Archived - Evaluation of Shelter Allowance as it Relates to On-Reserve Housing

Background and Description

Shelter Allowance is an eligible expense included under Income Assistance to recipients on reserve. The overall objectives of Income Assistance are to provide support for the basic and special assistance needs of First Nations people on reserve. Basic needs are defined as financial assistance to cover food, clothing and shelter.^{Footnote 1}

Shelter Allowance currently accounts for 18 percent of the existing Income Assistance budget.^{Footnote 2} AANDC provides approximately $118 million each year to First Nations on reserve in the form of Shelter Allowance payments under the Income Assistance Program.^{Footnote 3} Shelter Allowance, while not under the housing portfolio, fundamentally has an impact on housing on reserve and thus, must be included in the overall evaluation in order to have a complete understanding and to inform future direction.

Shelter Allowance is based on financial benefit rates and eligibility criteria set by the provinces and territories. Provincial/territorial legislation requires individuals on Income Assistance to have evidence of shelter costs to be eligible for the Shelter Allowance component. These criteria effectively mean that the First Nation must establish a rental regime in order to qualify for Shelter Allowances.

Canada Mortgage and Housing Corporation (CMHC) provides First Nations communities with a subsidy for the construction, purchase and rehabilitation of affordable rental housing units on reserves. These are referred to as Section 95 housing units. Typically, Section 95 homes are granted to recipients of Income Assistance and Shelter Allowance is used as a funding source to assist with the mortgage payments on the housing units.

Methodology

The evaluation activities and data collection took place between June and December of 2009. The methodology pursued a number of lines of evidence, as follows:

• Review of documents and literature sources;
• Review of administrative and statistical data;
• Forty key informant interviews of individuals from the following groups: AANDC managers; AANDC program and policy staff; CMHC staff; provincial counterparts; and First Nations; and
• Nine case studies conducted on-site at locations across Canada.

There were four areas of inquiry for this evaluation; impact, program input, design and delivery, and unintended impacts. Key findings from the evaluation were as follows:

Impact

Documentation states that the objective of Shelter Allowance is to provide financial assistance to Income Assistance recipients to cover their basic shelter needs. While key informants from AANDC, CMHC and provincial counterparts are consistent in their definition of the objective of Shelter Allowance to provide financial assistance to those in need to meet their basic shelter costs, key informants representing First Nations do not think the objectives of Shelter Allowance are clear. AANDC stakeholders are divided as to whether or not the objective of Shelter Allowance is understood by all parties. While AANDC stakeholders understand that the rates and eligibility criteria for Shelter Allowance are set by the province, only half believed that this is communicated to and understood by First Nations communities.

Shelter Allowance funds are an important funding source for First Nation communities to pay for costs related to Section 95 housing, which comprise a significant portion of recent housing developments. Shelter Allowance funds are used to grow the overall housing stock but are not used towards repairs or maintenance. In some provinces, provincial guidelines identify that repairs and maintenance are an eligible expense but is funded on a discretionary basis and funding is generally only available to homes owned by recipients. Key informants and information from case studies indicate that Shelter Allowance funding is typically prioritized in the following order: utility and fuel costs; mortgages under Section 95; and if there is money remaining, maintenance and repairs.

Program Input

Shelter Allowance is an important funding source to support social housing on reserve. Findings from the stakeholder interviews, case studies and the document review, note, however, that Shelter Allowance is not adequately funded to meet the needs of First Nation communities. Stakeholder interviews, case study findings and historical trends indicate that Shelter Allowance is not enough to cover the rent and/or mortgage payments, as well as fuel and utility costs and repairs and maintenance. Shelter Allowance has not been able to leverage any additional funding for housing on reserve other than the Section 95 subsidy.

Design and Delivery

AANDC regional offices administer Shelter Allowance in compliance with the eligibility criteria set by the provinces, in that a recipient must qualify for Income Assistance in order to receive Shelter Allowance. A universal^{Footnote 4} rental regime is required for communities to receive Shelter Allowance, although case study information indicates that this is not always enforced. Reports and case studies show that the extent to which rental regimes are in place and provincial rates are followed on reserve differs across the provinces/territories. Documentation indicates that AANDC is not able to monitor the actual implementation of universal rental agreements in all communities. Shelter Allowance is provided as a component of Income Assistance and in most provinces^{Footnote 5} is administered directly to the band as both the service provider (administrator of Income Assistance) and the landlord, except in Ontario where Shelter Allowance is paid to the recipient directly. Through key informant interviews, AANDC and CMHC stakeholders have raised questions regarding the understanding and administration of Shelter Allowance on reserve, noting that improvements can be made to these processes in First Nation communities.

