HUMA Committee Meeting

     Committee members, it is 4:30 p.m. The clerk has advised me that we have quorum, so I'll call the meeting to order.

    Welcome to meeting number 79 of the House of Commons Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities. Pursuant to Standing Order 108(2), the committee is meeting for a briefing with the Minister of Housing, Infrastructure and Communities.

    Welcome, Minister. We'll more formally welcome you a little later.

    Today's meeting is taking place in a hybrid format, pursuant to the Standing Orders. Members are attending in person in the room, and they're attending by Zoom as well.

    I would like to make a few comments before we begin.

    You have the option of choosing to speak in the official language of your choice.

     Madam Chabot, if there is a breakdown in the translation, please get my attention. We'll suspend while it's being corrected.

    Those in the room please raise your hand if you want to get my attention. Those on camera use the “raise hand” icon. As well, no screenshots are allowed to be taken when the meeting is in progress. I would also ask you to please speak slowly and keep your cellphones away from the microphone, that will avoid popping sounds and will be for the benefit of the translators as well.

    With that, as I indicated, we have some members joining us. Mr. Morrice, who was acting chair for a while yesterday is joining us. As well, we have Mr. Scheer, and Mr. Trudel is joining Madam Chabot and Madam Zarrillo.

    I will advise that we do have a communications problem with Ms. Kwan online. The quality is not sufficient to translate at this time. It is being worked on.

    Before we begin, I'll just say I'm going to conduct the meeting in two one-hour sessions. We'll have a health break after the first hour. For a couple of minutes, we'll suspend, and then I will go back to the normal rotation we have on the speaking order for the first hour. We'll revert to it again for the second hour, just so we're clear.

    I would like to welcome our witness this afternoon, Minister Fraser.

    Minister Fraser, welcome to HUMA. The floor is yours for your opening statement.

    Mr. Chair, before you start the clock, how much time do I have?

    Five minutes was almost unanimously agreed to by the committee, but I'm sure if you go over a second or two we won't have an uprising.

    With it being five minutes, I'll jump right in.

    Colleagues, if we're going to solve Canada's national housing crisis, we have to understand the constituent causes of the circumstances we find ourselves in and advance specific measures that are tailored to overcome the very specific obstacles that are posing challenges to home construction in particular.

    One of the things I want to acknowledge before I get into some of the challenges and potential solutions to those problems is the scale of what we're dealing with. We're talking about needing to build homes and to build them by the millions. We have about 16.5 million homes in this country. We need to build more than five million more if we're going to restore the level of affordability that existed in Canada 20 years ago.

    The way this is playing out is having very real impacts on real people in real communities across the country. We're talking about students who are not able to find a place near where they're going to school. We're talking about young professionals, sometimes who are in a two-income household, who can't afford to get into the market. We're talking about seniors who can't find an apartment when they're looking to downsize in a community where their grandkids are being raised. Of course, we're dealing with a significant number of people who have no place to call home.

    My view is that we, as a society, should aim to do better. It's going to require the federal government, working with provincial governments, municipalities, the private sector and the non-profit sector advocates, and of course parliamentarians, to advance solutions that are going to have a meaningful impact. But we won't have a meaningful impact if we just come up with random ideas and throw them at the wall. We need to have targeted measures that are going to maximize the output when it comes to building more homes for Canadians at prices they can actually afford.

    The first obstacle that I see is, really, the need to change the financial equation for builders. As a result of the increased cost of supplies and materials, labour, interest rates, the cost of land in Canada and a number of other factors, it's really hard for people to say yes to projects, even where they have the workforce, even where they've already had a project approved.

     We have been advancing measures you will have seen recently. The removal of the GST on apartment construction in Canada is resulting in more homes going ahead that otherwise would not have. You may have seen the changes to the Canada mortgage bonds program, which is going to help free up low-cost financing. You will have seen programs that have existed as part of the national housing strategy, such as the rental construction financing initiative that makes money available at a lower price for the people who are looking at the equation, so they can say, “Yes, I can go ahead now.”

    There are other things we can do as well, and I look forward to the advice of members of this committee, but it's not just the financial equation. We need to change the way that cities build homes, or in some instances don't build homes. We need to make sure that we're speeding up permitting processes. We need to make sure that cities are investing in housing-enabling infrastructure. We need to make sure that they are zoning in a way that makes it legal to build the kinds of homes that are going to help solve the housing crisis.

    When it comes to changing the way cities build homes, we have introduced the housing accelerator fund, a $4-billion fund that is starting to show very serious promise and is already changing the rules cities have in place in places like London.

    Peter, I know we were visiting your community a few weeks ago. More recently, Calgary has made a decision explicitly that relied, at least in part, on an exchange of letters we have had regarding the housing accelerator fund.

    Of course, we continue to invest in infrastructure that allows more homes to be built, such as water and wastewater, such as public transit funding and the like, so that we make sure we're building not just places to store people but real communities and homes for Canadians.

    As we continue to invest in housing, we can't forget that there are a lot of people who need homes that exist outside of the market. This was really the foundation for the national housing strategy: to build more affordable housing for low-income families. After 30 years of lack of investment by both Liberal and Conservative governments, I should say, we are hundreds of thousands of units behind where we need to be if we're actually going to make sure people who cannot afford a place in the market still have a roof over their heads. There's a social cost to not having the ecosystem exist as it should, and we need to work together to overcome it.

    Even if we get the policy landscape right on these other areas, we are going to run into a bottleneck at a certain point in time when it comes to the productive capacity of the Canadian industry to actually build the homes that we need. We can overcome this by investing in training programs, as we have in partnership with unions over the last number of years. We can continue to invest in programs like the sectoral workforce solutions fund, but we can't just rely on training the existing Canadian workforce.

    We also need to continue to embrace immigration as a strategy to bring in the skilled workers who we need. We had previously made changes to the express entry system through the category-based selection model to bring in more people as permanent residents who have the skills that are necessary to build homes, but even if we get all of those people building, we have to change the way that they build homes.

    We don't build cars the way we did a century ago. We're more efficient. We build them in factories now. We need to be looking at innovative ways to build housing more productively by investing in factory-built homes. We need to be embracing technologies, including modular housing, panelization, mass timber and 3-D printing, if we're actually going to change the way that we build homes so we can do it on a much larger scale than we are today.

    We need to continue to support labour mobility so workers that may be available in one jurisdiction in Canada can offer their skills to housing projects in other jurisdictions.

    There are improvements that I think we need to make on the coordination of programs as well between federal, provincial and municipal programs, and I think in all honesty we can probably improve the way that we administer programs. It might require us to take on a little more risk by times to speed up the process for the projects that we want to support.

    Before I conclude there are a few other categories that I'm happy to dig into should time permit, but we need to continue to respond to the changing nature of emergencies that put people in situations where they have no place to go.

    My own community was impacted severely by Hurricane Fiona last year and people were displaced. We saw it again during wildfires, not just in Nova Scotia but in communities across the country as a result of severe weather events that are driven by climate change. We need to continue to support communities through our programs that deal with severe homelessness problems, and we need as well to make sure that we're supporting emergency shelters in communities that are facing undue pressures.

    I don't want to ignore the need to also address the financialization issues that I know the finance committee has been studying, and I look very much forward to reviewing the report they are generating. However, there are measures we have implemented around changes to the tax regime on short-term rentals such as Airbnbs, the ability of foreign buyers to purchase and own homes, and taxation of people who are non-residents with non-occupied homes.

    Finally, we can't ignore that there is a generation of people who feel like they have been left out. If we build all the homes that we can build as quickly as we can, we're still going to have a significant number of people who find themselves with the inability to save up for a down payment to get into the market in the first place.

    My sense is that, if we tackle each of these problems with everything we have, in collaboration with every level of government, the private sector and the non-profit sector, we can make real progress. If we aim for anything short of solving Canada's national housing crisis, I think we will be selling ourselves short. I think Canadians deserve to see us working together to advance measures to solve each of the problems I've outlined for you today.

    Mr. Chair, I don't know how close I am to my time. I expect I'm over, but I'm glad to be with you and happy to take questions.

    Thank you, Minister.

     I forgot to introduce, with the minister, Ms. Romy Bowers, president and CEO of Canada Mortgage and Housing and Ms. Kelly Gillis, deputy minister, infrastructure and communities.

    With that, we'll go directly to questions with Mr. Aitchison for six minutes.

    Thank you, Mr. Chair.

    Minister, thank you for being here. Thank you for asking to come here for starters—that's great—and thank you for being here for a two-hour session.

    I have an easy one to start with. I'll take it easy on you. This one stumped your predecessor.

    Do you believe that Canada is in a housing crisis?

    I think I led with a statement saying, “If we're going to solve Canada's...housing crisis”, so yes, I do believe we are living with a housing crisis in this country.

    Do you think Canada was facing a housing crisis eight years ago?

    I think a significant number of Canadians were living in a crisis situation because of the lack of housing. Would it have constituted a nationwide crisis? I think that's a matter of subjective opinion.

    At the time, I was focused in my own community. We had an enormous supply of housing, but because we've seen a level of growth we couldn't have predicted, we are now facing similar challenges to big cities—even in rural Nova Scotia. It would have been community-dependent for me at the time and individual-dependent at the time.

    I think that's a fair statement. The average rent for a one-bedroom apartment eight years ago was about $973. Today, I'm sure you know.... Do you know what it is today?

    It would depend on the jurisdiction, certainly.

    Do you know the average across Canada?

    I don't have the specific average. I'm sure that in 30 seconds, we could find it.

    It's double. We've talked about this before, of course. It's $1,880.

    If it wasn't really a national crisis.... We would define it today as a national crisis, but it wasn't a national crisis eight years ago.

    In 2017, the Prime Minister announced his housing plan. He called it life-changing and transformational.

    Had it become a crisis by then, would you say?

    It depends on the specific community that you're in. The exact moment that you transition from dealing with real social issues to having a national crisis is a matter of opinion. I think somewhere along the way, the problem has become so much more widespread.

    Frankly, it fundamentally changed, in particular as a result of a changing economic landscape in the postpandemic period, which I see has really impacted a much wider array of Canadian families than it would have back in 2015.

    The Prime Minister described his housing plan, at the time, as transformational and life-changing. That was some pretty bold language in 2017. Obviously things were bad enough that he felt we needed a life-changing and transformational plan. He announced initially that it was $40 billion. It eventually crept up to $70 billion.

    Was that necessary then?

    Yes, certainly it was necessary then. In fact, it was necessary 30 years before. One challenge that we're dealing with is that we're trying to make up for lost time because successive governments of different partisan stripes didn't invest in housing.

    We re-entered the space in a way that no government has in my entire life. It was necessary, but we need to continue to do more. As the social and economic landscape in Canada changes, so too must our policy trajectory. My view is that it was essential. I'm very glad we moved forward with the national housing strategy, but I'm not here to tell you that it was enough to solve the problems that we're dealing with today. We have a lot more work to do and I'm thrilled to have the opportunity to do it.

    Eight years ago, the average minimum down payment was $22,000. Today the average is—you guessed it—$50,000. It's double.

    Do you know what the benchmark price of a house was eight years ago?

    I don't know to the dollar, but I have a sense that I know the point you're about to make.

    It was $452,000. In case you were wondering, today it's $750,000. That is with this housing plan that was supposed to be life-changing. That's maybe not the change I think the Prime Minister was hoping for at the time.

