Solving Canada’s Dire Need for Safe and Affordable Housing

Justin Marchand:

Broader society is recognizing that safe and affordable housing is an issue and one of the reasons why people are recognizing that is because it's affecting many people's family and friends. To be able to afford a mortgage or a rent in many of Canada's cities right now, for a young dual income couple, moving into entry level professional jobs, you cannot afford to purchase a house in most of Canada's major cities. And so when that's the case, society is realizing that this must be a difficult thing for many people.

Michael Torrance:

Welcome to sustainability leaders. I'm Michael Torrance, Chief Sustainability Officer with BMO financial group. On this show, we will talk with leading sustainability practitioners from the corporate, investor, academic and NGO communities to explore how this rapidly evolving field of sustainability is impacting global investment business practices and our World.

Speaker 3:

The views expressed here are those of the participants and not those of bank of Montreal, it's affiliates or subsidiaries.

John Uhren:

I'm John Uhren, head of products and strategy on BMO sustainable finance team. On today's episode, we're joined by Justin Marsh awn executive director at Ontario Aboriginal housing services or OAHS. Justin and BMO's own Dan Adams, vice president indigenous banking, sit down to discuss the housing crisis, facing many indigenous people and the critical role that OAHS plays in supporting both indigenous communities and individuals in rural and urban areas. And what a critical moment for such an important discussion.

John Uhren:

Affordable and accessible housing is top of mind for all Canadians with prices reaching never before seen heights and demand far outpacing supply. It's projected that North of a hundred billion dollars is required over the next 10 years to create much needed affordable housing and replace aging infrastructure. BMO recently committed to mobilizing $12 billion towards sustainable and accessible housing by 2030, which includes increasing access to quality housing for indigenous people and financing key infrastructure projects, including community owned housing, sewer and water infrastructure, health centers, and more.

John Uhren:

All Canadians, including government, corporations, individuals must take action to prevent the ongoing affordable housing crisis we're facing. OAHS, a not-for-profit that's creating safe and affordable housing for First Nations, Metis, and Inuit people is on the frontline and actively making a positive difference in society. We can all learn from OAHS's leadership, but one thing is certain, there's no time to waste.

Dan Adams:

Thank you, John. I just want to start off by doing a land acknowledgement, which is very important. I'm sitting in Thunder Bay, which is the traditional territory of Fort William First Nation, signatory to the Robinson Superior Treaty of 1850. Justin is also in Sioux St. Marie within the traditional territory of Batchewana First Nation and Garden River First Nation signatory to the Robinson Huron Treaty of 1850 as well.

Dan Adams:

I was first introduced to Justin and Ontario Aboriginal Housing four years ago and our first conversations was just to learn more about the programming, and then we learned more about their organization. Then immediately, I was very impressed. Since then the last four years we have slowly earned their banking relationship and we couldn't be more thrilled.

Justin Marchand:

[inaudible] for the land acknowledgement, Dan. And if I could, I'll just start with an introduction with my traditional name, [foreign language] My spirit name is fire rock. My clan is Eagle and I am from Bowating in the area today, currently known as Sioux St. Marie Ontario. Yeah. Dan Adams reached out a number of years ago, inquiring about our assisted market home ownership program and trying to understand that and how he and the bank could help our clients who needed a triple A mortgage with that program.

Justin Marchand:

Dan introduced us to Matt Neveu, who's based in Sioux St. Marie, and really took the time to understand that program. As Dan mentioned, once they understood that program, they also became interested in our overall organization. Just as a brief background, in 1992, a number of urban indigenous service organizations from across Ontario came together. Our founding executive director, Don McBain, helped lead that as well as our founding chair, Sylvia Miracle, who's the past executive director of Ontario Federation of Indigenous Friendships.

Justin Marchand:

They undertook consultations for two years with the Urban Indigenous Community in Ontario, who by the way, makes up 86% of indigenous people in Ontario; very important to note that fact. They decided to incorporate Ontario Aboriginal Housing Services in 1994. We started with one employee. And that was Don McBain as I mentioned. And fast forward to today, we have still a fairly lean staff of over 110 people. And very lean when you consider that our growth over the last 27 years, that today we now serve on a daily basis, 10,600 people with their affordable housing needs.