Unintended Impacts

Some of the challenges that were identified through the document review, interviews and case studies in administering Shelter Allowance include: appropriate levels of funding; compliance with provincial legislation; verification of universal rental regimes; and long-term reliance on Shelter Allowance and comparable administration of funding across the provinces and within communities.

It is recommended that AANDC:

1. Review the National Shelter Allowance policy, including the objectives and eligibility criteria to:
   • clarify the intended scope and intent of the funding and the degree to which it is expected to contribute to shelter costs; and
   • ensure that it is applied in a consistent manner across regions and reflects the provincial comparability principle.
2. Clarify AANDC's role and responsibilities with regard to monitoring the implementation of Shelter Allowance in First Nation communities. 
3. Clearly communicate the objectives of the Shelter Allowance program, as well as the determination of rates and eligibility criteria, to First Nations and other stakeholders. 

1.1 Overview

The following report presents the findings of a neutral, evidenced-based evaluation, undertaken by KPMG on behalf of Aboriginal Affairs and Northern Development Canada (AANDC), of Shelter Allowance as it relates to on-reserve housing. The evaluation looked at the implementation of Shelter Allowance across the country and the extent to which Shelter Allowance is contributing to the overall on-reserve housing objectives. This evaluation is part of the overall evaluation of AANDC's housing support in Canada's First Nation communities (reserves) to be completed in 2010.

1.2 Shelter Allowance - Background

1.3 Shelter Allowance across Canada

The following tables provide information pertinent to Shelter Allowance over a five-year period spanning FY2004-05 to FY2008-09. Shelter Allowance is used to contribute to, or cover up to, a maximum amount of the shelter costs of Income Assistance recipients on reserve, this includes payments towards rent and mortgage costs on Section 95 housing units. All the data in this section has been provided by AANDC Headquarters, Data and Operations Section.

Table 1.0 below highlights the annual rent expenditure funded to recipients of Income Assistance on reserve over the last five years. Note that Quebec does not administer Shelter Allowance separately from income assistance. As a result, information was not made available on Section 95 housing or trends in social housing in Quebec. Atlantic's change in data is primarily due to a decrease in the number of reporting communities with comprehensive funding agreements.

According to the table below, total annual rent expenditures funded to Income Assistance recipients on reserve through the Shelter Allowance has generally increased.

Shelter Allowance is also used to contribute to fuel and utility costs. Fuel and utility bills are typically paid first out of the Shelter Allowance budget. Table 2.0 below depicts the trends in total fuel, utilities and other allowable shelter expenditures (e.g. municipal taxes, insurance, condo fees, damage deposit) on reserve over the last five years.

According to Table 2.0, total fuel, utilities and other shelter expenditures funded to Income Assistance recipients on reserve through the Shelter Allowance has generally increased.

In addition to the data reflected in tables 1.0 and 2.0, key informant interviews and comments from communities visited for the case studies also depicted a growing need for Shelter Allowance to support rising costs related to rent and fuel and utilities.

Social housing plays a large role in the overall housing stock on reserve. First Nation communities work with CMHC and AANDC to build Section 95 housing units in order to grow their housing stock. Across Canada, there has been a general increase in the number of Section 95 housing units on reserve. This is illustrated in the table below.^{Footnote 11}

While Section 95 housing units are an important part of the housing stock on reserve, they put increased pressure of the Shelter Allowance budgets of First Nation communities. Shelter Allowance is often the sole source of funding being put towards these mortgages.

Finally, Table 4.0 reflects the total number of housing units for which fuel and utilities were paid. Over the last five years, the trend has generally increased in this area.

These general trends across Canada are comparable to the trends identified in individual communities through the case studies. After payments are made towards fuel and utilities and mortgages on Section 95 housing units, there is limited funding available for repairs and maintenance. This has an adverse impact of the life-span of each housing unit.

2.1 Evaluation Scope and Timing

This evaluation of Shelter Allowance is part of the overall evaluation of AANDC's housing support in Canada's First Nation communities (reserves) to be completed in 2010.

