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Nunavut changes loan program for homebuyers after ultimatum from MLAs

Starting this April, potential homeowners who want $30,000 in government funding toward their down payment will need to have lived in Nunavut for at least a year.

Before this 'a person could come off the airplane and they could apply for a subsidy right away' says MLA

George Kuksuk, minister responsible for the Nunavut Housing Corporation, announced the change in the legislature, saying it was 'based on feedback from members.' (Nunavut Legislative Assembly)

Starting this April, potential homebuyers who want $30,000 in government funding will need to have lived in Nunavut for at least a year. 

Last week, George Kuksuk, the minister responsible for the Nunavut Housing Corporation, announced that people who have just moved to the territory will no longer be eligible for the Nunavut Downpayment Assistance Program. 

It's a change that many MLAs have spent years lobbying for. 
The Nunavut Downpayment Assistance Program provides financial help to people looking to buy a home. (Travis Burke/CBC)

"Not only for me, the whole committee had issues with it," said MLA Allan Rumbolt, who represents Sanikiluaq. 

"A person could come off the airplane and they could apply for a subsidy right away and get it."

When the program was first created, the residency requirement was actually more stringent — at two years. But in 2012, the Nunavut Housing Corporation lifted it entirely, saying at the time that it wanted to "assist as many homeowners" as possible.

Things had 'come to a head'

The change, Kuksuk told MLAs, was based on "feedback" from members of the Legislative Assembly. In reality, it followed a political ultimatum. 

"The frustration has been there the last several years," said Rumbolt. "Every year we stressed in the meeting minutes that we wanted this residency requirement put back in and every year they just never listened to us."

This year, they handled the situation differently. 
'Every year we stressed in the meeting minutes that we wanted this residency requirement put back in and every year they just never listened to us,' said MLA Allan Rumbolt. (Nunavut Legislative Assembly)

Earlier in the fall sitting, the Nunavut Housing Corporation issued its opening statement to the Committee of the Whole, with regards to its capital estimates for the coming year. 

Once again, Rumbolt asked if the residency requirement would be reconsidered and, once again, the government deflected the issue.

"I think it just finally came to a head and the committee decided we need to make the next step and see if we can't push them to make the change."

The committee opted to defer its consideration of the corporation's estimates — and gave the minister something to think about in the meantime.

"I am prepared to move a motion to reduce the Nunavut Housing Corporation's proposed overall budget for the home ownership program by the exact amount that the Nunavut Housing Corporation actually spent in the 2014-15 fiscal year on the Nunavut Downpayment Assistance Program," Rumbolt told the department.

That amount is $602,794. 

When it came time for the Nunavut Housing Corporation to return to the committee, Kuksuk made the announcement. 

"I hope that the new residency requirements will demonstrate to the members and their constituents that the Government values long-term investment in Nunavut," he told MLAs. 

How it works

Under the program, eligible home buyers can receive a forgivable loan for 7.5 per cent of the home's purchase price — up to $30,000.   

It's meant to provide three quarters of a 10 per cent down payment for a buyer's mortgage. 

The loan is 'forgivable,' meaning that recipients do not have to pay it back, provided they fulfil all of the program requirements. 

After five years living in the home, the government will begin forgiving 20 per cent of the loan every year. On the 10th anniversary of the home's purchase, the loan will be fully forgiven.  

The residency change comes into effect on April 1.