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Terms and Conditions

Surplus Federal Real Property for Homelessness Initiative (Class contribution program)

1. PROGRAM DESCRIPTION

The Homelessness Partnering Strategy (HPS) promotes strategic partnerships and structures, including housing solutions and supports, to assist homeless persons move toward self-sufficiency. The Strategy recognizes that a stable living arrangement is a basic requirement for improving health, parenting, education, and employment.

The Surplus Federal Real Property for Homelessness Initiative (SFRPHI)—one of the seven funding streams under the HPS—uses program funds to pay custodian federal departments and agencies market value for surplus properties and makes them available for a nominal sum of $1.00 to community organizations, the not-for-profit sector, other orders of government, and housing cooperatives for projects that contribute to the prevention and reduction of homelessness.

Human Resources and Skills Development (HRSD) manages this horizontal initiative, in partnership and collaboration with Public Works and Government Services (PWGS) and Canada Mortgage and Housing Corporation (CMHC).

From April 1, 2011 to March 31, 2014, SFRPHI will contribute $9M worth of surplus federal real property. These funds will be transferred to PWGS for the management and control of funding for this program through the Affordable Housing Property Fund.

HRSD (the Homelessness Partnering Secretariat), which administers the HPS, provides support and national coordination. PWGS provides expertise related to real property as well as information and assistance concerning available surplus federal real properties, carries out property transfers, and administers the Affordable Housing Property Fund. CMHC advises and assists prospective recipients in the development of proposals, and provides information on the viability of proposals. A National Tripartite Committee composed of representatives from HRSD, PWGS, and CMHC carries out the final evaluation and selection of successful proposals from across Canada, and monitors the Affordable Housing Property Fund. Service Canada regional and local staff provide expertise concerning specific local needs and the level of community support for proposals submitted to the program.

Transfers of surplus federal real property to eligible recipients under SFRPHI are subject to the Treasury Board Policy on Transfer Payments, with a notable deviation from that policy in that these ‘payments’ are in the form of non-cash contributions of real property rather than cash contributions. Federal departments and agencies are paid the market value for surplus properties that are transferred to eligible recipients through the Affordable Housing Property Fund. The recipient only pays $1.00 for the title to the property.

2. OBJECTIVES AND OUTCOMES

Objectives

The HPS aims to prevent and reduce homelessness across Canada. It does so by developing partnerships that contribute to a sustainable and comprehensive continuum of supports to help those who are homeless and those at risk of homelessness move towards self-sufficiency. It mobilizes partners at the federal, provincial/territorial and community levels to address barriers to well-being faced by homeless individuals and those at risk of homelessness.

These objectives support HRSD’s strategic objective in the Program Activity Architecture, “income security, access to opportunities and well-being for individuals, families and communities,” by facilitating greater social and economic integration of homeless individuals and those at risk of homelessness. The HPS promotes the November 19, 2008 Speech from the Throne commitment to help Canadians who face barriers to participation in the economy and society, and the March 3, 2010 Speech from the Throne commitment to support communities in their efforts to tackle local challenges through a community-based approach.

SFRPHI contributes to these objectives by facilitating strategic investments in longer-term housing solutions. Its primary objective is to enhance the ability of communities to provide facilities that help stabilize the living arrangements of homeless individuals and families and those at risk of becoming homeless.

Expected results

By March 31, 2014, SFRPHI is expected to achieve the following expected results and will be evaluated accordingly:

Federal external partnering for the transfer of surplus federal real properties to eligible recipients to provide housing, sheltering facilities and services to help stabilize the living arrangements of homeless individuals and families and those at risk of becoming homeless. This will be measured by the number of housing units and the number of support/emergency facilities created by SFRPHI;
Access to surplus federal real properties to serve homeless people facilitated for community service providers through the provision of functional support and guidance to develop proposals, access other sources of funding, and develop longer-term business plans. This will be measured by the number of identified suitable properties that are transferred;
Improved local response and a broadened base of resources and partnerships available to eligible recipients through linkages to the HPS community planning process. This will be measured by the number of linkages and partnerships achieved, and the level of funding leveraged in support of the projects; and
Increased horizontal collaboration with other federal departments, agencies and Crown corporations to identify, provide and/or renovate federal real properties to help serve homeless individuals and families. This will be measured by the number of contribution agreements that are approved as a result of suitable properties obtained from the federal custodians for the Initiative.

3. AUTHORITY

The HPS is delivered under the authority of Section 7 of the Department of Human Resources and Skills Development Act, which provides that the Minister may, in exercising the powers and performing the duties and functions assigned by the Act, establish and implement programs designed to support projects or other activities that contribute to the development of human resources of Canada and the skills of Canadians, and the Minister may make grants and contributions in support of the programs.