The main objective of the evaluation was to conduct a detailed study of Shelter Allowance for a timely, strategically focused, neutral, and evidence-based report. The evaluation examines the impact, program input, design and delivery and unintended impacts of Shelter Allowance as it relates to housing on reserve. Shelter Allowance, as it relates to on-reserve housing, has never been evaluated since it does not fall under the housing portfolio and is funded through different authorities. However, it is an integral component of housing on reserve and needs to be included if AANDC is to have a complete understanding and view of on-reserve housing in Canada. Given the significant investment under Shelter Allowance and the fact that it can be a source of funding for housing in many First Nations communities, it is essential that the evaluation determine the extent of the impact that Shelter Allowance has on First Nation housing.

The objectives of this evaluation are to determine whether Shelter Allowance, as it relates to on-reserve housing,s being delivered in a cost-effective manner, and whether this component of Income Assistance achieves housing objectives of the Government of Canada and AANDC, including social housing objectives.

2.2 Evaluation Issues

An evaluation matrix was developed (see Appendix A), asking a series of questions designed to examine four areas of inquiry: impact; program input; design and delivery; and unintended impacts. The following are the evaluation questions that are answered throughout the findings sections of this report. Each section of the report reviews the scope of inquiry, the findings from our research, and the evidence that supports the findings. The conclusions and associated recommendations are presented at the end of the report.

Impact

• What are Shelter Allowance funds used for (to repair existing homes, to renovate existing homes, to build new homes, something else entirely)? To what extent is the money being used for housing purposes?
• What are the objectives of Shelter Allowance? To what extent does Shelter Allowance contribute towards the objectives of housing, including social housing (e.g. to ensure that all citizens have access to housing, which is adequate and appropriate)?

Program Input

• Is the provision of Shelter Allowance a cost-effective mechanism to support housing, including social housing on reserve?
• Is Shelter Allowance adequately funded to meet the needs of First Nation recipients?
• To what extent, if any, has Shelter Allowance leveraged additional funds for housing on reserve?
• What national, provincial, federal or First Nation policies and other preconditions determine effective re-investment in housing and building of internal housing revenues? To what extent, if any, has Shelter Allowance contributed to this re-investment?

Design and Delivery

• Is a rental regime required to receive Shelter Allowance? If so, is there a rental regime in place and is it being implemented? How does this differ between provinces/territories? 
• When a rental regime is required and there is no rental regime in place, is Shelter Allowance being paid anyway? Is so, what is the rationale? 
• To what extent are provincial rates and eligibility criteria followed in administering Shelter Allowance? To what extent should provincial rates and eligibility criteria be followed?
• Is Shelter Allowance administered separately from other Income Assistance? If yes, who are the beneficiaries (registered Indians living on or off reserve, registered Indians, people living on reserve – whether they are registered or not?) 
• Is Shelter Allowance being paid to individuals residing in homes or to the band (as the landlord?)

Unintended Impacts

• Have there been any unintended consequences or impacts of Shelter Allowance with respect to on-reserve housing (either positive or negative)?

2.3 Evaluation Methodology

The evidence that will support the evaluation will be generated from a document and literature review, key informant interviews, an analysis of administrative and secondary data, and case studies. The subjects for each of the sources were outlined in a methodology report that was submitted as part of the preparatory phase of the evaluation.

3.1 Scope of Inquiry

This section presents the findings of the evaluation questions related to impact. Under this area of inquiry, the evaluation sought to understand the objective of Shelter Allowance and how stakeholders from AANDC and First Nation communities interpret the objectives of the funding. Establishing the objectives of Shelter Allowance was necessary to understanding the extent to which Shelter Allowance is contributing towards housing on reserve, including social housing. The evaluation assessed what Shelter Allowance funds are used for and how the funding is prioritized in First Nation communities.

3.2 Achieving the objectives of Shelter Allowance on reserve

As a component of Income Assistance, the objective of Shelter Allowance is to provide recipients with financial assistance to meet their basic shelter costs up to a maximum or ceiling rate set by the province.^{Footnote 13} Under the terms and conditions of Shelter Allowance, First Nation recipients of Income Assistance shall receive the same assistance in accordance with the rates, standards and conditions of recipients living off reserve.^{Footnote 14} Provinces define the objective of Shelter Allowance as short-term, or temporary financial assistance to help recipients of Income Assistance meet their basic shelter needs as they take steps to become independent, therefore, the objective of Shelter Allowance is not a tool for increasing the housing stock but financial support towards shelter costs.

