Finance Committee on Dec. 7th, 2023

[The Chair, Liberal, Peter Fonseca]

Yes, of course, MP Hallan.

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

It is any member's right to do whatever they would like with their time. Just because the Liberals and the NDP or the minister don't like what I do with my time, it's still my time, so I would hope that you would appreciate that. We can ask what we want.

[The Chair, Liberal, Peter Fonseca]

It is your time, MP Hallan.

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

If we're not having an answer given, then we should have the right to move on.

[The Chair, Liberal, Peter Fonseca]

It is your time. We just ask that all members use this valuable time that we have with the minister in a respectful way and that we have decorum here at our committee.

MP Dzerowicz, it's your time now, please.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much, Mr. Chair.

I want to thank the Deputy Prime Minister for being here today.

I want to start off with two things.

On the record, Mr. Chair, I also want to say that the Conservatives keep asking our Deputy Prime Minister to attend, but they are not giving her a chance to respond. It's very sad to hear that the Conservatives are afraid to hear the facts directly from the Deputy Prime Minister and are willing to talk over her and interrupt her. I don't know why she would ever accept an invitation from us if this is what's going to happen.

I am also going to say that I am absolutely appalled that there was an accusation about our Prime Minister being a bully to former female members of Parliament. It is an appalling accusation and completely untrue, and that needs to be stated as well.

Perhaps I'll begin, Deputy Prime Minister Freeland, with.... I know there were a number of things that were mentioned by my Conservative colleagues. Is there anything you want to respond to before I actually get into my questions?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Yes. Thank you very much, MP Dzerowicz.

Mr. Blaikie was exactly right in saying that if committee members prefer to engage in monologues, then there doesn't seem to be much point in actually gathering as a committee.

I think it is worth putting on the record that there is a clear contradiction in the Conservatives' purported scheme on housing, because their scheme, at least ostensibly, would cut back on the elimination of the GST on the construction of purpose-built rentals that we have put forward, and which is already leading to more homes being built, yet the Conservative members of this committee, in the House of commons, voted to support our complete elimination of the GST on purpose-built rental apartments. It would actually be useful to understand the thinking behind that contradictory position.

It may also be worth my reading into the record a conclusion from an economist who is generally seen as one of Canada's pre-eminent housing experts, Professor Mike Moffatt. He has described the Conservative proposal as “an exceptionally weak response to the housing crisis, riddled with loopholes.” He has gone on to say, “This is a sign that the...Conservatives don't understand the urgency or scale of the housing crisis.” Those are not my words; those are the words of an independent expert.

I'm now happy to answer your question.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much.

As you know, the residents in my riding of Davenport, and indeed all Canadians, would say housing is one of their top issues, and they are very concerned about it.

In your opening statement, you mentioned broadly many of the initiatives we've undertaken. We've heard a lot of testimony at this committee that there have been issues at different levels of government that have prevented many people who want to build affordable housing, rental housing, from building.

Can you speak more specifically about how you're addressing some of the structural issues that result in the structural shortage of housing supply?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

I can, for sure, and thank you for the question.

Clearly, one challenge with housing is the current macroeconomic environment. That's why our government is there with support for financing. We want to make the math work for home builders, and that's what we've done.

Professor Moffatt estimates that lifting the GST on purpose-built rentals will lead to between 200,000 and 300,000 more homes being built. The apartment construction loan program, which we topped up with an additional $15 billion in the fall economic statement, will lead, in its entirety, to 100,000 homes being built.

Before the fall economic statement, we announced an additional $20 billion in the Canada mortgage bond financing program. That is going to lead, over the next five years alone, to another 150,000 new homes being built.

You spoke, Ms. Dzerowicz, about the structural obstacles to new homes being built. I think we all agree that there is red tape. There are restrictions on zoning that, as a country, we need to work together to lift.

That is where the housing accelerator fund comes in. It is a fund that allows us to work collaboratively with municipalities across the country to help them design tailored measures that work for their communities to get more homes built faster, and it provides financing to help them do precisely that.

