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Standing Committee on Finance



Wednesday, January 12, 2022

[Recorded by Electronic Apparatus]



    Welcome to meeting number 11 of the House of Commons Standing Committee on Finance and our first meeting of 2022. Happy new year to everyone. I hope you're all well.
    Pursuant to a request by four members of the committee under Standing Order 106(4), the committee is meeting today to discuss Canada's housing inflation crisis. This is important for all of us and for our parties, and foremost for our constituents. I look forward to our discussion on this matter.
    Today's meeting is taking place in a hybrid format, pursuant to the House order of November 25, 2021. Members are attending in person in the room and remotely by using the Zoom application. The proceedings will be made available via the House of Commons website, and the webcast will always show the person speaking rather than the entirety of the committee.
    Today's meeting is also taking place in a webinar format. Webinars are for public committee meetings and are available only to members, their staff and witnesses. Members enter immediately as active participants. All functionalities for the active participants remain the same. Staff will be non-active participants and can therefore view the meeting only in gallery view.
    I would like to take this opportunity to remind all participants in this meeting that screenshots or taking photos of your screen is not permitted.
    I usually go through all the health protocols. We're all virtual. The clerk, staff, interpreters, technicians and analysts, etc., are all in the room and will abide by the health protocols within the room. I thank them for that.
    To ensure an orderly meeting, I would like to outline a few rules to follow.
    Members may speak in the official language of their choice. Interpretation services are available for this meeting. You have the choice at the bottom of your screen of either floor, English or French audio. If interpretation is lost, please inform me immediately; we will ensure that interpretation is properly restored before resuming the proceedings. The “raise hand” feature at the bottom of the screen can be used at any time if you wish to speak or alert the chair.
     Before speaking, please wait until I recognize you by name. Please click on the microphone icon to unmute yourself. When speaking, please speak slowly and clearly. When you're not speaking, your mike should be on mute. I remind you that all comments by members and witnesses should be addressed through the chair.
    With regard to a speaking list, the committee clerk and I will do our very best to maintain a consolidated order of speaking for all members. I believe—and the clerk can inform me—that I will look for the hands as they go up in the order on the side panel by the “raise hand” feature. Thank you, Clerk.
     I see a hand up already. It's Mr. Poilievre's.
     Thank you very much, Mr. Chair. Welcome back and happy new year.
    I, along with the Conservative members of the committee, joined with Monsieur Gabriel Ste-Marie in signing a letter to restart meetings early. I think it's time we got back to work.
    We have an emergency in this country, and it is that our economy has become a gigantic, inflated balloon. The asset class in which we see this balloon most inflated is, of course, housing. Bloomberg rates Canada's housing bubble as the second worst on planet earth. Demographia says that Toronto and Vancouver are the fifth- and second-most unaffordable housing markets in the world. They are ahead of such places as Manhattan, Chicago, and London, England. Even tiny little Singapore, that little island out in the Pacific, has more affordable housing relative to local income.
    When Mr. Trudeau took office, you could buy the average house in Canada for $450,000. I think most people are chuckling when they think of that. We now have to pay $720,000 for the average house across Canada. In Toronto and Vancouver, it's now over a million.
    The year ending November 2021 saw the fastest housing inflation ever, according to the Canadian Real Estate Association. Home prices are up 58% under this Prime Minister, including 20% in the last year alone, all while real wages have been flat. It is a real quandary how house prices have gone up by more than half when the underlying wages that are used to buy housing have stayed completely flat over that time period.
    All of this raises the metaphysical question: Where is the money coming from? You know, we can all debate the cause of rising house prices. What we can't debate is that there are real dollars buying these houses. When the housing purchase happens, a real transaction occurs from buyer to seller, so this money is coming from somewhere.
    In late 2021, the year over year increase in the volume of housing purchases was 80%, going from $250 billion to $450 billion in one year. An 80% increase is something we've never seen before.
    The question the committee must answer is this: Where is the money coming from? It's not coming from a strong economy or growing wages, because we have neither, but it must be coming from somewhere because everything comes from somewhere and nothing comes from nowhere. Answering that question and solving that riddle will explain why this balloon is inflating so fast and abruptly, and it will allow us to halt the inflation before the balloon bursts altogether, with devastating consequences for families and our overall economy.
    That is why I propose the following motion, and Mr. Chair, your clerk has had notice of this motion in both official languages. The clerk should have been able to circulate it.
    It reads that the committee, pursuant to Standing Order 108, undertake a study of inflation in the current economy, including housing inflation, food inflation, repatriating supply chains for strategic goods, and any other issue that the committee deems pertinent to the question of inflation, and that the committee report back to the House no later than May 31, 2022; that hearings begin on Monday, January 17 and continue on Wednesday, January 19; Friday, January 21; Monday, January 24 and Friday, January 28 and that each of these meetings be three hours in length; that this study include the following witness testimony: the finance minister alone for three hours with a 10-minute opening statement; the Governor of the Bank of Canada alone for three hours with a 10-minute opening statement; Peter Routledge, the superintendent of financial institutions, and Romy Bowers, president and CEO of the Canada Mortgage and Housing Corporation, for three hours together; senior management at Sagen and Canada Guaranty for two hours; the chief statistician of Statistics Canada and any officials responsible for the consumer price index and taking housing costs, and any witnesses invited by committee members; that during hearings, the chair enforce the rule that a witness's response to a question take no longer than the time taken to ask the question; and that the study include 11 meetings.


