Last week, I was in Yellowknife, where I released results of new research on affordable housing in the Northwest Territories (NWT). The research project was sponsored by the Social Economy Research Network of Northern Canada, and was a collaboration with the Centre for Northern Families.
Research findings include the following:
- Housing indicators suggest that the state of housing in the NWT (especially in small communities) is much worse than in the rest of Canada. While 2 per cent of Canadians report living in "crowded conditions," that figure is 8 per cent for rural NWT. And while 8 per cent of Canadian households report living in housing that requires major repairs, the figure is 22 per cent for rural NWT.
- Housing is more expensive to both build and maintain in the NWT than in the rest of Canada, and there are three main reasons for this. First, building costs are higher in most parts of the North, especially areas that do not have road access; building costs on the Arctic Coast are roughly $300 per square foot, which is roughly double the cost in some other parts of the NWT. Second, utility costs (i.e. electricity, fuel, water) in the NWT, for the average household, are more than double the Canadian average. Third, there is a considerable amount of poverty in the NWT, especially in small communities, meaning that a large proportion of households in the NWT require public housing, which is a relatively expensive form of government-assisted housing. (Public housing requires a very deep subsidy -- i.e. as much as $20,000 per unit, per year, in the NWT -- for the operation and maintenance of that unit. Among other things, this subsidy covers fuel, power and water.)
- Due to many of the above factors, the government of the NWT pays considerably more on housing than a "typical Canadian province." While the average province pays $61 per capita on housing, the government of the NWT pays $1,672. Ergo: the government of the NWT pays more than 25 times per capita on housing than what is the norm for a Canadian province.
- In light of the above, the NWT is very reliant on federal funding for the building, operation and maintenance of housing. But across Canada, federal funding agreements for housing (most of which began in the 1960s, 1970s and 1980s, and which typically last between 35 and 50 years) are starting to expire. In the NWT, all federal funding commitments of this nature will completely expire by 2038. In the NWT, in the absence of new agreements with the federal government, roughly half of all public housing units will disappear by 2038. Put differently, the issue of expiring operating agreements is very significant throughout Canada, including in Toronto, but even more pressing in the NWT.
- The research results, which appear as a chapter in the 2011-2012 edition of How Ottawa Spends, suggest that a long-term, permanent commitment is required by the federal government in order to sustain housing in the NWT. The chapter argues that it's more cost effective for the federal government to reinvest the savings it accrues (as current agreements run out) into fixing already-existing housing, than it would be to allow current units to disappear completely and to then rebuild from scratch. (This general argument has been made before by Steve Pomeroy in the following report, commissioned by the Canadian Housing and Renewal Association.)
All of the information relating to last week's launch of the research can be found here, including a PowerPoint presentation I gave in Yellowknife on Thursday, and plain-language summaries of both my chapter and that of Dr. Frances Abele (who supervised this research and has a chapter of her own in the same publication on the federal government's northern strategy).
This article was first posted on The Progressive Economics Forum.