AANDC stakeholders and provincial counterparts are consistent in their definition of the objectives of Shelter Allowance to provide financial assistance to those in need to meet their basic shelter costs up to a maximum or ceiling rate. The majority of AANDC stakeholders reported that on reserves, Shelter Allowance is used to pay off Section 95 mortgages.

Key informants from AANDC and CMHC are divided as to whether or not the objective of Shelter Allowance is understood by all parties. Stakeholders from AANDC and First Nation communities understand that the rates and eligibility criteria for Shelter Allowance are set by the province. However, only half of the stakeholders interviewed believe that this is communicated to and understood by First Nation communities. Others believe that First Nation communities do not understand that AANDC is required to follow the guidelines set by the province. Seventeen percent of AANDC stakeholders noted that they have not received sufficient documentation from AANDC Head Office on the objective of Shelter Allowance as it pertains to on-reserve housing. Therefore, this is not communicated to First Nation communities.

About 10 percent of AANDC stakeholders noted that the objective of Shelter Allowance on reserve should not be to reach provincial comparability, as that does not necessarily support the larger goal of creating sustainable on-reserve housing. The objective should be to support the basic shelter needs of income assistant recipients.

AANDC key informants do not believe that Shelter Allowance is meeting the objective of helping individuals or families meet their basic shelter costs on reserve due to low rates and challenges faced by First Nation communities in enforcing rental agreements consistently. First Nation communities face significant challenges generating a revenue source to support costs related to Shelter Allowance and the growing demand of Income Assistance recipients for Shelter Allowance. Stakeholders from CMHC and First Nation communities agree with this observation, noting that Shelter Allowance is not fulfilling its objectives of covering shelter costs as most of the funding is typically used to pay for fuel and utility costs. The communities that participated in the case studies all reported that their social assistance departments pay utility and fuel costs before they put money towards rent and mortgage costs.

3.3 Conclusions

The stated objective of Shelter Allowance is to provide financial assistance to Income Assistance recipients to cover their basic shelter needs.^{Footnote 15} Key informants from AANDC and CMHC are divided as to whether or not the objective of Shelter Allowance is understood by all parties. Only half of all stakeholders interviewed believe that rates and eligibility criteria are well communicated to and understood by First Nation communities, and 17 percent of AANDC stakeholders noted that they have not received sufficient documentation from AANDC Head Office on the objective of Shelter Allowance as it pertains to on-reserve housing. Therefore, the objectives of Shelter Allowance are not being communicated to First Nation communities.

Shelter Allowance funds are an important funding source for First Nations communities to pay for costs related to Section 95 housing, which comprise a significant portion of recent housing developments. Shelter Allowance funds are used to grow the overall housing stock but are not used towards repairs or maintenance. Shelter Allowance funding is typically prioritized in the following order: utility and fuel costs; mortgages under Section 95; and if there is money remaining, maintenance and repairs. A more detailed financial breakdown of the portion of Shelter Allowance spent on utility and fuel costs was not available.

4.1 Scope of Inquiry

This section presents the findings of the evaluation questions related to program input. Under this area of inquiry, the evaluation sought to understand if Shelter Allowance is adequately funded to meet the needs of First Nation recipients and the extent to which Shelter Allowance is contributing to investment in on-reserve housing. The scope of this area of inquiry also evaluated if Shelter Allowance leverages any additional funding or is affected by other national, provincial or federal policies.

4.2 Effectively meeting the needs of recipients of Shelter Allowance

In 2005-06, AANDC contributed an estimated $110 million annually towards Shelter Allowance on reserve.^{Footnote 16}  AANDC currently provides approximately $118 million to First Nations on reserve in the form of Shelter Allowance payments under the Income Assistance Program.^{Footnote 17} However, the implementation of Section 95 housing has generated a new demand for Shelter Allowance payments and regional Income Assistance budgets fixed at historical levels struggle to meet increasing demand.^{Footnote 18} The discussion paper issued in 2004 examining the implementation of Shelter Allowance estimated that an increase between $50 million and $90 million was necessary to meet the growing needs of First Nation communities.^{Footnote 19}

Findings from the stakeholder interviews and case studies echo the themes of the document review, noting that Shelter Allowance is not adequately funded to meet the needs of First Nation communities. Stakeholder interviews and case study findings indicate that Shelter Allowance is not enough to cover the rent and mortgage payments, as well as fuel and utility costs and repairs and maintenance. The exception to this general trend is in the Yukon in which case AANDC stakeholders commented that Shelter Allowance is adequately funded.

