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The Labour Program operates on three levels: federal jurisdiction, national and international.
Federal jurisdiction includes many of Canada's national infrastructure industries or anything involving:
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navigation, fishing, shipping, operation of ships, airports, airlines, telecommunications, banks, and most of the transport industry interprovincially.
Activities include employer-union relations where we provide mediation services, labour standards, occupational health and safety, workers' compensation, and employment equity, where the federal government has regulatory responsibility.
I would say that the federal jurisdiction, just for your information,
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covers approximately 12,800 employers. Moreover, just under a million employees are covered by Part I.
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Between 1997 and 2006 the average share of the GDP of firms under federal jurisdiction was 9.3%, and over the same period their contribution to GDP growth was approximately 11.6%.
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I'm moving on to page 9, part II of the Canada Labour Code, which focuses on occupational health and safety.
The labour program takes both proactive and reactive approaches to occupational health and safety. We proactively deal with high-risk industries to make sure they have the education and information needed to address their safety and health concerns. And we are reactive: according to the Canada Labour Code, our health and safety officers go in to investigate accidents, fatalities, and refusals to work and we render decisions and we ensure compliance with the Canada Labour Code.
Under the Canada Labour Code the employee has three fundamental rights: the right to know about every known or foreseeable health or safety hazard in the area where they work; the right to participate in identifying and correcting job-related health and safety concerns through their representatives and committees; and the right to refuse dangerous work. And if an employee in a federally regulated workplace refuses work, that is when a health and safety officer from the labour program comes in and assesses whether there is danger and renders a decision.
It's important to note that the area of occupational health and safety is a shared responsibility. The government is the regulator, setting the norms, providing education, doing the health and safety inspections, and issuing direction, but as a shared responsibility of the employers and the employees to have their health and safety committees and to undertake to have the best they can in a healthy and safe workplace.
Our health and safety code has us covering 1.2 million workers, including the federal public service.
We recently put in place a new quality assurance framework that ensures more consistency in decision-making across the country and focuses on service delivery and service excellence. It's a very active area. For example, in 2010-11, 3,400 occupational health and safety proactive interventions were finalized and 93 hazardous occurrence investigations were initiated and 82 completed. It is a key component of our work under the Canada Labour Code.
On the next page, page 10, labour standards, we talk about healthy, fair, and productive workplaces. This is the area of fairness. What are the fair hours of work and wages? What are the fair conditions for severance and dismissal? We're very active in this area as well.
We also recover unpaid wages for employees, and approximately 1,000 unjust dismissal complaints were resolved, many of them through newer alternative dispute resolution, proactively to avoid formal lawsuits, formal complaints.
You'll notice on this page that there have been good developments in recent years on the labour standards front. We have the compassionate care leave, which is administered by HRSDC, as well as extended paternity, parental, and reservist leave.
We cover approximately 820,000 workers, accounting for 6% of all non-public-administration employees, including banks, first nations, governments, and enterprises.
On page 11 are some of the additional business lines that are related to the labour program.
The federal workers' compensation, which is our GECA, the Government Employees Compensation Act, is the area where we work very closely with provincial workers' compensation boards to make sure those who are injured in the workplace are compensated for their injury. Under this federal workers' compensation we're also very much engaged in helping people return to work appropriately. It's about prevention, support, and return to work. About 6,100 third-party claims were filed and about $1.8 million was recovered last year from workers' compensation claims.
The labour program also provides fire protection consultative services, through which we have engineers and inspectors helping across the country, those under federal jurisdiction, including first nations on reserve.
Lastly, there is the wage earner protection program. This is our new program, introduced in 2008 as part of the Government of Canada's economic action plan, which takes into account the economic fragility of the last few years by giving compensation to those who are affected by a bankruptcy. We have a cap of $3,400. It's a one-time payment, but it helps people to make that transition and adjustment to their next stage.
Since 2008, when the WEPP was implemented, 40,000 Canadians have received almost $90 million in WEPP payments.
