Honourable Chair and committee members, good morning. Thank you for the opportunity to appear today.
The Canadian Horticultural Council represents fruit and vegetable farmers across Canada, who grow over 120 different types of crops, with farm cash receipts of $5.4 billion in 2017, the foundation for an estimated produce value chain of $13.9 billion of real GDP and over 181,000 Canadian jobs.
Today, I want to highlight a few examples of how investment and support through budget 2019 would directly feed into our sector's ability to innovate and remain competitive while supporting the federal government's goals.
The first example relates to the importance of regulatory resources. Our farmers rely on government agencies, regulations and programs as they navigate the complex, evolving and increasingly costly food system. The decisions of the Pest Management Regulatory Agency directly impact the tools farmers have to protect their crops from pest damage, minimize food waste and maintain quality standards. Despite efforts to improve their stakeholder consultation process, PMRA is hindered by a lack of resources and scientific data as they try to meet their mandate of regulating pesticides. PMRA re-evaluations review individual active ingredients without further analysis of the big-picture impacts. Pest outbreaks require a full tool box, but growers are being asked to do more with less, as numerous crop protection products are being cancelled without new, effective alternatives entering the regulatory pipeline.
Other agencies are seeing a growing role in the success of Canadian horticulture. PMC's role in the regulatory approvals required for new pest control products, especially minor-use pesticides, and its pesticide risk reduction program are expanding. CFIA is leading the implementation of the 2017 approved plant and animal health strategy, including the plant health network and the Canadian plant health council. Adequate funding is needed for CFIA to be able to fulfill its critical role to reduce the risk of invasive species, adapt to climate change implications, regulate pests and diseases, gain access to new export markets and provide technical expertise to address non-tariff barriers.
CHC urges this committee to support increased funding in budget 2019 for government agencies such as the Pest Management Regulatory Agency, the Canadian Food Inspection Agency and the Pest Management Centre. They are critical to farmers' productivity, innovation and competitiveness.
The second example is the critical need for farm labour. Specifically, without efficient and timely access to an adequate workforce, it becomes impossible to grow and harvest perishable fruit and vegetable crops. The crops will simply rot in the field or greenhouse, on the tree or on the vine. Despite ongoing and rigorous recruitment, farmers are unable to find Canadian workers and must rely on the seasonal agricultural worker program or the agricultural stream of the temporary foreign worker program to address their labour needs.
CHC urges the federal government to allocate funds to implement a trusted employer program to help streamline and standardize the labour market impact assessment application process. In 2018, federal funds were provided through Employment and Social Development Canada for the support of foreign workers. However, farmers are already going above and beyond the requirements for employers to contribute to their local community support network. They know the value of the workers to their livelihood.
CHC recommends that ESDC funding be added, or redirected from budget 2018 allocations, to ensure a balanced approach to employer and employee education on the rights and responsibilities of both parties to maintain a safe and productive working and living environment.
Finally, we emphasize the need for policy alignment to reach federal goals. The federal government has emphasized its goals of trade diversification and the January 2019 implementation of a federal carbon price to respond to climate change. Infrastructure support is crucial for farms to continue to expand their operations and further contribute to Canada's economy. With the current limitations, many farms are unable to take advantage of market opportunities. An example of a specific infrastructure project is the proposed national tree fruit investment program.
New market access for tomatoes and peppers to China, combined with the current cucumber access, is expected to rival greenhouse exports to the U.S., valued at nearly $1 billion in 2017. With all due respect, we wonder how the Government of Canada can ask greenhouse farmers to step up to the plate to increase exports while they are the single most disadvantaged sector domestically and internationally with respect to carbon pricing.
The agriculture exemptions provided for in the budget implementation act did not provide any relief for greenhouse farmers, who use little or no gasoline and diesel. The legislation also currently excludes farm fuel exemptions related to heating and cooling uses, which are essential for greenhouse crop production and post-harvest and storage activities across various agricultural sectors.
The best opportunity to reduce agricultural emissions and grow operations, and therefore the economy, is found where harmonized policies, stable tax regimes and business incentives exist, so farmers and government can see a return on investments in infrastructure, technology and research.
Farmers want to be part of the solution.