Justin Marchand:

I'd also like to point out too, that about half of the people that we serve are indigenous and half the people that we serve are non-indigenous. And there's a number of very important reasons for that starting with our culture. And we understand, and our teachings, my teaching certainly, are that all individuals are gifts of The Creator and we're here to work together. So I think that's one thing that some individuals find surprising too. Obviously, our focus is on closing the gap if you will, as an interim step. Urban Indigenous People have housing outcomes that are 52% worse off than Canadian Society in general. And I don't think any of us feel that that's something that's appropriate or something that should continue. Of course, we have more aspirations than simply closing the gap and in being, if you will, as worse off as other people, we want to help ensure that everyone has access to safe, affordable housing.

Dan Adams:

I couldn't agree with you more, Justin, thank you. And [inaudible] I know BMO was very proud to provide financing to the pre and postnatal care building in Sioux Lookout Ontario. Why was that housing so important to the mothers, their babies and their families?

Justin Marchand:

Sure. So, Sioux Lookout, for those who aren't aware, is a relatively small community population of about Forty five hundred in Northwestern, Ontario. However, they serve a large geography over 31 First Nations fly in First Nations Sioux Lookout is generally speaking, is their first stop on the way to rural and urban parts of Ontario. And so there's a much larger population, closer to a hundred thousand that the hospital in Sioux Lookout serves.

Justin Marchand:

Up until the past year, those mothers that would come to Sioux Lookout to birth their babies, if they weren't doing it in their home community, at a nursing station, or otherwise in a traditional sense, didn't have anywhere to go. Hotels would be one option, but the availability wasn't always there. So in terms of coming to an urban area, sometimes for the first time, it's a very different experience than living in their home. And so we wanted to make sure that we had culturally appropriate housing and the requisite services available so that people felt welcome and that the birth of their child or children would be a very positive experience. So this is something that, that BMO helped us out with, and we wouldn't have been able to do it without BMO. And just the fact that the bank took the time to really understand our business was very much appreciated.

Dan Adams:

It's definitely important to me. Thank you for that. Also as equally important education, childcare, housing, I mean, these are all needs, not wants, when it comes to family. Could you share with us the story of the Homeward Bound Program?

Justin Marchand:

Sure; everyone wants their children and their communities and the people that they know their friends and family to be successful and to thrive. So in terms of education, childcare, and housing, education is one of the best ways to break the cycle of poverty. However, it's not the only way at a very fundamental level. If you look at Maslow's hierarchy of needs or indigenous communities, particularly at Western upon which Maslow's hierarchy of needs was based, housing is one of those core needs as a human being. If you don't have housing, then you're not able to participate in other areas of our life that lead to success such as education. We also know too, that if you are going to go back to school to complete your post-secondary education, if you have children, we want to make sure that children are taken care of in a culturally appropriate manner.

Justin Marchand:

So looking at all three of these aspects together, one of the things that we did was we partnered with the Ontario Federation of Indigenous Friendship Centers, who's an indigenous social service provider. They have the Dryden Native Friendship Center in Dryden, Ontario, of course, and their expertise is supporting education and providing childcare. Our expertise, as a housing provider of course, is, is providing housing. So what we were able to do was to bring together, in one physical geographic location, housing, along with onsite childcare and onsite support for education. What this is allowing indigenous mothers to do is to return to school, have the comfort of knowing that their children are literally down the hallway, having childcare that is culturally appropriate, and the mothers are able to focus on their education. Fast forward to a three or four year diploma or degree, whichever path the mothers choose. We also have a private public sector employment round table that helps the women transition into employment, post completion of their studies. Once they've done that, they move out of the program and we make room for more mothers to complete that program.

Dan Adams:

That's amazing. I mean, you're just setting the stage for success and we thank you for that. Speaking of education, sometimes we're asked to provide financial literacy education and one time Justin, the hub is that a grade 10 math class, and we're doing financial literacy education. And as a exercise for the kids to participate, we started doing a household budget and we had everyone kind of yellow, you know, what things cost, right? And it became apparent quite quickly that when you start adding up the necessities of housing and utilities, food, clothing, childcare, vehicles, and on and on there just wasn't enough money for an average household. So my question to you is, is safe and affordable housing for more people than we think?

