Canada funds housing markets on reserves

OTTAWA - The Canadian government has created a $300 million housing fund to jumpstart mortgage and rental markets on the country's First Nations reserves.

The money would be used to collateralize home loans, since the communal land status of the reserves makes it difficult for lenders to encumber them with liens.

The government hopes to finance 25,000 housing units on the reserves over 10 years through the First Nations Market Housing Fund.

And it is giving the First Nations a key role as intermediaries between tribal members and lenders in the plan.

The First Nations would apply to the fund for financial backing, which they would show to lenders to back loans to their tribal members. However, as in the private sector, the individual borrowers would be responsible for repaying their loans. If their borrowers default, the First Nations will be responsible to repay. If the First Nations default, the fund will repay the lenders, meaning the government is, in effect, guaranteeing their outlays.

The $300 million will be in addition to the government's annual housing aid to First Nations, which totals $261 million - $138 million from Indian and Northern Affairs Canada and $123 million from Canada Mortgage and Housing Corp.

According to the 2001 Census of Canada (its 2006 Census is done but has yet to release data on Canada's aboriginal population), there are 1 million Native people living in the country, with about 30 percent of them living on its 600 reserves. That's 3.3 percent of Canada's 30 million people.

The Canada Mortgage and Housing Corp., which will administer the fund, says the 2001 Census shows 27.7 percent of those living on the reserves being badly housed.

Monte Solberg, Canada's Minister of Human Resources and Social Development, commented, ''Canada has one of the highest levels of homeownership in the world. But we know that statistic does not reflect the situation for First Nations people on reserve.''

Solberg noted that Canada's Assembly of First Nations has advocated this kind of market-based housing to increase the quality of life on reserves.

He said he expected the fund to start by April 2008 and that meetings between First Nations, lenders and the government to hash out the details would begin in May.

Jim Prentice, Minister of Indian Affairs and Northern Development, said, ''Not enough people living on reserve know the feeling that comes from owning their own home. This approach will support the development of a housing market on reserve, while fully respecting the communal ownership of reserve land.''

According to the government, 62 percent of its Natives are Indians, 30 percent are Metis, and 5 percent are Inuit. The new province of Nunavut has the highest concentration of Native people, 85 percent, but is sparsely populated (22,720 Natives as of 2001). Provinces with the most Native people are Ontario, British Columbia, Alberta, Manitoba and Saskatchewan.

CMHC identified the following six partners as key to the success of on-reserve housing:

"First Nations: The tribes are responsible for ''developing community housing plans and priorities, administering INAC and CMHC housing programs and identifying funding from other sources for their housing needs.''

"INAC: Agency funds ''may be used towards the costs of new home construction and renovation, maintenance, insurance, debt-servicing and the planning and management of the housing portfolio.''

"CMHC: The agency provides housing subsidies, renovation programs, research and training.

"Health Canada: HC delivers health and health promotion services, including home inspections.

"First Nations housing institutions: These groups, such as First Nations National Housing Managers Association and First Nations National Building Officers Association, plan, deliver and manage housing programs.

"The private sector: Private sector groups have a role in financing, building and managing housing.