Annual Report WORKING TO MEET NUNAVUT S HOUSING NEEDS. Nunavut Housing Corporation

Transcription

1 Nunavut Housing Corporation Annual Report WORKING TO MEET NUNAVUT S HOUSING NEEDS

2 1 Nunavut Housing Corporation Annual Report 2013/2014

3 Our Mandate Created in 2000 through the Nunavut Legislature by the Northwest Territories Housing Corporation (Nunavut) Act, our mandate as a Public Agency of the Government of Nunavut (GN) is to create, coordinate and administer housing programs so that we may provide fair access to a range of affordable housing options to families and individuals in Nunavut. Our Mission To provide opportunities for all residents of Nunavut to have homes that support a healthy, secure, independent and dignified lifestyle through working with our communities to allow them to assume the role of providing housing to Nunavummiut. Our Vision To ensure families and individuals in Nunavut have access to a range of affordable housing options. Our Principles and Values The Nunavut Housing Corporation believes in and strives for: Placing human capital its employees, Local Housing Organization (LHO) partners, tenants and clients first when targeting housing solutions for Nunavut residents; Recognizing the contribution the Corporation and LHO staff make to housing in Nunavut and providing them with the proper work environment and tools to enable them to maximize that contribution; Making a positive impact on the quality and affordability of housing; Quality of property management services for Nunavut Public and Staff Housing; Ensuring housing services and support are provided in an equitable manner; Use of Inuit Qaujimajatuqangit (IQ) in Corporation decision-making; and Building constructive relationships with other governments, agencies, departments, and both community and Aboriginal organizations Quality of advice, assistance and support to LHOs, other client organizations and agencies, and individuals; 2 Nunavut Housing Corporation Annual Report 2013/2014

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5 Table of Contents Letter of Transmittal... 6 Minister s Message... 7 Chairman s Message... 8 President s Message... 9 Corporate Overview Consolidation Core Business Public Housing Staff Housing Homeownership Homelessness Departmental Roles Organizational Chart Priorities and Objectives Core Business Public Housing Staff Housing Homeownership Management s Discussion Report on Operations Advisory and Administration Services Public Housing GN Staff Housing Homeownership Programs Consolidated Financial Statements Nunavut Housing Corporation Annual Report 2013/2014

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7 Letter of Transmittal The Honourable Edna Elias Commissioner Government of Nunavut Dear Madam: I have the honour of presenting the Annual Report for the Nunavut Housing Corporation, covering the period April 1, 2013 to March 31, Respectfully submitted, George Kuksuk Minister responsible for the Nunavut Housing Corporation 6 Nunavut Housing Corporation Annual Report 2013/2014

8 Minister s Message was a year of change and renewal for the Nunavut Housing Corporation (NHC). The Corporation secured $100 million in federal funding for housing construction in Nunavut, welcomed a new President/CEO and a new Chair of the Board of Directors, and made significant progress in strategic planning. With this progress, the Corporation is poised to make great strides in the delivery of housing to meet the needs of Nunavummiut. The NHC has accomplished much in the short time that I have been Minister, including the successful tendering of contracts for the construction of 213 units across the territory. Additionally, following the approval of the GN Long-Term Comprehensive Housing Strategy, we can now begin the important process of strategy implementation, which will complete the three part Igluliuqatigiilauqta: Let s Build a Home Together initiative. With a comprehensive plan and a strong collaborative approach to resolving Nunavut s housing crisis, we will highlight the need for long term and predictable investments in housing, and strengthen our partnership with the federal government. The NHC will continue to build on its achievements in this fiscal year and fulfill its obligations under our new government mandate, Sivumut Abluqta, to deliver more energy efficient and economical solutions, and ensure more affordable housing options and alternatives are available to meet people s varied needs, including the needs of a growing elder population. I look forward to my continued work with the Nunavut Housing Corporation, and its dedicated local community partners to provide adequate and affordable housing to Nunavummiut. Sincerely, Hon. George Kuksuk Minister Responsible for the Nunavut Housing Corporation 7 Nunavut Housing Corporation Annual Report 2013/2014

9 Chairman s Message As Chair of the Nunavut Housing Corporation s Board of Directors, I am pleased to present, on behalf of the Board, the Nunavut Housing Corporation Annual Report. Throughout the many changes in the fiscal year , including welcoming a new Minister, President & CEO, and senior management team, the Board of Directors has provided consistent leadership and strong direction forward. Our experienced membership offers a level of knowledge and a Nunavut specific understanding to drive solutions to our unique housing issues. The Board has successfully provided strategic oversight and direction in the development of the Organizational Review, changes to the Rent Scale, and the Igluliuqatigiilauqta: Let s Build a Home Together initiative, and is pleased with the NHC s progress to date. In addition, the Board is proud of the NHC s performance in responding to the welcomed federal investment in housing, through the Economic Action Plan, which has allowed the Corporation to tender contracts for the construction of 213 units in 12 communities across the territory. The Board strongly supports the Corporation s staff and management as well as the Local Housing Organization board members and staff, as we continue to work to meet the housing needs of Nunavummiut. With a renewed vision and commitment to strengthening advocacy efforts, the Board of Directors looks forward to meeting the challenges and opportunities of Best regards, Bob Leonard Chairperson Nunavut Housing Corporation Board of Directors BOARD OF DIRECTORS Mr. Bob Leonard, Director, Arviat, NU Mr. Jack Anawak, Vice-Chair, Iqaluit, NU Ms. Kathleen Gomes, Director, Iqaluit, NU Ms. Vicki Aitaok, Director, Cambridge Bay, NU Mr. Gordon MacPherson, Director, Middleton, NS Mr. Ross Mrazek, Director, Sherwood Park, AB 8 Nunavut Housing Corporation Annual Report 2013/2014

