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Ministerial Statement by the honourable Art Reid
regarding review of the rental scale for tenants of
Newfoundland and Labrador Housing Corporation


Mr. Speaker, I rise today to announce the results of a promised review of the rent-geared-to-income scale for tenants of Newfoundland and Labrador Housing Corporation. In the time since I announced the review, this matter has been carefully and thoroughly reviewed. Mr. Speaker, I believe that people who live in social housing in this province will be pleased with the result. Most tenants in social housing will see a reduction in the amount of rent they will be expected to pay as compared with the plan announced earlier this year. This new approach is particularly sensitive to groups such as single seniors, single parents and families with a number of children.

Mr. Speaker, I am announcing today that government has authorized Newfoundland and Labrador Housing Corporation to reduce the amount of the planned increase by changing the household income threshold at which rental increases would be implemented. As members are aware, a sliding scale approach was put into place whereby tenants would pay rent based upon anywhere from 25 to 30 per cent of income. This scale was designed to be sensitive to those with the lowest incomes and to families with a number of children. It was also designed so the small number of tenants with high incomes would be encouraged to consider moving out onto the private market because they can afford to do so and thereby make room for those with greater needs.

This sliding scale approach will be maintained because it is sensitive to those most in need. It supports families and children and it should, over time, result in the departure of those tenants who can really afford to be out on their own. Mr. Speaker, I point out that social housing was designed as a stepping stone for low income families in need of affordable housing. It can help families move out of overcrowded, substandard accommodations. It can and does contribute in a very positive way to a family's overall well being. It is a fact, Mr. Speaker, that people living in decent housing are more healthy, have greater stability, are more productive at work, more successful in school and in society generally. So, I say to you today, housing is a very important component of our social safety net in this province and it is one that this government will continue to support to the greatest extent possible given our overall financial situation.

Mr. Speaker, in raising rents for social housing tenants, we are following the lead of virtually every other jurisdiction in the country. However, the rental increase here recognizes the circumstances of low-income people in this province and is much more lenient than anywhere else. Tenants in New Brunswick or P.E.I. play a flat rate of 30 per cent of income and have been doing so for some time.

Now, I want to provide a few examples of the changes we are now implementing. Under the scale which was implemented starting in July, a very large grouping of single seniors would have experienced an average rental increase of $43 per month. Under the approach I am announcing here today, the increase will amount to only $14 monthly. This brings the average rent for this group to $269 a month for heated accommodation. Another example is a grouping of 67 households comprising two seniors. Under the scale introduced earlier this year, this group would have paid an additional $64 per month. They will now pay an average of $35 more which brings their rent for heated accommodation to $389 monthly. A grouping of 76 single parents with one child who would have moved to paying 26 per cent ofincome under the scale will now stay at 25 per cent, therefore having no increase in their rent. Their average monthly rent will be $234.

Mr. Speaker, these rental rates are very reasonable compared to the private market. Indeed, even at 30 per cent of income, most of those living in social housing are receiving a very considerable benefit. Rent includes a heat and hot water subsidy. Social housing also provides a significant safety net as tenants who work on a seasonal basis or lose their jobs are eligible to have their rents reduced while they are not working.

If I may, Mr. Speaker, I want to take this opportunity to make very clear that neither the scale I am announcing here today, nor the one it is replacing, would cause a disincentive for tenants to continue in the workforce. The design of these scales was such that they would not leave a household with less income than it would receive on social assistance. Indeed, the approach ensures that growth in the client's disposable income is greater than the growth in rents charged.

Mr. Speaker, in conclusion, housing assistance provided to those with low incomes by the province through Newfoundland and Labrador Housing Corporation is a very important and worthwhile service and one this government takes very seriously. The provision of suitable, affordable housing plays an essential role in providing a stable home environment for children and comfortable accommodations for seniors. The approach we have used in designing a new rental scale is a solution made in Newfoundland and Labrador, sensitive to the needs of low income people and the most lenient in Canada.


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