HANSARD

Printed and Published by Nova Scotia Hansard Reporting Services

Ms. Maureen MacDonald (Chair)

Mr. James DeWolfe (Vice-Chairman)

Mr. Mark Parent

Mr. Peter Christie

Mr. Graham Steele

Mr. David Wilson (Sackville-Cobequid)

Mr. Keith Colwell

Mr. Michel Samson

Mr. Wayne Gaudet

In Attendance:

Ms. Mora Stevens

Legislative Committee Clerk

Mr. Jacques Lapointe

Auditor General

Mr. Claude Carter

Deputy Auditor General

HALIFAX, WEDNESDAY, APRIL 12, 2006

STANDING COMMITTEE ON PUBLIC ACCOUNTS

9:00 A.M.

CHAIR

Ms. Maureen MacDonald

VICE-CHAIRMAN

Mr. James DeWolfe

MADAM CHAIR: Good morning, I'd like to call the committee to order, please. Today we have with us witnesses from the Department of Community Services regarding the Canada-Nova Scotia Affordable Housing Agreement, and probably other matters with respect to housing. We will proceed in the usual fashion with introductions and a brief opening statement from the department - I'm not sure - Mr. Dillon, followed by two rounds of questioning. We'll start with introductions first.

[The committee members and witnesses introduced themselves.]

MADAM CHAIR: Welcome. Mr. Dillon, the floor is yours for some brief opening remarks.

MR. HAROLD DILLON: Thank you and good morning. My name is Harold Dillon, and as I indicated I'm the Senior Director for Employment Support and Income Assistance and Housing at the Department of Community Services. Deputy Marian Tyson is not able to join us today, unfortunately. So I'm here to speak on behalf of the department. We are here today with representatives of the department to provide information and answer any questions you may have about the Affordable Housing Program.

Quickly, to further introduce my colleagues, George Hudson is the Executive Director of Finance and Administration. He's a long-time financial senior manager in the department. He came to our team from - help me out here, George - the private sector. George is also the Chief Financial Officer of the Housing Development Corporation. Also with me, on my right, is Ed Lake, who is currently the Director of Properties and Facilities. Prior to taking on that job, recently he was Manager of the Affordable Housing Program, for the last three years, involved particularly in the delivery of Phase I of the agreement. Ed is also a long-time employee in various elements of the department, having worked in the Metropolitan Regional Housing Authority for a number of years before he joined the department. Dan Troke, further to my right, is the recently appointed Director of Housing, and came to us from the tax and policy branch of the Department of Finance.

To address the need for affordable housing in Nova Scotia, the province and Canada Mortgage and Housing Corporation signed the Affordable Housing Program agreement in September 2002. The agreement provides funding for a number of housing programs, including housing in the form of new rental accommodation, housing involving rehabilitation and conversion, and a New Home Purchase Program.

The initial agreement involved the commitment of $18.63 million of federal funding, to be matched by an additional $18.63 million in funding from Nova Scotia and its partners. As of March 31, 2006, we have committed approximately $37.3 million that was foreseen as the funding in the program, and that resulted in the creation of approximately 930 units. In March 2005, we entered into a further agreement with the federal government for Phase II of the Affordable Housing Program for $18.9 million in funding, and that funding will be split approximately 50/50, with half of it coming from the federal government and the other half required to be contributed by Nova Scotia and its partners. That will bring the total amount of funding in this agreement to $56.2 million over the period of the agreement.

I will briefly describe the four programs that are available to be delivered under the program. The New Rental Housing Initiative encourages the construction or conversion of new, modest, affordable housing for low- to moderate- income households in areas of need. This is the Phase I part of the New Rental Housing Initiative.

The developers and owners are provided with either one-time capital contributions of up to $25,000 per unit and, in some cases, offered rent supplement assistance to enable us to serve lower-income households.

The second program is the Rental Preservation Program, which is similar to the new rental, except it involves preserving existing affordable rental housing that is at risk of being lost to the affordable housing market because of its deteriorating condition. The level of funding support provided on this program varies according to the repairs required.

The New Home Purchase Program was a limited program aimed at assisting in the revitalization of some urban areas of the province and would assist of providing upfront capital grants to assist homeowners in achieving home ownership.

The final program is the Home Preservation Program, which is aimed at helping low-income homeowners make major repairs to their homes, to address health and safety issues, and to assure that the housing stock is not lost as affordable housing. The level of funding for that program ranged from lows of $20,000 to $24,000 a unit to highs of $35,000 to $40,000 per unit.

Throughout the delivery of Phase I, we also created about 170 affordable rent- supplement units. Thirty of which were in fact aimed at a student housing pilot project aimed at assisting single-parent families attending university full time. We are continuing to work with Nova Scotia universities to increase the number of students who can access that program.

As part of the implementation of Phase I, we held fairly broad consultations and carried out in-depth research on housing needs in Nova Scotia. That research identified how each program would be used to reach low-income households. Moving forward, we are ensuring we are supporting those with the greatest need, and we will continue to use a rent-supplement component as part of the menu to ensure affordable housing options are available to Nova Scotians.

Some of the successes. As I've indicated, we have committed the entire program funding for Phase I, as of March 31, 2006. We will have created 553 affordable homes under the new rental housing aspect of the program aimed at families, individuals, seniors and persons with disabilities. Through the Home Preservation Program, a very valuable program for many homeowners in Nova Scotia, we will have preserved approximately 176 homes scattered across the province, and investing approximately $6.3 million to bring those homes up to current health and safety standards. As many of you may know, Nova Scotia has some of the highest rates of home ownership in the country and also one of the highest ratios of older homes.

We helped six families purchase new homes who might not have been able to otherwise, through the New Home Purchase Program. We created 70 rent-supplement units, combined with the new affordable rental developments, in existing developments and through the Affordable Student Housing Pilot Program.

Also within the program, we will create about 50 barrier-free units and as many visitable units as possible. Visitable units contain features that reduce obstacles for people with physical disabilities.

In conclusion, good quality homes contribute to the health and well-being of individuals, families and communities. Affordable housing is an essential building block for

the health and economic viability of communities throughout Nova Scotia. At the completion of Phase I of the Affordable Housing Program as indicated, we committed about $37.3 million for affordable housing and under the agreement, $56.2 million will be committed for the creation of affordable housing. We expect to see Cabinet approval for the second phase of the Affordable Housing Program delivery plan this month. Phase II of the program will commit about another $18.9 million, as indicated, for a program total of $56.2 million.

In closing, I would like to thank you for the opportunity to speak today about the Affordable Housing Program. We look forward to providing you with more specific information in response to any questions you may have. We have a handout which will include a copy of the speaking notes, a couple of tables and a small photo essay, showing some of the projects that are either completed or underway across the province, within the various program mix.

MADAM CHAIR: Thank you, the clerk will distribute those. The opening round is 20 minutes.

Mr. Wilson. You have until 9:30 a.m.

MR. DAVID WILSON (Sackville-Cobequid): Thank you, and welcome to the committee. I know, Mr. Dillon, you've been here several times in the past. I think this is the first time where you'll be addressing most of the questions, with the absence of the deputy minister. I appreciate what information you can give us and I'm sure the information that you can't, you'll definitely get to us, I'm sure of that.

Housing is definitely a serious concern for our Party and I know for many of the members here in the committee. It is a concern of many Nova Scotians. We all know and recognize that housing has been neglected over the years and I think that is one reason why we're in the situation we're in today. The need and the responsibility of government is to address the concerns of the residents who are just looking for that safe, affordable environment for their families and for their children.

My questioning today will be around the affordable housing agreement, but also around a serious issue that has come up over the last week or so. I'm sure most people are aware of a very serious condition in Cape Breton that was brought to our attention recently by a colleague of mine, the member for Cape Breton Nova, Mr. Gosse, our Housing Critic, around the issue of the actinolite asbestos that was found in some of the public housing in Cape Breton, and the concerns that are associated with that, most importantly, are the well-being and safety of the residents and the workers who have been exposed, potentially, to a dangerous substance.

We all know that many years ago, the insulation used in many of the housing developments, the co-ops, public housing, has the potential to be dangerous and have asbestos in them and I think it is the responsibility of government to ensure that the people

who are using public housing are protected and are safe. So, I would like to start with a question around the housing authorities and their accountability to government, to the Department of Community Services and Housing. Are they accountable and do they report to the Department of Community Services, on a regular basis?

MADAM CHAIR: Mr. Dillon.

MR. DILLON: Yes, there are seven housing authorities, as you probably realize, around the province. They operate under a management agreement that has been entered into between the authority and the minister, and under that management agreement the general manager of the housing authority has a reporting relationship to the regional operations of the Department of Community Services. So, they have a reporting relationship on an ongoing basis to the regional operations people for the Department of Community Services, yes.

MR. DAVID WILSON (Sackville-Cobequid): How often do they receive a progress report of what is going on in those seven authorities? How often does the department receive those, what I'll call, progress reports, I guess?

MR. DILLON: Well, they operate relatively closely together, although as you are probably aware, the housing authorities are not civil servants in the conventional thinking. They are not a member of NSGEU and so on, so the operation is a bit outside of government as an operating agent of the minister. But the reporting relationship is fairly close on the general senior management level between the regional operations of the department and the authorities. The authority general managers - or directors, they call themselves now - meet with their counterparts in the department on a monthly basis, I would suggest and maybe more frequently on an individual regional basis, to review general activity going on in the authorities, to discuss how the business is going on in the department, to discuss any issues that may arise, to look at budgets, budget forecasts, issues and pressures that are going on within the authority.