     I've since had some feedback from members via text message that some would prefer to have a 10-meeting study rather than a 12-meeting study. I'm okay with that. I'm open to adjusting any of the logistical aspects of this motion, if doing so would be my colleagues' wish.
    Thank you, Mr. Poilievre.
    Is there any discussion on this? I see Mr. Blaikie. I have Mr. Beech on next.
    Go ahead, Mr. Blaikie.
    First of all, I think it is very important that the committee turn its attention to figuring out what the cost drivers are in the housing market. We know it is a real concern for Canadians who are trying to get into the real estate market or who have family trying to get into the real estate market. That is something that, even well before the pandemic, was getting harder and harder to do. The trend line that has been leading to this crisis in housing is a long one, going back quite a ways, so it would be a productive use of the committee's time to turn its attention to that.
    I'm also glad to see a suggestion reflected in the motion that we look at some of the other serious cost pressures on Canadian households, including the very real cost increases people are seeing at the grocery store, and some discussion of supply chains and how those are affecting the prices of goods in the Canadian economy.
    The language here is a little prescriptive in terms of the solution, but I'm quite on board with the following. In fact, earlier today at a press conference I was just discussing with my colleague and NDP health critic, Don Davies, the need to support a robust domestic manufacturing industry in respect of medical PPE, as just one example.
    There are other examples of essential goods where Canadians are currently exposed to disruption in international supply chains, whether that is the result of a public health crisis as has been the case in the pandemic, or the result of natural disasters, which we understand are going to happen more frequently as climate change manifests itself more frequently and more severely.
    We want to be able to look at that question of supply chain disruptions and how they are affecting pricing in the Canadian economy. We definitely have some ideas about what some solutions might be, but it is important for the committee to be able to look at that aspect in a very broad way.
    Energy prices, of course, are another serious issue in the Canadian economy. We kind of get it both ways. When energy prices are low, that's a problem for many Canadians who depend on that industry for their livelihoods, and when prices are high it can be a real problem for Canadian consumers. We're seeing some of that too.
    That would be an example of the kind of item the committee might consider under the fourth point.
    In respect to the number of meetings to hold, I'm a bit agnostic. I would like to see the number of meetings driven by the nature of the study. I don't think it would be hard to do 10 meetings on the housing question alone. There is a lot to hear about, and given that it's a broader study we may actually want more meetings than 10 or 12. I find it hard to conceive of our addressing the three issues named here as well as any other issues that may come up, such as energy prices or others, in a simple 10-meeting study, but that is something that shouldn't be a sticking point today. If we get into the study and we need more meetings, that will be apparent and the committee shouldn't feel bound by whatever particular number we happen to land on today. We should feel free to add meetings as required.
    For the moment, I am going to move an amendment that we delete the date of Wednesday, January 19. The NDP is having its national caucus meetings in that week, which extend over that day, so it's not a day when I would be able to attend. It would also be very difficult to have a substitute attend, because we're all going to be at the same meeting.
    As that is a legitimate part of our parliamentary work, I expect that we wouldn't want our committee meetings to interfere with our national caucus meetings. I understand that other parties are going to be having similar meetings, as they normally do in the month of January. I don't know if any of these other dates would conflict with their meetings, but I would certainly hope that we can find an agreement here that wouldn't create a conflict between our caucus meetings and committee meetings.
    With that, Mr. Chair, I move that we delete the words “Wednesday, January 19” from the motion. This amendment is motivated by my previous remarks.


    Can I ask a question?
    Yes, Mr. Poilievre.
    Would Mr. Blaikie be open to moving that day to Thursday, January 20?
    We're meeting on the Tuesday, Wednesday and Thursday, so I don't think there's another day that week that would work.
    All right. No problem. I consider it a friendly amendment.


