The Hon. Alfonso L. Gagliano
Minister of Public Works and Government Services
435S Centre Block, House of Commons, Ottawa, ON K1A 0A6
Saturday, June 16th, 2001
Dear Minister Gagliano,
I recently read in the La Presse and Montreal Gazette newspapers of your June 5th announcement of $17.5 million dollars in federal aid to Montreal-area homes damaged by the pyrite problems. While one can only sympathize with the pyrite problems—where oxidized pyrite expands when in contact with excess moisture, resulting in cracked and damaged walls and foundations it is not the only example of home building failure where compensation is appropriate.
The compensation you announced represents a $3,500 federal grant to each of the 5,000 owners of pyrite-affected homes who face an average repair bill of $20,000. The Government of Quebec was putting together a comprehensive $70 million plan to give each homeowner $13,800 and asked you for roughly $5,600 per home. Your grant of $3,500 per home is over 60% of what they asked for, so your actions are an encouraging precedent for Leaky Condo owners in my riding and throughout British Columbia.
You are undoubtedly aware that the 50,000 Leaky Condo owners in British Columbia face an average repair cost of $21,043 per owner, similar to the repair cost of Montreal-area pyrite-damaged homes. In reaction to the Leaky Condo crisis, the B.C. Government did not merely extend an open wallet and ask for Federal Government compensation. Instead, to its credit, the B.C. Government established an arms-length, independent commission (the Barrett Commission), which recommended, among other things, that the Federal Government should contribute $300 million towards a compensation plan. This represented roughly a 30% share of compensation financing for the Federal Government. Interestingly, this would represent roughly $6,000 per-home, or about $400 more per-home than the $5,600 the Government of Quebec asked for from the Federal Government.
The June 6th edition of the Montreal Gazette reports on page 2 that you rejected Quebec's call for a 40% contribution and instead decided to limit your funding to 25% of the overall package, because it is "similar to what you have offered homeowners elsewhere in the country plagued with major construction flaws." So your $17.5 million dollars will pay 25% of their total plan to give each pyrite-affected homeowner $13,800 in compensation.
In British Columbia, the total cost of the Barrett Commission compensation is $900 million, yet the Federal government has not given a cash payment of $225 million, which would represent, as in the Quebec case, 25% of the total cost of the program. Instead, the only federal contribution to the Leaky Condo disaster in British Columbia was the payment of a mere $27.7 million on a 50% cost-sharing basis to enable the B.C. Government to offer interest-free loans (i.e. "compensation" that must be repaid) to qualified, means-tested homeowners. The B.C. Homeowner Protection Office informs me that "the federal contribution amounts to only 20% of the cost of British Columbia's assistance programs for leaky condo owners."
Indeed, I've seen reports that the Federal government has already received $40.7 million in GST revenue on repairs to Leaky Condos in B.C. So your Government funds Quebec repairs, but pockets a tidy profit from B.C. misery.
This apparent double standard raises three important questions:
I would like to thank you in advance for addressing my questions in an expeditious manner. Owners of leaking and rotting homes in my riding and throughout B.C. are eager to understand your lack of action on this portfolio, and I am anxious to understand your actions and the apparent disparity in treatment between Canadians who are in need, in similar circumstances, but happen to live in different provinces.
Yours truly,
[ORIGINAL SIGNED]
James Moore, Member of Parliament, Port Moody-Coquitlam-Port Coquitlam