[9:15 a.m.]

MR. DAVID WILSON (Sackville-Cobequid): I would take it then, a progress report is then sent on to the Minister of Community Services. Is that how it all unfolds?

MR. DILLON: Generally speaking, there wouldn't be progress reports per se sent to the minister. The authorities would be operating day-to-day ongoing business. The times when something may be brought to the attention of senior officials in the department is if there is an issue or something comes up that is of an unusual or out-of-the-ordinary nature. The authorities really operate as an operating arm of the department and operate the public housing portfolio within a set of operating manuals that guide their day-to-day operations of the authority. Their reporting in would be on a cyclical basis around budgets and forecasts or if specific issues arise that need specific attention.

MR. DAVID WILSON (Sackville-Cobequid): So, would you say that the presence of actinolite asbestos found in public housing would be one of those issues that is serious enough that should feed its way up the chain of command?

MR. DILLON: I would think so, yes, if something like that was to show up in public housing stock, it would be normally expected it would eventually find its way up the chain of the organization.

MR. DAVID WILSON (Sackville-Cobequid): And eventually, we would hope, to the Minister of Community Services.

MR. DILLON: Yes.

MR. DAVID WILSON (Sackville-Cobequid): So with this case that we are finding out about down in Cape Breton around the Whitney Pier area around the knowledge of asbestos in public housing, the letter, as we know so far, stated the authority down there may have known since October 25, 2005 and the residents and workers were just notified less than a week ago. When did your department find out? You're senior director of housing, when did you find out about the issue that we're seeing in Cape Breton?

MR. DILLON: I understand the department found out about it, including myself, late last week.

MR. DAVID WILSON (Sackville-Cobequid): Was it through reports in the media or was it through the housing authority in Cape Breton?

MR. DILLON: It's a bit of a chicken and egg thing here. We heard of the media report probably from the authority or from our senior officials in the region. Whether they became aware of the matter before the media did or not, I'm not sure, but my understanding is it happened virtually all at the same time. The department, the authority and the media probably became aware of the issue all at the same time.

MR. DAVID WILSON (Sackville-Cobequid): So from the letter, from what we've been able to see from the residents down there is that the authority knew from an audit or a test that was done in October - it must have been before October so the authority must have known - where was the breakdown? Why do you think it took so long for your department, for you, for the minister to find out that there was this asbestos in public housing down there, well over five months ago? Why such a delay and why isn't there accountability here and steps in place to ensure that this information - this is a serious issue. I don't understand why you and the minister didn't know about this sooner and you had to find out through newspapers and news releases.

MR. DILLON: I think it has been made clear that we don't understand or don't know why we didn't know either. The deputy minister has appointed two senior departmental

people to carry out an investigation as to what transpired so we can gain an understanding of why it appears the director of the housing authority was not aware of this and, indeed, subsequently why the department was not aware of it.

MR. DAVID WILSON (Sackville-Cobequid):So, to your knowledge, the director of the housing authority did not know about this test that was done and the results of these tests?

MR. DILLON: That's the knowledge I've been given, yes.

MR. DAVID WILSON (Sackville-Cobequid):Was this investigation asked for by the minister or was it asked for by the deputy minister?

MR. DILLON: This was asked for by the minister, and I'm only to assume the deputy minister would have asked for it as well, but the minister has asked for it.

MR. DAVID WILSON (Sackville-Cobequid): Are you aware of a timeline on reporting back the findings from this investigation?

MR. DILLON: The senior staff that have been asked to carry out the investigation have been asked to provide the deputy with the results of their investigation within a matter of days.

MR. DAVID WILSON (Sackville-Cobequid): Will that be public information, will the public know and, most importantly, the residents and the workers in Cape Breton, will they know what this investigation has found?

MR. DILLON: We will be keeping it as a priority to keep the residents informed of the results of any of these investigations and/or test results that we get back further. Once the report is received by the deputy, a decision will be made on the release of the information. Most likely the outcome of that investigation will be made known.

MR. DAVID WILSON (Sackville-Cobequid): What actions will be taken to ensure the health of both the residents and the workers has not been compromised? What's your plan to address the potential of exposure to the residents and the workers that have been in this environment over the last several months?

MR. DILLON: What I understand the housing authority has done to date is they've sealed those attics. This is an attic insulation product, it's very rare, very uncommon. We're not aware of it anywhere else, but in any event we've discovered it there. We still are not sure exactly what we're dealing with because it's a bit of a surprise to both the department and the authority that it was there. We've sealed the attics, sealed the hatches, we've met with the residents, we've explained to the residents the precautions they should take, and we

have instructed staff and workers and so on to stay out of those attics until we have a determination of what we're dealing with.

At this stage, my understanding is samples have been sent off for more comprehensive testing to determine the threshold or level of asbestos that exists in this material and, pending those results, we'll know what we're dealing with and then have a management plan to deal with the material.

MR. DAVID WILSON (Sackville-Cobequid): Would you agree that the steps you're taking now should have been taken on October 25^th, if that's the date the authority found out about the results of the tests?

MR. DILLON: It's a bit of conjecture, but if we knew back in October what we know today, most likely the same steps would have been followed.

MR. DAVID WILSON (Sackville-Cobequid): In the letter that the residents received it stated the results of the tests, but if left undisturbed then there's not as high a risk of exposure to it. The thing that's most alarming is that many of these residents have had renovations done, have had roofs done, chimneys done, have had people in to put in cables through the ceiling - there's one report of a mother putting her Christmas presents up in the attic.

I think it's serious enough that we need to make sure that this doesn't happen again, that the people living in these houses are protected, and ensure their health is at the top of the priority for government.

What's really interesting, when I read about this in the paper - and I found out much like you did, through the media - was that I recalled asking a similar question in this Legislature well over a year ago. I'd like to read a little bit about my question and the answer I got at the time, because I think if my question had been taken seriously at that time maybe we wouldn't be in the position we are today, and maybe these residents wouldn't feel as though they had been put at risk.

My question originally was for the Minister of Service Nova Scotia and Municipal Relations, and the Minister of Community Services, on May 18, 2005, and it was around the question of Zonolite insulation which is associated and is similar to the insulation that we're seeing down in Cape Breton, and the use of vermiculite. My question was, "The federal government has so far refused to take any action on the issue, and in looking at the provincial Web site, I was unable to find any information about this topic. So my question to the Minister of Service Nova Scotia and Municipal Relations is, what steps are being taken by the province to warn residents of this potential danger that may be lurking in Nova Scotia's attics?"

To my amazement, the Minister of Service Nova Scotia and Municipal Relations, Mr. Barnet, really didn't know much about it, had what I would think were some smirk remarks around it's not the responsibility of the province to look at all this because it might have been a federal initiative back 30 years ago. He says the member was correct, he said there's no information on the Access Nova Scotia Web site because this is a responsibility of Industry Canada. It is their responsibility to regulate the sale of products and services in Canada and that's why the Nova Scotia Government does not participate in that action. I mean, he may be right in the fact that we can't regulate what's being sold, but he's wrong in saying that it's not their responsibility and it's not government's responsibility.

Quickly, the second question that day was to the Minister of Community Services. "Since the department's business plan states that most public housing is 30 years or older, I would think that it's safe to say that Zonolite may well have been used in the construction of many of these units that the province owns, and is posing a threat to the current residents. So my question to the Minister of Community Services is, what steps have been undertaken to audit public housing for the use of Zonolite, and what plans have been laid out to protect these current residents?" The answer from the minister at the time was that he wasn't aware of the substance, but he'll check with his staff, and there is an annual audit taken on all public housing and I will get the honourable member an answer.

To date, Mr. Dillon, I haven't received an answer from the minister. The minister made mention to an audit of public housing. So are there audits done on the public stock of housing that the province owns in the province?

MR. DILLON: I don't think audit is the correct term, necessarily, but the public housing operations manual requires each authority to do a physical inspection of the units on an annual basis. I wouldn't call it an audit. It's more to see the general condition of the unit and to see if there are any defects, any maintenance required and so on, and to see if the tenants have any concerns regarding the overall condition and maintenance of the units. Those physical inspections are done pretty much every year for just about every unit we have throughout the portfolio.

Something like attic insulation or wall insulation, or things that are hidden and not visible would ordinarily not be subject to that physical inspection on an annual basis. What we did on receipt of the correspondence from the House on that was we inquired of the authorities whether or not anyone was aware of the use of Zonolite in any of the history of the development of these projects over the preceding 30 or 40 years, and the information we got back was that nobody was aware that that product had ever been used. So that is the information we had at that time.

The experience of last week has indicated that, obviously, a vermiculite insulation, - perhaps Zonolite, perhaps not Zonolite - was found in a couple of specific projects in Cape Breton. The investigation that's underway will determine, among other things, not only the information around how the notice of that was handled from October, but perhaps how this

insulation came to be in those two particular projects when no one was aware that that was a product that was ever used here.

MR. DAVID WILSON (Sackville-Cobequid): So with the information we received since last week, and what I feel may have been not a serious attempt to look at the potential risks in public housing, is there going to be also an audit, an investigation, or a test done on all public housing to ensure that Zonolite, or vermiculite, or any other banned substance, especially that contains asbestos, is not lurking in the attics of public housing, is that going to be done now? Has that been a request from the Minister of Community Services, to do that?

