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May 23, 2003
For immediate release

Canada and Prince Edward Island Sign $5.5 Million Affordable Housing Agreement

Health and Social Services

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The Honourable Steven Mahoney, Secretary of State responsible for Canada Mortgage and Housing Corporation, the Honourable Wayne Easter, Solicitor General of Canada, and the Honourable Jamie Ballem, Prince Edward Island Minister of Health and Social Services announced today that Prince Edward Island residents will have increased access to affordable housing, thanks to the anticipated creation of approximately 140 affordable housing units in the province over the next four years.

The announcement was made at the signing of a $5.5 million Canada-Prince Edward Island Affordable Housing Agreement, a joint commitment to increase the supply of affordable housing in the province.

"More Prince Edward Islanders will be able to gain access to quality, affordable housing thanks to this agreement," said Secretary of State Mahoney following the signing of the agreement. "The signing of this latest agreement shows the federal commitment to healthy and competitive communities throughout Canada."

"This is good news for the Island, and will generate economic benefits in addition to meeting housing needs," added Minister Easter.

"We are pleased to partner with the Government of Canada to bring more affordable housing units to Prince Edward Island communities," said Minister Ballem. "Although the formal signing is taking place today, we have been working with community organizations including Habitat for Humanity, Kiwanis and other community organizations on local housing projects and we look forward to continuing these initiatives.

"It is important that we address both urban and non-urban housing needs and that we continue to work with Federal and Municipal governments, as well as community partners, towards long-term development," added Minister Ballem.

Funding under this agreement will be used for a provincially designed affordable housing program, which will create and sustain housing for low to moderate-income households and persons with disabilities/special needs. This program will be established by forging new and creative partnerships with community groups, private developers and/or not-for-profit groups.

There are approximately 600 families, whose assessment indicated a need for housing support, on a waiting list for family housing in Prince Edward Island. This Federal/Provincial Agreement will provide funding to increase the supply of affordable housing to complement the housing programs currently operated by the Department of Health and Social Services in Prince Edward Island.

Through this agreement, individuals, communities and the private sector have the opportunity to consider construction, acquisition, renovation, rehabilitation, conversion and/or rent supplements as affordable housing options. Projects and or proposals will be funded based on identified priority needs of families, persons with special needs, such as survivors of traumatic brain and spinal cord injuries and persons experiencing serious and persistent mental illness, and persons with disabilities in Island communities.

Stimulating the creation of more affordable housing was part of the Government of Canada's Speech From the Throne in January 2001. The $680 million in federal funding was confirmed in the December 2001 federal budget. The 2003 budget added an additional $320 million to bring the total investment to $1 billion by 2007-08.

Prince Edward Island residents may obtain additional information about the Affordable Housing Initiative by telephoning George O'Connor, Department of Health and Social Services at 368-6579.

AFFORDABLE HOUSING PROGRAM AGREEMENT SUMMARY

Objectives:

- To increase and sustain the supply of new affordable housing in Prince Edward Island

- Housing must be affordable for at least 10 years

Program:

Funding under this agreement will be used to:

- Create new rental and homeownership and to rehabilitate or convert existing affordable housing units

Administration:

- The program will be administered by the Prince Edward Island Department of Health and Social Services

- PEI is responsible for the selection of affordable housing projects

Financial Provisions:

- Maximum CMHC funding under the agreement is $2.75 million to be matched by the Province of Prince Edward Island, municipalities and others

- Overall average CMHC funding will not exceed $25,000 per unit

Accountability:

- PEI will provide annual audit and performance reports on the use of CMHC funding

- CMHC will lead a national evaluation of the program in 2006 and the province will be invited to participate

Communications:

- PEI and CMHC have agreed on a communications protocol, which will be open, transparent and will recognize the contributions of each party to this initiative

GOVERNMENT OF CANADA BACKGROUND: AFFORDABLE HOUSING INITIATIVE

The 2001 Speech From the Throne indicated the Government of Canada would help stimulate the creation of more affordable rental housing. The federal/provincial/ territorial housing ministers met twice to finalize details of an affordable housing initiative that would address the needs and priorities of individual jurisdictions while meeting the goal of increasing the supply of affordable housing. The final framework was developed and agreed to on November 30, 2001 and includes the following:

* Provinces and territories have the primary responsibility for design and housing program delivery;

* Provinces and territories require flexible programs to address their housing needs;

* The initiative needs to create affordable housing for low to moderate-income households;

* Units funded will remain affordable for a minimum of 10 years; and

* Provinces and territories will be required to match federal contributions overall.

The 2001 federal budget confirmed $680 million for this initiative. The 2003 federal budget added $320 million in additional funds, for affordable housing, to build on the initial allocation. This will bring the total federal investment in the Affordable Housing Initiative to $1 billion by the end of 2007-08.

Also as part of the 2003 Budget, Canada Mortgage and Housing Corporation's existing renovation programs, which help low-income Canadians, will be extended by $384 million over three years.

Other Government of Canada Housing Support in Prince Edward Island:

The $2.75 million, out of the $680 million federal contribution over the next five years, builds on current Government of Canada expenditures on housing in Prince Edward Island. The Government of Canada annually supports housing, with approximately $1 million in grants, contributions and subsidies which serve some 3,750 low-income families, seniors, persons with disabilities, Aboriginal people and victims of domestic violence.

Further information is available from the CMHC Web site: www.cmhc.ca.

GOVERNMENT OF PRINCE EDWARD ISLAND BACKGROUND: AFFORDABLE HOUSING INITIATIVE

The objective of the new affordable housing initiative is to increase the supply of affordable housing through creation or sustainment. Options include: construction, acquisition, renovation, rehabilitation, conversion and/or rent supplement.

Affordable housing is housing which is modest in terms of floor area and amenities, based on household and community norms, and is priced at or below median unsubsidized housing rents or prices in a community or area.

Proposals will be funded based on identified priority needs of families, persons with special needs (such as survivors of traumatic brain and spinal cord injuries and persons experiencing serious and persistent mental illness) and persons with disabilities in Island communities.

Projects, proposals, units approved under the program will include documentation detailing terms, conditions and or schedules which ensure quality and levels affordable to low-income Islanders.

The Prince Edward Island Housing Corporation will determine eligibility, modesty assurance, affordability assurance, areas for revitalization, and strategic needs within Island Communities.

The provincial government offers a number of programs to help lower-income households maintain, acquire, or rent safe, adequate and affordable housing. Through housing authorities, we own and operate over 1,600 rental housing units for families and seniors. Rent is based on household income (25% for families, 30% for seniors). We also provide grants, loans, leases and mortgage funds to purchase or build modest houses through programs such as: social housing, rural community and rural native housing, and the residential rehabilitation assistance program.

For more information on program elements, please contact George O'Connor, Department of Health and Social Services at 368-6579.

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Media Contact: Connie McNeill
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