As you mentioned, I am accompanied by Shaun Cathcart, Senior Economist with the Canadian Real Estate Association.
We're pleased to be here on behalf of over 127,000 realtor members who live and work in every riding and community from coast to coast. Together, we advocate on behalf of property owners, buyers and sellers. Our objective is to present socially and fiscally responsible proposals to the government that will help Canadians.
Today, I want to focus on those who share the dream of home ownership. Unfortunately, there are many Canadians—millennials, newcomers and working families—who feel they may never have a place to call their own. This should raise alarm bells for this committee, because housing plays a critical role in the economy and provides long-term social and financial benefits to homeowners and communities.
Owning a home allows Canadians to accumulate equity for retirement and provides positive social, economic, family and civic outcomes. With the purchase of a home come pride of ownership and the sense of belonging to a community, which in turn foster participation and civic engagement.
Real estate also plays a critical role in the Canadian economy, accounting for a fifth of all GDP growth. When Canadians purchase a new house, they typically acquire new appliances or furnishings, and undertake renovations to meet family needs. In 2018, each home sale in Canada is expected to generate almost $64,000 in spinoff spending. MLS home sales and purchases in 2018 will add an estimated $29 billion in economic activity.
Given the importance of home ownership, we are recommending that budget 2019 include measures to ensure that the Canadian housing market continues to contribute to the economy and support Canadians who are trying to achieve their dream.
Home ownership remains an aim for Canadians, including millennials, who are the next generation of homebuyers. However, affordability is often out of reach, as many struggle to accumulate enough capital for a down payment. Without the financial support of family, many first-time homebuyers are unable to enter the housing market.
One support that is currently in place is the first-time homebuyers' tax credit. This program provides financial support by compensating for some of the costs associated with a home purchase. At present, the program provides $750 of financial support. We are recommending an increase to the existing tax credit to more accurately reflect the current costs facing homebuyers and provide meaningful assistance to middle-class families and millennials. This tax credit enhancement would benefit every single new homebuyer, not just a select few.
We acknowledge that there is no one simple strategy to make home ownership more accessible in some of Canada's most active markets. However, recent federal government policies and regulations have made access to housing in Canada increasingly difficult for middle-class families, and in particular millennials.
The B-20 stress test is designed to ensure that Canadians don't take on more debt than they can afford, and to safeguard the financial system as a whole. These are commendable goals, but blunt regulations are having an impact, albeit unintended, on the housing market. In superheated markets, they have had their intended effect, but in stable, balanced markets such as Calgary, Saskatoon and St. John's, the stress test has driven middle-class families further away from reaching their goal of owning a home.
A report by Mortgage Professionals Canada in July 2018 estimates that about 100,000 Canadians, 18% of buyers, have been prevented from buying their preferred home since late 2016 because of new federal mortgage rules. It is increasingly difficult for first-time homebuyers to find a home that is affordable in some parts of Canada.
We believe these regulations should be more dynamic and applied only in markets the government has identified as requiring an intervention. Going forward, the federal government must take regional differences into consideration when implementing new measures that affect homebuyers.
Thank you very much, Mr. Chair.
Good morning. Thank you very much for this opportunity to speak to you today.
If you have any questions, I will be pleased to answer any questions in Quebecois as well.
I'm Gord Harling, president of CMC. CMC was founded in 1984 as a not-for-profit by the Canadian government. At the time, it was actually to provide access to Nortel's manufacturing capability so researchers across Canada could develop their own microchips, test them, and publish papers internationally. Over time, it has evolved, and we now have three different programs—what I like to call CAD, fab and lab.
CAD is computer-aided design software, and today we serve 52 different computer-aided design packages to researchers across Canada, from Newfoundland to Vancouver Island. We simplify the access to those tools, and by bulk buying and sharing licences, we're able to deploy a vast network of software across Canada. This makes it much easier for researchers and takes away some of the barriers to innovation, because it's simpler for them to train students and carry out their research.
I'll take one example. We have a tool that would cost on the open market, commercially, $10 million a year. We have 800 copies of that licence, and on any given day about 500 researchers are using that licence. It's an $8-billion value if you do the math. Obviously, universities could never pay that, but through special arrangements with these suppliers we're able to provide that.