     I guess it begs the question that, when eight years ago your government took office, there were challenges and problems in the housing space. They may have been unique to certain parts of the country. They were more acute in some areas than in others. A couple of years later, it was determined that we needed a life-changing plan. The change that we have today is that house prices have doubled. Rents have doubled. Vacancy rates hover around 1% or lower across most of the country, and homelessness is on the rise.

    Now we have a new minister. You've come out swinging. Would you describe the things you're announcing today, the new programs we're hearing your government talk about—you had a housing retreat on the east coast and another little session in London, and you've announced that you're going to do some really big things—as life-changing, transformational housing plans?

    Sir, when you say what I'm announcing today, what are you referring to?

    I mean the programs you've been announcing: the HST, the—

    You mean in the last number of weeks.

    I think they're important. They are going to fundamentally change the ability of the housing sector to produce more homes. I don't think the measures we've announced today in and of themselves will solve the crisis, but without them, I think it would be impossible.

    If you'll indulge me for 30 seconds, Mr. Aitchison, the problems you've outlined in your questions are different from those we were discussing back in 2015 to 2017 when we were building the national housing strategy. The motivation behind the national housing strategy was to make up for three decades of governments not investing in affordable housing for low-income families. That's why you've seen the co-investment fund, the rental construction financing initiative and more recently the rapid housing initiative targeting those housing developments that are designed to put a roof over the heads of some of the most vulnerable people in the country.

    What we're seeing now is a far more widespread challenge. It's impacting middle-class families very seriously. The change in policy track you would have seen since my appointment as minister is the decided expansion of the range of homes that we're trying to support through new policies, including adding to the supply overall, so there will be a greater ability for middle-class families to find a place to live as we continue to support the development of projects that will keep a roof over the heads of low-income, vulnerable Canadians.

    Thank you.

    We now move to Mr. Chad Collins for six minutes.

    Thanks, Mr. Chair.

    Welcome, Minister.

    I'm glad we received a bit of a history lesson today, because I'd like to jump in on that point. I was a municipal councillor back in 2008-09 when the recession struck. Our affordable housing wait-list in Hamilton at that point in time was, I think, about 3,600 to 3,700 individuals. Those people who sat on the affordable housing wait-list were waiting anywhere from three to five years to have their name called and to receive a unit.

    After the recession and over the years that followed, that wait-list jumped to almost 6,200 to 6,300 names. I think if you asked us in 2015 whether there was a housing crisis, the answer would have been yes.

    I should note that under the previous government, municipalities begged and pleaded for a national housing strategy. We noticed the jump—the doubling—of people on the affordable housing wait-list, and we asked, begged and pleaded with the federal government for resources to assist seniors, single moms and families who couldn't find a way to make it work.

    I wasn't here, Minister, but your government responded. I'm hoping you can relay to the committee the importance of having a strategy. There seems to have been a narrative in the House recently and over the last number of months bemoaning the fact that we have a national housing strategy, trying to poke holes in it, when we didn't have one with the previous government when they ignored municipalities.

    Why is it important to have a national housing strategy and why is it important to work with municipalities?

    Thank you for the question. I think you added some useful context around the previous questions about whether or not we were living in a crisis in 2015.

    In Hamilton, I have no reason to distrust that it is exactly the case you've just made. In my own community, things were very different. However, now in my small town—with a population of about 10,000 people—we're seeing homelessness for the first time. It's being driven by a number of different factors, not exclusively federal government policy, by the way, although I think federal government policy has an important role to play. This is where we see a sea change between the approach that we're taking and the one the previous Conservative government took, and I should, to be fair, point to the cuts that were made in the early 1990s under a Liberal government that actually discontinued investment in affordable housing for low-income Canadians.

    Cities can't do this on their own. There are things for which they are uniquely responsible—zoning practices, permitting processes and infrastructure prioritization—but when we saw a lack of investment not only in housing but also in infrastructure for many years, with the exception of the post-financial crisis injection of cash for the building Canada fund, we saw cities that were not prepared to grow when they started to experience population growth. Population growth is a major part of the economic strategy of the Atlantic provinces, for example.

    Without the investments we've been making in infrastructure, which have laid the track for community growth, we would be in a much worse position than we are today.

    From my perspective, it's essential to work with municipalities so we can incentivize them to overcome the barriers that are uniquely within municipal jurisdiction, but also so we can partner from a funding point of view to build housing-enabling infrastructure.

     To your question about having a strategy, if you have a problem and you don't have a strategy, you're never going to solve it. As the problem changes, my view is that the strategy too needs to change and that's why you've seen a new series of measures aimed at a wider array of homes than were uniquely the focus of the national housing strategy that was launched in 2017.

    Thanks, Minister.

    My next question would be around the provinces. You've addressed the issue of working with municipalities. We have a different approach from on the other side of the table, which is demonizing local mayors and municipalities for not building supply. They've taken the stick approach. We're taking the carrot approach in terms of incentivizing municipalities.

    The same needs to happen with provinces. I'm in the unenviable position of being in a province that has a Conservative government that has no affordable housing programs. I point to, as the shining stars in the country, British Columbia and Quebec, where all of the stars have aligned and the municipalities are working with the province in consultation and co-operation with the federal government, but in Ontario that's not the case.

    How do we create that healthy tension with the provinces, specifically Ontario, in areas where they're more interested in making people rich, rather than finding ways to help people who are on an affordable housing wait-list for a number of years?

    One of the things that you'll appreciate in my position is that I want to build healthy relationships with governments of different partisan affiliations in every region of the country.

    To a province, my sense is that everyone recognizes there's a need for more housing. There are different viewpoints about what kinds of housing we need, how we're going to build it and whether we should embrace urban sprawl or whether we should focus on intensification where services already exist.

    My view, particularly in medium- and larger-sized cities, is that intensification is absolutely the way to go, particularly when you have a generation of young people who want to live in urban environments, who want to give to the community and who have professional opportunities that are unparalleled in other parts of the country.

    My view is that we need to make sure we're identifying shared priorities, regardless of which province. I can tell you there are projects that we both want to get behind. I actually think we would benefit from improving the coordination of our programs, both for housing and infrastructure, with the project selection and the timing of the release of capital into the market for these different kinds of projects.

    My approach is to pick up the phone, to call people, to meet them in person where it warrants, and to actually talk through some of the challenges we're facing, because my sense is that, if you can agree on the nature of the problem, sometimes you'll realize you can pursue solutions in parallel and sometimes you can pursue a common solution together. Depending on the partner, depending on the province, I think there are wins for us to put on the table in every region of the country.

    Thank you.

    Thank you.

    Mr. Trudel, you have the floor for six minutes.

    Thank you very much, Mr. Chair.

    Minister, thank you for joining us.

    Mr. Trudeau didn't do you any favours by appointing you Minister of Housing. How did you react? We're experiencing a brutal housing crisis. It's extremely serious. You've said that we need to build 5 million housing units, while the Canada Mortgage and Housing Corporation, CMHC, estimates that we'll need to build 3.5 million units by 2030. That's a monumental undertaking. In Quebec alone, 1.1 million units need to be built. The private sector is expected to build 500,000 in Quebec, though forecasts for this year have now dropped. So it will likely be a little less than that, but to achieve a certain balance, we'd need to build 600,000 housing units in addition to what the private sector is going to build. It's a massive undertaking.

    I've just returned from visiting one end of Quebec to the other. I went to Gaspésie, Abitibi and Lac-Saint-Jean, and I witnessed tremendous distress. One of the stated goals of the National Housing Strategy in 2017 was to reduce chronic homelessness by 50%. It was in writing. Since then, the number of homeless people in Quebec has doubled. According to the latest count, from October 2022, there are 10,000 visible homeless people in Quebec, and everyone involved told me that this is likely just the tip of the iceberg. I was told that housing needs were so urgent that people were no longer finding their way through this massive strategy, which is not having its intended effect.

    Let's talk in concrete terms. A year and a half ago, we passed a budget that included a $4 billion fund to accelerate housing construction. It's a funny name, by the way, because after a year and a half, this fund to accelerate housing construction hasn't built a single house. It's quite peculiar. You are currently negotiating with the Quebec government. There are $900 million at stake and, in Quebec City, I'm told that the Quebec government could add another $900 million. That's quite significant. It would mean a total investment of $1.8 billion.

    In Quebec City, I was also told that the provincial government would like these negotiations to focus on real housing construction rather than zoning-related standards or improvements. I'm not saying those aren't important, but I'm told that the Quebec government's priority is to move quickly on housing construction to take concrete action.

     What is the status of these negotiations with the Quebec government on this $900 million, Mr. Fraser?

    Thank you for the question.

    You said the Prime Minister didn't do me any favours by appointing me Minister of Housing, Infrastructure and Communities. In fact, he gave me the opportunity to make a difference on an important issue for our country, and I have high hopes for the Housing Accelerator Fund.

    That said, it's important to understand the purpose of the fund. It's not just about building a house here and a unit there. In fact, its purpose is to change the way housing is built in communities. It's also about changing regulations in cities and municipalities. In Quebec, municipalities can't deal directly with the federal government. That's okay, because I have a good working partner in Ms. Duranceau, the Quebec minister responsible for housing. In fact, we've had discussions to come to an agreement that would ensure funds are used to increase the number of housing units in Quebec.

     To speed up the process, at the same time, we'll identify projects and infrastructure that will enable more house—

    Minister, right now, who's holding things up?

    You say you're negotiating, but housing falls under provincial jurisdiction. So housing construction is Quebec's responsibility, and it's up to Quebec to arrive at an agreement with its cities. If Ottawa were to hand over the $900 million cheque right now, Quebec would be in a position to build housing over the next year.

    Why are you getting in the way of the Quebec government? Quebec is used to doing this work. Cities are used to doing this work. Technical resource groups are used to doing this work. Non-profit housing organizations are used to doing this work.

    Ottawa's fiscal capacity is enormous. This $900 million is sleeping in the coffers, while people in Quebec are sleeping outside, even as winter approaches.

    That $900 million is sitting in Ottawa, useless. Why?

    There's no problem, the situation is normal.

    We began by allocating a fund of $4 billion, a very large sum, to make sure the program works.

    In my speech today, I talked about a number of things, including Canada's need to change the way cities build housing.

    If we just put money into the problem, we're never going to solve it. We have to change the system. If we work with the provincial government in Quebec to identify shared priorities on how we can implement systemic change, we can actually solve this problem.

     All the people on the ground in Quebec have told me that they can no longer navigate the various levels of government. People just want housing built. The cities set bylaws, the provinces institute programs and the federal government adds to them.

    Everyone thinks Ottawa should just send cheques to Quebec, so the money can flow quickly and housing can be built. We don't understand why Ottawa is standing in Quebec's way. Everyone agrees on that.

    I don't view partnering with provinces on shared priorities to be interference. We're contributing hundreds of millions of dollars to different jurisdictions. In Quebec, it's close to $1 billion, as you've indicated.

    Both Canada and Quebec want to see communities build more homes. Both Canada and Quebec want to see communities speed up the process to approve homes. Both Canada and Quebec want to see homes across a range, for middle-class families and vulnerable families. These are the ordinary conversations after we establish a program in our budgetary process in order to land on an agreement for what we're trying to achieve with the money. Pumping in money alone, without a systems change built into the programs, is not going to solve the problem.

    Thank you, Mr. Trudel.

    Ms. Kwan, I believe your sound is fine. You have six minutes.