I'm very glad this fund is being rolled out quickly and aggressively across the country. Already, more than 100,000 new homes will be built through this fund. Constructively and collaboratively, we're going to keep on reaching agreements with municipalities across the country.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you.

I have one more quick question.

Millions of Canadians are going to be renewing their mortgages this year. They are worried because the interest rates are so high. They are actually worried about whether they are going to be able to afford to renew their mortgages.

Is there anything we have put into place that's going to be helpful to Canadians at this point?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Thank you for the question.

I think all of us as members of Parliament talk with our constituents, and I'm sure all of us have heard from people who are really anxious about the renewal of their mortgages.

That's why in the fall economic statement, for the first time in Canadian history, we published the Canadian mortgage charter. It's very simple. It's in black and white. It tells Canadians what they have the right to expect from their financial institutions, the kinds of tailored relief and support they have the right to expect when they're renewing their mortgages. That is really about being sure people understand the tools that are available to them.

A couple of the key measures are that people have the right to talk to their financial institution about perhaps extending the amortization period, which could lead to a smaller monthly payment at this time of really challenging circumstances. Another element is for insured mortgages: You do not need to requalify in order to go and look for renewing at a different financial institution. Again, that's just to give people a little bit more choice, a little more flexibility.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Dzerowicz.

Now we'll go to MP Ste-Marie, please.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you, Mr. Chair.

Thank you so much for being with us and answering our questions, Minister.

Mr. Forbes, I also want to welcome you. We are very grateful to you for being with us. During the second hour, I will be asking you some more technical questions about follow‑up.

Minister, I might also send you these questions by email. Today, for this first hour, I have several questions concerning housing.

First, I would like to ask you about the economic statement, particularly concerning the document that the Parliamentary Budget Officer released this morning on that subject. Table 5 deals with spending reviews and the budget cuts under consideration...

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Allow me to interrupt you to clarify one detail: when you talk about table 5, are you talking about table 5 in the fall economic statement?

[Gabriel Ste-Marie, Bloc, Joliette, QC]

No, this is the report of the Parliamentary Budget Officer. It does the spending review and follows up.

It refers to a savings of $1.3 billion requested of Crown corporations, which include CBC/Radio-Canada. Given what we have heard on the news recently, we understand that you have asked that corporation to make $125 million in cuts and that it then announced that it was eliminating 600 jobs, something that would have a big impact on Radio-Canada, the francophone part.

As we know, the media are going through a major crisis. However, we need the public broadcaster, for one thing, to provide regional coverage and serve the francophone communities outside Quebec. What is your answer to CBC/Radio-Canada? Can you commit to not asking it to make cuts?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Thank you for the question.

First, I have to tell you that I do not have the document in front of me that was released this morning by the Parliamentary Budget Officer. I will therefore not be able to give a precise answer to that part of the question.

However, I share your concern when it comes to Radio-Canada. I agree with you that both Radio-Canada and the CBC perform a very important function all across Canada. Our democracy depends on journalism, and we particularly depend on public journalism. As well, I agree with your perspective, which I presume was included in your question, that Radio-Canada plays a special role in Quebec, for francophones from one end of Canada to another, and for the Quebec nation. We see that Radio-Canada broadcasts are widely listened to and watched by people in Quebec and by francophones from everywhere in Canada. That is very important, and so I share your concern and your perspective.

This is really a particularly difficult period and economic situation for all Canadian media. That is why our government is determined to work with the giants of the Internet. I am not going to talk in detail about the findings of the Parliamentary Budget Officer, but I can assure you that our government and I, as a former journalist myself, agree with you that journalism is important for democracy and that Radio-Canada plays a special role in Canada, in Quebec, and for all francophones in our country.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you.

Since you are concerned about this situation, if you and the government could somehow make sure that the 600 job losses at CBC/Radio-Canada did not happen, I would be more than grateful.