Once you design something, you want to fabricate it, so we have an international network of fabrication facilities. We use 20 different processes at nine different factories around the world, and this is what we build. This wafer is covered in chips. There are several billion transistors on this, and when we get the chips back, we cut them up and hand them out to the researchers. By putting multiple researchers onto the same wafer, again, we reduce costs by bulk buying and doing things they cannot do alone. We might buy $100,000 worth of “siliconaria” and share it among 10 or 20 designers, simplifying access for them and allowing them to do international-level research.
Our final area of research is the lab, where we actually develop platform technologies that researchers can use to build on. So, we'll build an amplifier that has an open face so they can put any material they like on it. They can sense bacteria, odours, the humidity, temperature, light or whatever you like. They don't need to create this. It doesn't exist in the open market, but they can modify it and use it for their own needs.
So, those are our three programs—CAD, fab, and lab. Today, we have 67 member universities. We have 730 paying members, who pay an annual subscription to access our services. They sign up their own researchers in their departments, so we have about 3,600 researchers and about 4,800 students who use these tools every day. Every year, 780 graduates come out having used the CMC tools and technologies. It's critical to their theses, their research and their ongoing publications.
We trace back the roots of 950 companies working in Canada today, companies like BlackBerry and OpenText. These are folks who were originally researchers using our services at university. Every year there are, on average, about 15 start-up companies that come out. This service is a great job creator. It's foundational to all supercluster areas. It's foundational to all strategic tables. Electronics are in every product you can possibly imagine. There are over 200 devices in your cellphone right now. Unless you have a really old lawnmower, you probably don't have an appliance that doesn't have electronics in it. So we think it's extremely important.
We make four recommendations in our paper. The first is that the government continue to invest in microelectronic, photonics and quantum technologies—all things that we enable and facilitate. The second is that they continue to fund the major research facilities and the MSI, which we call Canada's national design network.
One of the problems with these national research facilities is that we have a forty-sixty rule for funding. We have to find 60¢ of every dollar to get the 40¢ cents from the MSI funds. That is extremely difficult when you're a national organization like ours. We can't go to each province and expect all of them to pay up. There are have and have-not provinces, so we don't want to be unfair about it. It really is a federal mandate to support this research.
Thank you very much, Mr. Chair and fellow Maritimer.
It's nice to be here. I want to thank sincerely the committee for the invitation to discuss the vital role that municipalities play in the growth of Canada's economy.
As you may know, and it's probably been mentioned on several occasions to you in the past, the Federation of Canadian Municipalities, or FCM, has 2,000 members, representing 90% of Canada's population in every province and region of the country. They form the order of government closest to the people. On behalf of our membership, I am pleased to share with you today our vision, Mr. Chair, for a municipal sector with more tools than ever to help grow the Canadian economy.
Cities and communities are Canada’s hubs of growth and innovation, managing two-thirds of the public infrastructure that supports our economy. By working together, our orders of government have laid down important markers over the past few years, and for that we are very grateful. The federal government is delivering robust investments in infrastructure and affordable housing, and we look forward to seeing continued support for these critical projects as we move forward.
Municipalities are using these new tools to deliver local solutions with national impact on growth, productivity and improving climate resilience. That progress simply needs to continue in budget 2019.
In 2018, and indeed for many years now, new expectations and responsibilities have been brought to our municipalities across the country. We play a leading role on issues ranging from tackling gun crime and regulating the newly legalized cannabis next month to addressing the opioid crisis and helping new Canadians thrive in their new communities.
Yet, Mr. Chair, the outdated fiscal and legislative framework in which municipalities operate has not changed since it was created.
Municipalities continue to make the most of the tools available to respond every day to national challenges. We are forced, however, to rely on a property tax never designed to support this modern reality. With access to just 10 cents of every Canadian tax dollar, local governments must prioritize efficiently—and we do. Yet, modern realities mean that municipalities will continue to rely deeply on variable investment programs from other orders of government.
Nevertheless, Mr. Chair and esteemed members of this committee, we as the municipal sector are extremely optimistic for our future. We firmly believe that budget 2019 can be the launch pad for a generational shift, a shift toward a federal-municipal government having a fully engaged partnership, a true partnership, a shift that helps the Government of Canada achieve its central objectives of boosting economic growth and productivity, fostering innovation and creating more sustainable environments for its citizens.
