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The Honourable Sean Fraser, Minister of Housing, Infrastructure and Communities Appearance before the Standing Committee on Indigenous and Northern Affairs (INAN)
Subject: OAG Report 2 on Housing in First Nations Communities
Date: Monday, June 3, 2024 (11:00 a.m. - 12:00 p.m.)
Location: Wellington Building, Room 425

  1. Departmental Response to Auditor General’s Report on Housing in First Nations Communities
  2. Government Response to Auditor General’s Report on Housing in First Nations Communities

Departmental Response to Auditor General’s Report on Housing in First Nations Communities

Issue / question

In response to the Auditor General’s 2024 Report 2: Housing in First Nations Communities report, what are Infrastructure Canada, the Canada Infrastructure Bank, and Canada Mortgage and Housing Corporation doing with respect to First Nations housing?

Suggested response

  • Since 2015, the Government of Canada has built, repaired or renovated almost 22,000 homes on reserve, through investments provided via Indigenous Services Canada (ISC) and Canada Mortgage and Housing Corporation (CMHC).
  • Infrastructure Canada (INFC) and the Canada Infrastructure Bank (CIB) support infrastructure projects that enable First Nations housing development.
  • To support housing for Indigenous peoples living off reserve, the federal government has committed $4.3 billion to an Urban, Rural and Northern Indigenous Housing Strategy. CMHC has engaged with Indigenous partners, including First Nations, to develop a strategy framework, and is currently working with ISC to advance implementation.
  • INFC also delivers Reaching Home: Canada’s Homelessness Strategy, which is a community-based program aimed at preventing and reducing homelessness across Canada. Reaching Home has two funding streams specifically for the delivery of culturally appropriate homelessness services to Indigenous peoples.

Supplementary Responses:

  • ISC and CMHC lead on federal investments in First Nations housing.
  • INFC and the CIB support investments that enable First Nations housing development. CMHC’s programs, notably the On‑Reserve Non-Profit Housing Program and On-Reserve Renovation Programs, complement ISC’s funding for housing on First Nations reserves.
  • As announced in Budget 2024 and in Canada’s Housing Plan, the new Canada Housing Infrastructure Fund is designed to accelerate the construction of water and wastewater infrastructure that enables housing development. Provinces will be required to dedicate at least 20% of their agreement-based funding to northern, rural, and Indigenous communities.
  • In March 2024, the CIB launched the Infrastructure for Housing Initiative, with targeted loans for municipalities and Indigenous communities to help fund housing infrastructure.

Background

  • In March 2024, the Auditor General tabled a report on housing in First Nations Communities. The audit evaluated the housing program supports delivered by Canada Mortgage and Housing Corporation (CMHC) and Indigenous Services Canada (ISC) to First Nations on reserves. The report found that the current application-based programming approach is difficult to navigate and has not met the needs of communities with the greatest housing needs, and that there lacks a substantive, long term and transformational plan to address housing and infrastructure gaps in Indigenous communities.
  • The Assembly of First Nations (AFN) estimates that the cost to close the housing gap on reserve by 2030 has grown to $135.1 billion, and will grow to $201.5 billion by 2040, if action is delayed.
  • First Nations housing on reserve is primarily delivered by ISC and CMHC. Recent investments in First Nations housing on reserve include $2.4 billion over five years to support housing (Budget 2022) and $426 million over five years for housing and infrastructure (Budget 2024).
  • CMHC’s on-reserve legacy programs (see below) provide support for community and market housing. Both CMHC and ISC recognize that more work needs to be done to develop homeownership and alternative financing on - reserve.
  • Through the Joint Working Group on the National First Nations Housing and Related Infrastructure Strategy, discussions are ongoing with the AFN on transferring care and control of on reserve housing to First Nations. ISC and CMHC are federal co-chairs of the Joint Working Group while Infrastructure Canada (INFC) is a participant.

