Thank you, Chair, and members of the committee, for having us today.
I'll start at my left and just move around the table. Tony Giles is the assistant deputy minister of policy, dispute resolution, and international affairs in the labour program in the department. Next to him is Brian Naish, who is the chief financial officer for Canada Mortgage and Housing Corporation.
You had with you on Monday afternoon, Evan Siddall, who's the CEO and president of CMHC.
On my left is Louise Levonian, who is the chief operating officer of Service Canada. On my right is our chief financial officer, Alain Séguin. Paul Thompson is the senior assistant deputy minister for the skills and employment branch, and Kathryn McDade is the senior assistant deputy minister for the income security and social development branch.
We have other ADMs who I may feel at liberty to call to the table if your questioning gets into their areas of responsibility.
We've come in such numbers, Chair, to support the committee and answer your questions as fully as we can. It's good for the committee to get to know who are the senior officials in the department and for us to get to know the committee as well.
Would you like me to begin with some short remarks?
As you know, Chair, the 2015-16 supplementary estimates (C) were tabled on February 19 and the 2016-17 main estimates were tabled before the budget on February 23. I'm going to speak just by way of highlights to the main estimates as they pertain to the department.
The main estimates forecast spending for 2016-17 at approximately $61.5 billion. The estimates do not include charges against the Canada pension plan or employment insurance accounts for program benefits, which are about $44 billion and $20 billion, respectively, or for operating expenditures to administer these programs, which are about $243 million and $1.2 billion, respectively. Admittedly, these are very large numbers, and you get used to that with this department in time.
Of this, $59 billion is allocated to statutory programs. This represents an increase of about $7.3 billion over the previous year. This increase is mainly attributed to a forecasted increase of $2.4 billion for old age security pension and guaranteed income supplement payments. That, in turn, is due to the changes in the average monthly rate and an increase in the number of beneficiaries. This increase also includes an increase of $4.8 billion for the universal child care benefit as a result of the 2015 budget.
Operating costs are forecasted at approximately $600 million, a net increase of about $45 million, mainly due to additional funding to administer the temporary foreign worker program, to implement the old age security service improvement strategy, and to address old age security workload requirements.
Finally, an amount of approximately $1.7 billion is forecasted in grants and contributions.
An important consideration for the committee is that many of the budget 2016 items are not accounted for in the main estimates. These projections will be included in supplementary estimates, which will be tabled in Parliament over the coming months. As I indicated, our chief financial officer is here to help the committee with the financial details, if you wish, and my colleagues can also get into substantive issues.
We will make sure that the implementation of these initiatives will be made according to the new operating principles outlined by the government, including providing sound and politically neutral advice based on solid evidence; putting in place mechanisms to track, monitor and report on impacts and results; working with a wide range of partners in the public and private sectors, stakeholders, not-for-profit organizations, and other levels of government; and being transparent in all our operations.
We have several thousand extremely competent and dedicated employees who are deeply committed and proud to serve the public interest and implement the government's agenda.
Thank you, Mr. Chair.
It is a pleasure to be here.
As the deputy minister mentioned, I am joined by my colleague Brian Naish, chief financial officer.
Some members are new to the committee and to CMHC, so I thought I would take this opportunity to provide a brief overview of the work we do at CMHC to achieve our dual mandate of facilitating access to housing and contributing to Canada's financial stability.
As Canada's national housing agency, our mission is to help Canadians meet their housing needs. When we help low-income households access the housing they need, we are doing more than putting roofs over their heads. We are helping to build a foundation for broader social and economic success for these families.
Good housing cannot take the place of other key ingredients for success—such as family and community supports, education and employment opportunities—but it does provide the stability from which to leverage better social and economic outcomes. And its absence makes it that much harder for vulnerable Canadians to get ahead.
So, clearly, housing matters at a micro-economic level—to individual families and households. It also matters at the macro-economic level—to Canada's broader economic and financial stability.