What is needed now, from the position of the FCM, is a clear federal commitment in budget 2019 to engage FCM and the local orders of government in a new modern and mature conversation on updating the fiscal framework to reflect the critical roles that municipalities play in solving 21st century challenges.
This conversation is long overdue but absolutely necessary to ensure that local governments have the kind of long-term, sustainable, predictable fiscal tools already available to other orders of the government. As government leaders on the front lines across Canada, we can say with confidence that partnering with municipalities ensures the most efficient and accountable response to local priorities. We have proven that to various governments over the years.
We can make our economic partnership official through regular meetings with all orders of government to discuss our shared priorities for economic growth.
Interestingly enough, today in Halifax, for the third consecutive year, FCM's president is leading a team of municipal leaders, including Mayor Mike Savage, at the annual meeting of federal, provincial and territorial infrastructure ministers. They provide the critical local perspective, without which, as we have seen in the past, some national projects falter.
Whether through formalized FPT-plus municipal format or a new forum featuring orders of government as full partners, municipal governments are ready to bring to the table our knowledge and experience of delivering to Canadian people to ensure that Canada's economy grows from the ground up.
Successive federal governments have established a foundation for this conversation over the years with many initiatives of which you are well aware—for example, through the permanent and indexed federal gas tax fund and the 100% GST rebate for municipalities. Budget 2019 is an opportunity to grow and build on these highly effective programs.
The right solution could bring us closer to addressing the outdated fiscal framework, such as expanding on a predictable source of funding—predictable, dependable and sustainable like the gas tax fund—for local infrastructure such as roads and bridges.
Of course, core infrastructure, which we talk about a lot, is only part of the equation. We, collectively, just worked together on a transformational allocation-based funding plan that we recognize as a step in the right direction for the next decade of public transit expansions nationwide. Now is the time to build on that with a permanent funding mechanism for public transit.
Canada's economic future depends on vibrant cities with world-class mass transit that moves families and workers from home to school, to their office and back home again. The federal government has recognized and knows that it has a critical role to play in getting this right. With a permanent funding mechanism, cities will be able to plan over 20 and 30 years, driving major improvements in local congestion and national productivity.
I will just interject that FCM has done some amazing work with Abacus Data on what Canada will look like in 2040, and that is the type of funding that's required to make that vision a reality.
Of course, as we know, much too often climate adaptation and disaster mitigation are another priority for both orders of government. We've seen recently, again, extreme weather events costing money, closing businesses and putting families out of their homes. Our communities and this country need to be prepared when confronted with extreme weather. Getting ready could mean a targeted program such as the existing disaster mitigation and adaptation fund delivered by Infrastructure Canada, but this type of challenge will best be addressed for the future by reforming the underlying fiscal framework.
It is time also for much bolder federal leadership to achieve universal, reliable broadband Internet access in this country. I just talked to our colleague from the northwest. Communities from across Canada, small, remote and rural, call FCM all the time to talk to us about the need to have this major priority addressed. It should be a national imperative.
Without reliable connectivity, small businesses cannot grow, cannot link to the supply chain and cannot open new markets to new customers. Without connectivity from coast to coast, Canada will struggle to attract employers to regions where they are most needed. With strong federal leadership in budget 2019, we believe an investment of at least $400 million per year over 10 years in broadband and mobile connectivity can spark the transformational shift that Canadians and businesses need to thrive in a globally competitive economy.
Mr. Chair, we at FCM and our more than 2,000 members across the country, as I have stated, are extremely optimistic for our future.
In closing, as we also know, there is in fact an important debate happening across Canada about the role and autonomy of municipalities. The conversation about that is long overdue. This is the time to discuss a new federal-municipal partnership to achieve those objectives that we share and, together, to build tomorrow's Canada.
On behalf of our president, Vicki-May Hamm, who couldn't be here today, our board of directors and all of our members, again I say thank you for having us here today to share our vision.
Thank you, Mr. Chair.
Good morning. I'm Kathleen Sullivan, CEO of Food and Beverage Canada. I thank you for the opportunity to be here today. I'll try to keep my remarks brief; I know you'll want to get on to questioning all the witnesses.