MR. DILLON: I anticipate that that has been discussed, and I expect that will be done. The effort right now is aimed at getting the results of the initial testing on the material we have found, ensuring there's proper information passed on to the residents and the workers as we move into that piece. Following that, and the results of both the investigation of what transpired and this particular material, we will be developing a management plan to deal with not only that material, but also to ensure that any other buildings we have that we go back and check again and actually go in and physically go through attics to try to confirm whether or not there's a presence of a material that appears to be suspect.

[9:30 a.m.]

MR. DAVID WILSON (Sackville-Cobequid): I hope that the word anticipate actually turns into an actual request, because I think from the day that was exposed last week, and revealed that the potential is there, I think the Minister of Community Services should have given that direction to you, to your department, to the housing authority. That's one of the concerns we have had over the last several years with the Minister of Community Services, that I don't think he's taking this stuff seriously enough.

I know you and people in your department work hard to address the issues in Housing, but I don't feel that the Minister of Community Services has taken it seriously over the last several years. One example which I feel, and I know our Party feels, is a slow approach to unveiling the Affordable Housing Agreement and the projects in the province. I know it's probably frustrating on your end, because I know there's probably a lot of initiatives and a lot of programs that you would like to see initiated. I hope that you go back to the minister and to the deputy and say this is something we need to do immediately and we can't delay anymore, especially in light of such delays in reporting to residents.

MADAM CHAIR: Mr. Gaudet. You have until 9:50 a.m.

MR. WAYNE GAUDET: Thank you, Madam Chair. I want to begin by thanking our witnesses this morning for their presentation. I want to focus my questions on the original agreement that was signed back in September 2002. Under the agreement, first of all I want to look at and focus on a couple of the sections. Section 2.4 states in the agreement that it

basically allows the key elements of programs to be modified with approval. So my first question would be whether someone could confirm whether or not any of these key elements under this five-year agreement signed September 13, 2002, were modified?

MR. DILLON: I'm not aware that any of the key elements in the original agreement have been modified insomuch as they apply to Phase I of the agreement.

MR. GAUDET: My next question, I'm looking at Section 2.5, and under this section of the agreement, the Nova Scotia Housing Development Corporation may add or remove programs from Schedule A. My second question is, have any these four programs been removed from Schedule A, or have any new programs been added to Schedule A?

MR. DILLON: None of the four programs have been removed, and I don't believe that any particular program has been added, although we did clarify with our partner, CMHC, the methodology by which we would be using the rent supplement, which has allowed, I believe, in the agreement - I would have to find the spot, but there's a spot that says that the provincial contributions can be in a form of rent supplement payments, and we did get a clarification from CMHC that that was permitted under the agreement.

MR. GAUDET: Let me begin by focusing on Schedule A. The first program, or the key element, was to create rental housing units, 50 per cent of the funding, which basically is somewhere in the vicinity of $18.6 million. I guess my first question is, how much has been spent on constructing new rental housing units? In your opening comments you made reference to about 900 units, in all, that were constructed.

MR. DILLON: It's 930 for the whole program, and approximately 553 new rental. My understanding is that the funding that we've committed towards new rental as of the end of March will be approximately $27 million.

MR. GAUDET: So 534 new units were constructed, is that it?

MR. DILLON: If you look at my speaking notes, I think it was 553.

MR. GAUDET: Any units that were renovated were not covered . . .

MR. DILLON: No.

MR. GAUDET: Would it be possible for you to table the list of communities that benefited from these 553 new units that were constructed? What communities benefited under this program? Where were these new units constructed?

MR. DILLON: We should be able to provide you with that information, yes.

MR. GAUDET: My next question is what process was used to determine, prioritize, what community would benefit in receiving these new housing units? What was the process used?

MR. DILLON: I think I'll ask Ed Lake to respond to that.

MADAM CHAIR: Mr. Lake.

MR. ED LAKE: Firstly, proposals were requested by a public process. It was done through two rounds. There was an initial proposal called that was done in 2004 and a second one that was done in 2005. The first one, there wasn't any specific targeting of any geographic area, but proposals had to demonstrate their project had to be in an area of need and so if they could demonstrate there was an area of need and it was sustainable, projects were reviewed and evaluated on that basis.

In the second round of proposals, we took a look at where people wanted to put projects, we compared that to where we saw the areas of need were based on the research and targeted certain areas that needed to be served and, also, certain groups that needed to be served.

Based on that, people responded. We had no control over what people would propose, but certainly it was clear in terms of what we wanted or what we saw as being our areas of need. When proposals were evaluated, that was taken into account.

MR. GAUDET: So from this so-called call in identifying needs, the fact that when I look under the agreement this was supposed to be covering all of Nova Scotia. I'm just curious, did you receive requests or calls from all parts of the province?

MR. LAKE: That's correct - from all areas, from Yarmouth through to Cape Breton.

MR. GAUDET: Okay. So, the information that will be provided to us, we will see what community actually benefited under this program, where these units were constructed.

My next question is what criteria was used to determine which proposals or which calls were accepted, and which did not make the short list in the end? I'm looking at when the last series of announcements for new rental housing units were made and I was kind of curious why there were only four or five areas in the province targeted. So I'm just curious what criteria was used - why Liverpool and why not Yarmouth, for example?

MR. LAKE: Firstly, when we invite proposals we have no control over who submits them and where they want to put them. So, when we do get proposals, we can only deal with what people want to do. As for criteria, all the proposals have to meet the program criteria.

Secondly, proposals have to demonstrate sustainability, they have to conform to requirements that we set around good management and so on. So those are the basic elements of the criteria that were used to select projects.

MR. GAUDET: My next question. Speaking of proposals - proposals coming from whom, from housing authorities, developers, municipal units? Who were these proposals coming from?

MR. LAKE: They came from non-profit groups, private sector developers, as I say, non-profit groups - but that also included community groups as well.

MR. DILLON: I might add that some of them came with municipal support as well, some came with community support from others besides the municipality, and so one of the factors we considered - was there both a community need and a community support for a project. It mentioned some of the factors, project design and location. It was also a function of who they were targeting as a client base. The client base they were targeting, was that an area where we could discern that there was a need. So there would be some projects where we would have looked very closely at who they were proposing to target and ensure, by looking at the affordable housing demand in the area, that the target for their project was indeed an area of need.

MR. GAUDET: I want to move to the second program under Schedule A. I understand 25 per cent of the funding, approximately $9.3 million, was designated for a rental housing preservation program. Could you again clarify what that money was used for?

MR. DILLON: You're speaking to the original agreement?

MR. GAUDET: Yes.

MR. DILLON: Yes, the original agreement. By the way, in the original agreement, the funding that was set out in there was a funding mix that was considered to be the sort of initial target at the signing of the agreement. The province, the corporation, has the ability with CMHC's ongoing consent to adjust those figures, by program, as the demand and as the need and other variables show up through the delivery of the program. So the actual deliverable, under rental preservation, is lower than that number. As I have indicated, the amount of funding spent on new rental construction turned out to be significantly higher than the original agreement projection, and this is one of the numbers that went lower.

Part of the reason for that is, after we signed the agreement and got into consultation with the stakeholders around each of the programs and how it might most effectively be delivered, there was a lot of discussion about the rental preservation side and how we would deal with the rental stock that's currently in the province. That led to a decision to request a focus more on the creation of new rental stock than the preservation of existing rental

stock. So the numbers of units and the investment in the rental preservation side went down and the amount of investment and the number of units in the creation of new stock went up.

MR. GAUDET. If I understand correctly, this funding was used to renovate public stock?

MR. DILLON: No, the rental preservation, the Affordable Housing Program prohibits expenditure of any money on existing social housing stock.

MR. GAUDET: So, technically, this money was spent on renovating private housing units?

MR. DILLON: It would be required to be spent either on renovating private rental stock or non-profit stock that's not part of a social housing program, and that's a fairly scarce item, but there may be some non-profit stock that is not currently part of a federal-provincial subsidized housing program, in which case, it would be eligible.

MR. GAUDET: So would it be possible for you to provide us with how many units actually received funding under this program?

MR. DILLON: Yes.

MR. GAUDET: Furthermore, would it be possible for you to provide us with a list, again, of communities that benefited under this program?

MR. DILLON: Yes.

MR. GAUDET: Thank you. I want to go back to the process that was used under this program. What process was used to decide what community would benefit in receiving funding to renovate housing units?

MADAM CHAIR: Mr. Lake.

MR. LAKE: We used a request for proposal, a public process as well, and it was structured very much like the new rental requests for proposals.

MR. GAUDET: Requests for proposals, okay. What criteria was used to determine which proposals were accepted?

MR. LAKE: The very same criteria were used. The only thing that would have varied in this case were the rules around the program, because there were different program rules associated with rental preservation.

MR. GAUDET: Is it possible for you to provide us with a list of the people who did not get accepted for funding under this program - I'm just curious - the other communities that did not get funding, is it possible for us to see who basically applied but did not get accepted?

MR. LAKE: We can provide lists of all proponents.