Stakeholders are aware of overcrowding and housing shortages on reserve. However, stakeholders noted that there is a housing availability issue in the North. They commented on the lack of physical housing and shelter available. AANDC has struggled to have Shelter Allowance paid to recipients living in hotels in Yukon as a result of limited housing availability.

Approximately 40 percent of AANDC respondents commented that Shelter Allowance helps to pay off Section 95 mortgages and is meeting a short-term need in First Nation communities. However, this is not viewed as long-term or sustainable solution to First Nation housing needs.

Almost 40 percent of provincial counterparts commented that Shelter Allowance is not adequately funded to meet the needs of First Nation recipients on reserve because it has not kept pace with market rates. Less than 25 percent of provincial counterparts think that the needs of some communities are being met through Shelter Allowance. This is particularly true for rural communities. Stakeholders from AANDC and First Nation communities recognize that shelter costs are based on geographic and economic conditions and are not necessarily comparable to the costs off reserve. Stakeholders commented that larger communities and more urban communities have higher costs and Shelter Allowance is not adequately funded to cover these costs.

4.3 Supporting reinvestment in the overall housing stock

Key informants observed that access to funding, regardless of source, is more influential in determining reinvestment in housing on reserve and not the impact of policies or preconditions from government. Key informants from AANDC, CMHC and First Nation communities noted that Shelter Allowance is an important funding source to support social housing on reserve as it is the primary contribution to Section 95 mortgages. However, as previously noted, the current funding envelope has not kept pace with growing demands for housing and social housing on reserve. Therefore, stakeholders believe that access to adequate funding is more important in supporting the overall housing stock than the impact of polices and preconditions on Shelter Allowance.

Some First Nation communities noted that capital programs are supporting reinvestment in on-reserve housing. First Nation communities that have strong infrastructure, such as sewage and water systems, are better situated to reinvest in the maintenance of the overall housing stock.

Provincial counterparts referred to additional housing programs and social assistance programs run by the provinces that support reinvestment in housing. The extent to which these programs are offered on reserve and evidence of the potential impact of these programs on reserve was not available for this evaluation.

Stakeholders noted that as a component of Income Assistance, Shelter Allowance is a necessary source of funding. It is a last resort, short-term funding option for individuals and families who need help meeting their basic shelter needs. Therefore, Shelter Allowance can not be evaluated as whether or not it is cost-effective, only if it is adequately funded to meet the needs of recipients and is providing a sustainable support. 

4.4 Additional sources to support Shelter Allowance

As noted under the objectives, Shelter Allowance is intended to support the shelter costs of Income Assistance recipients. First Nation communities are required to charge rent to tenants on reserve in a fair and consistent manner. This implies that rent is charged in band owned homes as well as in social assistance homes. Rental regimes are discussed in further detail under the design and delivery section. However, it is important to note that communities struggle to collect rent. Communities are typically reallocating funding from their minor capital budgets (with the exception of British Columbia) and other funding where available to make payments on their mortgages and cover shelter costs as revenue from rental regimes is limited. Communities with well implemented rental regimes are better able to re-invest in housing, as they have a source of revenue to do so.

Access to funding has a large impact on re-investment in housing. Communities with well developed infrastructure and capital budgets are typically more successful in re-investing in housing.

4.5 Conclusions

Shelter Allowance is an important funding source to support social housing on reserve. However, the current funding envelope has not kept pace with growing demands for housing and social housing on reserve. First Nation communities are not able to solely rely on Shelter Allowance to support the needs of Income Assistance recipients for the reinvestment in social housing. Shelter Allowance has not been able to leverage any additional funding for housing on reserve other than Section 95 subsidy.

5.1 Scope of Inquiry

This section presents the findings of the evaluation questions related to the design and delivery of Shelter Allowance. Under this area of inquiry, the evaluation sought to understand if Shelter Allowance is administered on reserve in accordance with the prescribed policies in each region. This included a review of the extent to which AANDC regional offices are matching the eligibility criteria and rates for Shelter Allowance set in each province. The scope of this area of inquiry also evaluated the extent to which provincial rates and criteria should be followed and the processes used to administer Shelter Allowance to recipients on reserve.

