Why Funding Alone Doesn’t Build Homes

In March 2024, Canada’s Auditor General published a finding that should have changed how people think about funding Indigenous housing. It largely didn’t.

The finding almost nobody quotes

The audit examined how Indigenous Services Canada and the Canada Mortgage and Housing Corporation were delivering on the federal commitment to close the First Nations housing gap by 2030. Its headline conclusion was bleak enough on its own: 80% of housing need remained unmet, with seven years left on the clock.

But the finding underneath the headline is the one that matters most to anyone trying to help.

The Auditor General found that First Nations with the worst housing conditions received less funding than communities of the same size with better housing conditions. Neither the department nor the corporation had prioritised their limited funding toward the communities in greatest need.

That is worth reading twice. The money was not simply insufficient. It was flowing away from the communities who needed it most.

It was also the fourth time since 2003 that the Auditor General had raised concerns about unsafe and unsuitable housing in First Nations communities. Four audits, two decades, the same conclusion.

Why the money goes where it goes

Federal housing money is not distributed. It is applied for.

A community seeking capital to build homes generally needs some combination of a current housing needs assessment, engineering and site work, land tenure and servicing arrangements, a governance structure that satisfies the funder, financial reporting capacity, and a proposal written to the requirements of one specific programme, submitted inside the window that programme happens to be open.

That is a substantial administrative undertaking. It takes people, time and expertise — and all of it has to happen before any construction money arrives.

Now consider which communities find that easiest. Not the ones in crisis. A Nation whose housing stock is failing, whose administrative staff are managing evacuations and emergency repairs, and whose capacity is already stretched thin is precisely the Nation least able to spend months assembling a competitive funding application.

The result is a system that, without anyone intending it, rewards readiness rather than need. The Auditor General’s finding is what that looks like once it shows up in the data.

The conditions this leaves behind

The 2021 Census puts numbers to the consequences. People in First Nations communities are four times more likely to live in crowded housing, and six times more likely to live in a home needing major repairs, than non-Indigenous people in Canada.

On reserve specifically, 37.4% of First Nations people with Registered or Treaty Indian status lived in a dwelling needing major repairs — almost three times the rate for those living off reserve.

Mould deserves its own mention, because the Auditor General singled it out: neither Indigenous Services Canada nor CMHC had addressed or tracked the houses with mould, despite recommendations in previous auditor general reports. Canada still does not know how many First Nations homes are affected. It has been told to find out before.

The Assembly of First Nations estimates 157,453 new homes are needed, and that permanently closing the gap costs $135.1 billion. Those figures describe the size of the hole. They do not explain why it stays open.

What actually unblocks a project

If the binding constraint were purely money, the fix would be straightforward: appropriate more of it. But a community that cannot assemble an application cannot reach money that already exists.

The work that unblocks a project is unglamorous and largely unfunded. Sitting with a community to understand what they actually want built. Completing the housing needs assessment. Getting soil tested and the site surveyed. Sorting out land tenure and servicing. Building the governance and reporting structures a funder will require. Then working out which of several federal and provincial programmes fits, and writing to it properly.

Government programmes fund construction. They do not, as a rule, fund the year of preparation that makes construction possible. That is the gap philanthropic capital is unusually well suited to fill, because it is patient, flexible, and not tied to a construction milestone.

This is the whole premise of how Pleiades Housing Alliance is built to work. Our target is for each philanthropic dollar to unlock up to five dollars in available government housing funding — subject to programme eligibility, approvals and funding availability. It is a target we are working toward, not a track record we have banked: PHA has not yet completed a funding cycle, and the first home is still unbuilt.

Readiness is not a favour

How this work is done matters as much as whether it happens. Readiness support can very easily become another outside body arriving with its own plan, its own timeline, and its own idea of what a house should look like.

Every project we take on begins with a formal Joint Venture or Memorandum of Understanding with the partnering community’s own leadership. The homes are owned and maintained by the people who live in them. Designs are developed with communities to reflect how families gather, live on the land, and pass culture between generations — not imposed from outside.

The point of closing the readiness gap is not to make communities easier for funders to process. It is to stop a funding system from quietly penalising the Nations in the hardest circumstances.

What we would ask you to take from this

If you are considering supporting Indigenous housing, the instinct is usually to fund construction — something countable, something you can point at when it is finished.

The evidence suggests the scarcer and more valuable contribution is the work that comes before it. Four auditor general reports across twenty years have not shifted the outcome. The money has grown. The share of need being met has not.

Homes get built when a community has both the capital and the capacity to reach it. Canada has been supplying one of those.