CMHC

  • CMHC delivers specific housing programs that support construction, renovations, ongoing management of social housing and housing-specific development, including in Indigenous communities. These programs complement ISC’s funding for housing on reserve. Examples of CMHC-led programs include:
    • CMHC’s On-Reserve Non-Profit Housing Program (Section 95) assists First Nations in the construction, purchase and rehabilitation and administration of rental housing on-reserve.
    • CMHC’s On-Reserve Renovation Programs offer financial assistance to First Nations to repair substandard homes to a minimum level of health and safety, to convert non-residential properties into affordable self - contained housing units, and improve the accessibility of housing for low-income seniors and persons with disabilities.
    • CMHC’s Shelter Enhancement Program offers financial assistance for the repair, rehabilitation, and improvement of existing shelters in First Nation communities for survivors of family violence.
  • Budget 2022 announced $300 million over five years to co-develop and launch an Urban, Rural, and Northern (U.R.N.) Indigenous Housing Strategy. Of this, $281.5 million was accelerated over two years and provided to National Indigenous Collaborative Housing Inc. to address immediate unmet needs, through ISC. The remaining $18.5 million flowed through CMHC to support Indigenous-led engagements on the Strategy.
  • Budget 2023 committed an additional $4 billion, over seven years, starting in 2024‑25, to implement U.R.N., which is intended to support Indigenous housing off reserve and outside of Indigenous communities. CMHC is the lead federal organization, supporting the establishment of an Indigenous-led National Indigenous Housing Centre, which is expected to disburse 70% of the funding, 30% will be allocated on a distinctions-basis through funding arrangements with ISC and Crown-Indigenous Relations and Northern Affairs Canada.

Auditor General Report

  • The Auditor General Report on Housing in First Nations Communities calls on ISC and CMHC to work with First Nations to improve the supply and quality of housing on reserve. This included a number of recommendations to improve access to funding for communities with the greatest needs, improve data and reporting, and to work towards the eventual transfer of housing services and programs to First Nations.
  • Work to address the Auditor General’s findings is currently underway at CMHC and ISC, in partnership with First Nations, provinces and territories, in alignment with these recommendations.
  • CMHC welcomes the report of the Auditor General of Canada on Housing in First Nations Communities.
  • CMHC’s work with First Nations has continually evolved over recent years. CMHC is listening and changing the way it engages and works with First Nations, and CMHC is diligently seeking opportunities to supplement and complement the existing suite of programs.

INFC

  • Canada’s Housing Plan, announced on April 12, 2024, sets out an ambitious approach to restore housing affordability, where everyone – including First Nations – has a place to call home. The Housing Plan includes three pillars: building more homes, making it easier to rent or buy a home, and helping Canadians who can’t afford a home.
  • The new $6 billion Canada Housing Infrastructure Fund to be delivered by INFC will support the construction of infrastructure that is critical to enabling housing development (such as water, wastewater, and solid waste infrastructure).
    • Bilateral agreements with provinces and territories will direct $5 billion to selected projects, while INFC will launch a direct competitive intake for the remaining $1 billion.
    • To ensure this funding reaches communities of all sizes and needs, provinces must dedicate at least 20% of their agreement-based funding for northern, rural, and Indigenous communities.
  • INFC also delivers Reaching Home: Canada’s Homelessness Strategy, which is a community-based program aimed at preventing and reducing homelessness across Canada. Reaching Home was launched in 2019, and the Government of Canada committed $4 billion over nine years to support communities in addressing homelessness for individuals and families across Canada. Budget 2024 proposes to provide an additional $1.3 billion over four years, starting in 2024-25, for Reaching Home.
  • Reaching Home has two funding streams specifically designed to meet the needs of Indigenous peoples. Between 2019-20 and 2027-28, the Government of Canada is allocating $686 million for the Indigenous Homelessness Stream and $204.2 million for the Distinctions-based Stream. Note that these amounts do not include Budget 2024 investments.
    • The Indigenous Homelessness stream provides funding to organizations that provide culturally appropriate services and supports to address the specific needs of Indigenous peoples living in urban centers who are experiencing or at-risk of experiencing homelessness. Indigenous Homelessness stream funding is delivered in 30 urban communities and seven regions across the country.
    • The Distinctions-based stream provides support to homelessness-related initiatives determined in collaboration with First Nations, Inuit and Métis partners to help ensure that programming meets the specific needs of First Nations, Inuit and Métis peoples. A portion of this funding is also dedicated to support community-based homelessness initiatives led by modern treaty holders with provisions in their treaties related to the delivery of social services.
  • While the Territorial Homelessness Stream is not exclusively focused on the needs of Indigenous peoples experiencing or at-risk of homelessness, there is a significant focus on Indigenous homelessness given the high proportion of Indigenous peoples in each of the Territories.
  • Indigenous peoples are not limited to accessing only the services that are funded by the Indigenous-specific streams, they may also access services and supports from organizations that are funded by the program’s other regional streams.