5.2 Universal rental regimes on reserve

A universal rental regime on reserve is required to receive Shelter Allowance. This implies that rent is collected from recipients of Income Assistance as well as individuals who are not receiving assistance. Provincial/territorial legislation generally requires individuals on income assistance to have rental agreements to be eligible for the Shelter Allowance component.^{Footnote 20} However, many First Nations communities have not implemented rental regimes and AANDC estimates that a third of Income Assistance recipients on reserve do not receive Shelter Allowance payments.^{Footnote 21} Housing is very politicized in First Nation communities and rent collection is not always enforced on band owned homes. Further, there continues to be a claim of treaty rights in many communities, particularly in the North and across the Prairie Provinces. Finally, AANDC has no clear capacity to monitor if rental regimes are implemented.^{Footnote 22} Each province (off reserve) has a reporting or auditing mechanism in place to verify rental agreements or the payments of shelter costs.

One of the conditions under which a community can receive Shelter Allowance for Income Assistance recipients stipulates that the community must collect rent from both social assistance recipients and non-social assistance recipients.^{Footnote 23} Provinces and territories require proof of shelter costs in order to receive Shelter Allowance.^{Footnote 24} If rent is not being paid, clients are required to show proof of shelter costs, such as mortgage payments, property taxes or utilities, fees related to trailer parks, recreational vehicles, and other types of shelter, as permitted under the provincial criteria. AANDC retains a narrower scope of Shelter Allowance on reserve, due to a smaller funding envelope. Shelter Allowance is typically used to pay for fuel and utility costs and then rent and mortgage payments based on available funding.

In most cases, Shelter Allowance is being paid despite a limited or lack of universal rental regime. This is because Shelter Allowance is a primary funding source to pay for the mortgages on Section 95 housing units and utility and fuel costs.

The table below provides an overview of the rental agreement requirements and implementation of rental agreements in each province and region. This information was obtained from interviews with key informants from AANDC and First Nation representatives as well as for the case studies conducted in each province (as applicable). The table illustrates the varying degrees to which rental agreements are in place across Canada.

5.3 Compliance with the provinces and territories

The Office of the Auditor General of Canada report stated that Shelter Allowance is being applied inconsistently across the regions and noted that some regions could not pay Shelter Allowance to all of those individuals eligible for assistance due to a lack of appropriate funding.^{Footnote 25} This report recommended that AANDC evaluate its interim policy on Shelter Allowance and approve a final policy with necessary changes resulting from the evaluation while taking into account approved funding levels^{Footnote 26}.

The table below provides an overview of the general trends in which First Nation communities are in compliance with the rates and eligibility criteria for Shelter Allowance set by the provinces. This information was obtained from interviews with key informants from AANDC and First Nation representatives as well as from the case studies conducted in each province (as applicable).

Stakeholders from the key informant interviews and the case studies have observed that the provincial rates set for Shelter Allowance are not necessarily reflective of the shelter costs and circumstances on reserve. Due to the fact that Shelter Allowance on reserve is primarily used towards the payment of Section 95 housing units, there are conflicting views from key informants as to whether or not the minimum Shelter Allowance should reflect the minimum payments on Section 95 units or the rates set by the provincial governments.

With the exception of the Yukon, stakeholders cited the following reasons as to why provincial rates and eligibility criteria should not be followed on reserve:

• The funding envelope is not big enough to implement the rates set by the province;
• First Nation reality does not reflect the same circumstances and context of the rest of the province, and the rates and eligibility criteria for Shelter Allowance are not as applicable on reserve as they are off reserve; and
• First Nation communities do not all have the same funding agreements with AANDC. Therefore, the rates set by the province may not be applicable in all communities. Some First Nation communities have more flexibility to move funding around than others.

These findings highlight a need to assess why there is not enough money on reserve to meet the provincial standards. More research is required to assess if the provincial rates are adequate to meet the need of First Nation communities and whether or not funding envelopes reflect these budgets. These recommendations are explored at the end of this report.

5.4 Delivery of Shelter Allowance

Shelter Allowance is not generally administered separately from other Income Assistance. AANDC provides funding to First Nations who in turn deliver programs and services to the community members. On-reserve Shelter Allowance is typically paid directly to the band as both the service provider and the landlord. Typically, Shelter Allowance is paid directly to the Social Assistance Department and then transferred to the Housing Department as the landlord. Generally, the province and territories administer Shelter Allowance directly to the individual recipient, unless the individual recipient is unable to make payments.