MR. GAUDET: I want to move to the next section under Schedule A, the third program. Approximately 5 per cent of the funding was used to purchase new homes. As you indicated in your opening comments, I understand this was to support the creation of modest homes. According to the agreement, this was designated for urban areas. So I guess I'm trying to find out where the money was spent. Was it spent here in Halifax, or is it possible for you to provide us where exactly the money was spent across Nova Scotia?

[9:45 a.m.]

MR. DILLON: We can provide that information and, in fact, I could tell you today, we only delivered, at the end of the day, six units under the New Home Ownership Program. It was a single project in the centre of Halifax, and that was the only project that we received a request to do. This program, if you're familiar with the details of the agreement, is limited to what's defined as urban areas of revitalization. It was a program that was designed to perhaps reinvigorate some urban areas that might be falling into disrepair, and it was designed to allow ownership housing to be introduced into those communities as part of a mix of development to bring back those communities. I think the opening notion was that by introducing some home-ownership element along with maybe some new rental element, maybe some municipal infrastructure element and some other elements, municipalities might step forward to try to propose to revitalize some areas of towns, cities and so on.

At the end of the program we received very little, I guess, sustainable requests to do that kind of thing, other than the project in Halifax - which you may be familiar with - is part of the overall Creighton-Gerrish Development Association proposal to redevelop a fairly large block in the Gottingen Street area. So that was the only project that came forward that seemed to work for that program. Other new home ownership requests we got were stand-alone, and not part of an urban area revitalization and could not be considered under the program.

MR. GAUDET: So, technically, only six homes were assisted under this program?

MR. DILLON: Yes.

MR. GAUDET: You spent approximately $1.4 million?

MR. DILLON: No, the actual final funding was probably about $0.25 million.

MR. GAUDET: So where was the remaining money that was scheduled under this program spent?

MR. DILLON: It would have gone into the new rental creation program - program 1.

MR. GAUDET: I want to move on quickly to the last program under the agreement. Program 1 was to assist a Home Ownership Preservation Program. This was to make major repairs. I guess I'm trying to find out, number one, how much was spent on the program?

MR. DILLON: At the end of March 31, 2006, we've committed approximately $6.3 million for that program across the province.

MR. GAUDET: How many homeowners benefited under this program?

MR. DILLON: The final number is about 178.

MR. GAUDET: Could you provide us with what areas of Nova Scotia were targeted?

MR. DILLON: Certainly.

MR. GAUDET: Also, I guess my next question is, what was the criteria used to determine exactly what area was going to be targeted under this program?

MR. DILLON: The funding for this program was delivered directly through the regional office's operations of the department through their Housing Services office. We did an initial distribution of funding based on the Statistics Canada information on housing conditions regionally, which is a measure of both affordability and housing condition by region. So on that relatively competent model, we distributed funding, regionally, into the four operations, then the regional offices were given direction on how to respond to demands for the program as it came forward. So they would have delivered that money directly pretty much in the same manner they would deliver all of our home repair programs, whether it's RAP or SCAP, if you are familiar with those terms.

As applicants would come forward, they would put be put on a priority list in chronological order of making an application. Housing units would then be visited to determine that they were, indeed, at risk of being lost if they weren't repaired, and then the whole chain of events around inspections, estimates, approvals, carrying out the work, would take place.

MR. GAUDET: I want to move quickly, I know my time is coming to an end. So my final question, in looking at the second phase that was signed off on March 3, 2005, we're talking about approximately $18.9 million by 2008 - to date could you indicate how much the province has put into this new agreement?

MR. DILLON: How much funding has gone out under Phase II? I don't believe we've spent any funding on Phase II yet.

MR. GAUDET: Has any federal funding been received under the new agreement?

MR. DILLON: Dan, can you answer that?

MADAM CHAIR: Mr. Troke.

MR. DANIEL TROKE: Under Phase II, no, no federal money has been received on it. The way it works is that we would report to CMHC commitments of X amount at various points in time. So we're wrapping up, of course, Phase I in the information we're providing you today, and then we obviously will be going to Cabinet looking for a delivery plan for Phase II.

MR. GAUDET: Thank you.

MADAM CHAIR: Mr. DeWolfe, you have until 10:10 a.m.

MR. JAMES DEWOLFE: Madam Chair, I'm just going to ask a couple of questions and pass to my colleague. Good morning, thank you for joining us. Most of you have been here on previous occasions. Since this agreement was signed, of course, we went through a change in government federally. I was wondering, do you anticipate as a result of that change in the federal government any change in the agreement?

MADAM CHAIR: Mr. Dillon.

MR. DILLON: We've received no indication that the federal government has any plan or interest in changing these agreements. These agreements were executed and are in effect, and I haven't heard that they would plan anything like that and I wouldn't expect that they would. The Phase II agreement was signed, as I indicated, in March 2005 and the delivery planning for that is now underway, so I don't anticipate any changes.

MR. DEWOLFE: Were there any discussions to date with the new Housing Minister, the minister responsible for housing federally?

MR. DILLON: There are always ongoing discussions with federal ministers on all sorts of housing matters, but with respect to the details of Phase II of the Affordable Housing Program, I'm not aware of any discussions going on at the moment regarding that agreement.

MR. DEWOLFE: Are you on track with your plan to build and create housing units in Nova Scotia?

MR. DILLON: Yes, we are very much on track. I believe when we came before this committee last year, we indicated our objective was to fully commit the first phase funding by April 31, 2006, which we have done, and we are very anxious now to get underway with Phase II. Phase II requires us to launch a plan to get the commitments out on that as well, and we'll be anxious then to discuss with our federal partners - well, what we would like to talk about is Phase III, or what's coming next under the Affordable Housing Program or a similar program.

MR. DEWOLFE: Right. There seems to be, by way of a graph that's included in the package there, that the wait lists in certain areas are much greater than those in others - and on that note I'm going to pass to my colleague who is very anxious to continue down this road with you.

MADAM CHAIR: Mr. Parent. You have until 10:10 a.m.

MR. MARK PARENT: Thank you for appearing before us. You've appeared before the Community Services Committee that I've been on and we've talked extensively at those times about my support of co-op housing as a way to go for affordable housing - and I may come back to that in round two, but what I'm concerned about now is a matter I raised several times, and that is the extensive wait lists in the area that I represent. But just before I get to that question - on your Web site I think it states that under the new rental housing initiative 200 new rental units have been approved throughout the province, in the data you gave us today it indicates 530-odd. Is the Web site just out of date or is there a difference in the way it's being measured?

MR. DILLON: I can only assume the Web site must be out of date - 553 is the number, as near as I can understand, that was committed as of March 31^st. Now, there would have been some commitments in the last two to three months, so the Web site, I suspect, is probably out of date.

MR. PARENT: These commitments, is there a timeline on when they're supposed to be constructed?

MR. DILLON: In terms of finishing construction and rent up, there's not necessarily a timeline, although we'd like to see that happen as quickly as possible. There is a deadline on when the federal expenditures in those units have to be provided to the developer, and that's March 31, 2007, for Phase I.

MR. PARENT: When the agreement was signed in 2002, I was really quite excited, because our wait lists in the Annapolis Valley, in the area I represent of Kings North, were high at that time. In the constituency office where I work, one of the requests I get a lot of is for affordable housing, for families, for seniors, and I find it a constant source of frustration that I have to tell people who are looking for affordable housing that the wait list is so high. Oftentimes they need the affordable housing because they have lost a job, at the

time, a family member has gotten ill, and to tell them they have to wait two years is cold comfort, indeed.

I was interested in the Rent Supplement Program we talked about before, but I notice in the data you gave us, the Rent Supplement Program, there wasn't a lot used in the western area, it was roughly about the same as the northern Cape Breton area. So, my question is this, since 2002 have any affordable housing units been built in the largest town in the Annapolis Valley, the Town of Kentville?

MR. LAKE: No projects have been constructed yet, but certainly there has been a project approved in that area.

MR. PARENT: Since 2002, have any new units been built in the one of the fastest growing communities, which is in my riding, Centreville?

MR. LAKE: So far, nothing has been approved in Centreville.

MR. PARENT: Since 2002, has anything been approved in Port Williams, another of the fastest growing communities in Kings North and in Kings County?

MR. LAKE: Nothing in Port Williams.

MR. PARENT: Nothing in Port Williams. Has anything been approved in the Village of Canning?

MR. LAKE: No, I'm sorry, I don't think so.

MR. PARENT: So, since 2002, when this program was initiated and I was dancing for joy that affordable housing would be, and the wait lists would be brought down specifically in Kings North, which I represent, but then wider in Kings County, in Kings North, nothing has been done. How about Kings County? Have any units been approved in New Minas?

MR. LAKE: Yes, in New Minas, there have been projects approved in New Minas.

MR. PARENT: How many units?

MR. LAKE: There was an announcement of 24 units.

MR. PARENT: Wolfville?

MR. LAKE: In Wolfville, there was an announcement of 20 units in Wolfville, as well as an announcement with regard to the student pilot program in conjunction with Acadia.

MR. PARENT: So, 44 units in Wolfville and New Minas, and no units in the largest town in Kings County - Kentville.

MR. LAKE: That's right. Now bear in mind, we can only approve based on proposals that we receive.

MR. PARENT: Have you received any other proposals from Kentville or from Centreville or from Port Williams?

MR. LAKE: We received a proposal from Wolfville for a co-op housing project. As for that full list of proposals, we'll be submitting that to the committee as well. That will have all of the proponents.