     Thank you to the minister for his opening comments and for acknowledging the fact that the housing crisis is caused by successive Liberal and Conservative governments walking away from building social housing and co-op housing. In fact, it was the Conservatives that cancelled the co-op housing program in 1992. The Liberal government cancelled the national affordable housing program in 1993.

    For 30 years, successive Liberal and Conservative governments relied on market forces to provide the housing Canadians needed. It's been, frankly, a massive failure. We have record homelessness, rents have skyrocketed, young people are priced out of the market and we have the housing crisis we are faced with today.

    As the minister indicated, in 2017 the Prime Minister announced the national housing strategy with much fanfare—I actually remember this—and even proclaimed that adequate housing is a basic human right. However, the Liberal government's slow walk to roll out the funds resorted to double-counting to inflate the numbers. It was slow to renew the operating agreements for non-profits and co-ops, resulting in more loss of subsidized social and co-op housing units.

    The auditor has issued damning reports on the situation. I won't belabour all of those points because it's all on the public record.

    The minister admitted that we have a deficit in social housing stock. Canada's social housing stock is amongst the lowest in the G7 countries, at a mere 3.5%. We need to actually enhance and increase the social housing and co-op housing stock. Currently, in the national housing strategy, the development of social housing is pegged at 16,000 units per year. That's not going to do it. It's not going to meet the requirement and the housing needs that Canadians have.

    My first question to the minister is this. Will he commit to increasing the social housing stock, where rent is no more than 30% of total income, to at least two million, so that we actually have a fighting chance to meaningfully address the housing crisis?

    Thank you very much.

    Before I do my best to answer the question, I think one of the key points that you made, Ms. Kwan, during your remarks was to trace back to decisions that were made in 1993. It just kind of struck me because in 1993, I was eight years old. This problem didn't emerge overnight. It emerged over the course of my entire life. It's not going to be solved overnight. Although I will agree that we need to do more to continue to build out more non-market homes in Canada, I think we have to acknowledge that it is going to take place over a number of years.

     I will commit to introducing reforms that will increase the share of non-market homes in Canada. The exact definition you're using is something that I think I owe my team and, frankly, Canadians a little more policy work on to assure myself that I have the definition that will ensure that the greatest number of people have a roof over their heads at a price they can afford, regardless of their level of income. I believe the social cost of homelessness is extraordinarily high, and I think it's incumbent upon governments to do more to build out that stock.

     I'm happy to give the floor back to you to make sure we're focused on your priorities in this exchange.

    I was a community legal advocate 30 years ago. That is the reason I entered into electoral politics. It was when the federal Liberal government cancelled the national affordable housing program. Successive Liberal and Conservative governments caused this problem.

    Now you're at the helm. We have a chance, hopefully, to fix the problem. Instead of tinkering around the edges, we need bold action. We know that actually building social housing and co-op housing is effective and it works. It will house people in need. I look forward to the minister announcing the increase in the development of social housing and co-op housing.

     The NDP has called for an acquisition fund for the non-profit sector. Will that be part of the mix?

     I don't have an announcement to share regarding an acquisition fund at committee today. It's one of the options I've learned of since I was appointed to this position that are trying to address the unique issue—in particular the loss of organic affordable housing, if I can use that phraseology.

     There are rental units that exist in the market today at prices people can afford, but we are losing them quickly. An acquisition fund is not necessarily the only way to make sure we're protecting the loss of that affordable housing, or even acquiring properties that we expand or build affordable housing on.

    I'm trying to identify what I view to be the best option to make sure we're delivering the largest number of homes at the most cost-effective price.

     To be sure, the acquisition fund is not the only way, but it's certainly one way and something the NDP has called for. Another way is to stop the loss and erosion of existing low-cost rental apartments. The way to deal with that erosion is to ban those financializing and profiteering landlords from purchasing and sweeping up the low-cost units and then jacking up the rent, renovicting and demovicting people. That's another option. As Steve Pomeroy has indicated, for every one unit built of affordable housing, you lose 15. You need to build and you need to stop the erosion. That's what the NDP is calling for.

    The other thing I want to raise with the minister is this—

    Ms. Kwan, your time is up, so could you quickly phrase your question?

    I'll be very quick.

    On the housing benefit, in the 2022 budget, the NDP forced the government to deliver a one-time $500 housing benefit to help low-income Canadians, and with the rollout, the Liberals acted unilaterally to change the eligibility criteria, leaving out the most vulnerable and lowest-income people.

    How did the Liberal government reach this decision to limit the benefit, and what are the ministers going to do to fix it?

    You have time for a short answer.

    Thank you, Chair.

    The CEO of the Canada Mortgage and Housing Company is going to chime in on this response.

     Thank you very much for the question.

    This is a question that's been raised at this table before. There was no change in the definition of the benefit. I think there was some misunderstanding with how it was communicated, but it was not our intention to cut out certain segments of the population. We did have to draw some lines in the sand in terms of determining who was eligible. We'd be very happy to provide the definitions that were used and to have further discussions on this based on that submission.

    Thank you.

    Mr. Scheer, go ahead for five minutes.

    Unbelievable.

    Mr. Scheer, go ahead.

    Thank you very much, Mr. Chair.

    One of your government's main signature pieces to address the housing crisis, which you've now acknowledged, has pushed the dream of home ownership out of the reach of so many Canadians over the last eight years. It was the housing accelerator fund. This program was announced two years ago with $4 billion of taxpayers' money behind it.

    In that time, can you tell the committee how many homes have been completed thanks to the housing accelerator fund? Just give us the number, please.

    Look, I know this line of questioning is designed to try to set a trap, because you and I both know that the fund is now rolling out with investments that are changing the way cities build homes. It was announced as part of the 2021 campaign and budgeted for last year. It's now changing the way, but it's only now starting to have an impact.

    This is a two-year-old announcement. It's been two years—

    It was a two-year-old campaign commitment. It was implemented in last year's budget. It started rolling out two weeks ago.

    You've had two years.

    If you know the line of questioning, you should know the answer. How many homes have been completed?

    I reject entirely the false pretense that underlies your question, because this is going to fundamentally change the way cities—

    I'm sorry but this is not supposed to be—

    —build homes. I'm not to be tricked here.

    This is not a trick. It's not a trick question to ask how many results have come out of a government program. In fact, in your opening comments, you said we can't just throw ideas against the wall, and then you went on to say you have to measure results and maximize output.

    This is a two-year-old announcement involving $4 billion of taxpayers' money. Just tell us the answer. Is it warmer or colder? Is it—

    You see, the trick you're trying to play here—

    It's not a trick.

    It is, and it's cute that you're playing this game.

    How can asking for a number—

    Mr. Chair, can I have an opportunity to answer the question?

    It's a very simple question.

    It is Mr. Scheer's time.

    It's fine. He hasn't answered it. I'd like to know the number. It's a two-year-old announcement involving $4 billion of taxpayers' money. How many completions have there been?

    The housing accelerator fund doesn't directly build homes. It changes the way cities build homes, and then builders in those cities build homes. Right now, we expect this is going to have an impact of thousands of new homes for Canadians, but since the fund started rolling out only two weeks ago, it's only now starting to change those ways. It's going to play out over the next few years.

    I'm sorry but we're going to measure this from when the government announced it, which was two years ago and $4 billion. Tell us the number.

    For the clarity of people who might be watching this at home, the way policies are implemented is that, after you campaign on them, you budget for them, and then you implement them after the fact. This is a two-week-old program in terms of our rolling it out.

    Canadians who have been forced out of their homes and are living in their cars, students who have to live in tents and families who have to share one-bedroom apartments with other families don't have time, Minister. You announced this program two years ago. The question was very simple. How many homes have been completed with this $4-billion program? Tell us the number.

     Mr. Chair, I would encourage my colleague to drop the feigned outrage. He had almost a decade in government when he did absolutely nothing to build more homes in this country—

    Let's talk about a decade ago. Let's talk about eight years ago.

    We have done more in the past two weeks than his government did in 10 years in government. If he wants to be cute with the way he answers questions for a Facebook clip, go right ahead. I'm going to focus on building homes for Canadians.

    Wow. If the minister thinks it's “cute” to ask questions on behalf of desperate Canadians who don't know how they're going to make their next mortgage payment or their next rent payment or 35-year-olds who have moved back into their parents' basement, if he thinks that's “cute”, he can look Canadians in the eye and tell them that.

    This was a very simple question, and you have refused to answer it because the answer is, in fact, zero. That's a complete failure. If you want to talk about eight years ago, let's talk about eight years ago, when housing costs were half of what they are now, when the average—

    When the rate of building was half of what it is now....

    —mortgage payment was half of what it is now and the average rent payment was half of what it is now. I would be happy to compare the housing record of eight years ago with today's.

    Now, in budget 2022, the finance minister promised that, “Over the next 10 years, we will double the number of [new] homes we build”. Since that time, have housing starts gone up or down?

    It depends where you measure from or if you cherry-pick data, but if we compare it to the time that you were in government, housing construction is nearly twice what it was then.

    Minister, I'm not cherry-picking data. I'm picking the date on which your colleague, the Minister of Finance, made that promise. Since that time, have housing prices gone up or down?

    Housing prices...?

    I'm sorry. Housing starts, have they gone up or down? You can answer on prices, too, but have housing starts gone up or down since the minister promised to double the number in the next 10 years?

    Before we get to your question, I don't think any member of this committee or any party in the House of Commons has a monopoly on caring about vulnerable people who have very real housing needs.

    One of the things that I actually think is really healthy—

    It's about doing something.

    I agree, and I'm happy to talk about what I'm doing, but one of the things that I think is really important and actually very healthy in our democracy...and I credit all parties in the House. I think we're in agreement on what some of the problems are.

    However, back to the housing accelerator fund that you pointed to—

    The answer is supposed to be similar to the time for the question.

    —it has a very specific purpose. It's not throwing anything at the wall. It's designed to change the way that cities build homes, and it's having that desired impact today.

    Thank you, Mr. Scheer.

    Mr. Chair, I have a point of order. It's a simple point.

    When witnesses, regardless of whether or not they're ministers...and I understand that Mr. Scheer wants to make a political point here. However, when witnesses are given questions, we should allow them the time to offer an answer. It's basic decorum to maintain order at committee.

    On the same point, there is a well-established convention that the length of time for the answer should be commensurate with the length of time for the question. When the questions are simple yes or no—

    You didn't follow it.

    —or up or down, or just the number, it shouldn't take three or four minutes to answer that kind of question.

    Thank you, Mr. Scheer and Mr. Fragiskatos.

    We will go to Mr. Coteau for five minutes.

     Thank you, Mr. Chair.

    Thank you to the minister for being here.

    I want to start by saying there's no question that this issue impacts all communities across this country. All members on this committee are concerned about this issue because it impacts our neighbourhoods and people who live in the ridings we represent.

     I do think there's this narrative that the price of homes has increased just since 2015. It's a false narrative. I bought my house in 2007, which was basically a year after the Conservative government came to power. The average price in Ontario was just under $300,000. By the time 2015 hit, it was at $700,000. This has been an ongoing issue in Canada, and the trajectory has just gone.... It's increased so much. We all, as MPs, have to look for ways to find solutions.

     I'm happy with the new initiative to remove GST from new developments. Minister, I think you made reference to the article that came out in Toronto last week: 5,000 new units are going to be built because of this new initiative. Can you speak specifically to this initiative? What do you think the impact is going to look like across the country?