Overall, housing added $334 billion to Canada's gross domestic product in 2014, roughly one-sixth of the GDP. And the construction sector alone accounts for about 7% of total employment in Canada.
International research confirms that housing security and housing markets play an important role in supporting social and economic stability. It points to the benefits of housing affordability and ensuring stable, secure housing, both rental and ownership. The dignity of housing stability pays.
So what is CMHC's role in Canada's housing system? At CMHC, we help Canadians meet their housing needs in three basic ways.
First, CMHC's housing finance activities—mortgage loan insurance and securitization—contribute to the stability of housing markets and to Canada's financial system. As a crown corporation with a public policy mandate, we serve all parts of the country and support all forms of housing, including home ownership and large multi-unit rental properties, through all economic cycles. Effectively, we act as a shock absorber in the event of housing slowdowns or even crises. This is a fundamental way in which we provide Canadians with access to housing while contributing to Canada's overall financial stability.
Importantly, our commercial programs are operated at no cost to taxpayers. Indeed, over the past decade CMHC has contributed $21 billion in profits and income taxes to help improve the Government of Canada's fiscal position. We also provide market analysis, information, and research to support informed decision-making.
As Canada's authority on housing, we are the most comprehensive and trusted source of information on housing and housing markets in our country. But we also recognize that significant gaps in information on housing markets exist. We're committed to strengthening our analysis and research to better understand these gaps. I'm pleased to say that this year's main estimates include increased funding for this important work, and yes, our research plan includes further work on the magnitude and implications of foreign investment in Canada.
The third way CMHC helps Canadians meet housing needs is by working with provinces, territories, indigenous peoples, and other stakeholders to support the 20% of Canadians whose housing needs are not being met by the marketplace. The federal investment in housing assistance is provided under various programs and initiatives funded and appropriated through Parliament.
For the current fiscal year, CMHC had estimated budgetary expenditures of $2 billion. Most of this funding will be used to provide assistance to over half a million Canadian households in housing need, including low-income families, seniors, people with disabilities, indigenous people, and victims of family violence. Close to $1.7 billion of this amount will be used to support Canadian households living in existing social housing units across the country, including in first nations communities.
As well, the main estimates include some $286 million for new affordable housing, renovations of existing units, shelter allowances, rent supplements for affordable housing, and accommodations for victims of family violence.
The majority of this funding is delivered through the investment in affordable housing initiative, a collaborative initiative with the provinces and territories, which match federal funding and are responsible for program design and delivery, facilitating tailored programs for different housing needs across the country.
Also included in these figures is approximately $156 million to improve living conditions on reserve by building new social housing units, renovating existing homes, and building capacity within first nations communities. We're very proud at CMHC of our ability to have made even better use of these funds on reserve. In 2015, we built 626 new homes on reserve. I know that's a small amount, but that's 26% higher than the year before. This coming year, we will construct over 700 new homes on reserve in places where they're most needed. In addition, our active management and capacity-building activities helped reduce by 12% the number of first nations communities with high-risk housing portfolios this past year.
As I said, this is what's included in our main estimates. Not included in these numbers are the significant investments in affordable housing proposed in budget 2016, most of which will be delivered through CMHC.
As mentioned to committee members on Monday, the budget proposes to invest an additional $2.3 billion over two years, starting this year, in the following manner: over $500 million to be matched by provinces and territories to build and renovate affordable housing and provide rent supplements to support housing affordability; $200 million to build or renovate affordable housing for low-income seniors; $90 million to build or renovate shelter spaces for victims of domestic violence; $574 million to repair and improve the energy and water efficiency of existing social housing units; $30 million in transitional support to help preserve affordability for low-income households living in federally administered social housing where operating agreements are expiring; $178 million to address the unique housing challenges in the north and in Inuit communities; and $554 million to be delivered by Indigenous and Northern Affairs Canada and CMHC in partnership to first nations communities.