Canada Infrastructure Bank (CIB)

  • The CIB has a target to invest at least $1 billion in revenue-generating Indigenous infrastructure projects across five priority sectors: clean power, green infrastructure, public transit, broadband, and trade and transportation. Consistent with CIB’s authorities and in line with the Minister’s September 2023 Statement of Priorities and Accountabilities issued to the CIB, the CIB investments in housing are to be limited to enabling infrastructure needed to support housing growth, primarily water infrastructure, local civil works, and broadband.
  • Through the Indigenous Community Infrastructure Initiative, the CIB has an agreement to invest $7.9 million in the Netmizaaggamig Nishnaabeg Reserve Extension. The CIB’s investment will support critical infrastructure required for commercial and residential development that will improve living standards on reserve.
    • The project includes construction of approximately one kilometre of new road, the extension of water services tied into the existing water treatment system, the extension of existing fixed wireless broadband and the electrification of 55 new building lots.
    • Buildings planned for the 55 lots include: 10 units of multi-family affordable housing; two units of social housing, 8-10 units of market and staff housing; and commercial buildings, including a family services office building, a construction yard, a mixed office and retail building, a health centre with a pharmacy and clinic, and a police station.

Government Response to Auditor General’s Report on Housing in First Nations Communities

Issue / question

What is the Government of Canada’s response to the Auditor General’s 2024 Report 2: Housing in First Nations Communities?

Suggested response

  • The Government of Canada welcomed the Report of the Auditor General of Canada on Housing in First Nations Communities. We appreciate the work and effort put into this report and we plan to leverage it in many ways, to better respond to First Nations housing needs.
  • The Government of Canada’s work with Indigenous partners, including First Nations, has continually evolved over recent years. We are listening and changing the way we engage and work with First Nations, and we are diligently seeking opportunities to supplement and complement the existing suite of programs.
  • In addition, the work currently underway at Canada Mortgage and Housing Corporation and Indigenous Services Canada, in partnership with First Nations, provinces and territories, closely aligns with the recommendations in the Auditor General’s report.

Background

Investments

  • Persistent underfunding, combined with rising construction costs, climate change and population growth have led to the current housing gap in First Nations on reserves. In response, the Government of Canada has made significant investments in housing stock and repairs. Since 2016, $3.93 billion has been committed, through Indigenous Services Canada (ISC), in targeted funding for First Nations housing on reserves, on top of an average of approximately $150 million annually to support a range of on-reserve housing needs.
  • Through the National Housing Strategy, the Government of Canada has committed more than $1.95 billion in funding for Indigenous and Northern Housing.

Funding Formulas

  • The formula used to calculate the national allocation to regions was developed with the specific 2001 census data to accomplish the objectives of the tripartite agreement signed by Canada Mortgage and Housing Corporation (CMHC), ISC and the Assembly of First Nations.
  • Adjusting the national allocation is not a simple exercise of updating census data in the formula; the entire formula will need to be revisited, renegotiated and revised in agreement with our partners. The formula will not be changed unilaterally.

Supporting Smaller Communities and Communities in most need

  • CMHC has taken actions to try and ensure communities can access funding. We have created a nationwide Indigenous solutions team, that actively promotes programming to all communities and works closely with them to generate successful applications. Where possible we have created notional set asides for Indigenous housing providers, for example, from December 2022 to March 2024 we have worked closely with ISC to fund repairs to over 7,000 homes on-reserve through the Affordable Housing Fund.

Mould

  • While neither ISC nor CMHC has a dedicated program to address mould, mould remediation can be supported under existing ISC and CMHC programming. For example, mould remediation is an eligible repair through CMHC’s Residential Rehabilitation Assistance Program (RRAP). First Nations can choose to apply to RRAP for mould remediation.

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