10 President s Message The Nunavut Housing Corporation has been working hard over the past year to provide housing to Nunavummiut across the territory. In fiscal the Nunavut Housing Corporation made significant progress in its work to address Nunavut s housing crisis. With the $100 million federal investment secured, the NHC was able to successfully plan and coordinate land acquisition and contracting for the construction of 213 units in 12 communities across Nunavut. All construction is expected to be delivered on schedule and within budget, providing homes to families and individuals who are most in need. In addition to this federally funded construction, GN 2013/14 capital funding has allowed for the construction of 25 new public housing units and 10 new staff housing units. Our progress demonstrates that we are ready and able to continue to deliver much needed housing to Nunavummiut in a timely and cost effective manner. This year the NHC has made significant improvements in its frontline engagement with public housing tenants. With ongoing efforts to build capacity at the local level, the NHC has implemented new Rent Scale software, which has streamlined frontline administration and enabled stronger reporting. This new software also provides the data needed to continue our strong lobbying efforts with the federal government for more stable and long term funding for housing. I am proud of the progress that has been made towards the completion of the Igluliuqatigiilauqta: Let s Build a Home Together initiative. Having finished the GN Long-Term Comprehensive Housing Strategy in 2013, I look forward to working on the development of a realistic and achievable implementation plan to address Nunavut s housing issues. Working in partnership with GN departments and other housing stakeholders, I look forward to continuing to provide a strong vision for housing and foster an environment for collaboration and success. Housing is integral to a healthy and prosperous society, and is the cornerstone of development in Nunavut. Although additional funding is still required to close the housing gap, we should celebrate the significant progress achieved this year, which would not have been possible without the commitment and dedication of the Board of Directors, our Local Housing Organizations, and the staff at the Corporation. Together, we will succeed in overcoming Nunavut s housing challenges. Sincerely, Lori Kimball, President and CEO Nunavut Housing Corporation 9 Nunavut Housing Corporation Annual Report 2013/2014

11 Corporate Overview The Nunavut Housing Corporation (the Corporation) is a Public Agency of the Government of Nunavut (GN), created through the Nunavut Legislature by the Nunavut Housing Corporation (Nunavut) Act. As such an agency, the Corporation is at arms-length from the GN and its operating boundaries are set out in Part IX of the Financial Administration Act, the section of the Act specifically devoted to Public Agencies. The Corporation reports to the Legislative Assembly, Executive Council and Nunavummiut through its President, Board of Directors, and the Minister responsible for the Nunavut Housing Corporation. This approach allows the Minister to maximize the effectiveness of the Corporation for the present and future benefits of Nunavummiut. Status as a Crown corporation affords many advantages, including: The ability to enter into funding partnerships with others, principally the Canada Mortgage and Housing Corporation (CMHC). This means that Nunavut s transfer payments received from the federal government are not affected by the funding that the Corporation receives. The ability to carry over funds from one year to the next, ensuring that funds from all sources designated for housing initiatives remain dedicated to housing solutions. The stewardship of funds in the Capital and Operating and Maintenance pools, giving the Corporation full authority for the delivery of housing initiatives. Consolidation There were 25 Local Housing Associations and Authorities consolidated with the financial statements of the Corporation for the fiscal year. Core Business The Corporation offers multiple housing solutions including: providing education, training and support to Local Housing Organizations (LHOs) in the areas of administration, finance, program delivery and maintenance; providing homeowner services in the area of finance and technical assistance; and coordinating housing-related lobby efforts on behalf of all Nunavut residents. These business services are organized in four distinct lines of program delivery: Public Housing, Staff Housing, Homeownership, and Homelessness. Public Housing The NHC delivers a community-sensitive Public Housing Program by providing financial resources and ongoing professional support to its local delivery agents, the 25 Local Housing Organizations. LHOs are responsible for the complete care of the 5,123 units in the public housing portfolio (as of March 31, 2014), from unit allocations and rental assessments/collections, to maintenance and repairs, and energy upgrading. Staff Housing The Corporation administers the Government of Nunavut Staff Housing program, which includes both leased and owned units, and provides policy support to enhance housing options and services available to GN staff in Nunavut. The LHOs and other management agents have the responsibility of maintaining the 1,424 units used for staff housing at a local level (as of March 31, 2014). 10 Nunavut Housing Corporation Annual Report 2013/2014

