Financial Transfer Agreement, Indian and Northern Affairs Canada/First Nations Funding Agreement and Canada/First Nations Funding Agreement).
4. Requirements for certificates of completion depend on the type of funding arrangement used and the terms and conditions attached to any additional housing allocations.
Source: Departmental and CMHC documentation