Food and Beverage Canada, or FBC, is a national industry association that represents food and beverage manufacturers across Canada. Our members don't just sell food and beverage products in Canada; we invest in Canada. We create jobs in Canada. We contribute to Canada's economic growth and competitiveness every single day.
FBC provided a written brief to this committee as part of your pre-budget consultations. We also just recently provided extensive comments to Treasury Board as part of the federal government's budget 2018 regulatory modernization initiative. It my remarks today, I really want to focus on just a few of the comments we made, and one in particular.
To begin, I would like to note that our industry was very pleased when the federal government identified agri-food as one of its five priority sectors in both budget 2017 and budget 2018. It is important, though, to remember that agri-food is a very broad term and embraces several different sectors, including primary agriculture, food and beverage manufacturing, and aquaculture. Each of these sectors is distinct. Each of these sectors has its own unique challenges. All of these sectors, if we want them to achieve their full potential, are going to require supports that recognize their respective realities.
The industry I represent has very strong links to primary agriculture here in Canada, obviously, but we are first and foremost a manufacturing sector. We are, in fact—which is surprising to many people—the largest manufacturing sector in Canada in terms of contribution to GDP and also in terms of employment. We are also the second-largest manufacturing sector in Canada in terms of the value of our production.
To give you an example, in 2016 our shipments were worth more than $112 billion. We employed a quarter of a million people. That is more than the auto and aerospace industries combined.
While Canadian food and beverage manufacturing output is growing, we have great concerns that our sector is falling short of its potential. Of great concern to us is that Canadian food and beverage manufacturing companies are actually seeing a decline in investment in research and development, and a decline in investment in equipment. In addition, Canada has fallen from third place to fifth place, compared to our global competitors, in terms of the value of our agri-food exports.
We think it is possible for the Canadian food and beverage manufacturing industry to reach its potential. We share the government's optimism about this sector. To achieve our potential, though, we are going to have to work together to tackle some of the issues that are limiting or that, conversely, could in fact support our competitiveness.
We are particularly interested in the work of the agri-food economic strategy table. That's the main point I want to make here. The strategy table has been working for some time to develop recommendations to support competitiveness and economic growth in the broader agri-food sector. Their report, released earlier this week, focuses on five key policy areas: regulation, market development, innovation, labour and transportation. We cannot let this report languish. The report calls on the food and beverage manufacturing sector to increase its production, its output, by 30% over the next seven years. That will not happen simply on its own.
We are therefore encouraging the government to immediately establish a joint industry-government advisory committee to review the report of the agri-food economic strategy table, particularly, in our case, from the perspective of food and beverage manufacturers. We think the advisory committee should be given a mandate to establish objectives and identify key policies, essentially to create a strategy that will drive this industry toward the competitiveness goals in the next seven years. We think that this advisory committee should be formed now so it can come up with recommendations that can be inserted into budget 2019.
I have just a few other brief comments. In the submission we have made to you and also to Treasury Board Secretariat, we make the point that we think we need to adopt a whole-of-government approach to competitiveness. That's a term we throw around a lot. I think in some cases it may have lost its meaning. Government is complex. We really need to put in place mechanisms that bridge different departments if we're going to solve issues.
Labour, for example, is a critical issue that my colleague has already raised. We fall under the jurisdiction of Agriculture Canada, but labour issues fall under the labour department. They fall under the immigration department. They fall under Service Canada, which delivers many of these programs. Unless we really start to put mechanisms in place to bridge across these different departments, we will never resolve the barriers that are preventing us from achieving our potential, and we will never fulfill the objectives that the economic strategy table laid forward this week.
With that, I'll conclude my remarks. I look forward to any questions you might have.
Good morning, honourable chair and committee members and my fellow witnesses.
Thank you for this opportunity. On a purely personal note, I spend much of my time travelling to conflict countries, where most citizens don't have this opportunity to bear witness to a committee that is putting together a federal budget, so thank you for the work you do. It's extremely important, and we don't take it for granted here.
The Nobel Women's Initiative is a collaboration of six women who are Nobel peace laureates—I am not one. The organization uses the prestige of the Nobel Peace Prize to increase the visibility and power of women human rights defenders and women's movements working globally to bring about greater security and peace.