12 Homeownership Through its Homeownership Programs and supports, the NHC assists residents who can afford the costs of homeownership to secure and maintain their own housing. As well, homeownership education and counseling services are provided to homeowners. These services include consultations regarding purchase of existing homes or new home construction, repairs / renovations, bank financing, and energy conservation in the home. Homelessness The provision of these services transferred to the new Department of Family Services effective April 1, However, In 2014, NHC continued to provide support in the form of contributions for Shelter Enhancements through funding received under the Investment in Affordable Housing Agreement with Canada Mortgage and Housing Corporation (CMHC). Departmental Roles To administer the Corporation s programs, a small corporate team of ninety housing professionals work to make the Corporation an action oriented service delivery agency. Structured around five distinct offices, this cohesive group is further supported by a network of twenty-five Local Housing Organizations which provide a crucial link to Nunavummiut and their communities. Directorate & Corporate Headquarters The Executive is responsible for managing the Corporation to ensure consistency in all its activities across Nunavut, including the application of policies, standards and procedures, and the delivery of programs. It also oversees the development of long-range strategies, policies, and operational guidelines on corporate matters for the Board of Directors, the Minister responsible for the Nunavut Housing Corporation, and for the Executive Council (Cabinet). As well, it ensures that programs are delivered according to the Corporation s funding agreements with the Canada Mortgage and Housing Corporation (CMHC). Corporate Policy & Communications group works on the development of corporate policy, strategic planning and communications related to key program areas. They provide support to the Minister, the Corporate Executive and the District Offices. Corporate Headquarters coordinates the preparation, monitoring and reporting of the corporate programs. It also provides support to the District Offices in the areas of programs, contracting, project management, and technical design and maintenance. District Offices The Corporation s District Offices manage and provide support in the delivery of programs and services to the communities. District Offices set regional priorities and work with LHOs and individual clients to ensure programs delivered are of appropriate standards through monitoring and assessment. The District Office is responsible for ensuring the construction program is successful within its region. It is also responsible for the delivery of various homeownership programs, and developing positive relationships with other government departments and agencies. LHOs (Local Housing Organizations) The Corporation partners with LHOs at the community level, who provide most of the day-to-day services associated with program delivery to individuals and families. Virtually all LHOs are formed as independent organizations under the Societies Act (Housing Associations). Exceptions to this include the Iqaluit, Cape Dorset, Kugaaruk, and Taloyoak Housing Authorities which were formed under the Nunavut Housing Corporation Act. 11 Nunavut Housing Corporation Annual Report 2013/2014

13 Organizational Chart President & CEO 90PY Executive Secretary (Iqaluit) 1PY Headquarters Operations Directorate District Operations Operations (Arviat) 11PY Corporate Services (Iqaluit) 3PY Qikiqtaaluk (Cape Dorset) 25PY Staff Housing (Iqaluit) 6PY Corporate Comptrollership (Iqaluit) 10PY Kivalliq (Arviat) 15PY Construction (Iqaluit) 2PY Kitikmeot (Cambridge Bay) 14PY Policy & Planning (Iqaluit) 2PY 12 Nunavut Housing Corporation Annual Report 2013/2014

14 Priorities and Objectives The Corporation s priorities and objectives for the fiscal year : Core Business Develop an implementation and financial plan for the GN Comprehensive Long Term Housing Strategy, in collaboration with GN departments. Status: The NHC anticipates the completion of its Blueprint for Action: Building a Commonsense Approach for Overcoming Nunavut s Housing Crisis in The Blueprint will be based on NHC s proposed methodology for developing an Action Plan as stated in the GN Long Term Comprehensive Housing and Homelessness Strategy. Complete the implementation of approved recommendations of the second phase of NHC s organizational structure review. Status: The NHC has completed a comprehensive organizational structure review. Recommended changes will be considered in early Continue lobbying efforts at the territorial and federal levels to seek support for the provision of suitable, adequate and affordable housing across Nunavut. Status: NHC is an active member of the P/T Housing Forum, which is currently developing a coordinated federal engagement strategy to raise the debate regarding the need for a long term funding solution for housing to the national level. Continue to undertake research activities that will assist NHC in demonstrating the social, economic and cultural impacts of housing issues across Nunavut. Status: NHC has undertaken some research activities for the development of the GN Long Term Comprehensive Housing and Homelessness Strategy. NHC is also an active member of the Technical and Socioeconomic working groups of Tri-Territorial Housing Committee. Continue work with NTI to address affordable housing needs in Nunavut in accordance with Aajiiqatigiinniq. Status: NHC engaged with NTI on the development of the Framework for the GN Long Term Comprehensive Housing and Homelessness Strategy. The NHC is committed to working with NTI on housing matters and anticipates continuing to engage with NTI on the development of the Action Plan for the GN Housing and Homelessness Strategy in Continue to work with the Department of Culture and Heritage to implement the Inuit Language Protection Act (ILPA) and Official Languages Act (OLA). Status: The NHC spent its OLA-ILPA budget of $135,000 for training LHO staff on the Public Housing new rent scale software and the preparation of supporting documents in Nunavut s official languages related to Public Housing. Continue to identify training, mentoring, development and staffing opportunities for beneficiaries within NHC, through the NHC s IEP committee. Status: Within the last year, NHC and LHO staff have received training for changes to the Rent Scale, First Aid, Heating Systems, as well as Trauma Informed Practice training. NHC is also represented on the GN IEP Steering Committee, whose role is to determine ways to increase Inuit employment in departments and agencies. 13 Nunavut Housing Corporation Annual Report 2013/2014