MR. PARENT: I know you don't break down your statistics, you break it down by Annapolis Valley rather than by county or by provincial riding, but I dare say that in Kings North - which, as I mentioned, has Kentville, the largest town, and in the last sense, it's the only one that was growing, actually, over Wolfville - I dare say that our affordable housing issue is as intense, if not more intense, than any other part of the Annapolis region, yet you've built no units there since 2002, and you have none promised.

MR. DILLON: The commitments we've made up to the March 31^st date includes a project for Kentville - I think Ed was trying to make that clear - for 32 units. So, in fact, 32 units have been approved for the Town of Kentville, which I understand is in your constituency?

MR. PARENT: I announced that last year, but nothing has happened since then. There's not even any land secured, I understand.

MR. DILLON: There is still work underway in getting that project into the ground, yes. Your question was about the waiting lists, generally, in the Valley versus your specific constituency?

[10:00 a.m.]

MR. PARENT: Yes, you don't break it down by constituency, I don't think, do you?

MR. DILLON: Well, we would be able to provide a further breakdown of the waiting list by where people come from. The challenge there, of course, is where people come from may not necessarily be where they want to obtain social housing and, of course, we only have social housing where it sits. So the waiting list for the Annapolis Valley Housing Authority, and the Annapolis Valley Housing Authority would be covering pretty much from West Hants all the way down to Digby . . .

MR. PARENT: Annapolis.

MR. DILLON: Yes, to the end of Annapolis County. So when we talk about the waiting list for that authority, that's the waiting list we have. Individuals on that waiting list may have clear preferences, and we could provide you at any time some indication, without getting into the confidentiality of the list, of the relative number of applicants who would prefer to be in one particular jurisdiction or another if they indicate that's their preference. Many applicants for public housing don't indicate a preference. They would just like to achieve some affordable public housing somewhere close by, and don't necessarily want to stay in one particular community or another.

MR. PARENT: I'm just going by the population base, which is predominantly in eastern Kings County, with another population base in the Kingston-Greenwood area, but the majority of it is between Kings North and Kings South.

These 33 units that are promised for Kentville, they were promised last year, we are now a year later and still no further ahead?

MR. TROKE: In that particular situation, the developer is still working with us to accomplish what he had originally proposed. I guess, basically, at this point, the only thing we can say is that we have been in discussions with them and they feel that they're making headway on the project and, we, at this point, don't see any change from what was initially proposed.

MR. PARENT: So is the department still committed to 33 new units in the Kentville area?

MR. TROKE: As I mentioned, we're working with the developer, and that developer has made some adjustments to his plan and, at this point, we don't see anything in that proposal that would put the developer offside.

MR. PARENT: I may be sounding a bit harsh, and I certainly don't mean it towards you, because I know you've worked very hard, I have enormous respect for you, personally. I have made my criticisms to your boss, personally, so it's nothing new. Certainly he shares them with me since Kings North and Kings South are a bit of a seamless unit in some ways. I guess my frustration is that I was so excited in 2002 - I constantly have people coming into my office, and I see units going forward in New Minas, I'm happy about that, but I see nothing in my area, and I'm frustrated.

Even though those New Minas units can serve some of my people, oftentimes the suspicion is that the people from New Minas are the leg up on the waiting list. Now, I assure them that's not the case, it's first come, first served, so we can get into those units as well. The waiting lists for the Annapolis Valley, I know and I would assume that eastern Kings is a large part of that, just because the population base, I have been told by the people in New Minas, on a per capita basis, is the highest in the province. Is that true?

MR. LAKE: I'm not exactly sure of the exact numbers, but it's generally acknowledged that, yes, they are amongst the highest waiting lists in the province.

MADAM CHAIR: Mr. Dillon.

MR. DILLON: I think the data I gave you earlier indicated that, and that data has been distributed, I think, to several MLAs who have made requests for the current waiting lists. We always caution people on waiting lists - they are time-sensitive, they change over time, and people make applications to get into public housing sometimes years or months before they are necessarily anxious to go, and sometimes they're offered public housing and decline because they either are not ready to move or prefer another location and so on. So the waiting lists are a very important measure we use to gauge the need for public housing, but they need to be worked on fairly carefully.

The phenomenon in the Valley around waiting lists is interesting because, as many will probably know, public housing was built largely in this province from the mid-1960s right through to the early 1990s. Through much of that period the Valley was a fairly quiet growing area, not necessarily growing rapidly like it is today. So you probably have a growth in population in the Valley that has happened more recently, at least my sense would be in the last 20 years, and probably occurred during a period when public housing was not being built.

Public housing stock, generally, is probably under-available in some parts of the province, and perhaps even in the Valley. Now we haven't studied that issue because we don't have a public housing program now, but if we were to launch into one we would be immediately looking at what areas of the province are underserved by public housing, or social housing, at the moment. I suspect that may identify some areas, perhaps parts of the Valley, that are underserved.

MR. PARENT: The Rent Supplement Program would be a way of augmenting that, but when I look at the data here, in the Western Region, five units and 10 units, so really there was no increase in rent supplement to help compensate for the lack of public housing units.

MADAM CHAIR: Mr. Lake.

MR. LAKE: Our strategy for new units under the new rental program was through the RFP process. As I said earlier, in our first proposal we didn't target specific areas; in the second proposal we did target specific areas and certainly the Valley Region that you mentioned was within that target area. Unfortunately, we didn't get as many proposals as we would have liked for some of our target areas and, as a result of that, our response has been to try to fill some of that need through the rent supplement, but that wasn't the initial strategy.

MR. PARENT: I think one of the factors at least in Eastern Kings that would come into play is Acadia University and Kingstec College, and the students who come from away and rent. Of course that then displaces or, in Acadia's case, in Wolfville's case, raises the cost of affordable units around, so I understand there are mitigating circumstances and I understand, as you mentioned, that maybe we had a lower stock to begin with because of history. I just want to encourage you as strongly as I can, as I have in the past - so I'm not singing a new song - that you concentrate on, you have to look at the whole province, but if there are areas where the need is greatest, that there be a response to that.

Certainly the riding of Kings North, Kentville, Port Williams, Centreville, Canning, all those areas are areas where the waiting lists are very high. The data, the chart that we had indicates that. Now that's just a snapshot for one month, March 2006, but if we took snapshots back - well it's like glucose testing or blood pressure testing, you don't take just the one reading, you take a bunch, and if you took five or six readings you would find that the same information came back, that the Valley and Eastern Kings have the highest per capita number of people waiting for affordable units, families and seniors.

I know that's no news to you, but you're here in front of me and I get a chance to vent with you, as I vent with my colleagues, I want to encourage you in that regard. I still have concern about affordable units because you have the NIMBY factor lots of times, and I still want to push the co-op a bit more, but I'm going to turn it over to my colleague for Bedford first and I'll come back on round two.

MADAM CHAIR: The second round will be 12 minutes, and I recognize Dave Wilson. You have until 10:22 a.m.

MR. DAVID WILSON (Sackville-Cobequid): I think I really want to go back to the issue around the possibility of the government looking into or investigating the problems around potential dangers of the use of certain insulations, particularly around the question I asked last year.

Mr. Dillon, you stated that after my question there were some requests from the minister to your department around the use of Zonolite, but the way I framed my question was any insulation that may have had asbestos in it - to your knowledge, is that correct, that a year ago you were, or someone in your department was asked to look into the possibility of dangerous insulation being used in public housing in Nova Scotia?

MR. DILLON: Yes. From memory - I think we have some notes on it back at the office - my understanding is the message was relayed to us from what took place in the Legislature and we sent out a broadcast to the housing authorities around any knowledge of the presence of Zonolite or vermiculite insulation in public housing projects that they administer, which are some 12,000 units or so. The information that came back to us was that nobody found any evidence or was aware of any use of that product in any of our projects at that time.

Maybe while I have the mic - an earlier question was whether there was a request to now go and do a more in-depth examination of all that stock, and I've received a note confirming that. This is something I wasn't entirely up to speed on when you asked the question, so subsequently I found out the request has gone out, from the minister's request, to all housing authorities to reconfirm more clearly whether they have vermiculite insulation or similar types of insulation in any buildings, and what their asbestos management practice might be if they identify any product like that.

We have yet to hear back that information, but I anticipate we will be getting that information in the next week to two weeks.

MR. DAVID WILSON (Sackville-Cobequid): Okay. So, you're looking at getting confirmation from the housing authorities that they don't have vermiculite or any of those types of insulation that may be harmful.

When they responded to you, was it in letter form from the authority stating that they didn't recognize or think there was the use of these types of insulation, and is that something you could provide this committee? The response from the housing authorities and the request from the department - what did you ask for? Is that something you could provide to this committee?

MR. DILLON: As I indicated, the deputy has assigned a couple of senior people to investigate the entire matter, both the October receipt of information in the matter of Roseville or Rose Court, or whatever the project is, and also the overall approach that was taken on the matter when it was raised earlier in the Spring. I don't have any of those results; I don't have any information that I could provide you in terms of the actual details around how the request went out and how the responses came back.

MR. DAVID WILSON (Sackville-Cobequid): No. Basically my question was the request back in May 2005, when you're stating your department sent out a request to the authorities to check into this - can we have a copy of that response at that time, a year ago? I know you're investigating the current issue, but a year ago, can this committee see what response you received to what I think was prematurely just " think there were no problems in the public stock in the province" and maybe not investigated further. Is it possible for you to provide the information, the results of your request a year ago to the authorities, to this committee?