We work from the starting point that change happens from the ground up, and that to bring about more secure societies and sustainable economic change, we must support those doing the work on the ground. That is why we support Syrian women working to influence the peace process to end Syria's long and devastating war. We support Rohingya women working to end the war on their communities in Myanmar, and bring sorely needed help to refugee women in the Bangladeshi refugee camps. We support women in Guatemala working to bring an end to rampant corruption and human rights abuses, and women on the front lines in Asia and the Pacific working to mitigate the devastating impacts of climate change.
Today we are here to present you with one primary recommendation, and that is to invest boldly in women's rights organizations as part of Canada's international aid assistance, particularly direct aid to grassroots groups. We recommend an investment of $220 million per year over 10 years going directly to grassroots women's organizations.
We strongly believe that one of the primary ways Canada can help end war and conflict around the world and contribute to greater security and economic prosperity is to invest in such groups. We believe this is not ideological, but backed up by the latest and most compelling evidence from a range of sources, including the World Bank and academics like Valerie Hudson, professor and George H.W. Bush chair in the department of international affairs of the Bush School of Government and Public Service at Texas A&M University. The research she and many other researchers have done very clearly shows that the best predictor of a state's stability and security is the level of violence against women in a society. I think you all know and appreciate this, but it's important to remind ourselves of this.
Let me say this in another way. The larger the gender gap, the more likely nation states are to be involved in conflict and to use violence first in that conflict to resolve problems. The research also shows that the higher the gender gap is, the worse the relations with neighbours are. Focusing on the economy, the research shows that the larger the gender gap is, the lower the per capita of a nation state and the level of economic growth are, which is the concern of this committee.
Let's bring this back to grassroots women's organizations. Over a decade at Nobel Women, we have documented the very deep capacity of grassroots, small and national women's organizations working with quite meagre resources to broker local peace agreements, respond to crises with front-line services for communities, effectively lobby for legislation that reduces gun violence and successfully work with boys and men to prevent them from falling prey to extremist and violent ideologies that fuel so many of today's conflicts.
If grassroots women's organizations can do this with meagre resources, imagine what they could do with larger and more concerted investments. An investment of $220 million per year over the next 10 years is less than Canada's previous commitment on maternal, child and newborn health, and yet literally it will make a world of difference. This recommendation is very much in line with the excellent recommendation from the House Standing Committee on Foreign Affairs and International Development in its landmark 2016 study on women, peace and security. It also builds on the 2017 announcement of the women's voice and leadership initiative, and our government's current investments in peace and security.
In conclusion, Canada is doing important work to build peace and security around the globe, but it is imperative at this time in history that we do more. Having just come back from New York and the UN General Assembly, I can tell you that we are all looking to Canada for more leadership at this critical time.
Today, in this committee, I ask for your leadership. Supporting women's organizations and women's movements is a concrete and very cost-effective way to end conflict and build more peaceful, economic, viable societies.
Thank you for your work.
Thank you, witnesses, for being here.
Mr. Bourque, in your comments you mentioned three words, which I wrote down—about the affordability of real estate, the first-time homebuyer tax credit and looking to adapt to the realities of the marketplace in terms of the value of houses, and regulations that are having a large impact on the price of housing. I want to ask you some questions and get your response to them.
Recently, the Canadian Home Builders' Association did studies about the cost of a new home. A new build, of course, has a ripple effect into the resale market, because the resale market adjusts according to the new home prices. These studies have shown that, when the keys are handed from the builder or the developer to the consumer, fully 35% of the price of a new home in some markets, and as high as 45% in other markets across this country, is imposed government costs for regulations, development charges, and taxation by all three levels of government: federal, provincial and municipal. If you broke it down in a pie chart, those things would represent 35% to 45% of the price of that house.
When you hear about that kind of percentage, which is the government's take before we talk about the purchase of the land, the land cost, putting the pipe into the ground, putting the pavement on the roads, the materials for the house, the labour for the house, and the profit margin of everybody who supplies services in that supply chain, how do you react to that?
Yes, absolutely. Part of the city of Vaughan is in the riding that I have the privilege to represent. The gas tax funding delivered approximately $8 million to the entire city. That's one mechanism whereby dollars go directly to the city, which is great, and we need to look at other mechanisms as well.