     Thank you for this.

    I think it's important to go back to the point that I led with in my opening remarks. The measures that we introduce have to be designed to solve very specific problems. When I looked at the decision to remove GST on the construction of apartments in Canada, it was designed to address the supply challenges that the housing sector is facing, which is driving up the price of homes across this country.

    Going back over not only the time we've been in government but also during the government before, we've seen a steady increase in the price of homes. It's accelerated more recently, particularly during the pandemic when more people bought properties and dealt with historically low interest rates, but since then, the financial landscape has changed. The cost of labour has gone up. The cost of supplies and materials have gone up. The cost of land has gone up, and interest rates have gone up.

    If we're dealing with builders who have, by the way, hundreds of thousands of units that are already approved across Canada, we need to get them to a place where the equation they're looking at takes a project off the shelf and puts shovels in the ground.

    By removing the GST, I've seen estimates as high as 200,000 to 300,000 new homes for Canadians over the next 10 years. The 5,000 you mentioned are one storey. Many of the units, by the way, from that developer are going to be affordable, but that's one example I've heard of.

    I read an article today that cited that example, but it pointed to two other developers who now say they're moving ahead with 3,000-unit projects and 1,000-unit projects directly in response to this measure.

    This is going to cause an awful lot of home builders to take that project that has been yellow-lit, green-light it and start building right away. This is going to have a major impact. It's one of the most important things we could do, and housing advocates, not just developers but also those looking to build more low-income housing as well, are big advocates of this specific measure. That's why we've done it.

    You did recognize the importance of partnerships with provinces. I think, regardless of political differences, and that politicians of all stripes should be working together to look for solutions.

    What's that relationship look like in regard to other provinces? Is there any appetite to remove provincial taxes from these initiatives?

    One of the things that are important to understand is that the federal government has an important role to play, but we need everybody at the table. I am so optimistic about the opportunity to make a difference because of the response I've seen from different levels of government.

    With respect to the GST, this is actually an excellent example. We've seen other provinces follow suit or advance similar measures in British Columbia, Ontario, Newfoundland and Labrador, and more recently in my home province of Nova Scotia. Just to put that into perspective, when you're dealing with a removal of a 15% value-added tax at the end of a project and you're dealing with a project worth hundreds of millions of dollars, this is millions of dollars in difference. It's going to change that equation. Therefore, when provinces get on board, it's going to further accelerate the rate of building as a result of the federal government's decision to step out and make that change.

    You also mentioned modular homes. I'm a big fan of alternative housing options, from prefabricated to tiny homes. There are so many different.... You talked about 3-D-printing homes. Where do these alternative housing solutions fit into your strategy?

    They're complementary to the different challenges we need to overcome, because if we get the financial equation right, if we change the permitting process, if we invest in non-market housing, if we coordinate our programs perfectly, if we do everything perfectly, we're going to hit a bottleneck, and it's going to be the productive capacity of the Canadian workforce to produce the homes that Canadians need.

    If we don't change the way we build homes and we continue to have people put up stick-built homes one house at a time, we're never going to escape the challenge that we're currently wrestling with. However, if we make the kinds of investments that will increase the productive capacity of the Canadian workforce and we can significantly improve the number of homes that we build, per the person that's working on those homes and per the hour that's spent building those homes, I think we can solve this challenge. If we aim to do something short of that, I think it would be a moral failure, but by investing in innovation that will actually grow the capacity of Canadians to build more homes, we can actually then leverage the difference that we're making with the financial changes, with the regulatory changes and with the investments in specific kinds of projects.

    Thank you very much.

    Mr. Trudel, you have two and half minutes.

    Thank you, Mr. Chair.

     Eliminating the GST will help stimulate housing construction, but that doesn't mean people will be able to pay rent on those units. There's an affordability problem. We need to build housing that the poorest people can afford. I think, right now, the middle and lower classes have a housing problem.

    Why doesn't the GST break for builders come with an affordability requirement?

     When I first heard the notion that we should remove the GST to build more apartments, my first reaction was that we might want to have some affordability criteria. I spent about five minutes digging into the issue before I realized how wrong that would have been.

    When we actually address the supply challenge more broadly, it's one of the biggest things we can do to reduce, over time, the cost of homes. In fact, one of the developers mentioned by my colleague, as part of the 5,000 units, has one project that is 43% affordable. The way that most modern housing developments are being built in cities today involves a mix, in which you have some market homes and some non-market homes. I don't want to be building cheap homes in a bad part of town that are exclusively for low-income families, where they don't have access to the services they need. I want them to be integrated into communities and have full participation, living alongside people from different income backgrounds.

    In addition to removing the GST to boost supply and having mixed developments, I also want to see continued direct support for non-market housing. We have existing programs like the rental construction financing initiative and the national housing co-investment fund. We had the rapid housing initiative through the pandemic. We've done more to build out affordable housing than any government in my lifetime has, and we need to continue to make those kinds of investments, because I agree with you that this is an enormous challenge we need to overcome.

    I would like to address another very specific point.

    In Quebec, 72,000 social housing units were built before 1992, partly with provincial government funding and partly with funding from the federal government. As we speak, 4,481 units have been boarded up for lack of renovations. Currently, the Canada Mortgage and Housing Corporation, CMHC, is negotiating the cost of these renovations with the Société d'habitation du Québec, or SHQ.

    Mr. Fraser, if, tomorrow morning, you were to write a cheque to Ms. Bowers, who is present, or give her the mandate to quickly conclude agreements, we could renovate these 4,481 units, which could be ready by next July 1st.

    I don't understand what's holding up these negotiations.

    Are you referring to negotiations on the housing accelerator fund?

    No, not at all.

    Mr. Chair, please allow me to continue, this is important.

    These are low-income housing units that were built by the federal government with the provincial government. There are 72,000 social housing units funded by Ottawa and Quebec. Each year, CMHC and SHQ negotiate the cost of repairs to these units.

    Right now, in Quebec, 4,481 units are boarded up. These are real social housing units. They already exist.

    If you agreed to immediately write a check to Quebec, these units could be repaired by July 1st of next year. We could house half of the 10,000 people currently on the street in Quebec.

    I don't know if my colleague would want to chime in as well, but I agree with the member that we need to build not only new homes. We must build new homes but also make them available at an affordable price. I'd be happy to speak with him after the meeting to dig into more detail about the specific issues.

    Ms. Bowers, I don't know if you want to supplement that answer with any more detail.

    We can save it for after, Mr. Chair.

    Time is up.

    Ms. Kwan, go ahead for two and a half minutes.

    The Conservatives want you to believe that they will be the saviour of the housing crisis. Let's be clear. When the Conservatives were elected in 2006 and under the Liberals until 2021, Canada lost over 1,030,000 units of housing that were rented at $750 a month. That was under both the Liberals and the Conservatives. That's part of the housing crisis we're faced with today. Both of them created this problem.

    To Ms. Bowers' answer, she should know that the housing benefit change came from the department. It told applicants that if their rent was paid directly by the government, it would not pay the housing benefit. That's why the most vulnerable people did not get the support they needed. That was a unilateral change by the Liberals.

    On the GST, my question to the minister is this: Why is the GST exemption not being applied for co-ops? Would the minister support the NDP's suggestion to amend the bill so that housing co-ops could access the GST exemption? In addition, will the government also allow for existing social housing projects to qualify for the exemption?

     Thanks very much for the question. Though I have many thoughts about the precursor around various governments' plans, I'll try to focus on the question you've asked.

    First of all, I think co-ops actually have the potential to be a large part of the solution for non-market housing in Canada. The reason they weren't scoped into the GST rebate was.... There were a number of factors. First, there are other measures that provide a significant degree of tax exemptions for co-ops today. The measure was scoped for purpose-built rentals, and of course members of co-ops tend to own shares in the co-op. It's not quite the same as a rental, but it provides an opportunity for low-income people to find homes. We also have a program that had 1.5 billion dollars' worth of investments in co-ops, which is the largest in 30 years, so we want to support them. We decided to do it in a different way.

    On the question of how we can improve this measure to scope in more kinds of projects, whether it's non-profits under construction or whether it might be expanding access to other forms of housing, I would actually value the feedback of this committee. However, I do want to make sure that I give myself the opportunity to conduct a proper analysis to understand and to ensure that we're getting the greatest degree of protection for low-income Canadians and growing the housing supply in the most cost-effective way.

     If there are proposals to come from this committee on this subject, I would be more than happy to study them and come up with a formal response.

    Thank you.

    I have Mrs. Gray, and then Mr. Long will conclude the first round.

    Mrs. Gray, you have five minutes.

    Thank you, Mr. Chair.

    Thank you, Minister, for being here.

    Minister, you talked about a housing crisis. Is it the Government of Canada's official position that Canada is in a housing crisis?

    I don't know that we establish official positions when we label something a crisis or not. It's my view that we are in a housing crisis, and I want to approach it from a policy point of view as though it is.

    During the time that you have been in government, which has been the entire time that you've been elected, did you at any point step back and say that “something isn't working and my government is responsible for this housing crisis”?

    I don't think you can attribute the housing crisis that we're living in to any one government, any one level of government or any one political party. My sense is that it's driven by forces that exist in the market and a lack of investment over a generation, more than decisions of the government. I've been actually quite proud of a lot of the work that we have done to step back into the housing space. I think we've been on a good track and we need to be on a better track.

    Thank you, Minister.

    Are there any policies over the last eight years when your government has been in power that have contributed to the housing crisis? Are you willing to acknowledge that there have been policies that have actually contributed to the situation we're in, where people can't even afford rent, where people can't even afford to live in a home? Will you acknowledge that there are policies that have actually contributed to the crisis?

    My sense is that the bigger challenge is a result of what has not been done over a much longer period of time, rather than a specific policy that's driving the crisis. If there's one in particular that you're thinking of, I'm happy to give you my thoughts.

    Inflationary deficit spending has led to inflation going up, which has caused interest rates to go up, so there are a number of things. However, I'd like to move on to something else, Minister.

    We know that people are having a really tough time, and the director of Viola's Place, which is a shelter in your riding in New Glasgow, told me that beds have been full all summer and that their services are increasingly being used by middle-income earners and seniors. I hear this in my riding, and I hear it across the entire country. Out of your roughly $82-billion national housing strategy, what program will get people out of the shelter and into a home they can afford?

    First, I categorically reject your assessment on inflationary deficits, because the counterfactual would have been that millions of Canadians would have lost their jobs and their homes during the COVID-19 pandemic. If you take objection to our supporting households and businesses and blame the inflationary pressures on COVID spending, I think I'd have that debate. I would also point out that I believe more of the inflation is being driven by supply-side factors than purely a government spending issue.

    Viola's Place is a tremendous asset to our community. We recently dropped food off after one of our events with local volunteers to support the work they do—

    Thank you, Minister. I'll go back to my time here.

    You can debate with the Parliamentary Budget Officer, because he actually put out a report stating that a lot of the spending didn't have to do with the pandemic.

     I'll move on to another question. The deputy minister of housing in Nova Scotia said that the province needs 70,000 new units of all types in the next five years. Will your housing accelerator build 70,000 units in the next five years in Nova Scotia?

     The housing accelerator fund on its own...? No. It will make a significant difference, but we hope that the complete suite of policies that we're going to introduce will help cure the supply gap. The exact time at which we will achieve the goal will be the result of factors that are beyond the control of any one level of government and that are subject to market forces, but my goal is to cure the supply gap and solve Canada's national housing crisis. It will be very difficult to do, and I can't tell you with certainty the exact number of homes that any one fund will result in for a particular community, but the housing accelerator fund will be a major part of the solution.