MR. DILLON: I'm assuming, within the rules of FOIPOP, yes, information that's within the department that might shed light on that would be available subject to the normal FOIPOP rules.

MR. DAVID WILSON (Sackville-Cobequid): Okay, we'll look forward to that. To your knowledge, do you know if there were any physical tests done to check the insulation that was used in public housing? Were there any physical actual tests where they went into

a residence, went to the attic, took a piece of insulation and sent it off for testing? To your knowledge, do you know if any of that was done a year ago, with the request from your department.

MR. LAKE: I'm not exactly sure what was done, but I can tell you that in the case of Zonolite or vermiculite insulation, that it is very distinctive in appearance, and that the first thing anyone would be doing would be to just check to see that its physical appearance was that of Zonolite. To the best of my knowledge, the request that went out was not specific in terms of Zonolite, but anything that looks like vermiculite. The response that came back from the housing authorities, my understanding is that no one had anything that resembled vermiculite, at all.

[10:15 a.m.]

MR. DAVID WILSON (Sackville-Cobequid): A visual inspection, and actual clinical testing, are two different things, in my view. This is insulation that might have been there for 30 years. It could discolour, it could change its appearance. In my mind, in my view, if there's a potential risk, especially for asbestos to be in insulation, then there should have been a physical test done. To your knowledge, what you're saying, I believe, is that there was no physical test done, there was just a visual kind of exam of what was used, or what is used, is that correct?

MR. LAKE: Those were the instructions or the guidelines that people were given. I will also add that the forms of insulation that you're going to find in attics is very limited, and if it isn't vermiculite, then it's going to be one of two or three other forms of commonly-or easily-identifiable insulation. Vermiculite, itself, like most insulations, is a very stable product, its characteristics and appearance are going to be very constant over many, many years.

MR. DAVID WILSON (Sackville-Cobequid): I would agree, as long as it's undisturbed. That's what's so alarming about this issue, it, in my view, probably was disturbed because they were doing the renovations to the roof, to chimneys and stuff like that. This is a serious issue. I think there has definitely been a problem in accountability, a problem in information being processed and passed on to people who should be looking out for the residents who use these facilities.

So you're stating that maybe there was a visual test. In light of all the issues and concerns we have now - and you stated there's well over 1,200 units in public housing - is that a request that is now going to be made, not just to reconfirm the original test, because I think if they had gone a step further we wouldn't be in the mess we're in today, is there going to be a request to actually do physical clinical testing of the insulation in public housing? Is that going to be the main priority for the audit or the investigation into the use of certain insulations?

MR. DILLON: The management plan to further check and confirm exactly what we have and what we're dealing with has yet to be finalized, but, clearly, we will have to ensure that we know what we're dealing with. I've been involved in the design and construction of public housing since the mid-1970s, and as near as I can recall over that 30-odd years, we've never specified vermiculite as an insulation in any of our buildings since 1975. Commonly, we use pink fibreglass insulation - and that may be a brand name - but, effectively, the kind of fibreglass insulation, bat insulation, both in attics and walls that everybody would be familiar with. Every project that I've been involved and associated with since that time has had that form of insulation. Flat-roof buildings would have had Styrofoam or similar rigid insulation that is perfectly acceptable.

The buildings that we're dealing with in the Sydney area were built prior to 1972, probably in the late 1960s, early 1970s. They were built by the Canada Mortgage and Housing Corporation, I believe, and the province inherited those projects under the Social Housing Agreement. We would be a little bit less familiar with those. So, clearly, those will be a target of a management look at this whole initiative, maybe buildings that were built that we're not aware entirely of what is there, and if we have to go in and remove attic hatches or do exploratory hole openings to try to confirm what is there, we will have to do that. We also understand that the vermiculite insulation that is in the buildings that are under question now, quite possibly was added, and it appears most likely it was added as a retrofit measure sometime in the late 1970s, maybe as an energy upgrade. We're trying to confirm whether that was the case, in which case that would be a particular response to an energy upgrade thing, and we will then be looking at whether energy upgrading was done on buildings of similar age during that period, and those would be potentially the suspects we would look at first.

So we will clearly have to put together a plan to not only confirm, but to certify that the buildings that we own, all buildings - new, old, renovated or otherwise - do not have this material in it, or if they have something similar to this that we carry out any tests that we feel are necessary to confirm the existence or presence of asbestos.

MR. DAVID WILSON (Sackville-Cobequid): I understand that these buildings that we're talking about weren't built by the provincial government, it was under federal jurisdiction at the time, but you said the way vermiculite got into these residences, these buildings, was through retrofitting or upgrading of insulation - now that would have taken place under the provincial overseeing of public housing at the time. So I don't understand, when I made a request a year ago, about Zonolite and vermiculite, how that isn't registered on any books or in any files in the Department of Housing - which was probably the department at the time - or the Department of Community Services, and that alarm bells didn't go off. That is the most concerning thing for us, that potentially we could have saved a health hazard for many of these residents in Cape Breton, who now are feeling vulnerable and are left wondering if they've been exposed to potentially a hazardous material.

The only conclusion I can come to is that it was just a question that I asked in the Legislature, it wasn't taken that seriously by the Minister of Community Services and it was just dropped at that point. Do you understand the frustration on our part, knowing that potentially we could have addressed this issue well over a year ago and potentially protected the people who are using public housing?

MR. DILLON: I just want to confirm the test results on airborne asbestos, which is the more problematic issue from a health perspective, came back negative and we're pleased, certainly, and I think everybody is that that is the case. With respect to the housing authorities at the time, you're talking in the late 1970s and there was a different reporting structure and, although we're not trying to escape culpability here, the reporting structure at that time was fairly autonomous. Housing authorities at that time - there were some 40-odd of them around the province - operated pretty autonomously, in terms of their day-to-day operations, from government. That reporting relationship, as I reported earlier, under the current management agreements changed in the mid-1990s, where the reporting relationship directly into the regional operations became the model.

MADAM CHAIR: Thank you. The time has expired. I recognize Mr. Colwell for the Liberal caucus. You have until 10:35 a.m.

MR. KEITH COLWELL: Thank you. Mr. Dillon, first of all I want to thank you and members of your staff for the home repair program that they administer and the many people in my area and other areas of the province that they've helped. They really do go out of their way to try to help people who are really in need, and I appreciate that. The only complaint I have is you don't have enough money in your program. That is the only complaint I have with that program and that is beyond your control, of course.

I have just a couple of questions. Any housing stock you have, like an individual home leased to a family, say for a long period time, maybe for several years, in some cases the individuals want to buy those properties now, after they've lived there maybe 25 or 30 years, is that possible under the agreement or not?

MR. DILLON: The ability for the department to convert a lease into ownership varies by program but, for the most part, most of the social housing that is covered under the Social Housing Agreement, there is no option to convert a lease into an ownership. However, we do have two programs where that option exists. One is the former lease purchase program, under which occupants, original purchasers or those under a lease, did retain the right to convert the lease into an ownership option under certain conditions. So some of those units are still out there in the province. I think there are probably fewer than 100, but there are some that we operate under the public housing portfolio from a general operations' point of view, but do have that convertibility option with the tenants to convert to ownership.

The second program is the Rural and Native Housing Program, which is a program we've inherited from Canada Mortgage & Housing Corporation under the Social Housing

Agreement. Under that program, there are about 500, 600 or so rental rural and Native units and 600 or 700 ownership rural and Native units. Both sides of that portfolio, the way that program operates, can convert back and forth into ownership or rental, depending on the circumstances of the occupants. So owners could wind up giving up their mortgage rights and convert the property to a rental, in which case they become just a tenant of ours and, similarly, tenants in that portfolio, if they have the means to acquire the unit, we can convert the unit to an ownership from a rental. So, as I say, there are 1,200 to 1,300 units in that portfolio that have two-way convertibility, from rental to ownership. Those are the two programs where that option is available.

MR. COLWELL: I have a copy of the agreement dated December 12, 1997, the Social Housing Agreement between CMHC and the Nova Scotia Housing Development Corporation. On Page 7 of that, transfer of CMHC ownership, and in Clause 8(b), it says, "The Nova Scotia Housing Development Corporation assumes full responsibility to ownership of the projects in Part B or Schedule F with no liability or responsibilities remaining with CMHC as of the effective date." Then it goes on to say, "CMHC shall be entitled to sell or otherwise dispose of any projects and maintain or repair them without consulting CMHC." Now, that would seem to me that any that are under this agreement, anyway, could be sold; according to CMHC, they would have no objection to it.

MR. DILLON: Yes, that may be the case. The public housing, or the traditional public housing stock we have is seen as a very valuable asset that the province owns and controls for future use of social housing forever and a day. The agreement may permit us to dispose of a property, but certainly our practice and our policy is we would only dispose of a property when it's not required for social housing purposes. In other words, it's not needed for the purpose for which the housing was built. While, technically, we probably could dispose of a unit, technically, under the agreement, there has never been any practice or precedent of doing that. So while I may have said that two programs specifically allow for that within the design of the program, the Public Housing Program did not specifically allow for that in the design of the program.

MR. COLWELL: I would like to turn over the rest of my time to Mr. Samson.

