The Federation of Saskatchewan Indian Nations says the Canada Mortgage and Housing Corp.'s budget for the program has been cut 30 per cent in the province to $18.7 million from $26.2 million.
"This is a crisis. Housing cuts will impact the standard of living of our communities which is already well below the poverty line," federation vice-chief Morley Watson said in a news release.
"What's needed is a stable, reasonable, multi-year funding so that First Nations can plan ahead instead of the current approach."
Under the program, the housing corporation allocates funding for long-term social housing subsidies.
The federation says 159 units were committed through the program in 2011-12. But this year, it says, the national housing agency estimates 88 units will be built in the province — a drop of 45 per cent.
The federation says there is a shortage of 11,000 homes on reserves across Saskatchewan.
One official pointed to the CMHC's 2011 annual report, in which the agency said that aboriginals living on reserves generally face poorer housing conditions than Canadians in general. That report said that based on the 2006 census, 52 per cent of on-reserve households live below adequacy and suitability standards.
The federation also says "it seems incredible" to make cuts to the program given the humanitarian crisis last fall on an Ontario reserve.
Attawapiskat declared a state of emergency after a severe housing shortage forced more than two dozen families to live in temporary, mouldy shelters, some without insulation or plumbing.
In an email to The Canadian Press, the CMHC said funds are provided every year for the new construction of about 400 homes, renovation of more than 1,000 and for ongoing subsidies to almost 30,000 households on reserves.
CMHC said "since this specific subsidy is not a one-time lump sum, payment calculations have to be adjusted according to projected interest rates."
"In previous years, CMHC was able to top-up this budget based on lower-than-expected interest rate projections and other risk factors," according to the email.
"However, with interest rates expected to increase over the coming years, CMHC will no longer have the ability to provide these increased top-up dollars."
It continues: "While the base funding for this program has not changed, projected increases to interest rates over the life of a project, as well as increases in the cost of construction and materials, the projection for units to be funded this year is lower than last year."
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