    Thank you. It's a friendly amendment by Mr. Blaikie.
    We'll move now to Mr. Beech.
    I was going to speak to the amendment, because we have our own issues with regard to the 28th, but perhaps I'll speak to the main motion first and then I'll ask my colleague, Mr. Poilievre, for a similar consideration with regard to the date of January 28. Assuming we're sticking to 10 meetings at a minimum, we will find time to get adequate meetings in.
    With regard to Mr. Blaikie's comments and prior to addressing the motion as a whole, there was something we did at the fisheries and oceans committee in the previous Parliament, when we had a very significant study on the impact of different issues on wild salmon. We made it into a rolling study, because the issue was so multi-faceted and there were so many aspects that it touched. It's something we could consider.
    I don't think we need an amendment to address this issue right now. I think the motion is fine as it is. If necessary, and depending on how far the housing and food conversation goes—and of course the fourth part, the other issues that the committee deems pertinent to the question of inflation—we could have an interim report and continue on past the date if we wanted to continue on these issues and have a study before it, if that is still the top priority of the committee at that time. We'll have to see how the study commences and how people feel it is going.
    I want to take an opportunity to speak to the motion as a whole and to welcome everyone back. I hope everyone had a safe New Year's and Christmas.
    I'd like to thank my colleagues, Mr. Poilievre and Mr. Ste-Marie, for bringing this meeting together and for moving this motion. Housing affordability, prices at grocery stores, as described by Mr. Blaikie, and issues with supply chains are issues we're all hearing about across the country. Certainly we're seeing them affect countries beyond Canada as well, and it's something that deserves immediate study.
    I think some of the key actors who have been solicited for questioning are good sources of information. I expect we will have other experts who can add to this study, and in fact I'll probably move an amendment at the end of my opening remarks here just to make sure we have a deadline for submitting witnesses.
    Overall, these are important issues. Something else that might be useful, given the breadth of affordability and inflation issues that could be cited in this study, is that we might look to have an expert come in early to see the major drivers of inflation. We know about housing; we know about food, and we know about energy. One way we could prioritize what we're talking about is by determining which of those have been affected most recently. We could also prioritize according to the areas where we have the methods to bring in measures that could help Canadians most immediately.
    Saying that, and saying thanks to everyone for being here today and bringing forward this important motion, I would move an amendment.
    I move first that we amend the dates to remove Friday, January 28, for the same reason that Mr. Blaikie had for removing his date. It has to do with our caucus schedule and our regional caucus meetings, which lead into our national caucus meetings.
    If that can be considered as a friendly amendment, and I look to Mr. Poilievre for that—
    I thank him for that.
    Then I would move a formal amendment as the third-to-last bullet point. I would move that a prioritized list of witnesses be submitted to the clerk by the end of day on Friday, January 14, 2022.
    I'm flexible on that date if people want the weekend or something like that, but I think we should have some sort of deadline to make sure we get witnesses into the queue in addition to the ones outlined in the motion.
    Thank you, Mr. Chair.
     Thank you, Mr. Beech. We have your amendment.
    I have Mr. Baker next, and then Ms. Dzerowicz.
    Is it on the main motion or the amendment?
    Thanks very much. I can speak to both, Chair.
    I want to just say that the issues identified in the report are touching Canadians. These are important issues; there's no question about that.
    The proposals made by Mr. Blaikie and Mr. Beech on the dates are very reasonable. Mr. Poilievre has accepted those as friendly amendments. The suggestion that Mr. Beech made around a deadline for a list of witnesses is a good procedural addition to help ensure that we get the witnesses in, but in time to maximize the chances that we can hear from them within the schedule.
    As we all know, this committee typically has a tremendous amount of important business that is brought to its attention. If we were able to set aside.... To me, 10 meetings is a reasonable number of meetings. The committee has the ability to add meetings if needed, depending on the extent of testimony, from whom we hear, what we hear about, etc. I would propose that a 10-meeting initial plan is reasonable.
    Those are my thoughts, Mr. Chair.