On page 12, last but not least, there is the Employment Equity Act from 1986. The Minister of Labour has responsibility for the act, but of course it is something that every federal department and agency and those under their jurisdiction have responsibility to conform to. The Employment Equity Act is about four designated groups chosen because they have high unemployment rates and more barriers to labour market participation. The groups are women, aboriginal persons, persons with disabilities, and visible minorities.
We have three programs related to the Employment Equity Act. The first one is the legislated employment equity program requiring those under our jurisdiction to file an employment equity report and to show us they are making every effort to bring in, through an inclusive strategy, those four designated groups.
We also have the federal contractors program, whereby those who get a contract with the federal government also have to demonstrate that they are taking seriously their employment equity commitments.
Lastly, the racism-free workplace strategy helps us work in partnerships with groups such as the Aboriginal Human Resource Council, the National Film Board, and the Metropolis Secretariat run out of Citizenship and Immigration Canada to promote the benefits of inclusion in the workplace.
It's not only about doing the right thing; it's also to try to help workplaces see that there are benefits to productivity. As you probably know, the Canadian workforce before long is going to have its growth in two groups: new immigrants and aboriginal persons. We try to promote the benefits of inclusion and not just the barriers that are being faced.
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Thank you very much for the question.
Yes, indeed, we rely on a very professional team of mediators and conciliation officers in the program.
The first thing that happens in a collective bargaining process is that either the employer or the union gives a notice to bargain to the other party, and that would be direct bargaining. There is no time limit; they can take the time they wish to bargain. Then after a period, if they see that they are not going to be able to bargain by themselves, they can file a notice of dispute with the minister. The minister has 15 days to appoint a conciliator. Then for 60 days the conciliation officer will work with the parties, trying to facilitate, and have a process in place for both parties to address their issues. This period can be extended, but that needs the mutual agreement of both parties.
After 60 days, if the parties don't agree to extend, it's the determination of the conciliation, and then there's a 21-day cooling-off period. During that period we appoint a mediator to help the parties, because discussions continue to happen during the cooling-off period. After 21 days the parties acquire the right to strike or to a lock-out.
That is, in a nutshell, how the federal conciliation and mediation services are there to support the parties in their discussions and negotiations.
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Thank you, Mr. Chair. It's a pleasure to be here with my colleague.
Canada Mortgage and Housing Corporation is celebrating its 65th anniversary this year, and I certainly appreciate the opportunity to discuss how we contribute to a strong and stable Canadian housing system.
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CMHC is Canada's national housing agency and the Government of Canada's advisor on housing policy matters.
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Looking at slide 2, as a federal crown corporation, CMHC's mandate is to improve housing quality, affordability, and choice for Canadians. With the exception of temporary shelter for the homeless, which falls under the mandate of Human Resources and Skills Development Canada, CMHC's activities touch on all parts of the housing continuum.
For the 20% of Canadians in housing need, CMHC uses a number of tools and programs to deliver more than $2 billion a year in federal housing assistance.
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We also support the 80% of Canadians whose housing needs are met by the market. CMHC's commercial activities are cornerstones of Canada's stable and well-functioning housing finance system.
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In short, CMHC is a single window for federal housing products and services off reserve.
Turning to slide three, the housing assistance programs delivered by CMHC are funded through appropriations voted by Parliament. As I noted a moment ago, our main and supplementary estimates A provide for slightly more than $2 billion in spending in fiscal year 2011-2012. These investments support some of the most vulnerable in society: low-income families, seniors, persons with disabilities, aboriginal people on and off reserve, and victims of family violence.
The commercial side of our business, mortgage loan insurance and securitization, operates at no cost to taxpayers. The premiums we collect pay for any claims incurred. CMHC's annual net income and our consolidated retained earnings are in fact reflected or consolidated with the Public Accounts of Canada.
At the end of 2010 CMHC had total assets of $293 billion and capital of $11.4 billion.
