Opening Statement to the Standing Committee on Public Accounts

Federal Government Support to First Nations—Housing on Reserves
(Chapter 6 - April 2003 Report of the Auditor General of Canada)

5 May 2003

Maria Barrados, Ph.D.
Assistant Auditor General

Mr. Chairman, thank you for this opportunity to present the results of Chapter 6 of our April 2003 report on the Federal Government's support to First Nations' housing on reserves. With me today are Mr. Joe Martire, the Principal responsible for the audit, and Mr. André Côté, the Director.

This audit is in support of the Auditor General's priority on aboriginal issues. In December 2002, we published a study on the reporting burden that First Nations face, due to the requirements of four federal organizations. They required at least 168 reports annually.

Our April report reviewed policy developments and analyzed information covering the 10 years since our last audit of on-reserve housing. Over this period we estimate that the federal government invested about $3.8 billion. We also examined the current support for on-reserve housing by Indian and Northern Affairs Canada (DIAND) and Canada Mortgage and Housing Corporation (CMHC).

Although the Auditor General is not the auditor of First Nations, we seek and take into account their views. Their input was extremely helpful and we are grateful for their continued support.

Mr. Chairman, there are three key areas that I would like to touch upon briefly in my remarks; the first deals with the need to address the critical housing shortage on reserves, secondly, the complexity of the current programs, and thirdly, areas for performance improvement.

Critical Shortage of Housing

Housing on reserve is fundamentally different and more complex than housing off reserve. It is governed by the legal framework defined by the Indian Act, which does not provide for activities otherwise taken for granted. For example, it is not possible to take out a regular mortgage from a bank to buy a house on reserve.

Numerous studies have called for action to address the shortage of adequate houses on reserves. Yet, despite these studies and a significant investment of federal funds, many First Nations are still facing a critical housing shortage to accommodate a young and growing population.

The numbers are telling. A shortage of 8,500 houses, which is forecasted to increase by about 2,000 units per year over the next 10 years. Furthermore about 44 percent of the 89,000 existing houses require renovations.

Streamlining the Programs

It is difficult for us to assess whether the federal contribution is an appropriate amount, in part because neither INAC nor CMHC have clearly defined what the federal assistance is intended to achieve in terms of addressing the critical housing shortage; nor have they defined a time frame in which to achieve it. Your committee may wish to seek further clarification from departmental officials on this matter.

We found that First Nations presently have to contend with two federal housing policies and up to five funding and two operating agreements, each having different administrative and reporting requirements. The First Nations that we visited told us that they do not understand why they have to deal with two organizations for housing and that they find their programs confusing and costly to administer. Our study on reporting requirements identified similar concerns in other federal programs.

The two organizations are not always clear about their roles and responsibilities, for example, on who is accountable for allocating CMHC funds to regions. Mr. Chairman, your committee may want to seek clarification on how roles and responsibilities are being defined, including streamlining programs.

Performance Improvement

The audit identified a number of other steps that we believe need to be taken promptly to improve program performance and compliance with authorities. They include:

• developing a strategy and action plan to address the problem of mould;
• ensuring that all federally subsidized houses meet the National Building Code; and
• obtaining the necessary program authority from Treasury Board.

We also concluded that Parliamentarians have not been getting a complete picture of the housing situation on reserves and the difference that federal assistance is making in addressing the critical shortage of adequate houses.

Mr. Chairman, that concludes my opening statement, and my colleagues and I would be pleased to answer any questions that members may have.