    Thank you, Minister.

    The Auditor General of Canada's damning report on homelessness says that your government can't show that your efforts have reduced homelessness. Halifax has seen a 60% increase in homelessness in the last year and a 500% increase since 2018. By what date will the housing accelerator program cause homelessness rates to decrease?

    The point that I made...and this is really important. I'm not just trying to eat up time. If you need to extend 15 seconds, Mr. Chair, to accommodate this, it's really important. Each of the policies that we're putting forward is trying to solve different challenges. The housing accelerator fund is designed to change the way that cities build homes. It is not a program that is directed specifically at curing homelessness. We have other programs that are designed to do that. It will help by growing the housing supply, but the combined impact of the housing accelerator fund, the national housing strategy, Reaching Home and others is going to be meaningful.

    I can't tell you the specific date with respect to that fund because it's not the only thing aimed at solving that problem.

    Thank you. That's great.

    Now we'll hear from Mr. Long for five minutes to conclude the first round.

    Thank you, Chair.

     Good afternoon to my colleagues.

     Minister, thank you so much for coming to chat with us.

    First and foremost, I'm really pleased to hear you say that we do have a crisis and that the lack of action by successive governments has gotten us to where we are.

    I want to make a few points. My province of New Brunswick grew by 49,000 people last year. It grew by 49,000 people in the 29 years before that. That is something that is a good thing for growth, but obviously, when you bring in 50,000 people in one year, that is going to put a lot of pressure on housing stock.

    In my province, we have a Conservative premier who boasts about having a billion-dollar surplus this year, yet what he has invested in housing wouldn't fill three streets. The lack of focus is unbelievable. I will say, too, Minister, before I get to my question, that I came in in 2015. I'm happy to be here. In 2016 I did some research on previous policies that the federal government before us had enacted, and what I got back was a blank sheet. I was shocked. I said, “Where are all the policies that the previous government enacted federally?” and there weren't any. I was shocked to see that.

    I congratulate you. I think we've shown a lot of leadership by stepping up and recognizing that we need all levels of government to solve this crisis. We need the federal government. We need the provincial government. We need the municipal government, and let's not forget the private sector.

    Minister, can you just talk about the importance of having all three levels of government and the private sector working together, and what we are doing to make that happen? Thank you.

    Yes, and the story of your province is not too different from that of mine and of Atlantic Canada, with the population growth that we've seen, including when a number of Canadians moved to the east coast during the pandemic. What is ironic is that part of the reason you're seeing surpluses for governments that were on very shaky fiscal ground before the pandemic is that home values have increased and provincial governments have collected their share of HST to a much larger degree and now have money in the kitty.

    To credit my home province's government, after they reported a $116-million surplus, they recently announced that they too would be piggybacking on the GST measure we have discussed by waiving the provincial share of tax. That demonstrates the kind of work we need to do together if we're going to leverage the maximum number of homes out of every public dollar spent. No one level of government can do this alone. We're talking about millions and millions of homes, and we need the people who build them to be part of it too.

    We need municipalities to change the way they do permitting for homes to speed up the process of permitting them and make it legal to build the homes that people need by building more densely. We need provincial governments to get on board by supporting programs to build more housing with direct financial support, and we need to better coordinate the different programs we have so we can work together.

    My hope is that we continue to experience the benefits of population growth on the east coast and that we can collaborate across levels of government to make sure our communities are ready to successfully absorb the people who want to move there.

     Thanks for that.

    I want to hone in on cities and my city of Saint John, obviously, in my riding of Saint John—Rothesay. I'm seeing municipalities becoming—and it's a good thing—seized with the problem. They understand that they have to be part of the solution, but there are so many cities that just don't have the capacity. They don't have the department and they don't have the people, the staff and the permitting people—what have you—to accelerate this issue.

    Could you talk about the accelerator fund and its importance to cities like my city of Saint John?

     Yes, and keep in mind that the fund isn't just designed to pay for the new permitting system that's implemented. It's a fund that contributes to infrastructure or housing projects and the systems that can be implemented, but part of the conditions to access the fund is that you're going to change the way you get homes built.

     I think, for example, of the conversation we had with the city of your colleague to your right just a few weeks ago. We had a really healthy proposal from the City of London that was going to lead to their making certain changes and building more homes where people could access services and the like.

     We sent them a response indicating other ways in which we thought they could build homes more quickly, including allowing people to build four units as of right on the properties they may own in the city and including zoning more densely, in particular around places such as post-secondary education institutions and transit developments. The mayor, Josh Morgan, whom I should give credit to, responded in the best possible way, saying, “We want to do this.” As a result, we're investing $74 million in the city, and that's going to add thousands of homes that otherwise would not have been built.

    Other cities across the country can change the way they build homes, change the process to permit them and legalize housing. They can make it legal to build the homes that will actually help to solve the housing crisis. If we actually change the rules and have a federal incentive to drive municipal change, we can make a heck of a difference.

    That will conclude the first round.

    I'm going to suspend for two minutes for a health break. When we come back, we will begin the second round.

    Thank you, Minister.

    We'll now resume with the second hour. We'll lead with Ms. Ferreri for six minutes.

    Thank you, Mr. Chair.

    Obviously we have limited time, so we'll be as fast and furious as we can to get as much information as we can.

    Thank you, Minister. You quoted in 2021 that your Liberal government was able to “lock in long-term interest rates.” Can you tell the committee how much interest rates have increased by since 2021 in percentage, please?

    It would depend from exactly where in 2021, but it would have gone from record lows—a fraction of a per cent—to now in excess of 5%.

    Yes, it's 4.75%, and if we look at what it was, which is what a lot of people put into their mortgage. Now they're up for renewal, which is what we see in terms of people collapsing on their ability to refinance their mortgages and that is creating homelessness.

    Do you know what amount was allocated to the Reaching Home program, which was targeted to reduce homelessness?

    Yes. It's a $4-billion fund.

    There was $1.36 billion spent in three years specifically on Reaching Home—and I'm going to get to why I'm asking about that—which is targeted at reducing homelessness. A colleague of mine has already brought this up, but I think it's important for people who are watching at home. They may not know what's happening in terms of policy. How did we get to where we are? Tent cities have taken over across this country.

    There was an Auditor General's report, and it had some pretty scathing remarks. Can you share with the committee—or would you rather that I share with the committee—what the Auditor General's report stated about what were the Liberals' investments and targets to reduce homelessness?

    Go ahead. I have a feeling that you're going to one way or the other. I'm happy to hear it.

    There was $4.5 billion spent on housing and reducing homelessness, and there's not even the knowledge if the funding is making a difference. You said in your opening statement, Minister, that you have to have measured targets. If you are not measuring something, how do you know it's working? Where I'm going with this is that chronic homelessness has increased by how much since 2016...?

    Look, I don't have the specific figure in front of me.

    Romy, do you have the data point she's looking for, or Kelly?

     We do know that chronic homelessness has actually stayed relatively the same at about 30,000, but homelessness has increased. We know that in 2021, for example, 94,000 people used emergency shelters, and then there is unsheltered homelessness or people in encampments, and that is very visible across the country. It has increased by about 100%. We know that those have been important changes.

    Thank you. I don't mean to interrupt—if people are watching at home—but because we have very limited time, we try to get in as much as we can.

    There was a 2016 housing strategy, and we talked about this in committee too. It's all fine and good to have a housing strategy, and I think your intentions seem good, Minister, but there seems to be a disconnect between the Prime Minister who runs this country and what you are saying here in this committee. On behalf of all Canadians and people who are living in tents, especially in Halifax where the rate just went up 500%, I will say that this is not reaching measured targets.

    You got upset with Andrew Scheer, my colleague, because you thought he was playing games. It's not a game. Houses are not being built. I hear your empathy. I hear your intention and I hear you trying to say you're going to do things differently, but nothing has happened. I want to point to you in terms of where these operational dollars are going. This is why we talk about having to build homes and not bureaucracy, which is what the Liberal government has done.

    There's a youth emergency shelter in my riding. There are 19 family units. These are parents with children and 39 youth on the by-name list in Peterborough, and this is an under-representation. Reaching Home is the only federal homelessness funding they know of. It provides funding for transitional housing amongst other things. They receive funding to cover the cost of one prevention worker. That's where operational dollars are going. When you go downtown in Peterborough, when you go downtown in Halifax and in Ottawa and there are record numbers of people living in tents, that's why. It's because of bureaucracy.

    They have a question. I'm here, elected on behalf of Peterborough—Kawartha, and they want to know. I would ask the finance minister how she accounts for the costs associated with homelessness. The costs of shelter plus emergency services are higher than those of providing transitional or permanent affordable housing, so why is she not offering funding to the organizations that are already offering the solution to expand their housing programs? Marcel Lebrun, who runs 12 Neighbours, also asks why they're not getting these funds into their hands quickly.

    These are life-changing programs and I hear you, but honestly we don't believe you and that is the problem that is on the ground.

     I will leave it with you, Minister, to answer that, because what you're saying and what you're doing are not adding up. We saw that today in the House of Commons, with the Prime Minister, who said he is sorry but they're not going to change anything they're doing.

    Mr. Chair, I agree with my colleague on the scale of the challenge, and I think it's important that we all acknowledge that, due to a range of factors, homelessness is a problem and a growing problem in particular parts of the country as well.

    One of the things that I find difficult to accept, given her intervention, is this. I have a hard time accepting it at face value when she and her colleagues voted against doubling funding for homelessness.

    Mr. Chair, because it is my time, I would stand by voting against that, because do you know what's happened in this country? People can't afford to live, and we voted against those programs, and it didn't matter because they passed anyway.

    Mr. Chair, are we respecting the convention that Mr. Scheer indicated earlier was important, about the witness having equal time to answer the question?

    It hasn't made a difference.

    Okay, Mr. Minister, please give us a short answer.

    One of the things I think we have to ask ourselves is, first, what more can we do? When I look at the comparative advantages of the plan that we are building and the one that the Conservatives recently released, I would point out that there is no homelessness funding in the Conservative plan. There is no affordable housing funding in the Conservative plan.

    It's not our plan. It's the government's job to do this.

    Mr. Chair, I've been interrupted again. I believe the time is mine.

    That concludes your time, Ms. Ferreri.

    We'll now move to Mr. Collins for five minutes, and, please, stick to the subject matter.

    Thanks, Mr. Chair.

    If the minister wants to give an answer on that last point, I'd be interested in hearing it.

     One of the things I find difficult to accept—particularly since Mr. Poilievre, over the course of the summer, has been touting himself as some working-class hero with all the solutions for housing and shooting videos for Twitter—is that he seems to communicate effectively that he understands the anxiety that people are going through. I think we all need to better reflect the very real anxiety that people are going through. However, when we came back to Ottawa after the summer and they put forward a plan, it's unimaginably weak. There is no funding for housing for low-income families. There is no plan to address homelessness. He says that he's building homes and not bureaucracy, and introduced the most bureaucratically possible form of the GST. He wants to hire public servants to run a snitch line for purposes I can't possibly imagine. He wants to cut the housing accelerator fund, which is worth $4 billion, to put on the table $100 million that will only apply in 22 cities.