In Ontario, an individual on reserve is paid Shelter Allowance directly. If the individual is unable to make his or her shelter payments, a third-party manager is brought in through the band office in order to administer the payments. Based on information gathered during the case studies, this tends to be an exception.

The manner in which fuel and utility costs are paid in the communities visited for the case studies varies. Depending on the maximum rates and scope of Shelter Allowance, utilities are either paid by the individual, or the bills are sent directly to the Social Assistance Department in the band office and paid through the social assistance budgets.

The table below highlights how the communities visited for each case study pay the utility bills for recipients on Income Assistance.

5.5 Conclusions

A universal rental regime is required in all provinces, except Quebec, for communities to receive Shelter Allowance. The extent to which rental regimes are in place and provincial rates are followed on reserve differs across the provinces/territories. AANDC is not able to monitor the actual implementation of universal rental agreements in all communities. Rental agreements are in place for social assistance recipients as Shelter Allowance is paid directly to the band office. There are significant implementation gaps with regard to the extent that communities collect rent from people who are not on social assistance.

The extent to which provincial rates are followed also varies by province as highlighted in stakeholder's interviews and case studies.

Case studies illustrated that Shelter Allowance is provided as a component of Income Assistance and is administered directly to the band as both the service provider and the landlord.

6.1 Scope of Inquiry

This section presents the findings of the evaluation related to any unintended impacts or consequences of Shelter Allowance on housing on reserve that were identified in the evidence sources.

6.2 Impact on Section 95 housing units

CMHC provides First Nations communities with a subsidy for the construction, purchase and rehabilitation of affordable rental housing units on reserves. These are referred to as Section 95 housing units. Typically, Section 95 homes are granted to recipients of Income Assistance and Shelter Allowance is used as a funding source to assist with the mortgage payments on the housing units. The majority of stakeholders interviewed see a strong link between Section 95 housing and Shelter Allowance.

On the other hand, stakeholders believe that Section 95 homes are driving up the costs of Shelter Allowance. Communities are pressured to place recipients of Shelter Allowance in Section 95 homes in order to pay off the loans. Key informants noted in interviews that this may causes inequalities in access to housing in communities as rent is only being charged to residents in social housing and not to people who reside in private or band owned housing. This may also be having an impact on the amount of Section 95 homes, which the communities are able to build due to the low levels of revenue a community is able to collect through rental payments.

6.3 Rising costs related to housing

Some of the challenges that were identified in administering Shelter Allowance in the document review include: appropriate levels of funding; compliance with provincial legislation; verification of universal rental regimes; and long-term reliance on Shelter Allowance. [Note 27] Shelter Allowance has not kept pace with rising costs in inflation and building costs (such as material, labour, energy, etc). This puts pressures on the community's budgets. First Nation communities often use money from their capital budgets to cover their shelter costs.

Communities visited for the case studies are concerned that the high cost of utilities on reserve is draining Shelter Allowance funding and, as a result, First Nation communities struggle to meet their rent and mortgage payments. Recipients are not paying these bills directly and their dependence on the band to pay them is not teaching individuals about budget management or the actual costs associated with home ownership and maintenance.

First Nation stakeholders who were interviewed commented that communities can be isolated and people have few employment options on reserve. Shelter Allowance is not a sustainable solution for First Nation housing needs.

6.4 Conclusions

Some of the challenges that were identified in administering Shelter Allowance include: appropriate levels of funding; compliance with provincial legislation; verification of universal rental regimes; and long-term reliance on Shelter Allowance and comparable administration of funding across the provinces and within communities.

7.1 Conclusions

The objective of this evaluation is to determine the effectiveness of the Shelter Allowance component of Income Assistance as it relates to on-reserve housing, evaluate its implementation across the country, and fulfillment of results and objectives.

Shelter Allowance, while not under the housing portfolio, fundamentally has an impact on housing on reserve and thus, must be included in the overall evaluation in order to have a complete understanding and to inform future direction. Given the significant investment resulting from the utilization of the Shelter Allowance component of the Income Assistance program in relation to housing on reserve, it is important to understand the extent of the impact that Shelter Allowance has on First Nation housing.