15 Public Housing Begin implementing changes made to the Public Housing Rent Scale as per the results of the Public Housing Rent Scale Review. Status: NHC implemented the new Rent Scale Management System, which incorporates the changes made to the Public Housing Rent Scale on February 1st Implement the occupational health and safety plan in consultation with WSCC for both NHC and LHO operations. Status: NHC completed, in consultation with WSCC, its Occupational Health and Safety Manual. A training plan for LHO and NHC operations will be developed based on the manual for implementation in Develop and begin implementation of new financial and property management solution. Status: NHC has held several consultations with GN Information Provision Services and anticipates having a software selection and implementation plan complete in early Implement internal plan to reduce LHO arrears, and continue to develop and implement LHO deficit recovery plans. Status: NHC has implemented a number of pilot initiatives for the collection of LHO arrears to be included in a formal Arrear Reduction Plan. The NHC has drafted a Collections Policy that has been reviewed by the Board and approved for consultation with the GN. Staff Housing Continue to enhance the staff housing portfolio, particularly in communities with growing staff housing requirements. Status: The NHC built 17 staff housing units as per their new construction plan. These 17 units represent a 10-plex in Cambridge Bay, a duplex in Clyde River and a 5-plex in Taloyoak. Continue to work in close partnership with GN departments to meet their staff housing requirements. Status: The NHC has held consultations with GN departments regarding their staff housing requirements. NHC considers the demand for staff housing as well as units available for lease in each community as part of its assessment of where to build vs. lease to assist with meeting future staff housing requirements. Homeownership Finalize Homeownership Applicant Database. Status: The NHC completed development of a prototype of Homeownership Applicant Database for testing. Continue to implement changes to NHC s home ownership programs resulting from the GN Comprehensive Long Term Housing Strategy. Status: NHC is reviewing its programs to determine whether they currently support the development of Nunavut housing continuum. Monitor the success and impact of the homeownership programs. Status: NHC is currently reviewing the performance of its existing programs and anticipates being able to report on their impacts in Promote homeownership in Nunavut through publicity and promotion as well as through education and counseling. Status: The NHC has established and advertised new applicant intake deadlines in January 2014 as part of its on-going promotion of homeownership in Nunavut. 14 Nunavut Housing Corporation Annual Report 2013/2014

16 Management s Discussion Report on Operations Directorate / Headquarters In CMHC announced $100 million in new funding under the Economic Action Plan (EAP). NHC initiated land acquisition and began the tendering process for 213 new units across 12 communities. The Government of Nunavut provided $8 million in capital funding which was matched with $1.455 million of CMHC funding under the Investment in Affordable Housing (IAH), which funded the completion of a 5 plex in Clyde River, and two 10 plexes in Arviat still under construction as at March 31, As well, saw the completion of the remaining affordable housing units funded under the $200 million Nunavut Housing Trust (NHT). The NHC completed the development of a strategic framework along with the GN s Comprehensive Long Term Housing and Homelessness Strategy. During fiscal 2014/15 NHC will be working on the development of a realistic and achievable Blueprint for Action to address the housing crisis in Nunavut. Districts District Operations focused on providing support to LHOs and delivering the Corporation s major lines of business, namely the Public Housing, GN Staff Housing, Homeownership, Public Housing Modernization and Improvement, and Construction programs. The NHC offers homeownership programs geared towards assisting homeowners throughout the life of their home, such as the Emergency Repair Program, Home Renovation Program, Senior Citizen Home Repair Program, Seniors and Disabled Persons Preventative Maintenance Program, and the Heating Oil Tank Replacement Program. The Corporation also offers homeownership programs geared towards the purchase of a new and existing home, such as the Nunavut Down Payment Assistance Program. 15 Nunavut Housing Corporation Annual Report 2013/2014

17 Advisory and Administration Services Administration In 2013/14, administration costs (not including administration related to staff housing) increased from $ million to $ million primarily due to increases in compensation and benefits, travel and training, and professional and special services. 2013/ /13 $12.0 $10.0 $8.0 In 000's $6.0 $4.0 $2.0 $0.0 Compensation & Benefits Professional Services Travel & Training Office Accommodations Other Total Revenues & Government Funding Total Revenues increased from $224.8 million to $246.3 million in 2013/14. Government funding increased from $205.3 million to $227.3 million. This included an increase of $17.2 million in funding from the Government of Nunavut and $4.8 million in funding form CMHC. All other revenues decreased from $19.5 million to $19.0 million mainly due to a decrease in social housing rental assessments. These other revenues can be broken down as follows: $16.0 $14.0 $12.0 $ / /13 In 000's $8.0 $6.0 $4.0 $2.0 $0.0 -$2.0 Public Housing Rent Mortgages Investment Revenue Gain / (loss) on disposal of capital assets Other 16 Nunavut Housing Corporation Annual Report 2013/2014

18 The Corporation s most significant generated revenue is public housing rent. During fiscal 2013/14, the collection rate increased from 80.1% to 89.6%. Details by community are as follows: Community Rent Receivable (dollars) Number of Months Outstanding 2013/ / /12 Iqaluit 3,066, % 82.8% 90.1% Resolute Bay 208, % 88.8% 87.0% Pangnirtung 1,199, % 91.3% 96.7% Pond Inlet 1,817, % 82.3% 83.7% Grise Fiord 80, % 92.7% 89.2% Arctic Bay 1,543, % 75.6% 72.2% Igloolik 1,143, % 83.1% 85.3% Cape Dorset 1,181, % 85.2% N/A Sanikiluaq 904, % 81.7% 82.2% Qikiqtarjuaq 618, % 67.8% 73.3% Hall Beach 2,580, % 73.6% 99.7% Kimmirut 359, % 94.4% 91.8% Clyde River 2,494, % 41.0% 40.9% Baffin 17,199, % 77.9% 82.3% Chesterfield Inlet 63, % 91.3% 112.5% Coral Harbour 121, % 86.7% 94.0% Rankin Inlet 679, % 102.2% 92.6% Whale Cove 88, % 104.3% 100.8% Repulse Bay 288, % 82.4% 91.1% Arviat 1,280, % 72.3% 85.2% Baker Lake 1,451, % 88.4% 86.6% Kivalliq 3,973, % 89.5% 90.8% Cambridge Bay 1,695, % 71.2% 106.1% Gjoa Haven 1,454, % 78.1% 60.4% Taloyoak 1,291, % 75.1% 85.5% Kugluktuk 906, % 83.6% 83.4% Kugaaruk 447, % 59.3% 69.0% Kitikmeot 5,795, % 74.8% 82.7% Nunavut 26,968, % 80.1% 84.4% Note that where collection rates exceed 100%, this indicates that LHOs were able to collect more rent than was assessed during the year by collecting amounts owing from prior years. The number of months outstanding was calculated by taking the total rent receivable divided by the average monthly rent assessment for fiscal 2013/ Nunavut Housing Corporation Annual Report 2013/2014