MADAM CHAIR: Mr. Samson. You have until 10:35 a.m.

MR. MICHEL SAMSON: Thank you, Madam Chair. Mr. Dillon, if I were to tell you that the current waiting list for housing units under your department in the Cape Breton area, which is Inverness, Richmond, Victoria and CBRM - the numbers, I have them, our caucus has made them public and has raised concerns - if I were to say to you that the current waiting list is unacceptable and needs to be addressed by your department, would you agree with that statement?

MR. DILLON: I could only confirm for you what the waiting list is, and the waiting list in the Cape Breton jurisdiction, generally speaking, is relatively consistent overall with the waiting lists across the province.

MR. MICHEL SAMSON: What exact figures are you looking at?

MR. DILLON: Well, the information I have indicates that the waiting list for seniors is a little over 300; for families, close to 400; and for non-elderly singles, about 150, 160, for the whole of the area that's governed by the Cape Breton Island Housing Authority, which would be virtually the entire Island of Cape Breton.

MR. MICHEL SAMSON: You are saying that's a standard across the province right now?

MR. DILLON: Not necessarily a standard, but that waiting list size compared to the size of the portfolio. The Cape Breton Island Housing Authority manages something in the vicinity of 3,300 units, I think, of public housing on the Island, so the current waiting list of 800 to 900, that relative ratio is somewhat consistent across the province. Probably the only exception would be, as indicated earlier in the discussion, in the Annapolis Valley the waiting list compared to the stock available is probably higher than the other jurisdictions.

MR. MICHEL SAMSON: That's something the department is pleased with?

MR. DILLON: In the operation of any public housing program you're going to have a waiting list. The risk, if you don't have a waiting list, is that you will have vacant units which would be an expense to the province. We would always like to see the waiting list lower; we would always like to see more public housing units.

As you may be aware - I think I've discussed this here at earlier meetings - the public housing program ended quite abruptly in 1994 when the then federal Treasury Board decided it could not support the construction and subsidy of additional public housing units throughout the country. The federal government was a 75 per cent cost share in the losses on public housing across the country, particularly in Nova Scotia. That left very little choice to the province then to also cease the development of additional public housing.

We've been trying to do our best with the portfolio we have which stands, as I've indicated earlier, at about 12,000 units. We've also embarked on the Affordable Housing Program which is the new approach to try to ensure there's more affordable housing stock available across the province.

[10:30 a.m.]

MR. MICHEL SAMSON: Okay, if I can just stop you there, Mr. Dillon. Concerns have been raised and it's well known that a lot of the housing stock in Cape Breton -

especially in the CBRM area - is quite old housing stock. They are homes that have been there for many, many years. I know your department has tried to make upgrades to them, but the fact is an old home is an old home. Would you agree with me that the housing stock in the CBRM area is quite more aged than what's available in the rest of the province, creating an even greater concern for that particular area of the province? Would you agree with that assessment?

MR. DILLON: I can't agree or disagree one way or the other. My own sense is that the average age of the public housing stock in Cape Breton would not differ dramatically from anywhere generally in the province - HRM, for example, or the Truro area. There may be in some areas of the province where there are a small number of units that the units are somewhat newer but, generally speaking, I wouldn't think the public housing stock in Cape Breton, by and large, is any older than the pattern for the whole province.

MR. MICHEL SAMSON: To your knowledge, under the Cape Breton Housing Authority, is there a problem with filling units? You've indicated a waiting list of 300 for seniors and 400 for families - is there an actual problem in filling units under the Cape Breton Housing Authority as far as you know in the administration through your department of actually from the time someone leaves to getting someone in there? Is there a problem with the system that you're aware of?

MR. DILLON: Not that I'm aware of, no.

MR. MICHEL SAMSON: Okay. If I were to tell you that the department is indicating that there are problems in the fact that up to eight people are being contacted for units and they're not taking them and this is causing unnecessary delays, are you aware of this situation occurring?

MR. DILLON: In public housing, in filling of units generally, we go on a chronological based waiting list. Oftentimes when we contact clients who are at the top of the list, they may indicate initially they will take a unit and then subsequently, perhaps a week or two later as we are getting ready to rent to them, decide to decline for any number of reasons. It's a freedom-of-choice issue for our clients. It's not unheard of anywhere in the province for a particular unit in a particular building to be turned down by a prospective tenant for any number of reasons.

MR. MICHEL SAMSON: My question is, is this causing an unreasonable delay, to your knowledge, in the Cape Breton area, filling units when a vacancy occurs?

MR. DILLON: I'm not aware of any pattern of unreasonable delay.

MR. MICHEL SAMSON: I'm curious, did you approve of a letter that was submitted by Mr. Frank Sutherland, Chair of the Cape Breton Island Housing Authority, to the reporter

at a local paper in the Strait area? Did you or any member of your department approve of that letter?

MR. DILLON: I'm personally not familiar with the letter you're referring to.

MR. MICHEL SAMSON: Okay, it's a letter that appeared on March 28^th and it's signed by Frank Sutherland, Chair of the Cape Breton Island Housing Authority, in which he challenges the numbers that have been provided by our caucus - in fact, they're the exact same numbers that you just provided to our committee here and in fact that's where he talks about problems with actually filling it and seems to say that there is some sort of administrative problem there, in the department, which is causing some delays there. But you're not familiar with that letter or did not have any input in that?

MR. DILLON: I've never seen the letter, no.

MR. MICHEL SAMSON: Okay, thank you very much. I'll pass the rest of the few minutes to my colleague, Mr. Gaudet.

MADAM CHAIR: Mr. Gaudet. You have the time remaining, to 10:35 a.m.

MR. GAUDET: Thank you, Madam Chair. I'll be very quick. I have a question under the affordable student housing pilot program. Mr. Dillon, in your opening comments you indicated about 170 affordable rent-supplement units were created. Could you provide us with where these units were created?

MR. DILLON: Certainly.

MADAM CHAIR: Thank you very much. The time remaining, 12 minutes, to the PC caucus. I would like to recognize Mr. Christie. You have until 10:54 a.m.

MR. PETER CHRISTIE: Thank you very much, and welcome to the witnesses this morning. I would like to go to a couple of issues that we talked about. First, in your opening comments you talked about the housing stock as the department saw it, the aging stock, and some issues that the member for Richmond just raised. As you started into the agreement, what were the goals of the Nova Scotia Department of Housing, as you moved into the agreement in 2002? Were your goals to put in additional units? Were your goals to work on the housing stock? What were the particular goals that you had as you started into the CMHC agreement?

MR. DILLON: To put it in a little bit of perspective, the federal funding was targeted simply to create stock, and CMHC's opening view was that they were simply interested in creating average market rent stock to kind of stimulate the economy and put more housing on the ground. When we looked at it from a Nova Scotia perspective, while that was an allottable federal objective, it wouldn't address some of what we saw as Nova Scotia's

pressing needs. So through the negotiation of the agreement, we put forward things like attention to some of the home ownership stock that was completely off the table at the opening salvo from CMHC, they simply wanted to create new rental stock only. We wanted to address preservation.

Also, we wanted to reach deeper to lower-income households than CMHC's target, which was largely just simply average market-rent housing. So in the consultations, through discussions with government, we designed a proposal, which we subsequently got endorsement from the federal government on, to change both the mix of money, how the money would be spent and kinds of clients we would target. That led us to things like a significant chunk of the money going to home preservation, which was an area that CMHC hadn't contemplated at all. It was a bit of a tough battle to convince them that that was important to Nova Scotia, particularly since a lot of that poor-condition housing lies in rural areas, where there are not rental options and other options available to them.

We also talked to them, subsequently, about using our money in a rent-supplement model that would ensure we could go deeper down in the income scale and ensure people had affordability for 10 to 15 years. So we brought a Nova Scotia solution, I guess, to the final agreement.

MR. CHRISTIE: So essentially what you said, it was a negotiated - you got some of what you wanted, but not all of what you wanted, but to tie into the program, you had to marry into the concept, and then make a few adjustments along the way?

MR. DILLON: Yes.

MR. CHRISTIE: I'm interested in the other part of your statement. You were talking about the consultations that you had with the housing stakeholders back after that agreement was signed. Were the views of the stakeholders similar to the programs and similar to the requirements that you just outlined?

MR. DILLON: I would say, generally speaking, yes. They echoed the same - in fact, some of our final sort of approach to the feds subsequently came, in terms of distributing the funding, from those stakeholder consultations, where they indicated a need for a creation of new stock in areas of need, the need to have mixed housing, in other words mixed income housing, not to have projects that have all lower-income households in them are all average income, but to introduce a mix in all the housing projects. That has been a fundamental concept in our request for proposals, that we would be looking for proposals that offer a mix, so there is no stigma associated with buildings. So many of the rental projects we've approved, the 553 units, they've gotten capital contributions to create average market rents for many of the units, and rent supplement contributions so that some lower-income households can, in fact, occupy the same building.

So that is the equation or formula that we've used, and it has been very successful, has been very popular with the developers because they can help us meet our need and, at the same time, serve their traditional clients.

MR. CHRISTIE: In terms of the first agreement, to make it affordable there was going to be a contribution by the Nova Scotia Government and a contribution by CMHC to the developer which, by definition, dropped the capital cost and made the rental. Is that the same structure that's under Phase II?