Justin Marchand:

Absolutely down that recognition is fortunately unfortunate. It's unfortunate in the sense that we have this issue that we have to dedicate our time and resources to. It's fortunate in the fact that at least broader society is recognizing that safe and affordable housing is an issue. And one of the reasons why people, in general, are recognizing that is because it's affecting many people's family and friends to be able to afford a mortgage or a rent in many of Canada's cities right now. For a young dual income couple starting out with, having just graduated from a university, moving into entry level professional jobs, the analysis was just done recently that you cannot afford to purchase a house in most of Canada's major cities. And so when that's the case, when you have middle income, highly educated individuals who themselves cannot access say affordable housing, society is realizing that this must be a difficult thing for many people.

Justin Marchand:

What we've been trying to do since, the founding of our organization, is trying to help individuals across many different parts of the housing continuum, if you will. So we don't just help individuals that have low incomes. We help those with medium incomes as well, because this isn't a low income issue. This isn't a social housing problem. This is affordable housing and we know that there's a place for market housing in Canada. It takes care of the vast majority of housing needs for many Canadians, but we need additional tools beyond the simply the free market in order to ensure that the worker at Tim Horton's can afford housing so that people who do have lower incomes, middle incomes, who are the typical average Canadian worker, can afford to live and can afford to prosper in this society.

Justin Marchand:

One of the things I'll give kudos to Bank of Montreal for is that both yourself, Dan and Matt Neveu, as well as his analyst, Laura Lee took the time to understand that very story that we're providing services to a wide variety of individuals that real estate at its core is a relatively low-risk investment for the bank to make. You took the time to not just understand the financial aspects of our business and understand the cashflow and the equity that we plan into each development that we have. But you took the time to understand the demand side, right? You really took the time to understand the business of what we're in and what we're doing and why it makes financial sense as an investment for the bank as a long-term business plan for OHS, and also why it makes financial sense for Provincial and Federal Governments, as well as Municipal Governments to pay more attention.

Justin Marchand:

We know that housing is one of those preventive measures. If you don't have safe, affordable housing, depending on where you are along the housing continuum or the housing mosaic, whichever term you'd like to use. If you're somebody that is homeless, I'll start there, we know that emergency services at the hospital are very expensive. We know that emergency services for ambulance for police calls are very expensive. That's been costed out and there's numerous studies out there that the cost of homelessness is anywhere from $90,000 to $160,000 a year. For those very expensive services.

Justin Marchand:

We know that housing is a very, very cost-effective solution to homelessness for under $10,000 a year we can house somebody who is homeless. That's pennies on the dollar compared to highly expensive social services, safety net services. And so when you look at that, the bank understood that, you know what, this is a business case for governments to our doctors and nurses, our ambulance drivers, our police officers, their time is better spent addressing the issues that they were hired to do and our time is better spent addressing homelessness.

Justin Marchand:

When you look further up the income scale, if you will, go back to that couple that can afford to live in some of Canada's larger cities who are young professionals, when you have businesses that are crying for labor right now, crying for skilled professional labor. And if you don't have access to the labor, businesses are hurting too. And if people don't have access to the housing where a business needs them located, then they're often accepting lower paid jobs just to go into an area that they can afford as opposed to maybe reaching their full potential. So it's right across the spectrum. Dan, and I think again, I just want to say me glitch to the, to the BIMO team for really understanding the demand side of our business and in understanding how much opportunity there is.

Dan Adams:

Yeah. I appreciate that, Justin, good to you and your team as well. You're absolutely right. I mean, there's a stigma when it comes to affordable housing, when the reality is, it affects average Canadian families and the good work that you and Ontario Aboriginal Housing is doing is as really tackling that. And you mentioned the BMO support, so just recently BMO just announced like commitment at $12 billion to affordable housing in Canada, we as a bank, I acknowledge that there is an issue here, and it's something that as a responsible corporate citizen, we're going to take head on, but what can government and all other corporations and all Canadians in general do to help with the huge demand for safe and affordable housing.