19 Accumulated Surplus During fiscal 2012/13, the Nunavut Housing Corporation adopted the Public Sector Accounting Standard 3410 relating to Government Transfers. In the past funding related to the acquisition of capital assets was deferred and amortized over the same period as the corresponding capital asset. Therefore, the net effect of amortization of deferred capital and amortization of the asset had minimal impact on the annual surplus or deficit incurred during the year. The new standard requires that the funding be recognized as income as it is expended. Therefore, the full amount of funding is recognized immediately, while the asset acquired with that funding is amortized as expense over many years. The result is that there will be a net impact on an annual basis. If the impacts of this accounting change were excluded, the surplus generated for 2013/14 would have been $5.9 million ( $5.3 million), which would have resulted in a cumulative surplus of $27.7 million ( million). The closing accumulated surplus balance of $644.1 million is not funds available for use. Non-financial assets will be amortized and expensed during the course of their useful life which will draw this balance down over time. This simply represents the value of NHCs assets less its liabilities. Public Housing In , the Corporation wrote off 5 public housing units destroyed by fire with a total net book value of $168,961. In addition, the Corporation recorded a write down of $262,854 for 7 public housing units damaged by fire. Operation and Maintenance (O&M) for Social Housing The Social Housing Program now consists of a single line on the Consolidated Statement of Operations with the details outlined in Schedule B. This amount increased from $ million in 2012/13 to $ million in 2013/14, an increase of $7.066 million. This increase is primarily due to the addition of new public housing units, resulting in increases in utilities, and LHO administration and maintenance costs. O & M costs for public housing were as follows: $90.0 $80.0 $70.0 $ / /13 In 000's $50.0 $40.0 $30.0 $20.0 $10.0 $0.0 Utilities Amortization LHO Maintenance LHO Administration M & I Other 18 Nunavut Housing Corporation Annual Report 2013/2014

20 Operating costs for public housing can be further broken down as follows: $ % $11.7 9% $3.4 3% $ % $2.1 2% 2013/14 (in millions) $ % $ % Water & Sewage LHO Maintenance Power Fuel LHO Admin Garbage Average Cost Per Unit (in thousands) Water & Sewage $ 7.4 Power 5.1 Fuel 3.7 Garbage 0.7 Taxes 0.4 Subtotal Utilities 17.3 LHO Admin 2.3 LHO Maintenance 5.2 Sub-total LHO 7.5 Total $ 24.8 Taxes Water & Sewage costs are the largest single expense for public housing units, and are almost equal to the cost of LHO Admin & Maintenance costs combined (Average cost per unit for LHO operations is approximately $7,512, while water & sewage is approximately $7,434 per unit). Public Housing Capital Projects In fiscal 2011/12, NHC entered into a 3 year cost shared funding agreement with CMHC under the Investments in Affordable Housing initiative. This agreement provides $1.455 million per year in additional funding from CMHC towards public housing from 2011/12 to 2013/14. In addition, a further $10 thousand per year is provided to assist in funding building maintenance for homeless shelters. Over the past year, the Corporation saw construction wrapping up for public housing. As of March 31, 2014, all 285 units funded through Canada s Economic Action Plan (CEAP) and all 726 units funded under the Nunavut Housing Trust (NHT) were complete and included in the public housing inventory. In 2013/14 the Corporation incurred $14.2 million in costs relating to the construction of new public housing units. Public Housing - Modernization & Improvement (M & I) The Corporation is responsible for 5,123 units in the public housing portfolio. The Modernization and Improvement Program ensures the health, safety and suitability of these units. In 2013/14, $8.921 million was used for modernization & improvements. Funding for the program came from the following sources: GN $ CMHC $ Nunavut Housing Corporation Annual Report 2013/2014

21 GN Staff Housing Through the GN Staff Housing Program, the Corporation provides subsidized rental units to GN staff. The GN staff housing inventory is administered by the Corporation and includes 1,424 units. Of these, 365 are owned by the Corporation; the remainder (74.4% of the staff housing portfolio) is leased. Over time, the Corporation will need to address the composition of this portfolio with a view towards rebalancing its assets. Steps are being taken to increase the range of housing options available to GN staff. GN Staff Housing Program In 2013/14, costs related to the staff housing program costs increased from $ million to $ million, an increase of $2.057 million. This was primarily due to increases in the number of units under the staff housing program, costs of utilities, and the costs of demand and preventative maintenance. Revenues for staff housing rents are collected and retained by the Government of Nunavut Department of Finance. Staff Housing Program costs were as follows: $ / /13 $30.0 $25.0 In 000's $20.0 $15.0 $10.0 $5.0 $0.0 Leasing Utilities, taxes, and land lease Maintenance Agency Fees & Admin Amortization Interest Homeownership Programs Through its Homeownership Programs and financing options, the Corporation assists eligible residents who can afford the costs of homeownership to secure and maintain their own housing. The number of clients served under any one program depends on homeowner demand in each area/community. District Directors are charged with the responsibility of apportioning their funding appropriately. Demand for these programs is high. To ensure fairness, each district uses a priority allocation rating system to determine application approval. GN funded programs: Emergency Repair (ERP) up to $15,000 per client Home Renovation (HRP) up to $65,000 per client Senior Citizen Home Repair (SCHRP) up to $15,000 (plus shipping) per client 20 Nunavut Housing Corporation Annual Report 2013/2014

