March 11, 1998
To: Community and Neighbourhood Services Committee
From: Commissioner of Community and Neighborhood Services
Subject: Status of Devolution and Reform of Social Housing Programs
Purpose:
To review the status of the current social housing reform process, intended to occur prior to devolution; to review the delay in the federal plans to devolve their social housing programs to the province; and to review the impact of this delay on provincial plans to devolve the administration of social housing to municipalities. To recommend that the City take a position urging the federal government to co-operate in the simplification process with the proviso that municipalities and housing providers are satisfied with the outcome of the reform process on these matters and request the transfer of ownership of the Metro Toronto Housing Authority stock to the City now that the City is paying for its operation.
Funding Sources, Financial Implications and Impact Statement:
This report discusses policy issues related to social housing responsibilities that have been devolved to the City of Toronto as of January 1, 1998. Devolved social housing costs (estimated at $265.5 million after pooling across the GTA) have been included in the draft 1998 Operating Budget. The Province has indicated that the administrative responsibility for social housing will be transferred to municipalities between 1998 and 2000. The actual timing will be dependent on the pace of the reform process and the development of the administrative capacity at the municipal level. The cost of administration is presently covered by the province, but we do not know how long this will continue. The province has indicated that the administration will be devolved to 50 designated upper tier municipalities of which Toronto is one. Decisions with regard to the reform of social housing programs will affect the form and cost of administration. Simplification of the current amalgam of programs, the co-ordination of the administration of federal and provincial funding for social housing and the transfer of ownership of the provincial public housing stock in the City are essential to allow for the efficient administration of the programs when the municipalities take over.
Recommendations:
It is recommended that:
(1) Council support efforts to reform social housing prior to devolution and request the federal government to co-operate with the province, the municipal sector and the non-profit housing sector to reform social housing programs prior to devolution of administrative responsibilities to municipalities, so that all possible administrative complexity and duplication can be eliminated;
(2) as Toronto has been forced to accept the former provincial funding responsibility for social housing, the province and the federal government be advised that the municipal management of a simplified and reformed set of programs is the only reasonable and acceptable outcome to the City and, furthermore, that the establishment of a provincially controlled special purpose body to administer social housing programs is not acceptable to the City;
(3) the provincial government be requested to transfer ownership of the Metro Toronto Housing Authority stock to the City;
(4) the municipality indicate to the federal government that it has no interest in administering the existing unilateral federal non-profit and co-op units;
(5) these positions be communicated to the provincial Minister of Municipal Affairs and Housing and the federal Minister Responsible for the Canada Mortgage and Housing Corporation; and
(6) that the appropriate City officials take the necessary steps to give effect thereto.
Background:
Current Critical Issues Regarding the Federal Role in Devolution
Discussions with regard to social housing devolution have reached a critical stage. The province is now beginning to invoice municipalities for the cost of social housing. Provincial plans to reform the programs and to transfer administrative responsibility to municipalities will require federal concurrence for all the programs where there is any federal financial involvement. Without this concurrence, the reform process will be seriously compromised and the City will likely pay for the provincial share of social housing costs, with little or no say in management.
Now that funding devolution has occurred, it is in the City=s interest to ensure that it has control over program administration for the downloaded programs. It is also in the City=s interest to ensure that the social housing system is simplified as soon as possible to reduce administration costs that will ultimately be borne by the City.
City Involvement in Devolution Discussions
To protect its interests, the City of Toronto must be actively involved in discussions related to the future design and administration of social housing programs. City representatives are participating in a number of working groups related to the devolution and reform of social housing. They include:
(1) A social housing task force struck by the Association of Municipalities of Ontario (AMO). Councillor Gordon Chong and Commissioner Shirley Hoy sit on this group.
(2) The GTA Mayors and Chairs Committee which now includes Mayor Lastman and six councillors (Councillors Faubert, Holiday, Nunziata, Ootes, Prue and Layton) has struck a working group to develop strategy related to these issues.