    I go up and down the plan, and I just see that people within the Conservative caucus seemingly don't understand the scale of the problem we're dealing with, despite the rhetoric. I find it hard to accept that someone would criticize our record on homelessness...which is something that I will be the first to acknowledge we need to do more on because there are vulnerable people out there. When I hear the rhetoric and it's matched with a voting record that opposed doubling the funding for homelessness, a voting record where the entire Conservative Party voted against the national housing strategy, which puts money in place for affordable housing, it makes no sense.

    Let's not just focus on the things that people could have done over the past 20 or 30 years—that's important to acknowledge—but compare one plan to the other and figure out who's actually going to do more. Seven days a week, I know that the measures we're advancing, even in the last few weeks, will dwarf the proposed plan that Mr. Poilievre has put forward.

    Thank you.

    I want to stick with the housing accelerator fund because it seems to be the topic of discussion today.

    You talked about working with municipalities. I've had to sit in the House and listen to the nonsensical tag lines, the bumper sticker solutions, in terms of “Get rid of the gatekeepers” and nonsense like that.

    Having come from the municipal sector, I'll tell you that municipalities across the country have been building a record number of houses up until the time of the pandemic. They were breaking municipal records. They were in Hamilton. I know that in Ontario, the area that I come from, they were doing much the same in different areas. To say that municipalities aren't doing enough and then to demonize mayors and councillors for not doing their fair shares when, for the last 30 years, they were the only ones, by and large, across the country who were doing their fair share on the affordable housing scene.... They were cash poor and land rich and had to find unique ways, then, to build affordable housing units and housing supply.

    Like you, I find it difficult to listen to some of the comments in terms of “they had their opportunity”. The FCM and municipalities across Canada begged and pleaded for support. It didn't come, and hence came the national housing strategy.

    I want you to, if you could, reference how important it is...instead of demonizing municipalities and blaming them for the situation that we're in. This is very much where we were with former premier Harris when he demonized municipalities for not doing enough, and then he talked about amalgamation and all of those other things and how it was the “common sense revolution”.

     Mr. Chair, we heard this week the common sense plan—very much like what we heard from a former Conservative premier in Ontario—demonizing municipalities for not doing their parts.

    I'm just hoping, Minister, that you could talk very briefly about why it's important to work with our partners and work with municipalities, who've done their fair share, and illustrate what contrasts we have in terms of our approach to dealing with our partners in that space.

    Sure.

    Mr. Chair, how much time do I have before time expires?

    You have two minutes.

     It's really important to work with partners at different levels of government. Some of the greatest leaders in terms of reforming the way Canada is going to build homes are municipal government leaders—their mayors, their councillors. There are others who do need to be pushed, but we still need to partner with them, and there are others still who've never dealt with a housing crunch like they're facing now and don't have the muscle memory to know how to respond but very much want to and maybe need a partner from a funding perspective to help share best practices. Depending on the community you're dealing with, the circumstances are different.

    The housing accelerator fund is a great example. It's not the only one, but it's a great example of how we can leverage municipal co-operation and partnership by putting real money on the table that's going to incentivize change. Municipal councillors know what it's like to have a little extra cash to invest in the infrastructure they need to have livable communities and communities that can actually have the capacity to accommodate more housing developments.

    If I look back in the spirit of comparing what's actually being put on the table, the housing accelerator fund is $4 billion across Canada. That's going to help. We now have in excess of 500 applications that have come in. Compare that to the difference that would be made under the Conservative plan, with a $100-million contribution that's going to be split between only 22 or so communities and is also going to require.... It ignores the fact that sometimes communities need the investments in infrastructure they're threatening to cut if they're going to meet the targets they're now setting. It makes no sense.

    If we actually work with municipalities, find the good leaders out there and incentivize the changes that they're already pushing, but then find the ones who are laggards and push them to do more, I think we can actually squeeze more productivity out of every federal dollar and create an ecosystem not just for the next couple of years but for the next couple of generations. We'll have a different way that people build homes, because it will be legal to build the kinds of homes that are required to solve the crisis. It will be faster to permit the kinds of homes that will be built and that will help solve the crisis.

     If we work with municipalities, push ones to go further where they need a push and work with the leaders who are already there by incentivizing change, we can make a major difference.

    Thank you, Mr. Chair.

    Thank you, Mr. Collins.

    Mr. Trudel, you have six minutes.

    Thank you, Mr. Chair.

    I’m trying to understand, from what you’re saying, how we’ll be able to build affordable housing, housing that people will be able to afford.

    Earlier, you spoke about a GST exemption. How many housing units do you think that measure will help build between now and 2030? Have you done the math?

    The estimates I've seen range between 200,000 and 300,000 over the next decade or so, but it depends on other factors that are within the control of other levels of government as well. That number could increase if provincial governments come on board with similar measures. It will increase further if we grow the productive capacity of the Canadian workforce. It's hard to look at it in isolation, but the estimates I've seen tend to range between 200,000 and 300,000 homes.

    How many of these units will be affordable housing and how many will be social housing?

    What I want to know is how you’re going to go about it. You’ve told me that you don’t want to establish the affordability requirement, but private builders want to make money. That’s the way it works. One of our concerns is that a large portion of the funds from the National Housing Strategy will go to private builders who will erect so‑called affordable housing at $2,000 a month in Montreal. That doesn’t help the most disadvantaged people in society, like single mothers and victims of domestic violence who need housing.

    How do we go about building housing for them?

    I completely agree, it is essential to continue to build housing for the most vulnerable among us. However, it’s important to understand the rationale behind each policy.

    With the GST measure that we have put in place, it's addressed at building more supply. There are other programs that are tackling the measures you're dealing with and that offer a parallel track for people to build more affordable—

    What programs are you referring to, Minister?

    From what I understand, this GST exemption will not support the construction of affordable housing. Earlier, you talked about a bottleneck for builders. I completely understand that. It’s a pharaonic undertaking. Of course, we have to find a way of calling on the private sector to help us.

    However, it’s your responsibility to house everyone in society, not just those who can afford a $2,000-a-month home in Montreal. You must also take care of people who only have $600, $700 or $800 to spend on rent.

    What program are you going to use to build housing for them?

    There are programs specifically targeted to the issues you're dealing with, like the national housing co-investment fund, the rapid housing initiative and the rental construction financing initiative, but to a different degree.

     I don't want to ignore the importance of increasing supply and reducing the cost for everyone, including low-income families. By moving forward with the GST, we're going to reduce the cost of building, making it more reasonable for people to build the kinds of buildings that ordinary people can afford to pay for. When you complement that measure with the other programs I've mentioned, you're going to see additional incentives to build homes below market value and, in some instances, geared to people's incomes so that they can afford it regardless of their ability to pay.

     Minister, one of the federal programs that’s working well, I’ll tell you, is the Rapid Housing Initiative, or RHI. Everyone on the ground talked to me about it. The program works well, and people understand it. In fact, it almost moves too quickly for non-profit housing organizations to apply.

    In my opinion, you could simply scrap the national strategy, which isn’t working, and put all the funds into this program. We’re in the third phase of the RHI, and $1 billion or $1.5 billion isn’t going to do it. We could invest billions of dollars in this program and really build social housing and affordable housing. Have you considered that approach?

    Yes, but it’s not possible to solve the national crisis with this program alone. We must also create opportunities to attract private sector investment.

     When we're dealing with the need to build millions of homes, and the per unit cost through a program that's designed specifically for affordable housing can be hundreds of thousands of dollars, we have to realize that, if we're going to spend our way out of this, we will be waiting a very long time.

    We need to continue to directly invest in affordable housing projects through initiatives such as the rapid housing initiative, but we also need to create the framework and conditions for home builders to build based on the economics of the project, not just the scale of the subsidy. We need to pursue both tracks to grow the supply by changing the system, but we also need to continue to make the investments necessary to build dedicated non-market housing.

    Thank you, Minister.

    I’d now like to turn to homelessness.

    People tell me that homelessness has doubled in Quebec, and that’s the major problem. What has changed a lot, however, is the regionalization of homelessness. The Reaching Home homelessness strategy sends money to designated communities. Roughly speaking, those are the major cities in Quebec. However, at the moment, we’re seeing homelessness in smaller municipalities, such as Lebel-sur-Quévillon or Saint-Jean-de-Dieu, in Témiscouata, among others. These small municipalities have no resources, because they’re not accustomed to seeing homelessness in their areas.

    It’s absolutely vital to review the program and increase the funding. Will you commit to studying this and trying to improve the Reaching Home program?

    I agree. I think it's something we need to constantly reassess. I have seen in my own community a change that we did not experience.

     As I mentioned during my opening, we're used to having many homes available because so many families moved away. The circumstances have changed. Housing is not available. Homelessness is a real problem, even in small-town Nova Scotia, to the extent that we need to change our programs to reflect the changes to the environment we're living in.

     I'm not somebody who is dogmatic and will dig in and say the first way is the only way we're going to do it. I hope that was reflected as we advanced policies during the pandemic, when we heard from Canadians that we needed to make changes. I got more compliments from my constituents about our willingness to change than I did about any one program.

    We're now looking for ways to change the course to respond to the current dynamics that exist so that we can address very real problems, including for very vulnerable Canadians.

    I would like to add that this is urgent.

    Do we have Madam Zarrillo or Ms. Kwan?

    Madam Zarrillo, you have six minutes.

    Thank you, Mr. Chair.

    Minister, I'm hoping we'll be able to have that meeting soon that we had to cancel recently.

    I wanted to talk about systemic problems in getting affordable housing built. I was looking forward to seeing you here today, because I wanted to hear from you your value proposition and your mentality for addressing this crisis, because we know that the crisis cannot be fixed with the same market-focus mentality of governments current and past.

    Here is an example. I wanted to share with you, and perhaps you know this.... I guess I'll ask you.

     Did you know that the Canada Infrastructure Bank is investing in REITS, retrofits that result in renovictions and rent hikes? The Canada Infrastructure Bank is doing that. Avenue Living Asset Management, an owner and operator of properties, primarily out in the Prairies, has received commitments from the CIB for retrofits.

     Is your plan to continue to use the Canada Infrastructure Bank for REITS and renovictions?

    One thing that I think is important when we deal with the Canada Infrastructure Bank is that the investment decisions it makes will be independent of me.

     I would encourage the Canada Infrastructure Bank to consider how it can be investing in projects that will grow the housing supply. That would typically be more along the lines of housing-enabling infrastructure, but I can't dictate the specific investments it would make in individual projects.

    Thank you, Minister.

    I'll just bring to your attention that this is a continuation of the systemic problem around this government and past governments having a really market-based lens, even though we knew that no federal investment for 40 years in social housing, no plan for expiring operating agreements for not-for-profits, no investments in the maintenance of co-ops and no appetite for risk.... This is the other thing I wanted to talk about as we talk about risk.

    Minister, were you aware that the CMHC pension plan holds real estate—16%—and that, of that real estate, a percentage of it is residential real estate? Do you think that's a conflict of interest, Minister?

     I don't want to be interfering with the independent decisions of pension investments. Protecting the ability of pension boards to make independent decisions to protect the pensions of workers is something that's extremely important to me. I think it's possible for a pension board to make investment decisions that don't necessarily interfere with the ability of an organization to still continue to support housing.

    On your broader focus, on the market focus versus non-market focus, my view is that we need to do both. I think some market measures can address affordable housing, though it's more targeting increasing supply, but in parallel, we need to advance measures that support non-market housing as well, including co-ops, as per the comments I made earlier in this conversation.