Going over to CREA, our government has put in place, along with some of the arm's-length agencies, macro prudential measures, as we'll call them, to ensure that the quality of debt that Canadians are taking on is good debt and that we're not seeing over-leveraging. If you read some of the Bank of Canada reports, which I like to do on occasion, you'll see that the quality of that debt—the FICO score, as they call it, the credit score—is improving. We don't want to get in a situation of moral hazard, if I can call it that.
I think we've done the right things in terms of housing markets on the federal level. We all know— knows this quite well—that there are four levels of government in some places, because you have the regional level of government, municipal and provincial, and the housing market is complex. There are things that we can do at the federal level and could look at.
If you wanted to rank at the federal level.... I'm not talking about development charges or the availability of land, because those are decided at different levels of government, but at the federal level, are there one or two key things that you think would be most constructive for housing affordability?
I'll start with the Real Estate Association and go back to the stress test. I guess, really, when you look at the effect it has had, in combination with some of the other changes that were made, it made it more difficult, particularly for first-time or young buyers, to be able to even save a down payment and get into the market. The stress test has added to that.
I saw recently an article, I think last week, in The Huffington Post that talked about some of the other unintended consequences, besides the ones you've mentioned, which are the effects on other markets outside of Toronto and Vancouver. I've seen very significantly in my area, the Calgary area, the impact that has had on people in this difficult time that we're facing there, when maybe they're trying to downsize into a smaller home so they can find a way out, but they can't do it because the value of their home has dropped and it just isn't something that makes any sense to do. It's really having an impact on a lot of families.
However, the other impact we've seen, according to that article, is that the number of mortgages being issued to those between the ages of 73 and 93 in the first quarter of this year jumped by 63%. That doesn't even include reverse mortgages. That doesn't even include HELOCs, so those numbers are probably even higher. At the same time, we saw the number of mortgages issued to millennials fall by 19% and the number to Generation Z by 22%. You can obviously see what's happening there. What we're seeing is that people are going to parents or grandparents and saying, “Help me out here, because I can't do this anymore.”
We also had the Home Builders' Association here a couple of weeks ago, and they were telling us that what they think they've seen is people aren't getting mortgages. The goal here was supposed to be to make sure people weren't getting into debt they couldn't afford, but what they're doing instead is just going and buying a fancy new vehicle because they're going to rent instead.
Have you seen those types of consequences as well, and is this policy really going to have any impact on those types of issues when what we're seeing instead is this type of increase in mortgages amongst people in the older generations who are trying to help out the younger generations, or people taking on other types of consumer debt that certainly doesn't have the enduring value that investment in a home would?
Thank you very much for that question. It's a question I ask myself every day in terms of how to better address the needs of municipalities across the country.
From day one, FCM did mention that we're willing partners with the federal government that is going to pass this legislation into law in October to deliver to our residents the cannabis regime, as long as it's done safely, effectively and with no cost to the municipalities. The federal government, I do believe, did its part by stepping up in December of last year and changing the initial formula on the excise gas tax from a 50:50 ratio between the province and the feds to 75:25.
The has been very adamant in budget 2018, and in subsequent occasions when I've had the honour of meeting with him in Halifax at the FCM conference, that the 25% and more, if necessary, was meant to run through to municipalities to cover our costs. The costs are real, and the arrangement is such that now only two provinces in Canada signed or even verbalized agreements with municipalities as to how those costs are going to be covered. In Halifax we have the concern on a weekly basis. We're passing new bylaws, we're spending staff time, and there is frustration in trying to procure that money, and on many occasions—I say respectfully—it's falling on deaf ears at the provincial level.
This is again a great example of why, collectively, we need to be together and talk about a mature and modern mechanism and framework for fiscal policy, because the current model as far as our getting the 25% is concerned is that we have to knock on the doors harder to get in.
Well, that's a very good question.
I found out yesterday that PMRA is undergoing an evaluation of their re-evaluation process, on which we're very much looking forward to providing input.