This additional $2.3 billion of federal housing funding, together with provincial matching funds and the $2 billion of existing annual federal commitments, will bring the combined federal, provincial, and territorial investments in housing to at least $7.3 billion over the next two years.
In addition, these planned investments are to be supplemented by the proposed $208 million Affordable Rental Housing Innovation Fund to be administered by CMHC. The fund will be used over the next five years to test innovative financing, partnership and business approaches to encourage the construction of affordable rental housing.
CMHC will also consult with stakeholders on the design of the proposed Affordable Rental Housing Financing Initiative to provide a further $2.5 billion in low-cost loans over five years to municipalities and housing developers during the earliest, riskiest phase of development.
Importantly, CMHC will also support on the development of a national housing strategy.
The government has announced its intention to re-establish the federal leadership role in housing. As the committee can see, our support for assisted housing, our market analysis and research functions and our significant commercial operations put CMHC at the heart of Canada's housing system.
As a crown corporation with the sacred trust of managing public resources, CMHC is determined to be a high-performing organization: accountable, transparent, efficient and innovative, in order to serve the housing needs of tomorrow.
Thank you again for the opportunity to be here.
My colleague and I would be pleased to answer any questions the committee may have.
If we can get these before the meeting, all the better, because then we can be better prepared. That's just said as a suggestion on a point of order. Thank you. You can start the clock on me.
I want to thank the witnesses for being here.
Mr. Shugart, you're always known for your riveting speeches, and maybe that's why we have so many people here. I've known you and respected you over the years, and it's good to see you again.
My focus in the questions is going to be on seniors, because I'm the critic for seniors. When the was here, I asked him about the splitting of the guaranteed income supplement. I'm glad that the government is increasing the guaranteed income supplement by 10%, but it's only for single seniors. In the consultation I've been doing around Canada, I've met a number of people. There are some very wealthy seniors, but there are many seniors who need that guaranteed income supplement, so increasing it is good.
In a scenario, however, in which you have a single senior who has no assets and is living from what they get month by month—maybe a couple of thousand dollars—in the Vancouver area it's not a lot of money; it's like $24,000 a year. They're relying on that, so the boost up is going to help them with the situation of their drugs, their food, keeping their home warm. That little boost is good.
Another scenario I have also seen, however, is that it may be that $2,000 a month is from two people living together in the same home: spouses together have this combined income of $2,000 a month. I'm using approximate numbers just to make a point. In a situation like this, in which you have double the drugs, double the food, double the need, the advantage in it is that they can take care of one another in a number of wonderful ways. That helps, but if the net income of that family is two people with $2,000 a month or one person with $2,000 a month.... In the new program, the single person would qualify.
I've heard of families for various reasons being split apart because there's an economic benefit to splitting apart. That's my concern. If we are now increasing the guaranteed income supplement if you're a single person in need, but it's based on income instead of on how many people there are, are we possibly going to create a scenario whereby we're forcing people to come apart or we have people who are in dire situations, whose needs are not being met?
I can't ask questions on policy and your advice to the minister, but my question to you is, in the scenario that I present, is it possible that by only including single seniors we are going to miss out on some Canadians who need help through increasing the guaranteed income supplement?
Thank you to everybody for coming today and for your presentations, which were very good.
My riding is Saint John—Rothesay in southern New Brunswick. We're a riding of two stories, if you will. There's lots of wealth and success, but there's also many people in need, and many people who are using or need unemployment insurance.
My question to start is for Mr. Shugart.
I have a very good friend who recently needed EI. He called Service Canada, and he waited and waited. In my MP office, we get constituent after constituent coming in looking for help. My colleague across the room here was talking about the wait times and how long people have been waiting to get a response.
What I did after that was a bit of checking. Under the last government, service standards were really decimated. There were 600 positions cut from EI processing, EI call centres. I did some more investigation, and 100 out of 122 processing centres closed. Two remained open, obviously, MP MacKay's and MP Keddy's.