In June 2000, Treasury Board Ministers approved the creation of the Affordable Housing Property Fund, which is administered by PWGS for the purpose of compensating federal custodians, agencies and agent Crown corporations at fair market value for surplus federal real properties contributed for a nominal sum to eligible recipients through SFRPHI.

On December 19, 2006, the Government of Canada announced the HPS, which provided $269.6M, over two years (from April 1, 2007 to March 31, 2009) to help prevent and reduce homelessness. Of this funding, $6M was allocated to SFRPHI.

On September 4, 2008, the Government of Canada extended the HPS, including SFRPHI, for two years, until March 31, 2011, at the same funding levels.

On September 21, 2010, the HPS was renewed from April 1, 2011 until March 31, 2014, at the same funding level of $134.8M per year, including $3M per year for SFRPHI.

Authority to Approve Proposals

The Minister of HRSD has the authority to approve all proposals that have been duly recommended by the National Tripartite Committee. This authority may be delegated by the Minister to appropriate HRSD officials as per delegation instruments.

Authority to Sign Agreements

The Minister of HRSD and the Minister of PWGS have joint authority to sign all contribution agreements. This authority may be delegated by the Ministers to appropriate officials of both departments as per delegation instruments.

Any major amendment or modification to an existing contribution agreement must be submitted to SFRPHI and then reviewed by the National Tripartite Committee for recommendation, prior to seeking the approval of both Ministers.

Authority to Approve Payments

All projects subject to these Terms and Conditions are sales of surplus federal real property in the form of non-cash contributions, rather than payments. The Minister of PWGS, consistent with existing departmental mandates and delegated financial limits, has the authority to approve the sale of all surplus federal real properties under SFRPHI. All sales exceeding PWGS’ delegation limits will be subject to approval by Treasury Board Ministers.

Payment of the market value of the properties acquired through routine disposal is made to the custodian department, which will have access to the funds through the Supplementary Estimates. For properties acquired through strategic disposal, payment is made directly to Canada Lands Company CLC Limited, per the terms of the contribution agreement.

4. ELIGIBLE RECIPIENTS AND COMMUNITIES

Eligible recipients include provincial, territorial and municipal governments and agencies, including public health and educational institutions, with the agreement of their provincial/territorial governments, and community organizations with valid not-for-profit charters, which may include housing cooperatives.

SFRPHI is a supply-based program dependent on the availability of surplus federal properties. Once a property is assessed and found suitable for use under this program, the opportunity is communicated to regional delivery staff and the community is made aware of this property.

Eligible communities should have a demonstrable need for facilities that could help stabilize the living arrangements of homeless individuals and families and those at risk of homelessness, as well as contribute to the prevention and reduction of homelessness. In HPS designated communities, the need can be identified through the Community Plan. In other communities, the community must demonstrate how such a project would meet the overall objectives of the HPS and show that the project has community support.

5. ELIGIBLE ACTIVITIES, PROPERTIES AND EXPENDITURES

5.1 Eligible Activities

Eligible activities include investments in longer-term rental housing and longer-term home ownership housing; transitional housing; supportive housing; and related emergency and support services. The primary purpose of these investments is to help individuals obtain access to longer-term housing and stable support that will reduce the risk of homelessness.

5.2 Eligible Properties

Eligible properties to be used for SFRPHI include properties declared surplus by the federal government and agent Crown corporations. This includes surplus lands and surplus buildings.

Recipient groups may be allowed, under special circumstances and as a last resort, to transfer proposed services and usages to another similar and more suitable property of similar or higher value acquired within the same community from another order of government (provincial, territorial or municipal) or public agencies, such as school boards, through an exchange with the federal property received under SFRPHI without breaching the terms of their contribution agreement.

Such land exchange would be considered if the priorities of the HPS and SFRPHI cannot be fulfilled using the available surplus federal real property. Treasury Board approval is required for each transaction involving an exchange of property. Proponents wishing to avail themselves of this option will have to make their request as part of their proposal which must provide: details on the property being sought for an exchange; the current owner; the terms of the exchange; and the rationale describing how greater public good is being achieved through this exchange.

5.3 Eligible Expenditures

All properties subject to these Terms and Conditions are sales, for a nominal sum, of surplus federal real property in the form of non-cash contributions to recipients.

The largest portion of the funds under this program will go towards the payment of federal custodians and agent Crown corporations for surplus federal real properties. The dollar value of the contribution payments will be based on the fair market value of the property to be transferred. Custodians will have access to their funds through Supplementary Estimates.

Eligible expenditures include the payment of program administration expenses, such as unrecoverable staff costs incurred by PWGS, and/or incidental service costs and extraordinary incremental costs, such as heating and maintenance costs over and above those that would normally be incurred by custodians during a normal disposal process, and that are due to significant program delays.

