Human Resources Committee on May 9th, 2023

[Marie-Josée Houle]

It certainly takes political will. We also need to recognize that all levels of government and municipalities have a role to play, especially on the issue of zoning and building permits.

To move forward, we need not only a national strategy or fund, but an action plan. We also need to focus the action plan on the human right to housing.

[Soraya Martinez Ferrada, Liberal, Hochelaga, QC]

How can we do that practically if the federal government doesn't have the jurisdiction to legislate on the rental market?

[Marie-Josée Houle]

To date, the measures have not met the obligations, that's for sure.

Personally, I work with the provinces and municipalities, but I'm looking at one systemic issue at a time, unfortunately. Having said that, there are bilateral and trilateral agreements in place with respect to funds, such as the accelerated housing fund. We definitely need to include some very concrete conditions in those agreements with the provinces and municipalities.

[Soraya Martinez Ferrada, Liberal, Hochelaga, QC]

Some members of Parliament—I'm not going to name them—feel the government should do less on housing, that they should pay less attention to this issue and get out of the national housing strategy altogether.

If I understand your comments correctly, you feel that the strategy isn't perfect. However, you understand that its intent is to increase the supply of affordable housing. What are your thoughts on investment in the national housing strategy?

[Marie-Josée Houle]

Actually, the National Housing Strategy Act says that housing is a human right. So we need to align the national housing strategy with the act, which was written two years later, unfortunately.

I would add that our country is huge and there are many invisible lines in provinces, territories, Indigenous communities and municipalities. We realize that people have a right to housing the moment we cross one of those invisible lines. Many Canadians move around within Canada. It's therefore essential that their rights be respected, no matter where they live. This is where the federal government has an extremely important role to play, although that's not its only responsibility.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Mrs. Houle.

Committee members, we now have bells ringing. I need direction from the committee. We have two more six-minute rounds.

[A voice]

Let's finish.

[The Chair, Liberal, Bobby Morrissey]

Okay. We have unanimous consent to proceed with Madame Chabot and Madam Kwan, for six minutes each.

Ms. Chabot, you have six minutes.

[Louise Chabot, Bloc, Thérèse-De Blainville, QC]

Thank you, Mr. Chair.

Mrs. Houle, I like to begin by saluting you. You're the first female housing advocate. That's certainly no small feat.

We keep rereading the annual report you produced and its complementary reports. I feel we're doing the right thing making people and the right to housing the heart of the matter. Housing is a right guaranteed by international conventions, but it's also a basic need guaranteed by the right to be safe. Thank you.

You make many recommendations. We've focused on them because I'm sure the federal government can play a role, particularly through the national housing strategy. In your annual report, you recommend that the government target its programs to prevent the financialization of rental housing and ensure that its programs don't contribute to the financialization of housing.

In your opinion, do any of the national housing strategy programs directly or indirectly promote the financialization of housing right now?

[Marie-Josée Houle]

Absolutely.

There are loan programs under the national housing strategy. They lend money at low interest rates and provide financialized actors with housing construction incentives. However, it's important to note that the funds for this strategy are public funds, the people's money. These funds represent $8.2 billion, and we haven't seen a federal investment like this in decades.

The financialized actors who use and profit from those funds are not making investments that belong to the community. They aren't common goods or social assets. Instead, they become personal wealth or wealth of fund holders.

[Louise Chabot, Bloc, Thérèse-De Blainville, QC]

What would you recommend to correct the situation? There are a number of programs in the national housing strategy. Over $80 billion has been invested to date.

Do we need to completely withdraw the support we give from the market, and focus our efforts and funds on non-market strategies for non-profit housing, like co‑ops or other types of housing?

[Marie-Josée Houle]

Yes, absolutely. As previously mentioned, our recommendation is that the national housing strategy no longer subsidize financialized landlords and that CMHC no longer provide preferential loans to financialized landlords. Lending companies must also be regulated so that they can suspend loans to entities that violate human rights, including the right to adequate housing. We also need to eliminate financial incentives and introduce a gains tax, including on real estate investment trusts. We need to build, acquire, and subsidize non-commercial social housing projects, housing co‑ops, and non-profit housing.

