Evidence of meeting #66 for Finance in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was immigration.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

10:20 a.m.

National Chairperson, Canadian Federation of Students

Roxanne Dubois

In fact, we are still feeling the effects of those budget cuts today. That is one of the main reasons why tuition fees are going up in almost all provinces: there is a significant shortfall. Canada's education system is short of funding, to the point that students are facing situations that are tougher than in the past 10 or 20 or even 30 years.

10:20 a.m.

NDP

Guy Caron Rimouski-Neigette—Témiscouata—Les Basques, QC

Thank you.

Mr. Lee, have you had a glance at CMHC's financial statements for the last year?

10:20 a.m.

Prof. Ian Lee

Yes, but I didn't bring them with me.

10:20 a.m.

NDP

Guy Caron Rimouski-Neigette—Témiscouata—Les Basques, QC

Would your appraisal be that CMHC's financial statements are positive and the agency is in relatively good health? If we go by its financial statements, would you say it is a well-managed institution at the moment?

10:20 a.m.

Prof. Ian Lee

CMHC is making money. Many people attribute that to the mortgage underwriting policies of CMHC. As a former mortgage manager who's very intimate—

10:20 a.m.

NDP

Guy Caron Rimouski-Neigette—Témiscouata—Les Basques, QC

My question—

10:20 a.m.

Prof. Ian Lee

I believe it's due to the bank's due diligence.

May 31st, 2012 / 10:20 a.m.

NDP

Guy Caron Rimouski-Neigette—Témiscouata—Les Basques, QC

My question related to CMHC's financial health, and you confirm that it is in good financial health.

Canadians are familiar with two particular components of CMHC. The first is social housing; the second is the guarantee program for people who cannot put at least 20% down on a home purchase. In general, the proposal to make the Office of the Superintendent of Financial Institutions responsible for CMHC's assets and securitization activities is not bad in itself. It will eliminate taxpayers' liability for a major organization.

Where I see a problem in the direction you are going is when you talk about privatizing the activities. There are two factors. The first is that the private sector has never considered social housing to be a priority. There are no particular incentives for it to invest in social housing. The other factor relates to guarantees. CMHC occupies that niche because of imperfections in the market. This is somewhat the same as for the student loan program, where the private sector does not guarantee loans to borrowers who might present more of a risk.

That is why I think CMHC meets needs that the private sector could not meet. So how can you think that CMHC is in competition with the private sector?

10:25 a.m.

Conservative

The Chair James Rajotte

A very brief response, please.

10:25 a.m.

Prof. Ian Lee

I never advocated the privatization of social housing. I argued that it should never be done by the federal government. Provincial governments are much closer to the people and they should be responsible. Those programs and resources should be transferred.

Very quickly on mortgage insurance, there's a huge difference between mortgage insurance, which is a commercially profitable project, and student loans, which are seen as something that's not so profitable.

Mortgage insurance can be done by the private sector very well. We don't have a government-owned London Life or a Great-West Life or those kinds of companies.

The private sector could do it if it weren't at a competitive disadvantage because the government guarantees 100% of CMHC but only 90% of the private sector. They have an unfair competitive advantage.

10:25 a.m.

Conservative

The Chair James Rajotte

I have Mr. Grady. Please be very brief.

I would just caution members that they should leave enough time for witnesses to answer.

Mr. Grady.

10:25 a.m.

Economist, Global Economics Ltd., As an Individual

Patrick Grady

I just want to make one comment. Because of the large extent of mortgage insurance that CMHC covers, if there were to be a correction in the Canadian housing market, the financial picture of CMHC could look quite different than it does now.

10:25 a.m.

Conservative

The Chair James Rajotte

Thank you.

We'll go to Mr. Adler, please.

10:25 a.m.

Conservative

Mark Adler York Centre, ON

Thank you, Mr. Chair.

Thank you all for being here today. This is a very interesting discussion.

I feel like a hungry dog and you've all kind of thrown this nice juicy bone out there. But since I only have five minutes, I really do have to allocate my scarce resources.

I want to start with Professor Lee.

You spoke a bit about moving the OAS eligibility age from 65 to 67. I feel like we're looking down a tunnel and that light at the end is not the end of the tunnel but a locomotive racing towards us. All informed opinion can, and have, empirically demonstrate that our population is aging and that OAS is a social program for which, in order to maintain sustainability, we need to make adjustments to.

Could you speak to those adjustments that we, as a government, are making and whether they are responsible adjustments and in the interests of the sustainability of this very important social program?

10:25 a.m.

Prof. Ian Lee

Just by way of answering your question, I only use data that I call “official” data, from OECD, IMF, StatsCan, the U.S. Census Bureau. I'll be very blunt. I don't trust data from NGOs or unions or professors or corporations or politicians.