22 Nunavut Down Payment Assistance (NDAP) During 2012/13 the NDAP program was revised. Clients approved prior to August 2012, received the following: In Iqaluit, Rankin Inlet and Cambridge Bay assistance from $30,000 for an existing unit or $50,000 for new construction. In all other communities $45,000 for an existing unit and $75,000 for new construction. Clients approved subsequent to August 2012 are required to provide a portion of their down payment (a minimum of 25% must be provided by the client and 75% provided by NHC). The calculation of the assistance is based on a 10% total down payment and the maximum value of NHC s portion is $30,000. For example, if a client purchases a $400,000 property, a 10% down payment would be $40,000, and would consist of $10,000 from the client and $30,000 from NHC. If a client purchases a $500,000 property, the program would only provide the maximum assistance of $30,000. Seniors and Disabled Persons Preventative Maintenance Program (SDPPMP) - provides an annual grant of up to $1,500 to eligible senior and disabled homeowners to undertake preventative maintenance on their homes. Interim Financing Program (IFP) provides interim financing for new construction. In 2010/11 the Corporation introduced the Heating Oil Tank Replacement Program (HOTRP), which provides assistance in the form of a grant of up to $5,000 to replace aging oil tanks. In 2013/2014, $3.553 million was spent on Homeownership Programs. Funding for these programs came entirely from the GN in 2013/14. Breakdown of homeownership applications by program Pending & Waitlisted as of March 31, 2013 Pending & Waitlisted as of March 31, 2014 New Applications Approved Applications Declined Applications SCHRP ERP NDAP HRP SDPPMP HOTRP IFP TOP TOTAL Breakdown of homeownership spending by region and by program Kitikmeot Kivalliq Qikiqtaaluk Total SCHRP $ 6,000 $ 38,000 $ 10,000 $ 54,000 ERP 40, , , ,000 NDAP 38, , , ,000 HRP 349,000 1,025, ,000 1,970,000 SDPPMP 3,000 1,000 1,000 5,000 HOTRP 73,000 96, , ,000 TOTAL $ 509,000 $1,494,000 $ 1,550,000 $ 3,553,000 *Note: All projects were complete or in progress at year end. 21 Nunavut Housing Corporation Annual Report 2013/2014

23 Consolidated Financial Statements Management Responsibility for Financial Reporting Independent Auditor s Report Consolidated Statement of Financial Position Consolidated Statement of Operations and Accumulated Surplus Consolidated Statement of Changes in Net Financial Assets Consolidated Statement of Cash Flow Notes to the Consolidated Financial Statements Schedule A Consolidated Schedule of Other Revenue and Recoveries...45 Schedule B Consolidated Schedule of Expense Details by Program Schedule C Consolidated Schedule of Tangible Capital Assets Nunavut Housing Corporation Annual Report 2013/2014

24 knk7u w[loep3jx4f5 Nunavut Housing Corporation Nunavutmi Iglulirijirjuarkut Société d habitation du Nunavut 30 September 2014 To the Honorable George Kuksuk Minister Responsible for the Nunavut Housing Corporation P.O. Box 2410 Iqaluit, Nunavut X0A 0H0 Dear Mr. Kuksuk, Re: MANAGEMENT S RESPONSIBILITY FOR FINANCIAL REPORTING The accompanying consolidated financial statements have been prepared by management in accordance with Canadian public sector accounting standards. Management is responsible for the integrity and objectivity of the data in these consolidated financial statements and, where appropriate, the statements include estimates and judgements based on careful consideration of information available to management. Management has developed and maintains books of accounts, records, financial and management controls, information systems and management practices. These are designed to provide reasonable assurance as to the reliability of financial information that assets are safeguarded and controlled and that transactions are in accordance with the Financial Administration Act of Nunavut, the Housing Corporation Act and policies of the Corporation. The Corporation s management recognizes its responsibility for conducting the Corporation s affairs in accordance with the requirements of applicable laws and sound business principles, and for maintaining standards of conduct that are appropriate to a territorial corporation. The Board of Directors is responsible for ensuring that management fulfils its responsibilities for financial reporting and internal control. The Board of Directors meet periodically with management and external auditors. The external auditors have full and free access to the Board of Directors. The Auditor General of Canada provides an independent, objective audit for the purpose of expressing his opinion on the consolidated financial statements of the Corporation. He also considers whether the transactions that come to his notice in the course of this audit are, in all significant respects, in accordance with the specified legislation. Lori Kimball, CPA, CGA President Heather Moffett, CPA, CMA Acting Chief Financial Officer Iqaluit, Nunavut 30 September Nunavut Housing Corporation Annual Report 2013/2014