Eligible expenditures also include fees charged by the Department of Justice for the provision of legal services, including transaction fees incurred in the placement and/or removal of restrictive covenants on property titles as required.

6. FUNDING FORMULA

The Homelessness Partnering Secretariat establishes the overall allocation for SFRPHI, based on plans and priorities.

Agreements under SFRPHI entail the transfer of surplus federal properties, and are not in the form of cash contributions. The value of a contribution is based on the market value of the property in question, and expenditures related to the property transfer (as set out in section 5.3).

As this is a supply-based program dependent on the availability of surplus federal government properties, there is no pre-established plan for the distribution of funding and no limit on the amount of a contribution; projects are approved on a first-come, first-funded basis.

7. STACKING LIMITS

The maximum level (stacking limit) of Total Government Assistance (federal, provincial/territorial and municipal assistance for the same eligible expenditures) for the HPS cannot exceed 100% of eligible expenditures. This stacking limit must be respected when assistance is provided.

HRSD shall ensure that the amount of the contribution it makes is appropriate where funding or in-kind contributions in support of the costs for the eligible activity is anticipated from more than one HRSD program, from more than one federal department, from more than one level of government or from the private sector.

In the event that Total Government Assistance, as defined in the Treasury Board Directive on Transfer Payments, received by a recipient in respect of an eligible activity exceeds the amounts of such assistance declared, HRSD has the right to reduce its contribution by the amount of any additional assistance that is to be received, or to require repayment of an amount equal to the amount of such assistance if HRSD’s contribution has already been paid.

8. BASIS OF PAYMENT

Transfers of surplus federal real property to eligible recipients under SFRPHI will be in the form of non-cash contributions of real property rather than cash contributions.

Transfer payments made under SFRPHI are in the form of contributions under the HPS, which is a class contribution and class grant program.

The sale of surplus federal real properties under SFRPHI will occur on a timely basis after ministerial or Treasury Board approval has been received, as appropriate. The intended sales are to be completed within 60 days of the signing of the contribution agreement.

Because the transfers will be of real property rather than cash, there are no provisions for advance or progress payments or holdback provisions. All transfers subject to these Terms and Conditions will be non-cash contributions of real property.

9. MAXIMUM CONTRIBUTION

The program transfers real property assets for a nominal sum, to eligible recipients; thus, there is no maximum contribution per recipient for SFRPHI and no maximum value for the property to be transferred. This transaction is a non-cash contribution of real property, and consequently there is no amount payable to the recipient.

10. INFORMATION REQUIRED AND CRITERIA FOR ASSESSMENT

The application process ensures fairness and transparency. All proposals are reviewed initially on the degree to which they directly contribute to the priorities established in the community plan (where applicable) and to the broad HPS objectives, and based on their eligibility for funding under SFRPHI:

project proposals are submitted to SFRPHI for an initial screening and review of all essential components of the proposal;
proposals are then shared with and assessed by the National Tripartite Committee members; and
the National Tripartite Committee will either reject or accept proposals, and issue its recommendation for approval by the Minister, provided sufficient funding is available for the acquisition of the surplus property.

The National Tripartite Committee—composed of officials from HRSD, PWGS, and CMHC—completes a thorough assessment of the potential recipient’s capacity to implement the proposed project by reviewing evidence such as:

incorporation of documents demonstrating that the group has a valid and current non-profit charter, and a mandate to provide long-term affordable housing and/or related supports to households at risk of homelessness;
recent audited financial statements;
documentation of competent operation of a similar project by the group;
other evidence of the group’s capacity to complete the project; and
references or letters of support from other regulatory or funding agencies.

In addition, the financial viability of the project and its sustainability will be appraised by considering the following:

reasonableness of proposed construction costs, rents and expenses;
reasonableness of the estimated operating expenses budget;
housing market information;
sustainability, as demonstrated by long-term forecasts of revenues and expenses;
funding gaps and possible funding sources;
evidence of support for the project by the provincial/territorial government; and
borrowing possibilities, including the availability of CMHC mortgage insurance.

The review of a proposal will also include the following background information:

relevant municipal planning and zoning information (timing, anticipated problems, the likelihood of resolution of problems), soil conditions, environmental contamination;
evidence that the community has a significant and verifiable homeless population and a population in core housing need;
where a community plan exists, evidence that the proposal is supported by the recognized community plan to address homelessness;
where there is no community plan, evidence of need and demand for the proposed project (intended client group(s), housing needs, information on other similar projects under development);
information regarding how the services will be maintained; and
provision of performance indicators to be used for reporting purposes during the monitoring period.

Where a project’s sustainability will rely on provincial/territorial funding, the onus will be on the proponent to demonstrate provincial/territorial concurrence, as part of the proposal.

Only those proposals that satisfy all of the above requirements will be supported and recommended by the National Tripartite Committee for approval by the Minister of Human Resources and Skills Development.