    Thank you, Mr. Baker.
    I have Ms. Dzerowicz and then Monsieur Ste-Marie.
    Thank you so much, Mr. Chair.
    I, too, think that this is an important study to undertake. I support all the amendments that have been proposed and the deadline Mr. Beech has proposed in terms of the witnesses.
    There are only two additional comments I would make. First, I'm glad we have a section in here that has “and any witnesses invited by committee members”. I did a very quick search on housing prices and inflation around the world. In the search that I did in literally a few minutes, I saw the massive increases in housing prices in Nordic countries, the U.S., the U.K., Germany and Italy. It was quite interesting to see what's happening around the world.
    One witness that I'll be suggesting is someone from.... The Pew Research Center has actually done a big report on 46 countries in terms of inflation. It will be good to put some of the things that are happening in Canada into context with what's happening in the world, so that we can identify what is Canada-specific and what, more specifically, we could actually address here in Canada.
    The other comment I would make is on the original motion Mr. Poilievre has put forward and the second-last bullet point, “That...the chair enforce the rule that a witness's response to a question take no longer than the time taken to ask the question”. I agree with this statement broadly. I will say, though, that there are times when it is difficult to say, “Answer this question, yes or no.” If we're really looking for a response, we won't get much of one in two or three seconds. I don't know how to address that. I would just say that witnesses need a fair opportunity to be able to genuinely answer the question.
    At this point, I'll just note that I have a bit of a concern about a very definitive rule of two seconds and two seconds. Let's just remind ourselves that we want answers, and we want to respect witnesses and their ability to have the time to provide those answers to us.
    Those are my comments for now, Mr. Chair.
    Thank you, Ms. Dzerowicz.
    Go ahead, Monsieur Ste-Marie.


    Thank you, Mr. Chair.
    Hello and happy new year to everyone.
    I am very pleased to be with you to discuss what should be done about the important issue of inflation. All of the parties recognize the importance of addressing that issue.
    Mr. Chair, before I talk about the motion, I would like to remind you that, according to my whip's office, you are supposed to mention at the beginning of the meeting that the committee has ensured that all of the participants did a sound test. We know that those tests were done before the broadcast of the meeting began, but the whip's office asked me to remind you that the chair is supposed to mention that.
    That being said, it is important for us to be able to address the issue of inflation, particularly when it comes to housing. I know that we will not all share the same views on the matter, but it is a big problem so it is important that we address it.
    I would like to remind the committee of the importance of conducting the pre-budget consultations since that is an important role that the committee plays. We dealt with this matter in December by saying that we would start working on it again in a few weeks. In my opinion, we have an opportunity to start examining the issue of inflation right now. I am pleased that we are able to bring this matter forward.
    With regard to the number of meetings, I would respectfully ask Mr. Poilievre to reduce the number of meetings provided for in the motion to 10. I therefore propose a friendly amendment in that regard.
    If that is not possible, I could propose an official amendment. If we find that the committee needs more meetings to deal with this issue, then we could change that number at any time. If a friendly amendment were made that sets the number of meetings at 10 rather than at 11 or 12 as the motion proposes, then I would support the motion.


    Thank you, Mr. Ste‑Marie. 


     We had an amendment already on the floor just prior to your amendment, and that was in regard to the deadline for witnesses. The amendment was to prioritize a list. I believe it was...if the clerk could read exactly what was brought on record...“by the end of day on Friday, January 14, 2022”.
    On that amendment, I look to the members.
    Is it clear, though, in that amendment that the 14th would be the deadline to submit the names of the first group of witnesses and that members would be able to submit other witness names throughout? I agree that we should have our lists for the first batch of witnesses in by Friday, otherwise we couldn't begin the study the following week. However, it is a very short turnaround time now—48 hours—so I would suggest that it be clear in the amendment that members can get their lists for the first group of witnesses in on Friday, but that they can also submit other names as our proceedings go on.
    Thank you, Mr. Poilievre.
    Mr. Blaikie, is it on this?
    Thank you. It is, Mr. Chair.
     I understand that you can submit witness names throughout.
    Mr. Blaikie.
    On a very similar point, I would be very happy to supply an initial witness list, particularly on the housing issue, but I think it would be unfortunate if the understanding were that Friday would be our last opportunity to submit witnesses for the entirety of the study. I'm very happy to commit to having some initial witnesses so that we can get started and the clerk can get started.
    If that's the understanding of the committee, I'm happy to support this amendment, but if that's not the understanding, I think we would need a bit more discussion about the deadline and things of that nature.
     Thank you, Mr. Blaikie.
    Ms. Dzerowicz, are you speaking on this amendment? You are.
    We will go to Mr. Beech afterward.
    I think Mr. Beech and I are probably going to channel the same things.
    I am going to agree with what Mr. Blaikie said. I think that was the intention of what Mr. Beech said earlier, which is that this is our initial tranche. As we move along, we're probably going to learn more and will want to hear from some other witnesses. This is a very important topic that it appears we are all seized with.
    Thank you, Ms. Dzerowicz.
    Go ahead, Mr. Beech.
    I'm agreeing with what has been said. I'm also happy to change the date from Friday to Monday if individuals think having the weekend would be valuable.