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The corporation employs a total of about 2,100 people at our national office here in Ottawa, five regional offices and 19 points of service across Canada.
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Turning to slide four, mortgage loan insurance is mandatory for federally regulated lenders when the homebuyer's down payment is less than 20% of the value of the property. The insurance is paid for by the borrower and allows them to access the housing market at interest rates comparable to those with larger down payments. Mortgage loan insurance can be purchased from CMHC or from private insurers.
However, unlike private insurers, CMHC has the public policy mandate to provide mortgage loan insurance to qualified borrowers in all parts of the country, including rural and smaller communities, and for all forms of housing. Close to 45% of CMHC's high-ratio insured business in the first half of this year was in areas of the country, or for housing options that are less well-served, or not served at all, by the private sector. For instance, CMHC is the only mortgage loan insurer for large rental housing projects, as well as retirement and nursing home accommodation.
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CMHC's insurance business is strong. We consistently apply prudent underwriting standards to help ensure a stable housing finance system in Canada.
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CMHC tracks the risks carefully, and it is well capitalized. We have more than twice the minimum capital required by the Office of the Superintendent of Financial Institutions.
Turning to slide 5, you can see that the other side of our commercial business is securitization. Securitization, simply put, is the process by which banks package up mortgages that have already been insured and sell them to investors, thereby gaining access to new funds that they can in turn loan to consumers.
CMHC's securitization programs support a well-functioning housing finance system by helping to ensure that financial institutions, both large and small, have access to funds for lending and are able to serve the needs of Canadians through competitive prices and products.
The value of our securitization programs was particularly evident during the recent economic downturn. These programs, together with the temporary measure called the insured mortgage purchase program, ensured that financial institutions continued to have access to a steady flow of low-cost funds for mortgage lending. As a result, during the downturn qualified Canadians were able to secure mortgage funds to buy homes, and financing continued to be available for the construction of rental housing.
For the 20% of Canadians who are not able to meet their housing needs independently, the federal investment in housing assistance takes a number of forms. For example, on behalf of the federal government, CMHC provides $1.7 billion each year in ongoing subsidies so that almost 615,000 families living in existing social housing can continue to afford their homes.
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In addition, in September 2008, the Government of Canada committed to investing $1.9 billion over five years to renovate existing social housing, build new affordable housing, and help the homeless. In July 2011, a new affordable housing framework agreement was announced with all the provinces and territories, which will guide how these funds will be spent over the next three years.
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The overall objective of the framework is to reduce the number of Canadians in housing need by improving access to affordable housing. The framework recognizes that provinces and territories are best positioned to design and deliver affordable housing programs to address housing needs and priorities in their jurisdictions. The framework agreement is being implemented through bilateral agreements signed with each province and territory, which will cost-match the federal investments.
Slide 7 notes that CMHC is also working in partnership with the Department of Aboriginal Affairs and Northern Development to address the housing needs of first nations people living on reserve. Of the total federal investment of approximately $400 million per year for housing on reserve, CMHC is responsible for delivering approximately half. This funding supports the construction of new homes each year and the renovation of existing homes, as well as providing ongoing subsidies for close to 30,000 existing rental housing units on reserve.
CMHC also played an important role in delivering stimulus funding to the economy under Canada's economic action plan. The economic action plan included more than $2 billion in new spending over two years to build new and to renovate existing social housing across Canada. As reported in March 2011, more than 14,000 social housing and first nations housing projects have been completed or are under way with the economic action plan funding.
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As part of Canada's economic action plan, CMHC funded a further $2 billion in low-cost loans to municipalities for housing-related infrastructure projects. More than 270 loans were approved under the municipal infrastructure lending program.
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Underpinning CMHC's housing finance and assisted housing programs are a number of other activities that support a well-functioning Canadian housing system. For example, CMHC is an important source of information on housing markets. Reliable market information helps industry, governments, and consumers make informed housing decisions and also helps ensure that housing-related issues are considered in the context of broader policy discussions.