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27 Nunavut Housing Corporation CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT MARCH 31 (in thousands of dollars) Financial Assets Cash $ 12,457 $ 19,819 Accounts Receivable (Note 5) 7,553 12,105 Portfolio Investments (Note 4) 93,847 48,810 Mortgage Receivable (Note 6) 1,766 1,667 Direct Financing Lease Receivable Total Financial Assets 115,950 82,744 Liabilities Accounts Payable and Accrued Liabilities (Note 7) 35,548 33,906 Security Deposits Capital Funding Advanced (Note 8) 23,751 - Long-Term Debt (Note 9) 14,061 15,264 Capital Lease Obligations (Note 10) 5,520 9,226 Employee Future Benefits (Note 11) 2,303 2,056 Total Liabilities 81,741 60,981 Net Financial Assets 34,209 21,763 Non-Financial Assets Tangible Capital Assets (Schedule C) 607, ,294 Inventory for Use 2, Prepaid Expenses Total Non-Financial Assets 609, ,140 Accumulated Surplus $ 644,070 $ 641,903 Contingencies (Note 14) Contractual obligations (Note 15) Approved by Management: Lori Kimball President and CEO Heather Moffett Acting Chief Financial Officer The accompanying notes and schedules are an integral part of these consolidated financial statements 26 Nunavut Housing Corporation Annual Report 2013/2014

28 Nunavut Housing Corporation CONSOLIDATED STATEMENT OF OPERATIONS AND ACCUMULATED SURPLUS FOR THE YEAR ENDED MARCH 31 (in thousands of dollars) Budget Actual Actual Generated Revenues Social Housing Rental Revenue $ 12,656 $ 14,204 $ 15,346 Other Revenue and Recoveries (Schedule A) 3,000 4,832 4,185 Total Generated Revenues 15,656 19,036 19,531 Expenses Social Housing Program (Schedule B) 172, , ,625 Staff Housing Program (Schedule B) 48,021 48,301 46,244 Corporate Administration (Schedule B) 17,561 18,545 16,957 Homeownership Programs 4,616 3,553 4,243 Homelessness Total Expenses 242, , ,748 Net Results of Operations before Government Funding (226,693) (225,064) (215,217) Government Funding Transfers from Government of Nunavut 197, , ,801 Transfers from Canada Mortgage and Housing Corporation (CMHC) (Note 13) 20,018 30,256 25,470 Total Government Funding (Note 3) 217, , ,271 Surplus (Deficit) for the year (9,665) 2,167 (9,946) Accumulated Surplus, opening 641, , ,849 Accumulated Surplus, closing $ 632,238 $ 644,070 $ 641,903 The accompanying notes and schedules are an integral part of these consolidated financial statements. 27 Nunavut Housing Corporation Annual Report 2013/2014

29 Nunavut Housing Corporation CONSOLIDATED STATEMENT OF CHANGE IN NET FINANCIAL ASSETS FOR THE YEAR ENDED MARCH 31 (in thousands of dollars) Budget Actual Actual Surplus (deficit) for the year (9,665) 2,167 (9,946) Tangible Capital Assets (Schedule C) Additions (30,694) (22,666) (10,693) Disposals Amortization 32,132 33,768 34,728 (8,227) 14,008 14,971 Net use (addition) of Inventory for use - (1,573) (770) Net use (addition) of Prepaid Expenses Change in Net Financial Assets (8,227) 12,446 14,204 Net Financial Assets, opening 21,763 21,763 7,559 Net Financial Assets, closing $ 13,536 $ 34,209 $ 21,763 The accompanying notes and schedules are an integral part of these consolidated financial statements 28 Nunavut Housing Corporation Annual Report 2013/2014

30 Nunavut Housing Corporation CONSOLIDATED STATEMENT OF CASH FLOW FOR THE YEAR ENDED MARCH 31 (in thousands of dollars) Cash provided by (used for) operations Transfers from Government of Nunavut $ 178,318 $ 173,496 Transfers from CMHC 22,535 22,843 Rent collections 12,803 14,979 Miscellaneous revenue and recoveries 2,673 3,952 Contributions for social housing (137,187) (128,074) Staff housing (48,099) (44,720) Administration (15,699) (18,055) Homeownership grants and contributions (3,013) (4,607) Homelessness (10) (679) Interest payments on long term debt (1,103) (1,182) Interest payments on capital leases (568) (918) Capital lease executory costs (1,090) (1,232) Interest earned on mortgage receivable Cash provided by operations 9,644 15,897 Cash (used for) provided by capital activities Tangible capital asset acquisitions (20,772) (17,046) Proceeds received on disposals of tangible capital assets Funding from Government of Nunavut 20,093 4,906 Funding from CMHC 31,508 5,791 Cash (used for) provided by capital activities 30,850 (6,029) Cash used for financing activities Principal payments on long-term debt (1,203) (1,123) Principal payments on capital lease obligations (3,706) (3,890) Cash used for financing activities (4,909) (5,013) Cash (used for) provided by investing activities Investments acquired (126,131) (196,343) Investments redeemed 81, ,160 Recovery of homeowner's assistance Mortgage payments received 1,574 1,199 Cash used for investing activities (42,947) (40,569) Decrease in cash (7,362) (35,714) Cash - beginning of the year 19,819 55,533 Cash - end of the year $ 12,457 $ 19,819 The accompanying notes and schedules are an integral part of these consolidated financial statements. 29 Nunavut Housing Corporation Annual Report 2013/2014