(3) The Province has established a Social Housing Committee, and a number of working groups, to develop recommendations for the restructuring of the social housing system and ownership of the public housing stock. Councillor Feldman co-chairs a working group looking at the future of the Ontario Housing Corporation. David Peters, General Manager of Cityhome, sits on a working group looking at future roles and functions of the Province, municipalities and providers of social housing.
It is important that Council keep up to date on these discussions and begin to take positions on these issues to guide the City=s participation in these forums.
The Community and Neighbourhood Services Committee has also struck a political liaison committee, consisting of Councillors Feldman and Chong, to consider issues related to devolution and reform of social housing, and to advise staff.
Formal consultations with the non-profit and co-op housing sector in the City are intended, to ensure that the views of social housing providers are taken into account as the City begins to assume its administrative role.
Comments:
Status of Social Housing Devolution and Reform
As of January 1, 1998, municipalities became responsible for funding the subsidy costs of social housing previously borne by the province. (The federal government continues to flow funds to the Province for its share of federal/provincial programs and directly administers and funds projects developed under the unlilateral federal housing programs). As has been indicated, for the time being, the Province will continue to administer the programs and will bill the City for these costs.
Last Fall, the provincial Minister of Municipal Affairs and Housing accepted in principle the recommendations of an Advisory Council that suggested major reforms to social housing programs, in the context of devolution. The reforms focus on the relationship between government as funder and the various housing provider agencies, but they also address savings/efficiencies, accountability, future ownership of provincially-owned public housing, and security of tenure for residents. The Advisory Council=s proposals set out a direction rather than a detailed plan and the province has now established working groups, made up of municipal, provincial and housing provider representatives to develop these more detailed plans.
Federal co-operation is needed in order to achieve the reforms proposed by the Advisory Council. This is because existing federal/provincial agreements would have to be amended in order to allow reform to take place. The federal government seems to be in no hurry to enter into a devolution agreement with the Province of Ontario. Provincial staff have indicated that without the inclusion of the federal component in the reform process, they will need to reconsider whether the reform process can proceed. In view of the fact that social housing costs have already been downloaded, this is a serious development from a municipal perspective.
From the beginning, municipalities have opposed devolution of social housing funding to the property tax base; however, now that municipalities are being billed for the cost of social housing, it is vital that municipalities be in a position to assume administrative responsibility for the programs they are paying for. It is equally vital that program administration be simplified and that, at the very least, the federal/provincial and provincial social housing programs be co-ordinated. To achieve this latter objective it is imperative that the federal government and the Ontario government reach an agreement that will permit the municipalities to develop a co-ordinated and efficient administration for all social housing programs within their jurisdiction.
The reform proposals include:
- a simplified financial structure, which will be less costly to administer;
- redefined roles and accountability structures for providers and funders of social housing;
- local control of the program within the limits of provincial and federal standards;
- harmonization of public and non-profit programs; and,
- joint municipal and provincial decisions with regard to the future ownership and structure for Ontario Housing Corporation housing in each municipality.
The Province has established a Social Housing Committee and a number of working groups to test the feasibility of the reform proposals and to develop implementation plans. These bodies include representatives of municipalities, the social housing sector, the provincial government and private individuals. The Social Housing Committee is expected to report to the Minister this spring.
Transfer of Federal Programs to the Province
The majority of the housing stock in Ontario is cost shared by the federal and provincial governments, and administered by the provincial government. Some of the older co-op and non-profit stock is federally funded and administered. More recently, the Ontario government developed its own program with no federal involvement. See Appendix for a detailed breakdown of social housing units.
Since early 1996, the federal government has been attempting to transfer the administrative responsibilities for its own programs to the provinces and territories and has signed agreements with 5 provinces in this regard. Under the terms of this transfer, the federal government would continue to provide funding for existing social housing, capped at 1995/96 budget levels, until existing mortgages and agreements run out.