    Thank you, Minister. I encourage you to continue to work very closely with MP Jenny Kwan, then, because I know that she has many solutions that we need to take under advisement.

    I agree.

    I wanted to also ask about the CMHC's mandate.

     Again, going back to my topic of systemic problems, the FCM has called for a “review” of CMHC's mandate. Will you take on that review of CMHC's mandate?

    I'm happy to review on an ongoing basis. The only details I would quibble with are what specifically we are going to be reviewing and for what purpose.

    To the extent that we want to continue to encourage a focus on increasing supply and growing the non-market supply, I think that's important. My own view is that we need to continue to use the organization with a primary focus of building more homes for Canadians who need them at prices they can actually afford, but the details as to what level of formality or what that process would look like would be something that I would want to have a proper opportunity to consider before making a public commitment.

    Thank you, Minister.

     I'll take a minute, then, to suggest a couple.

     One is that Ms. Bowers—it's good to have Ms. Bowers here again today—made this comment to this committee before: “for many decades CMHC was not involved in the delivery of affordable housing, and we have lost connections with many institutions in the non-profit sector”. I think this is an area that needs to be addressed. How do you remake those connections with the non-profit sector?

    The other systemic problem that we see with CMHC is, again, that lack of data collection, that lack of measuring tools and that lack of understanding.

    That's the couple that I would put out.

    Very quickly, before I turn the floor over to Ms. Bowers, look, I agree with you. Due to a lack of investment by different governments of different parties and persuasions for decades, there was a lot of muscle memory that was lost, and I think building those relationships for continuity and efficiency is important.

    I'll turn to Ms. Bowers, please.

    Thank you for that question.

    I've had the privilege of speaking to this committee before about the decades during which CMHC was not engaged in the delivery of affordable housing. With the launch of the national housing strategy in 2017, we've had to re-establish our connection with the non-profit sector. It's early years. There are many learnings, but in the subsequent years, I think you've seen a strengthening of the relationship.

     Can we do better? Absolutely. Are we committed to supporting the non-profit sector to deliver non-market housing? Certainly. We always welcome feedback that would strengthen our capabilities.

    Could I have the last 10 seconds or so?

    Minister, will you commit today to take on a review of at least this portion of the CMHC's mandate?

    Before I commit to a formal review, I will commit to having a specific meeting with you about what a review would look like. Then I'll want advice on what shape that kind of exercise would take, but let's have that conversation privately at the soonest opportunity.

    Thank you, Ms. Zarrillo.

    Mr. Scheer, you have five minutes.

    “CMHC” stands for “Canada Mortgage and Housing Corporation”. Is that the federal agency responsible for housing?

    Yes. There's a more specific mandate, but that's the Crown corporation that we deal with on our housing programs.

    Does that agency, that corporation, report to you directly? Yes...? Okay.

    You've talked about the core mandate. I'm reading from the CMHC's website. It says, “we are driven by one goal: housing affordability for all.”

    Housing starts are down. Were you expecting housing starts to fall?

    When I saw an increase in interest rates and the cost of supplies, it made sense to me from a basic economic point of view. I think home construction has been on a positive trend over the last number of years, but—

    Is that a yes?

    In light of recent changes, yes, but it would depend on when you asked me that question because—

     Housing starts are down. They were down this year again. In fact, CMHC's own report predicts—this is from its 2023 “Housing Market Outlook” report—that, “We also expect housing starts to decline in 2023 and remain well below recent levels posted in the 2020-2022 period over the forecast period.”

    They were down over those periods, and they're going to be down in the future.

    Does that sound like the CMHC is achieving its goal of affordability for all?

    There's a piece of clarity that will provide context. That's based on the policy track that existed at the time when that would have been generated, which was fairly recently. For example, the expansion in the Canada mortgage fund or the GST was not factored in. I want to change that policy track.

    It was a simple question. Do you think that CMHC is hitting its goal of making housing affordable?

    I think we need to do much more, including having CMHC do much more.

    Okay.

     Can you tell Canadians why officials at CMHC received almost $27 million in bonuses? They have one job, which is making housing affordable for all. That's their goal on their website. Those are their own words.

     They have resources to do that. They collect premiums off the backs of mortgage payers. These are people who cannot afford to put the entire amount down for a house, or even 20% down, so have to pay CMHC fees. Those premiums are paid into the CMHC fund. That management team paid themselves 27 million dollars' worth of bonuses over the last few years.

    Do you think the officials at CMHC achieved their goals and deserved those bonuses?

    I can completely understand why, when people hear a figure like that, they'd start asking questions about the appropriateness.

    From my point of view, it's really very important that elected officials don't interfere with the compensation of individual public servants—

    I'm sorry. This isn't about compensation.

    What's most important is that we need to have a process that's independent and that is designed—

    This is not about the independence of the compensation. This is about bonuses.

     Bonuses in the federal civil service are awarded to individuals who exceed expectations. There was $27 million paid out to CMHC officials during a time when housing starts went down, when mortgage costs doubled, when rents doubled and when the dream of home ownership was obliterated out of the reach of Canadians hoping to move out of their homes or start their lives.

     During that time, the officials at CMHC were paid $27 million by your government. Why?

    One thing I think it is really important to understand is that there is a process whereby there's an independent assessment of whether people meet the standard that's expected of them. I would say that I don't attribute the changes in the financial landscape to any public servant at CMHC—

    It's their role.

     I have a quick question. I'm sorry. I don't have a lot of time here, and you're not providing clear answers.

    Who appoints the CEO of the Canada Mortgage and Housing Corporation?

    That's the Government of Canada.

    So you do.

    There's more than one individual involved in that process, but I am one of the people who would be involved.

    It says on the CMHC website that they're appointed by the minister.

    There's—

    You appoint the CEO.

    There's a role for the Department of Finance as well, but I take your point. Continue.

    The management team at CMHC—after looking at the past few years, seeing housing starts go down, hearing stories about 35-year-olds moving back into their parents' basements, and seeing seniors being forced into homeless shelters and students having to live in their cars—looked at the housing landscape in Canada and said, “Let's pay ourselves a big fat bonus.” Your government said, “No problem.”

    That's not how the process works. I think we both know that.

    You and your government had the opportunity to ensure performance from the officials who report to you, so this is a simple question. Going forward, will you demand to see any bonuses proposed by the CMHC? Answer yes or no.

    Will I demand to see...?

    Any proposal that requires your sign-off going forward. That money was already paid, despite the fact that CMHC did not make housing more affordable for all.

     Will you take any steps to ensure that performance bonuses are linked to performance targets and actual results?

    I'm happy to review the process by which bonuses are provided. I am very hesitant to have elected officials interfere with the independence of the public service when it comes to the appropriate compensation for public servants.

    You don't believe that the minister has any oversight role in bonuses paid out to people who don't do their jobs.

    Your time has concluded.

    We'll go to Mr. Van Bynen for five minutes.

     Thank you, Mr. Chair.

    I don't want the conversation to focus solely on the CMHC. I do know that we have arranged for the CMHC to come back to this committee one more time. We did have a study, and there were some recommendations that I hope we can discuss at that time when the CMHC comes back. One of those was the efficiency of the application process and the responsiveness to the clients. I think that's an important question that we should be hearing about when we come back to that.

    I'd like to go back to the fact that we have a number of approaches to solving the affordability issue. In my riding of Newmarket—Aurora, because of the GST waiver that is currently under debate, I had a developer contact me and say that he was going to go ahead with 390 new rental units that had been in the hopper for over two years now but the business model didn't work. Now, with the GST waiver, the business model does work, and my community's going to have 390 new units.

    I want to go beyond that and talk about an example of collaboration between governments and how important that is. In 2020, through the rental construction financing initiative, the government was able to advance a $79-million construction loan that resulted in 216 units in my riding. In 2023, we also announced a $77-million loan under the same program to finance an additional 175. This emphasizes that it isn't always giving money away, in terms of the reduction of the CMHC. It's also working together with the developer, with the municipality and with the financing organization to cover and manage the risk during the construction period.

    Can you explain how the funding of the rental construction financing initiative will help families and build more housing?

    It's important to understand that these policies don't operate in isolation. They work in parallel and one on top of the other. Your citing of the GST, I think, provides a good example.

    Everything we can do to change the financial equation to make it more likely for a builder to go ahead is going to help address the supply challenges that we're facing. The GST, obviously, knocked several percentage points off overnight and even more so in jurisdictions where provincial governments have followed suit.

    If you piggyback programs like the rental construction financing initiative on top of that now more attractive financial landscape, you're going to see that more people are going to be building homes but also building particular kinds of homes. The rental construction financing initiative operates, essentially, by giving a lower cost of financing, typically in exchange for some kind of a commitment that you'll offer a certain number of units at a particular percentage of market rates.

    We made a recent announcement in Vancouver that's going to make available $500 million in financing that's going to 11 different projects, I think it was. It could be nine different projects; I'm testing my memory here. They are typically close to transit or post-secondary institutions. They're typically offered at a fraction of what the market would bear, and because we've changed the equation by offering competitive, low-cost financing in a high-cost financing environment, we're seeing more developers who are interested in building the kinds of homes that will be offered at lower prices because they have access to financing that allows the projects to go ahead.

    With everything that we do—whether it's making more low-cost financing available through the RCFI, cutting the GST for apartments that will be built or expanding access to low-cost financing by growing our insurance programs through the Canada mortgage bonds—we're going to see more competitive rates for people who have the capacity to build homes.

    Although I'm very encouraged, I'm entirely unsurprised to hear that your community is seeing more people announce that they will go ahead with projects, because I'm hearing it in every community in Canada.

    In my community, we're looking at close to 2,000 new units. For a community that has 24,000 homes, I think that's quite substantial. I believe that we need to have the building community and private markets participate in solving this. We'll never be able to borrow our way out of this, so we need to rely on that collaboration.

    A lot of conversation has been going on about a number of the programs, but can you tell me more about the co-investment fund and how well that's working? What is the target market for the co-investment fund?

    Yes, the co-investment fund is a terrific program. It provides opportunities, and can sort of be a mix of grants and loans, that will allow people to build more affordable housing stock.

    Since you've cited your own community, I'll cite mine. The Antigonish Affordable Housing Society is a group of volunteers who decided that they wanted to do something about affordable housing, given some of the challenges in a university town in Nova Scotia. They hopped online and started working with people in the space. They learned about the co-investment fund. They now have navigated what can be a complex system, and there are members of my community who now have a place to live.

    The stories that you hear are life-changing for people. There's a young woman who has been able to return to school. She told me that her son is able to now take part in elite basketball camps because she can afford to take him because she's not spending all of her money on housing.

    I've run out of time, but it's a perfect example of just how powerful this fund is to build more units at prices people can afford. It's meaningful stuff.

     Thank you.

    Mr. Trudel, you have two and half minutes.

    Minister, unfortunately, I haven’t heard anything from you in the past two hours that will enable the construction of affordable housing and social housing.

    The financialization of housing is one of the major problems of the current housing crisis that we haven’t addressed. Recently, the committee conducted a study on the subject. Even the Federal Housing Advocate, who is supposed to be working with you, conducted a study on the subject. It defines the financialization of housing as the “fact that housing is increasingly treated as a commodity—a vehicle for wealth and investment—rather than as a fundamental right and social good for individuals and communities.”