Two out of 12 call centres closed, and again, that's the 600 service positions eliminated. Service standards were dropped from 95% answered within three minutes to 80% answered within three minutes. They didn't meet the reduced standard, so in 2014 it went to 80% answered within 10 minutes, and they only achieved 45% success even with that lower standard.
My constituents are asking me, my friends are asking me, what's going to be done?
So I ask you, what can we do as a government to correct that?
Thank you all for coming. I'm sure this whole room belongs to your team, right.
I have a couple of comments. I'm going to echo my colleague's sentiments. What I'm noticing in my riding is that some people are starting to realize if they come to my office they might get a quicker route to what they need to get done, which is not good for my staff.
Another comment is that during the pre-budget consultation process that we had through the year, I held my own. I separated the groups into low income and seniors, middle class, and small business.
In the middle class I had a smart gentleman, an executive, whose family made probably in the neighbourhood of $140,000. He was quite irate because we're cutting taxes, we're cutting the disability tax credits, and about everything else that went on. He was upset about all of that.
Last week, back in the riding, he made another appointment. He came in, and he had done his numbers. Surprisingly he comes out about $2,500 ahead. He was ecstatic about that, and thumbs up. I think that's working.
I'm going to move my comments now to Mr. Siddall. Yesterday spoke about increased investments in social and low-income housing. In my riding of Pitt Meadows—Maple Ridge, we're currently facing an unfortunate increase in the number of homeless people in our community. This is an unfair reality for too many Canadians.
Could you please provide further information about the increases in investments to the homelessness partnering strategy, as well as how this money will be most effectively allocated and utilized to provide homeless Canadians with the support they need to escape poverty?
You've put your finger on a challenge that we have been focused on for some time now. Those disparities often arise because of barriers, many of which are regulatory or have been regulatory. Let's deal with, broadly speaking, the professional categories. This is in the domain of the provinces, and even within the provinces, the reality is that it is often within the domain of the professional associations that establish the credentials and that kind of thing.
We have had a program of work with provinces to address systematically, picking profession after profession progressively down the list, the requirements for people who have achieved their credentials offshore to practice and to use their credentials in Canada, and to reduce the lapsed time between when they arrive and when they can be put to work.
I think this is a broadly shared objective across political groupings and across jurisdictions. But from our point of view, we have to work through the existing authorities. I think we're getting, generally speaking, good co-operation from the professional organizations.
We collectively as governments are keeping the pressure on. Of course, one has to be tested. If one is going to practice one of the health professions in the Canadian context, there are standards that need to be met. Increasingly, the requirements that foreign-trained arrivals to Canada are going to have to meet are being conveyed to them offshore even before they arrive, further reducing the gap. We have also recently had a loan program in various situations to make it easier for people to access training to meet the Canadian requirements.
This has been a pretty aggressive body of work. I believe we are making progress, but I don't think any of us will be satisfied until this is a smooth, seamless, and relatively rapid transition.
Last March 19, on a sunny Saturday afternoon, 300 of my constituents travelled to an information workshop about the tax credits for disabled people. In fact, I found out after the workshop that they should actually be referred to as people with functional limitations. On that day, I was sorry to learn that only 20% of the people who may be entitled to those tax credits are claiming them. Often, they have not been told that it is possible. In some cases, people are being deprived of an amount that can go up to $15,000.
I also learned something else at that workshop that was given by my colleague . He is actually the one who is going around communities to provide these information workshops, given that, for four years, staff in your department have no longer had the mandate to offer similar workshops to Canadians.
My questions deal with Canadian disability savings grants.
Of the 300 people directly affected by the topic presented at the workshop, only three or four knew that these grants existed. In the main estimates, the government is providing for an increase of $67.2 million for the grants, because of increased participation in the program.
I would like to know how many registered disability savings plans currently exist, how the government came to set the increase at $67.2 million and what percentage of eligible people have a registered disability savings plan.