MR. DILLON: Phase II, that option is there. Initially CMHC's opening gambit - to use a chess term - in Phase II was their contributions were to be capital, and their approach on the capital side has always been a function of Treasury Board. Government simply wants their money to go up front and be done with and not to be a long-term budget pressure on them. So their opening salvo was capital up front and they left it to the province whether to work on the capital, the rent supplement, or some other variation. Since the agreement was signed we've received a letter from their minister indicating that they are now also prepared to allow their money to be used in a rent supplement model over five years if that flexibility improves the viability, suitability and so on of any particular project. So they have introduced that flexibility across the country as an option that provinces can avail themselves of.

MR. CHRISTIE: Does rent subsidy and affordability change by regions within the province, or is it consistent across the province, or are there regional differences?

MR. DILLON: Well, rent supplement covers the difference between what a tenant can afford to pay based on the 30 per cent rule and what average market rents are for the area. In some areas of the province average market rents might be higher than other areas and so, yes, the rent supplement amount will vary depending on the prevailing average market rent in the area and what the tenant can actually afford to pay.

MR. CHRISTIE: So as we hear criticism that a particular development in a particular region is not affordable - and I'll use the term north end Halifax for an example of where you hear some criticism - that formula that applies in Sydney or Yarmouth applies in north end Halifax, so it's consistent across the province?

MR. DILLON: It's consistent across the province. In areas where there's a fairly strong or heated housing market we have to exercise great care to ensure that we don't overpay, that the so-called average market rent isn't escalated or becomes unaffordable to government.

MR. CHRISTIE: Yes.

MR. DILLON: So we would be trying to encourage, to work with developers who are bringing units that are truly average market rents, and not escalated above a high level

so that the resulting subsidy we would have to provide would be excessive. So we work very hard on trying to achieve that low end of average market.

MR. CHRISTIE: Can I take it from your comments in terms of the proposals that you have had that the private sector has found this concept to be acceptable of the rent supplements and finding land to develop, so they found that concept to be acceptable and are continuing to put proposals in to you from all the different areas across the province - is that a fair statement?

MR. DILLON: I think it's a fair statement. The private sector, who this program by CMHC originally targeted, in fact their only target was really to create private sector new construction. I think they've been very receptive to the program and the way it has been designed. Ed would know better, but I don't believe we've gotten any sort of negative push back from them that the design of the program has been a problem for them in bringing programs forward.

MR. CHRISTIE: Thank you very much. I'll pass to the member for Kings North.

MADAM CHAIR: Mr. Parent, you have until 10:47 a.m.

MR. PARENT: Just following up on that, because I have some public housing units in my area which, because of the way they're factored without this mix that you're talking about, have deteriorated and neighbours have complained. So is that why we're doing rental units mainly and not doing new housing construction, because rental units, you can get the mix in better and you can keep the unit up?

MR. DILLON: There's a whole range of influences as to why we're going with the current formula - and you're thinking about Phase I. As I indicated, the funding metrics around Phase I, the capital contribution amount and the rent supplement approach were really the factors that contributed to the model we've got in Phase I - a fairly small amount of investment available from CMHC and from the province, and therefore it required projects that have this average market rent because there aren't enough subsidies for the program equivalent to a public housing program.

Phase II has deeper subsidy available or support available, and will be able to, in some instances, do more of an equivalent to a deep social housing model, but, again, we'll be challenged by not wanting to create the stigma of projects that are simply all the same income. So we will be looking, in the design for Phase II, to take advantage of the deep subsidy rules that are available in Phase II and build it into the model we had for Phase I in a manner that achieves the same results as Phase I, that is mixed income projects, good possible private- sector interest, and target the federal and provincial money at households in need.

The operative rule for Phase II is, the people who are receiving the federal and/or provincial support, have to be people who would be eligible to apply for public housing. So that really puts a target on the Phase II money that did not exist for Phase I. Phase I was simply affordable housing as measured by average market rents. So Phase II is a much more, I would say, social housing program than Phase I.

[10:45 a.m.]

MR. PARENT: That program, what are the dates for that? That starts next year?

MR. DILLON: Yes, Phase II effectively started when we signed the agreement, but the actual delivery of it will commence this fiscal year, and we have been offered, by CMHC, the ability to deliver that program out to about 2009. I think the original agreement says 2008, and by letter they've indicated they've provided all provinces with the flexibility now to deliver out to 2009, I believe the letter with final CMHC expenditures, I think, March 31, 2010. I don't anticipate we will necessarily need those further deadlines, but those are the deadlines that are currently on the table.

MR. PARENT: So what are your plans to avoid the social stigma that public housing causes, not just the social stigma, but when there's no sense of ownership, there's no real motivation to keep the unit up, besides personal pride, I guess?

MR. DILLON: Well, the question yet to be resolved, and it will be part of Cabinet discussions, is whether there's a share of this additional stock, the province will simply take the ownership of and be the owner and be able to take care of it, or it will be done through the private sector, or through non-profit groups, or a combination thereof. So those decisions haven't been made yet. In all of those forms of ownership, private, non-profit or the corporation, maintaining the units, keeping them in good condition and ensuring there's not the stigma associated with some traditional public housing projects will be one of the factors we'll have in mind in delivering.

MR. PARENT: So is the department recommending - for example, I'm very high on non-profit, the co-op - any one of those three models, or just leaving it up to Cabinet?

MR. DILLON: We won't necessarily be recommending anything. Cabinet may give us some direction on that. To date, I think all three models are open for discussion. If we decide to go to a proposal call, for example, we'll see what we get, whether it appears to be the kind of approach that is appropriate in that particular area. No decisions have been made on any of that.

MADAM CHAIR: Thank you very much. The time for questioning has now expired. I'd like to invite Mr. Dillon to make a closing statement, if you wish.

Just before you do this, you made reference to wait times in response to some of the questions, but in the package we were given, we don't have any of that information with respect to wait times. I would request that you make the information you have on wait times across the province, in each of the regions, that you were referring to, available to the committee.

MR. DILLON: Wait lists, you're referring to, not times.

MADAM CHAIR: Yes, wait lists. Thank you.

The floor is yours for a brief closing comment.

MR. DILLON: Thank you, Madam Chair. On behalf of the department, I want to thank you for the opportunity to be here and to talk about the Canada-Nova Scotia Affordable Housing Agreement and the other matters that have been raised. This program is a reflection of our commitment, along with our federal, private-sector and community partners, to provide affordable housing in Nova Scotia. Providing safe, adequate and sustainable homes for communities throughout Nova Scotia is one of the top priorities of the department, and it has always been a priority of the former Housing Commission and the various iterations of housing services in the department.

Good quality homes, as you know, contribute to the health and well-being of individuals, families and communities, and support their objective of achieving social and economic inclusion. The Affordable Housing Agreement was created to add or sustain the supply of safe, adequate, affordable housing, and we talked today about how our Affordable Housing Program is benefiting Nova Scotians.

We support the creation of modest new homes for modern income households. We help lower-income Nova Scotians make major home repairs that address health and safety. We have worked to preserve existing affordable housing for lower-income households by providing assistance to renovate existing rental housing. We have increased the availability of affordable family housing for single parents and students attending university full-time, and we have provided housing for persons with disabilities.

We continue to work with our partners in the delivering of this agreement. We hope, by the end of this agreement, to meet our goal of providing $56 million to renovate or create affordable housing for Nova Scotians.

In closing, I would like to thank you for the opportunity to speak to you and hope we've been able to provide you with the information you were looking for. Thank you.

MADAM CHAIR: Thank you very much. Thank you for appearing here today. Briefly, I would like to make a report on behalf of the subcommittee. We met this morning.

You will see that we have two pieces of correspondence back from the Nova Scotia Farm Loan Board, and from OED regarding the Industrial Expansion Fund.

The subcommittee wishes to recommend that a warrant be served on the Nova Scotia Farm Loan Board for all documents pertaining to S&J Potato Farms, and that our committee reserve the option to call them before us in May to answer questions, including the possibility of the failure to disclose the information the committee has requested if this situation continues. We've been very clear with the Farm Loan Board subsequent to other discussions of what it is that this committee is seeking, yet there appears to be a reluctance to release information. So that is a recommendation of the subcommittee.

Additionally, we were not happy with the response, we weren't satisfied with the response we received from OED regarding information that we requested about the additional appropriation of $50 million to the Industrial Expansion Fund without approval from this Legislature. It was the opinion of the subcommittee that we should pursue that additional information rigorously and perhaps with a subpoena as well, and that we seek further legal opinion from Legislative Counsel in light of the position which has been taken by the Department of Justice on behalf of the government with respect to the withholding of information that this committee has been requesting. Is there any discussion about the subcommittee's report? Hearing none, I would ask for a motion to accept the report of the committee.

MR. COLWELL: I so move.

MADAM CHAIR: Any further discussion? Would all those in favour of the motion please say Aye. Contrary minded, Nay.

The motion is carried.

We will now adjourn until next week when we have the Maintenance Enforcement folks in front of us. (Interruption)

Legislative Counsel has advised that we should have a motion to issue the subpoenas.

MR. COLWELL: I so move.

MADAM CHAIR: Is there any further discussion? Would all those in favour of the motion please say Aye. Contrary minded, Nay.

The motion is carried.

Thank you very much. We stand adjourned until next week.

[The committee adjourned at 10:54 a.m.]