On the subject of housing, I want to come back to Bill C‑56. Earlier, you alluded to Mr. Moffatt. When you appeared before the committee concerning Bill C‑56, I asked you whether your department could send us the figures and statistics concerning the predictions as to what the freeze on the goods and services tax would allow in the case of rental housing construction. To my knowledge, the committee has never received that information and we would be very grateful if you would kindly follow up on that subject.

On the question of the construction of social housing or affordable housing co‑ops, you have made commitments concerning subsidies or support. I believe, as do a number of other actors, that in the present situation, when interest rates are high, one possibility worth exploring would be to allow people to get a lower interest rate, whether through the Canada Mortgage and Housing Corporation, given its borrowing capacity, or through the federal government. If I am not mistaken, the federal government rate is 3.6% at the moment. The mere fact of these people being able to get that rate would be a step forward.

For example, if there were a reduced interest rate of 2%, the government could cover the difference. To finance $1 billion, the annual cost would be $16 million. That would free things up and get around the current problem of high interest rates, by using a method that would not cost the government too much. I humbly suggest that and I would like to know whether you have any comments on that subject.

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Thank you for your work and your question.

In principle, what you are saying corresponds to the idea that underlies all federal government programs that address housing. In my opening remarks, I talked about the $20 billion we have added to programs to finance housing construction. These programs contribute to offering a lower interest rate to companies that build housing. As well, the program referred to in the fall economic statement, to which we have added $15 billion for building rental housing, amounts to exactly what you are describing: a program to facilitate the construction of rental housing.

This program has two goals. The first is to create an economic situation in which the companies will build more rental housing, not condos. The second is to change the economic situation. We believe that Canada needs more rental housing, especially to help who are not as well off. Under this program, rental housing, in the general sense, will have to be built, but a portion of those apartments, which I have seen and I also invite you to go and see, will have to be affordable. That applies to the entire program.

So you are right. This is one of the ways the federal government can offer an incentive in order to get more housing built. It is an effective method, and we are using it.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Ste-Marie.

I now give the floor to Mr. Blaikie.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Thank you, Mr. Chair.

Minister, it's good to have you here at the committee.

The last time you were here, we talked about non-profit projects that were already on stream for federal funding and about the possibility of applying the GST rebate to those projects. I asked you and your officials to provide information to the committee on how many projects there were and what the estimated costs of doing those would be.

Could you share with the committee when we might expect to receive that information?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

It's a good question. It's something that we are looking at.

I will say, though, that our primary objective is to put in place policies that will lead to new projects being put in motion, for the obvious reason that it's good to have incentives to create new projects rather than to be adding on the incentives to projects that are already in train.

I would like to take the opportunity to say that I have looked carefully—and looked carefully initially—at your motion on the financialization of housing. As I'm sure you have noted.... One of the points you raised in your motion was around the short-term rental business. I hope you have noted—and I'm glad to do so publicly—that we have subsequently acted in that area. I think it's a really good point.

I think all of us who care about the housing situation are focused on getting more homes built. That's a good thing, but it takes a while to build a home. The great thing about the short-term rental, which you yourself pointed out, is that those are homes that exist right now, and if we can move them into the longer-term rental market, that's progress, so I just want to say thank you for singling that out for attention.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

I would like to underline again that some of these non-profit housing projects that have successfully been awarded federal funds aren't proceeding because of higher interest rates, hence why applying the GST rebate would help get units built that otherwise won't be built. What I would like is for the committee to have the information on what those projects are and what the estimated cost would be in extending the GST rebate to them. When can the committee expect to get that information?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

It's a good question—something certainly worth looking at.

One thing I would also say to all MPs here is that we're all familiar with projects in our own ridings. If people would like to point out to me—not right now—any specific projects they think are worthy projects that are running into some obstacles, do please bring those particular ones to my attention.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Absolutely, and in the meantime, I would like to know if your department has run a list of those projects and has estimated the cost of applying the GST rebate to them.