The main concern we have from the PMRA perspective, only for the purpose of this discussion, is that there are over 350 pesticides that are up for re-evaluation, and they're not able to keep up with what they have right now. They are lacking data to be able to provide the sufficient scientific basis for decision-making. That has ended up in decisions, from our point of view, that are perhaps made too hastily and not based on science. In part, we think it's because it's a lack of resources. Maybe there are misplaced resources, but it's a lack of resources for the research.
On the other hand, we do know of the Pest Management Centre that has the ability, the know-how, to do a lot of this research that is needed and could feed into the process. They are efficient in their use of resources. They have the data processes in place. If they were provided with additional resources themselves, they would be able to feed into PMRA. Because of their efficiencies in PMC, maybe it would help out PMRA without increasing PMRA's problems.
There is a lack of resources at some point. It might be an efficient way to feed into PMC, which could then feed into PMRA.
To go beyond your question there, for CFIA, I think they are trying to take a broader look, through the creation of the Canadian Plant Health Council. I am on that council and hopefully will be able to provide some direction from the industry perspective on that. Hopefully, that will also help in having more of an integrated approach to plant health in Canada and bringing the different parts together to avoid the problems like you've mentioned in Newfoundland.
Thank you so much, Mr. Chair. I am very pleased to be here today and I'm very pleased to see you again. I can tell you, Mr. Chair, you can ask any question you want, because the quality of the questions is very remarkable.
My friends are very pleased for me to be here—gentlemen and madam—and to be welcomed to your House of Commons.
For sure I want to address one specific issue that is so important for our economy and for the finance department. It is housing. Mr. Bourque gave us some figures, some information that was unfortunately troubling.
A year ago, when the was misguided in launching his wall-to-wall policy on the housing situation in Canada, we raised the flag of concern. Indeed, there was something to be done about big cities like Vancouver and Toronto; we all recognize that. However, just because a policy is applied in Toronto does not mean that it is good for Baie-Comeau.
What we have seen unfortunately with this government is that this stress test, which was quite important for Toronto, was not good for each and every area in Canada. Just because it's good in Toronto doesn't mean it will be good in Baie-Comeau, but unfortunately the government decided to do that. Mr. Bourque gave us some information that is unfortunately disturbing for each and every Canadian, and especially for millennials.
Speaking of that, Mr. Chair, I don't want to get too personal, but I am speaking to you about that today because right now my daughter and her spouse are in the process of buying their first home. I think I'm more excited than they are. For sure it's a great moment for each and every millennial and each and every Canadian to buy their first home, but unfortunately with the stress test imposed by the Liberal government
A hundred thousand Canadians had their dreams shattered. One in five Canadians has not been able to buy a home, according to the figures provided by Mr. Bourque.
This is terrible, Mr. Speaker.
My question will be to Mr. Karsten.
As you know, because you are a municipal guy, it's quite important to have new houses, new families, to have millenials buying their first house. What was the impact in each and every municipality in Canada with the stress test imposed by the Canadian government?
Thank you to all of you for presenting here today.
I want to ask a question to FCM. I have a long history with the organization. I entered politics quite young, as an aboriginal person with the tribal councils. Then, at 22 years old, I became mayor of our community and have been involved ever since. It was because I recognized there was a level of despair in our communities in the north that I took this route. I've been working towards achieving and meeting the Canadian quality of living standards in our communities, and it's an ongoing thing for sure.
The north is quite different from the south. We don't have any communities that are older than probably 60 years. When you come south, you have buildings that are over a hundred years old. You don't find that in the north. Our communities are young. The aboriginal people lived out on the land and only came into communities fairly recently.
When we talk about funding our communities, we really can't talk about one-size-fits-all, because the north is so different. The FCM has really done a lot of good work in that area. When we talked about funding our communities, we partnered with the east coast communities, the jurisdictions that are smaller. We had a lot of things in common. We recognized that per capita doesn't work for us. When the government invests in public transit, well, in all of the Northwest Territories, we may have two buses, so it doesn't really work. We need flexibility when it comes to that.
However, I think a lot of lessons have been learned over the years. Maybe I could get you to talk about some of the things that the north and other smaller jurisdictions need when the government looks at funding, such as base-plus funding. I think that's a good mechanism to use, a good formula to follow.
Could you maybe elaborate on some of the work you have been doing on this?