    It’s estimated that, when the federal government withdrew from the housing sector in 1993, close to 0% of the market was owned by large real estate investment trusts or public funds investing in housing. Today, it’s estimated that between 20% and 30% of the housing stock is owned by these large real estate empires, which couldn’t care less about the right to housing; all they want to do is make money.

    What’s your position on this? Do you intend to legislate to prevent the financialization of housing from increasing in Canada?

    First, let me just address your preamble. I'll acknowledge that you recognized that some of the programs are effective in terms of delivering housing for low-income families. You specifically mentioned the rapid housing initiative.

    On the financialization of housing, there's no one policy that will completely cure the circumstances. We need to continue to do more. There's no one level of government, by the way, that with the stroke of a pen can solve all of the challenges such as, for example, dealing with people who may be buying up homes and evicting tenants so they can increase the price. There could be mixed jurisdictions from different levels of government, but there are some things we have done—and I acknowledge that we could do more—things around additional taxation on the flipping of homes, things around additional taxes for foreign-owned unoccupied homes or changing the tax rates for short-term rentals like Airbnb. These are all things we have made progress on, but that, I would argue, we need to continue to do more on. Housing, to me, cannot be a commodity. It has to be a place for families to live in real communities.

    If you have advice on further areas we can tackle that don't interfere with the ability to continue to grow the supply, that's something I think we could co-operate on.

    You had two seconds left, Mr. Fraser.

    Ms. Kwan, are you taking the question?

    Yes. Thank you.

    I want to follow up with the minister on the question around co-op housing and urge the minister to reconsider. As he knows, many of the co-ops are non-profits. It's not like they're actually making money in the share system he mentioned, so it's important that the co-op sector be exempted from GST as well.

    He actually talked about the importance of co-ops. Budget 2022 did make an allocation for a co-op program; however, to this day not one dime has actually rolled out for the program. There hasn't even been an agreement signed with respect to that. What's the holdup, and when will Canadians see the money roll out the door to build the housing that's desperately needed?

    Thank you, Ms. Kwan.

    I don't have a specific date, but rest assured that, as soon as we're ready to launch, we'll be broadcasting broadly. The ordinary process for us, too, as I described in response to Mr. Scheer earlier in this meeting, is that after we have budgeted we have to go through the appropriate cycle before I have access to administer a program we design. However, my hope is to move these programs as quickly as possible, because I don't think there is time to waste.

    Budget 2023 has come and gone, and we're still talking about rolling out the budget 2022 initiatives the government promised, so, actually, the slowdown is happening on the government side. Let's get on with it.

    On the co-investment fund, the minister said about the value of that program that the bureaucracy the non-profits are saddled with in trying to get through it is onerous. Now, as it stands, the funding for the co-investment fund has primarily been depleted to the point where the department has actually reduced the amount of funding non-profits can apply for to $25,000 per unit. This is not going to work.

    My question to the minister is this: Will the minister do what the NDP is calling for, which is to actually provide lift by eliminating the $25,000-per-unit limit and providing new funds to the co-investment fund so that more non-profits can access the funding to develop the housing that Canadians desperately need?

    I anticipate that I'll have an opportunity to look at increasing the contribution amount through the co-investment fund in the short term. One decision point that I will need to take on and the government will need to take on is what the next generation of investments in affordable housing will look like. I believe I owe it to myself and, frankly, to communities across the country, to do a proper exercise to understand the best way to increase the supply of non-market housing.

    The co-investment fund has had some success. As you've pointed out, there are areas in which it can improve. I want to make sure I have an opportunity to compare continued investment in the co-investment fund with other potential avenues to grow the supply of non-market housing in Canada, which I understand is a major priority for you as well.

     Yes, for sure. The area that could be improved would be the red tape that CMHC is saddling people with—

    The Chair: Ms. Kwan, your time is up.

    Ms. Jenny Kwan: —and the bureaucracy they have to go through to try to get that fund through.

    Mr. Chambers, you have three minutes.

    Thank you, Mr. Chair.

    Minister, thanks for coming. I'll note that some of your colleagues don't even accept invitations to come to committee, so thank you for coming of your own volition.

    Bloomberg and many others have talked about the risk in the Canadian marketplace with respect to an overheated housing market or a bubble. Are you concerned about the risk to taxpayers if rates continue to stay high or higher for longer, as we're actually seeing?

    Look, I have many concerns. The risk, given the rate of interest that exists in the market, is one of them. I'm more concerned about the risk to Canadians who don't have a place to live that they can afford than I am about the risk to taxpayers, given the very present and serious challenge that families are facing. It's one of many concerns that I think on daily.

    I don't have time to get into it, Ms. Bowers, but could you provide later to the committee the total net and gross exposure that Canadian taxpayers have through CMHC? You did provide that a couple of years ago, but I'd like an updated number, if that's okay.

    Yes, we'd be very happy to.

    Thank you.

    Minister, David Dodge, John Manley and the current Governor of the Bank of Canada have all said that government spending—all levels—is driving inflation, which is making the Bank of Canada hold rates higher for longer or maybe even increase them further.

    Have you expressed concern to your colleagues or the Minister of Finance that they need to rein in spending so that Canadians don't face the pressure of continued interest rate hikes or its staying higher longer?

    I've had many conversations with colleagues about the need to make sure we're spending responsibly. We are not, by the way, in a position where we will not have access to the ability to borrow. There is the potential to impact the interest rate, but my perspective when you look at the equation is that a huge portion of the inflation we've seen is driven by supply-side factors.

     Whether that's the impact that climate change has had on the price of food, or whether that is the impact of the war in Ukraine on the price of energy or the price of wheat that's exported, there are a number of different factors that have interrupted supply chains and have driven up the cost of labour and materials. I think those are more responsible, but this is an issue that we need to be careful about and we need to make sure that we're spending responsibly.

    I'm on my last 30 seconds. We've talked a lot about supply side, but no one is really admitting the fact that it's going to be hard. Douglas Porter at BMO says it's almost impossible to build the number of homes. We haven't really talked about demand. I don't want to talk about immigration, but I want to talk about short-term rental housing.

    Do you even understand or know, or does the government know or has it asked, how many units have actually been taken off the market and used for short-term rentals? Some studies suggest that in some cities up to 10,000 units could be released if somebody actually started asking the right questions. I don't know why this committee hasn't asked for this yet, frankly, from some of the short-term rental units. Why are we not looking there?

    We have made a policy change with respect to the taxation of short-term rentals that will make it less appealing for people who own a property to take it off the market so that they can profit from short-term rentals. This is an area where I will ask for everyone's help. Given the nature of your question, I think we likely agree that this is an opportunity to free up, for families, housing that is not being used currently for anything beyond short-term stays.

     I would welcome the recommendations of this committee should you choose to study measures the federal government can impose to actually reduce the number of homes that are being used for short-term rentals, particularly where they exist in communities where families need homes, and these days that's just about everywhere.

    Thank you, Minister.

    Next is Mr. Fragiskatos.

    Thank you, Chair.

    Thank you, Minister and officials, for being here.

    Minister, you've mentioned London already. Without surprise, I'm going to ask you about London.

    To what extent do you think the approach that was taken with respect to the housing accelerator fund can serve as a model for other communities in terms of how you and the federal government approach the entire issue of building and of building more through the HAF program?

    In terms of the collaboration and the very healthy back-and-forth that happened there, among other ways to engage communities, can London be that model?

     Before I answer your question, I knew you were going to ask about London, because I sat on the finance committee with you during the pandemic and you asked about London every single day. I knew you would be true to character.

    It's exactly the model that should be replicated across the country. London submitted, I should say, an ambitious application to grow its housing stock. They had e-permitting they wanted to adopt. They had upzoning. They had plans to focus particularly on affordable housing and supportive housing and recognizing that affordable housing is a health care issue. They were demonstrating leadership, but we didn't want to leave homes on the table that we could squeeze out of their housing accelerator fund application. We pushed them to do more to have four units, as of right, citywide, for example. We had conversations about what more they could do to continue to build homes, as they have plans to, around post-secondary institutions and around transit lines, and a handful of other measures.

    They responded in the most encouraging way possible. They said, “Yes, yes, yes, we want to do it all, and if you support our application we'll be able to do it.” The result is that thousands of additional homes are going to be built in London over the next few years, but better than that, permanently changing the way that London permits homes to be built and the homes that they allow to be built is going to carry on forever.

     This is the kind of thing that's going to have a lasting impact, not just over the next few years under the period of the housing accelerator fund's conflated timelines but permanently. It's this kind of change in cities like London across the country and in communities big and small that's going to help us escape the housing crisis and make sure ordinary people have homes they can afford.

    Thank you for that. For my remaining time, Mr. Chair, I'm going to put him on the spot, but I know he'll appreciate it anyway. I'll give my time to Mr. Morrice for a quick question.

    I appreciate that. Thank you.

    I want to start by saying that I really appreciate the candour you've brought to this conversation, Minister. I appreciate the genuine sense of collaboration that you're bringing to this role. I think it's really important that, if we're going to share in the fact that we're in a housing crisis, we have someone in your position open to working together to try to solve it.

    I also think it's important to make clear that, as you've said, this is a crisis that's been decades in the making. It's not going to be solved within weeks. I think what is reasonable to expect is to see seeds planted for a solution both in terms of sustained investments and addressing the way that homes have been treated as commodities, instead of as places for people to live.

    You and I have spoken about one way to do that, which is to remove exemptions for large corporate investors who have been commodifying the housing market, real estate investment trusts being one example of that. In my view, that is a clear litmus test for being serious about this.

    Can you share whether you're going to give this idea some consideration over the coming weeks and months?

    I'm open to all suggestions. I think we have to make sure that any special measure we have in place is actually a productive use of public money. Before I commit to any particular policy proposal and the exact measure that you've identified, I want to be very careful not to interrupt the potential addition of supply to the market with policy changes that have not been fully studied and understood.

    I believe this is another area that the finance committee is going to cover in their report on the financialization of housing. More broadly, making sure we're treating homes like places for people and families to live, as opposed to commodities that people can hold onto and the value of which will appreciate, is going to be an essential part of the path forward. I just want to make sure that, to the extent we consider policy changes, it doesn't interfere with the supply. That is of paramount concern to me right now.

    Thank you, Mr. Morrice.

     Thank you, Minister, for appearing with your officials.

    Thank you for accommodating my request. I appreciate it.

    Certainly you can see from the exchange that there's a lot of interest from this committee. Everybody is approaching it with the same level of concern.

    Committee members, I will remind you about the witness lists for the study on Canada summer jobs.

    Madam Chabot, put your earpiece back in.

    What do you want, Mr. Chair?

    I am reminding members to get their witness lists in for the upcoming study on Canada summer jobs by the end of day Friday, September 29.

    As well, is it the committee's wish to have the minister in on October 16? That's the date she has given as being available.

    If I see consensus, then we will—

    Are we talking about the 16th?

    Yes, I’m talking about October 16th.

     The minister will be in on October 16. I see consensus here on the Canada summer jobs study.

    With that, the next meeting will be on committee business and version two of the financialization report.

    Mr. Aitchison.

    I have a quick point of order, if I could.

    I don't know if this has ever been done before or not, but I thought I would table the Leader of the Opposition's PMB with the committee because, of course, it was disparaged a little bit. I wanted to point out that it really is about accountability and targets. It's holding municipalities accountable.

    It was misrepresented, and I think it's actually pretty good.

    With that, committee members, thank you for your time.

    We'll see you next week.

    The committee is adjourned.