A number of groups, including municipalities and bodies representing the social housing sector have opposed the transfer of federal responsibility to provinces, particularly in light of Ontario=s plans to devolve social housing to the local level. This opposition was motivated by a concern that, with both federal and provincial devolution, the senior levels of government would effectively be @out of the housing business@, leaving municipalities to shoulder the responsibility on their own, with only a property tax base at their disposal. Many also distrusted the provincial government=s intentions with regard to social housing. They felt that if federal cost shared and unilateral programs could not be included in the devolution, then the Province=s plans for program reform and administrative devolution would not be practical. They believed that the entire devolution package of tax and program reform would could in this way be stopped.
However, now that the provincial devolution of social housing is a Afait accompli@, this strategy no longer makes sense. Municipalities now need a reformed program that they can administer efficiently. It is therefore in the municipal interest to encourage the federal government to collaborate with the provincial government in eliminating administrative duplication and developing common, simplified program requirements for the cost shared and provincial unilateral programs. As the municipality will not be assuming any costs for those programs unilaterally funded and administered by the federal government, these programs need not be affected in any way.
It is important to note that federal government obligations to housing providers are tied to the housing providers= mortgages. As these mortgages expire, the federal obligation ceases. This withdrawal of federal funds will eventually occur regardless of changes due to devolution.
Current Issues Related to Devolution and Reform
As was indicated earlier in this report, social housing reform is unlikely to be effected unless the federal government proceeds to transfer control over some of the federally cost shared social housing to Ontario. Existing agreements between the federal government and the provinces would prohibit the devolution of administration of social housing to municipalities.
Provincial staff have indicated that they are working on a APlan B@ in the event that an agreement with the federal government is not possible. Plan B involves using the existing Local Housing Authorities (L.H. A.=s), reduced to 50 in number, as the bodies that would take over the administration of all social housing in each region. Municipal representatives would sit on the boards of these special purpose bodies to provide municipal input. This would be the means by which Asay for pay@ would be achieved. The use of special purpose bodies in this manner has not been acceptable to most municipalities.
It should be noted that the issue of the ownership of the public housing stock has not been resolved. Non- profit and co-operative housing projects are owned by the community or municipal organizations that operate them and the reform process is not intended to make any changes to these ownership arrangements. The public housing stock is owned by the Ontario Housing Corporation, an agency of the provincial government. Some municipalities have argued that, if they are to pay for the operation of this public housing, ownership should be transferred to them. It is recommended that the City of Toronto adopt this position.
Conclusions:
Proposed City of Toronto Position
The City should support in principle the reform of social housing programs, as it will provide a number of benefits for the providers and funders of social housing, as described above. Such a reform is long overdue. Further, given that the province=s social housing costs have now been devolved to the City, it is in the interest of the City to ensure that program reform occurs as soon as possible. To make this possible, the City should now press for federal co-operation in the reform process so that it may proceed.
In requesting that the federal government co-operate in program reform, the City should also request that federal representatives assist in ensuring that the reform package eventually put forward by the province is acceptable to the housing providers and the municipalities.
Housing projects administered and funded unilaterally by the federal government need not be subject to any changes in order for the reform process to proceed and it is not recommended that they be considered as part of the proposed negotiations.
Contact Name:
Joanne Campbell
Phone: 392-6135
Fax: 392-3037
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Interim Functional Lead for Housing
Commissioner of Community and Neighbourhood Services
Appendix
Social Housing in the New City of Toronto
Within the new City of Toronto there are about 95,000 units of social housing owned by public, non-profit and co-op housing agencies (see Table 1). This represents about 74 percent of the social housing stock in the GTA and about 45 percent of the provincial total. This stock has been developed over the past five decades through various provincial and federal programs. Municipalities have played an active role in initiating many of these programs and assembling land for this housing. Both Metro Toronto and the former City of Toronto developed social housing through their own housing companies, in support of planning goals related to affordable housing.
Table 1