Furthermore, the inclusion of an environmental, social, or labour market integration component, where appropriate, in the development of projects is encouraged (projects adapted for people with physical disabilities, projects with an energy-efficient component, projects related to skills development, etc.).

If competitive applications are submitted for the same property, a formal review and evaluation of all applications will be carried out by the National Tripartite Committee. A recommendation for a specific project will be made according to the above-mentioned considerations and in fulfillment of SFRPHI priorities (i.e., longer-term rental housing/home ownership, transitional housing, supportive housing and related emergency and support services).

The National Tripartite Committee has systems, procedures and resources in place to ensure due diligence prior to recommending approval of the non-cash contributions of surplus federal real property. This due diligence process includes verifying eligibility and entitlement, and the management and administration of the program.

11. INFORMATION REQUIRED FOR FINANCIAL AND PERFORMANCE REPORTING

PWGS will determine the internal audit requirements related to the Affordable Housing Property Fund, in accordance with the management control framework established for SFRPHI.

Internal Audit Plan

During the fifteen-year control period specified in the contribution agreement, the recipient is required to file an annual report confirming the use of the facility. HRSD will review the report and verify that the property continues to be used to support homeless people and those at risk of homelessness. This report will be retained in each contribution agreement file.

Contributions

Each agreement will specify that HRSD retains the right to audit the records of the recipients to verify compliance. Contribution agreements also specify that HRSD retains the right to conduct a formal audit of the recipient’s records to ensure that the real property is being used for the purposes intended for the duration of the fifteen year control period.

Failure to comply with the reporting requirements and/or non-compliance with the conditions of the contribution agreement during the control period may incur damages to the recipients, the amount of which will be specified in the contribution agreement.

Program Evaluation Plan

The evaluation of SFRPHI will be part of the evaluation of the HPS, which will be conducted in two phases. Phase I of the evaluation will be completed in the fall of 2011. Phase II of the evaluation will commence in 2011–2012 with a plan for completion by the fall of 2012. The two components of the evaluation will focus on:

building upon the 2009 Evaluation by assessing the validity of the proxies used in the 2009 evaluation to estimate the impacts of the new components of the Homelessness Partnering Strategy, which had not been implemented fully at that time;
assessing the accuracy and completeness of the performance measurement system as a monitoring and tracking tool and to estimate the impacts arising from knowledge development, strategic investments and horizontal pilot projects; and
informing the policy development process for the development of policy options on homelessness for the post-2014 period.

Performance Management Strategy

SFRPHI will be included in the HPS Performance Management Strategy— including performance indicators, expected results and outcomes, and methods for reporting on performance and evaluation criteria to be used in the assessment of the effectiveness of the transfer payments—and will cover the duration of the HPS.

Each contribution agreement will specify that HRSD will develop and conduct an evaluation and that the party signing the agreement is prepared to actively participate in the evaluation process as needed.

12. CONTRIBUTION AGREEMENTS

There must be a written contribution agreement between the Recipient, HRSD and PWGS, which identifies the conditions of the contribution, the expected results to be achieved and the obligations of the parties involved.

13. OFFICIAL LANGUAGES ACT

SFRPHI at HRSD is committed to respecting its obligations under the Official Languages Act. Specifically, SFRPHI will provide the following bilingual services to facilitate access to both linguistic communities:

application forms will be available in both official languages on the HRSD public Web site;
general information about SFRPHI, and any notice, advertisement or other matter relating to SFRPHI, will be available in both official languages; and
applicants can communicate with and receive services from SFRPHI in their official language of choice through the head office, from offices in the National Capital Region and from designated bilingual offices.

SFRPHI will also ensure that recipients offering services to the public on its behalf offer such services in both official languages, when there is significant demand from the minority language community in accordance with Section 25 of the Official Languages Act. Where applicable, SFRPHI will require (through a clause in the contribution agreement) that the recipient:

make project-related documentation and announcements (for the public and prospective project participants) in both official languages;
actively offer project-related services in both official languages;
encourage members of both official language communities to participate in the project; and
conduct project activities, including services, where appropriate, in such a manner as to address the specific needs of both official language communities.

14. DURATION OF TERMS AND CONDITIONS

These Terms and Conditions are in effect for payments made from April 1, 2011 to March 31, 2014.

15. REPAYMENTS

All non-cash contributions of real property will contain a covenant, applicable for a minimum of 15 years (monitoring period) from the date of commencement of the operation, restricting the use of the property to the uses outlined in the recipient’s proposal. If the property is not used for the purposes intended or if the property is sold, the recipient agrees to pay forthwith to Canada a sum equivalent to the current market value of the property, excluding all improvements contributed by the recipient, and thereby solely reflecting the value of the federal contribution, at the time of this default. Market value at the time of default will be determined at the expense of the recipient.