    I'm looking to the members. Is that something that is required? Do we want to change the date?
    Well, the only problem with changing the date to Monday is that the original motion proposes to begin hearings on Monday, so it would be hard to get witnesses the same day.
    We do have some proposed witnesses who could be here, potentially.
    Oh, right. Yes, that's true.
    I was going to add that it may be helpful for us to have certain witnesses come first, before other witnesses. I was okay with the proposed witnesses who are already in this original motion. I'm not sure if we want to start with them next week.
    Yes, that makes sense.
    Just on this amendment, are we holding with Friday or are we moving that to Monday?
    I consider Monday to be a friendly amendment.
    So it's Monday, January 17. That is friendly. It looks like everybody is in agreement with that.
    Then we had Monsieur Ste-Marie's amendment. I believe it was to move to 10 meetings. Is that right, Monsieur Ste-Marie?


    Yes, okay.


    Thank you.
    Is there any discussion on this?
    Well, my suggestion is that we just leave it open-ended—that we remove the 12-day clause and that we leave the study to go on until committee members have decided they've heard enough. Some of the other members of the committee have suggested that. It seems reasonable to me. If we get through 10 meetings and it seems there's not much more to hear, then we can terminate the proceedings and draft and publish a report, but if we want to go on longer, we can do that too.
    I'm looking for agreement from everybody. It looks like everybody is shaking their heads the right way, with thumbs-up.
    Go ahead, Mr. Beech.
    Mr. Chair, speaking to this, an easy solution might be “that the study include at least 10 meetings”.
    Yes, there you go.
    The phrasing would be “that the study include at least 10 meetings”. That is friendly.
    On discussion to the amendments to the main motion, I see Madame Chatel.
    As a quick question in regard to Mr. Blaikie's amendment and the week of January 26, that was the day that would be difficult. If we need more meetings, maybe we could find another week.
    Thank you, Madame Chatel.
    I'm looking to members to see if there's any discussion.
     No. Then we can take this to a vote.
    Sorry, Chair, I missed it. What are we voting on now?
    This would be the main motion. I think all the amendments were friendly, right?
    Okay, yes.
     I think everything's been accepted.
    Do you want to go through your motion now, with the changes that have been brought in? Then the clerk can interject if something is missing or something needs to be added.
    To be honest, first of all I have one final friendly amendment to my own motion.
    Oh, you do. Okay.
    I had written, in the bullet point about Peter Routledge, the superintendent of financial institutions, the words “in June 2021”. That was actually the time he was appointed. When I made that note, I forgot to take out that date, so the words “in June 2021” should not be in this motion. It was just a clerical mistake on my part.
     Shall we strike that out?
    Just strike it right out.
    Okay. Thank you.
    I'm not seeing any other hands up, so I'll ask the clerk to read through the motion as amended so that we have everything captured.


That the committee, pursuant to standing order 108, undertake a study of inflation in the current Canadian economy including (i) housing inflation; (ii) food inflation; (iii) repatriating supply chains for strategic goods (iv) any other issue the committee deems pertinent to the question of inflation and that the committee report back to the House no later than May 31, 2022. That hearings begin on Monday, January 17 and continue on Friday January 21 and Monday January 24, and that each of these meetings are 3 hours in length. That this study include the following witness testimony:
a. The Finance Minister alone for 3 hours, with a 10-minute opening statement;
b. The Governor of the Bank of Canada alone for 3 hours, with a 10-minute opening statement;
c. Peter Routledge, the Superintendent of Financial Institutions and Romy Bowers, President and CEO of the Canada Mortgage and Housing Corporation for 3 hours together;
d. Senior Management at Sagen and Canada Guaranty for 2 hours;
e. The Chief Statistician of Statistics Canada and any officials responsible for the Consumer Price Index and taking housing costs;
f. Any witnesses invited by the committee;
and that these names be submitted to the Office of the Clerk by the end of the day on Monday, January 17, 2022; that during these hearings, the chair enforce the rule that the witness's response to a question take no longer than the time taken to ask the question; and that the study include at least 10 meetings.
    Is everybody clear on the motion and the friendly amendments?
    We will put the question on the motion as amended.
    Go ahead, Clerk.
    Is there unanimous consent, or shall we take a recorded division?
    I think I'm seeing unanimous consent.
    (Motion agreed to)
    The Chair: Excellent. It's a great way to start the new year. It's great to see everybody.
    The meeting is adjourned.
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