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CMHC also works with housing exporters to build markets abroad, which in turn boosts the Canadian economy by creating jobs.
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I'll turn to slide 10. CMHC's annual report provides a description of the key initiatives and performance measures for 2011. Some of these initiatives include working with provinces and territories to deliver the next three years of federal investment in social housing; working with Aboriginal Affairs and Northern Development Canada and first nations to improve the delivery of housing programs on reserve; continuing to apply prudent underwriting standards to ensure that only qualified borrowers are approved for mortgage loan insurance and that homebuyers will be able to meet their mortgage obligations into the future; and focusing our research on understanding housing need and policy responses as well as the implications of an aging population on the existing housing stock.
As I hope the committee can see, Canada Mortgage and Housing plays a key role in providing leadership, coordination, and support to the Canadian housing system.
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Thank you again for giving me the opportunity to speak to you.
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I would be very pleased to accept any questions the committee may have.
This question relates to a specific type of housing, and it's student housing. I know CMHC gets involved in that. I don't know the specifics of the program—and again, if it's too specific and someone has to get back to us, that's fine.
We as a government, through the economic action plan, did some precedent-setting investments in post-secondary institutions that we've never done before, but part of what we funded did not include student housing.
A number of universities are experiencing growth, and they cannot provide enough housing for the students, particularly first-year students. The private sector is available to partner on some of this work—actually, this came to me through a senior manager at the Royal Bank—but the program that currently exists with CMHC limits the participation of CMHC to on-campus housing. It limits it to buildings that would be built, obviously, on campus.
That's a pretty severe limitation to that program, given today's desire by entrepreneurs in the private sector to be involved in providing that type of housing that universities need, particularly under 3P partnerships.
Are you aware that? Has CMHC ever contemplated any change to the guidelines as they currently exist to allow that to happen?
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Thank you. Yes, I am aware of that.
The answer depends in part on the type of student housing we are talking about. We limit what you might consider typical student resident housing to housing on campus. Think of that as quads with a common kitchen.
Basically what we do, through mortgage loan insurance, is facilitate the financing of the construction of these facilities, again on a commercial basis. We find that accommodation is generally unique to students and unique to university communities. However, if you're gong off campus, student housing can take many forms. It can be rental housing generally; it can be secondary suites in an existing home. Provided it is not that quad and common kitchen structure, we provide financing for that. We consider it to be rental housing off campus.
The place where there's the issue is if you're trying to build off campus, purpose-built—by that, I mean designed—student housing. The problem we find with that is if there is an issue, heaven forbid, it can be very difficult off campus, in a general community, to actually realize on that for purposes of other use.
So we do student housing of different types off campus in the rental sector, and for very specific, purpose-built housing of a specific configuration, we do it only on campus.
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Thank you for the question.
We're very aware, obviously, of when the specific terms of the agreements expire. We have struck a federal-provincial working committee, which has actually been under way for about a year now, to look at the viability of these projects when the agreements expire.
The whole notion, when the programs were designed, was that when the mortgage was fully paid off--i.e., at the end of the operating agreements--the projects, with the low rent they were collecting and not having to pay the mortgage any longer, would be able to be self-sufficient going forward. That was the theory of the program design.
What we're looking at, and this is the point that I think CHRA is making, is that some projects and some programs work better in that regard than others. They prepared a report called “Was Chicken Little Right? Is the Sky Falling?”, and they concluded that in fact non-profit housing and co-op housing are in pretty good shape at the end of their agreements, whereas public housing is less so with its 100% concentration in low-income housing.
The working group that's been put together, and that includes all jurisdictions, is looking jurisdictionally at the portfolio of housing that's out there. They're looking at the portion of the portfolio that will in fact be financially viable, as was hoped at the outset of the program design, and that can continue on post the agreement expiry, and looking at which projects may need some reinvestment, followed by how that reinvestment might occur.