Justin Marchand:

I think I'll start where Bank of Montreal started. We're starting to see some of the other big banks look at safe and affordable housing as a business opportunity for them. I think that's a great start. Hopefully more we'll follow your lead. Again, in terms of the non-profit housing sector or the affordable housing sector, our loan losses are negligible, if any, at all, just in terms of that business case in a nutshell. Our rents are by design below market. The bank has an inherent cushion in our cashflow in that we are charging below market rents. We also have developments that have a fairly significant amount of equity in each development and part of that is to help us achieve lower rents that are affordable for most people. So Bank of Montreal understood that, and you can see that some of the other banks have followed your lead.

Justin Marchand:

In terms of what government can do, our governments are selected by citizens of Canada and residents of Canada. So I think individuals who are experiencing housing issues, please take the time to contact your candidates in the Federal and Provincial arenas, Municipal as well. We traditionally have not had a very active voter base in Canada. What that means is that when you do reach out to candidates of all political stripes and let them know that housing is an issue, your voice is essentially outsized. Whether it's yourself, that's experiencing an issue, or whether it's friends or family, please let your politicians know that this is something that needs to be supported. When I say supported, flipping to what government can do, it's not always about dollars. There's policies that Municipal Governments can make to ease the burden on all developers, whether they're nonprofit developers or whether they're private market developers, to facilitate the construction of new homes, to facilitate the construction of new apartment buildings. The amount of hurdles that that any developer has to go through has only been increasing over the years. And I don't think that's a coincidence. It's not the sole cause, but it's not a coincidence that we find ourselves in this housing right now.

Justin Marchand:

The other thing that provincial and federal governments can do is look at different policies, federal and provincial governments could make those policy choices and I'll touch on one example. Making the choice to invest program dollars in preventive programs rather than reactive programs. So again, going back to the, to the notion that housing is a preventive program that not only reduces barriers for individuals to participate in society, whether that's education, whether it's employment, but also to support their success. And we know that if we don't do that, it does cost governments far more, many fold dollars more, to address issues further down the line, and we have much poor outcomes. So really, I think it's also incumbent on governments to understand the business case that Bank of Montreal has understood that investments in safe, affordable housing help our entire society.

Justin Marchand:

It helps the first and foremost, the individuals who need the housing, it helps employers who need labor. It helps reduce strain and demand on other social services, and it provides a better financial and social return for all of us.

Justin Marchand:

Just in closing, if I could, one of the things that's unique about Ontario Aboriginal Housing Services that I'd also like to highlight, is that we are very much a community-based, community governed organization. We're unique amongst a number of other nonprofit housing providers in that we have elected members on our board, which is not typical of many housing providers.

Justin Marchand:

Our Governance Structure is comprised of the three largest Indigenous Provincial Territorial Organizations in Ontario. That being the Ontario Native Women's Association, the Ontario Federation of Indigenous Friendship Centers and the Metis Nation of Ontario. And why I'd just like to close with that thought is that it really ensures that what we're doing is driven by community and that what we are doing is meeting those highest priority needs as defined by the community. And we know that when community leads the way on issues that are affecting community, we know that community is much more successful. So I think this is a great partnership between community, the nonprofit sector, the private sector being Bank of Montreal and various levels of government. I think what we're really showing Dan, is that we can work together and we can work together for the success of everyone involved.

Dan Adams:

Absolutely. Justin, I just want to say thank you [foreign language 00:23:44] for having this important conversation with us and I hope we continue it. And [foreign language 00:23:53]

Michael Torrance:

Thanks for listening to sustainability leaders. This podcast is presented by BMO financial group to access all the resources we discussed in today's episode, and to see our other podcasts, visit us at bmo.com/sustainabilityleaders. You can listen and subscribe free to our show on Apple Podcasts or your favorite podcast provider and we'll greatly appreciate a rating and review and any feedback that you might have. Our show and resources are produced with support from BMO's marketing team and Puddle Creative until next time, I'm Michael Torrance, have a great week.

Speaker 3:

The views expressed here are those of the participants and not those Bank of Montreal it's affiliates or subsidiaries. This is not intended to serve as a complete analysis of every material fact regarding any company, industry strategy or security. This presentation may contain forward looking statements. Investors are cautioned not to place undue reliance on such statements as actual results could vary. This presentation is for general information purposes only, and does not constitute investment legal or tax advice and is not intended as an endorsement of any specific investment product or service. Individual investors should consult with an investment tax and or legal professional about their personal situation. Past performance is not indicative of future results.