31 Nunavut Housing Corporation Notes to the Consolidated Financial Statements March 31, 2014 (in thousands of dollars) 1. PURPOSE OF THE ORGANIZATION The Nunavut Housing Corporation (the Corporation), established under the Nunavut Housing Corporation Act, is a territorial corporation as defined under the Financial Administration Act of Nunavut. The Corporation is exempt from income tax but is subject to goods and services tax. The Corporation is committed to working in partnership with communities and to providing opportunities for communities to become accountable for their own choices and delivery of housing programs. Through this partnership, opportunities are provided to community residents to have homes that support a healthy, secure, independent and dignified lifestyle. The Corporation's principal objective is to develop, maintain and manage social and staff housing programs in the Nunavut Territory. Pursuant to provisions in the Nunavut Housing Corporation Act, the Corporation is dependent upon the Government of Nunavut (GN), either directly or indirectly, through guarantees, for the funds required to finance the net cost of its operations and for capital projects. 2. SIGNIFICANT ACCOUNTING POLICIES The Corporation's consolidated financial statements are prepared in accordance with Canadian public sector accounting standards (PSAS). The following is a summary of the significant accounting policies. a) Principles of consolidation These consolidated financial statements include the accounts of the Corporation and the accounts of controlled Local Housing Organizations (LHOs). These can be in the form of Housing Associations or Housing Authorities. The consolidated financial statements include the accounts of the Corporation and 25 LHOs that are fully consolidated. The following LHOs comprise the reporting entity represented by these consolidated financial statements. All of the organizations have March 31 year ends. (b) Arctic Bay Housing Association Arviat Housing Association Baker Lake Housing Association Cambridge Bay Housing Association Chesterfield Inlet Housing Association Clyde River Housing Association Coral Harbour Housing Association Grise Fiord Housing Association Hall Beach Housing Association Igloolik Housing Association Kikitak (Gjoa Haven) Housing Association Kimmirut Housing Association Kugluktuk Housing Association Pangnirtung Housing Association Pond Inlet Housing Association Qikiqtarjuaq Housing Association Rankin Inlet Housing Association Repulse Bay Housing Association Resolute Bay Housing Association Qammaq (Sanikiluaq) Housing Association Tasiurqtit (Whale Cove) Housing Association Cape Dorset Housing Authority Iqaluit Housing Authority Kugaaruk Housing Authority Taloyoak Housing Authority All entities included in the reporting entity are fully consolidated on a line-by-line basis. Significant transactions and balances between consolidated entities are eliminated. Contributions for social housing Housing units owned or leased by the Corporation are operated by local housing associations and authorities under agreements. The Corporation provides subsidy assistance to various non-profit housing sponsor groups and cooperatives in accordance with operating agreements, which set out the basis on which eligibility for subsidy assistance will be determined. These expenditures are recorded based on actual or estimated costs incurred by each sponsor group in the year. 30 Nunavut Housing Corporation Annual Report 2013/2014

32 Nunavut Housing Corporation Notes to the Consolidated Financial Statements March 31, 2014 (in thousands of dollars) (c) Revenue recognition Legislative appropriations are restricted subject to the provisions of Section 20 of the Nunavut Housing Corporation Act, Part IX of the Financial Administration Act of Nunavut, and an Agreement between the Corporation and the Government of Nunavut. Accordingly, appropriations received are recognized as revenue in the year in which the funding is authorized. Government Transfers are recognized as revenue when the funding is authorized and any eligibility criteria are met, except to the extent that funding stipulations give rise to an obligation that meets the definition of a liability. The funds used for long term debt principal repayments are reported on the consolidated statement of operations and accumulated surplus as transfers from the Government of Nunavut. Social housing rental revenue is recognized on an accrual basis. An allowance is established for any amounts deemed not recoverable. Federal funding from CMHC, provided under the Affordable Housing Program, are used for the capital costs of housing units built under these programs. Finance income related to the direct financing lease for the Commissioner of Nunavut s Residence is recognized in a manner that produces a constant rate of return on the investment in the lease. The investment in the lease is composed of net minimum lease payments less unearned finance income. This amount is included in other revenue and recoveries on the consolidated statement of operations and accumulated surplus. (d) (e) (f) Cash Cash is comprised of bank account balances (net of outstanding cheques). Portfolio investments Portfolio investments consist of investments in organizations that do not form part of the Corporation reporting entity and are accounted for by the cost and amortized cost method using the effective interest rate method. Where there has been a loss in value of a portfolio investment that is other than a temporary decline, the investment is written down to recognize the loss, which is included as a component of investment income. Interest income is recorded on the accrual basis. Tangible capital and leased assets Tangible capital assets are recorded at cost less accumulated amortization. Mobile equipment includes transportation type vehicles. Amortization is provided using the following methods and annual rates: Office furniture, equipment and mobile equipment - Declining balance - 20%. Warehouses and offices - Declining balance - 5%. Equity land leases and leasehold improvements are amortized on a straight-line basis over the term of the leases. Equity land leases are land that is owned by the municipalities which NHC leases the right to use the land for a period of 30 years. Land is recorded at cost. Buildings constructed or purchased by the Corporation for the rental portfolio are stated at cost less accumulated amortization. Buildings transferred to the Corporation from CMHC or by the Government of Nunavut, are stated at their respective fair value when transferred. Construction in progress includes amounts which may be transferred to social housing, staff housing, or offices and warehouses and are carried at cost. Construction in progress and housing for sale include amounts that may be transferred to homeowners and a mortgage taken back against the property. These properties are carried at cost. Social and staff housing units are recorded as capital leases when the Corporation enters into lease agreements where, in effect, the risks and benefits of ownership are transferred to the Corporation. In such cases, the cost of the asset is determined as the discounted net present value of the minimum lease payments and is amortized using the straight-line method over the lease term. Obligations 31 Nunavut Housing Corporation Annual Report 2013/2014