Scotiabank recently published a report recommending that, to properly control financialization, Canada needs a percentage of non-profit housing comparable to that of a number of European countries. These units include social housing or housing co‑ops, and they currently account for only 4% of all housing in Canada. So we have a lot of work to do in that respect.

National housing strategy investments should focus on acquiring and building new social housing and housing co‑ops.

[Louise Chabot, Bloc, Thérèse-De Blainville, QC]

If you wanted to target one or two national housing strategy programs, would you have a preference for any programs over the rest?

[Marie-Josée Houle]

To address the issue of financialization, it would be the program that the Canada Mortgage and Housing Corporation is developing with the Co‑operative Housing Federation of Canada to build new housing co‑ops. We look forward to that. The federation has been prepared to act on this since last June.

We'd also like to have an acquisition fund, which I asked for last November, to give non-commercial actors the opportunity to buy buildings currently on the market, thereby ensuring their long-term affordability, before the financialized actors can buy them. There is currently no such program.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Ms. Chabot.

We'll now go to Ms. Kwan for six minutes.

Ms. Kwan, you have the floor.

[Jenny Kwan, NDP, Vancouver East, BC]

Thank you very much, Mr. Chair.

I'm sorry. I heard a very loud sound. Is it okay now?

[The Chair, Liberal, Bobby Morrissey]

Yes. I can hear you fine in the room.

[Jenny Kwan, NDP, Vancouver East, BC]

Maybe it was just me. I was hearing a very loud echo of myself when I started to speak, but that's not happening now.

Thank you very much, Mr. Chair.

Thank you to Ms. Houle, the federal housing advocate, for the work that she and her office do and for her presentation today.

I'm particularly interested in the issue around the financialization of housing and of course the impact that she's already laid out. My questions are going to be centred around what actions can be taken to address this, particularly as it relates to the housing crisis we're faced with.

The community has called for a moratorium to be placed on the acquisition of housing by, for example, real estate investment trusts or other corporate landlords. Is that something that, in your opinion as the housing advocate, the government should act on? Would that actually help address the financialization of housing?

[Marie-Josée Houle]

Thank you so much for the question.

I think the government has a really important role to play. There are a few things they can do.

The first one is creating an acquisition fund so that non-market actors, such as housing co-ops, non-profits and those in social housing, can purchase properties for sale before they are financialized by other actors or mechanisms of financialization. These particular actors—the non-profit and non-market actors—will guarantee affordability in perpetuity. That is a role they play. They create community wealth instead of individual wealth.

However, before that, the federal government has a very important role to play in tracking ownership and measuring the impacts of financialization. For example, we need transparent data on beneficial ownership. I was very pleased to see this need recognized in the pre-budget recommendations of the finance committee. We need to definancialize housing by supporting and expanding non-market housing, which I have mentioned a few times. We also need to de-incentivize financialization by suspending subsidies and supports, such as favourable interest rates and tax treatments for financial firms, and by regulating pension funds to require their investments be compliant with human rights, including the right to housing.

This is why we're here today: to talk about how centring these decisions around human rights and the human right to housing can mitigate this harm.

We also need to strengthen controls and tenant protections. The research shows that financialization thrives where tenant protections are the weakest.

[Jenny Kwan, NDP, Vancouver East, BC]

To follow up on that, many landlords—corporate landlords, particularly—use numbered companies and hide their ownership behind them. One issue tenants have raised is that they can't find out who is really their landlord.

Should the government ensure these corporate actors disclose their property ownership so that tenants actually know who their landlord is?

[Marie-Josée Houle]

That's exactly right. Thank you for that.

There is a lack of transparency. The research of Martine August has been painstakingly done to try to track down who the owners are of a lot of these purpose-built rentals, because there is a lack of transparency. What she's able to report on is, we suspect, the tip of the iceberg. We're also hearing about private financialized landlords who sell each other properties in order to artificially inflate property values and then use that value to acquire more assets.

When you're a tenant in these buildings, you don't know who your landlord is. They're changing all the time, so there's no one to hold to account and no one to complain about. We know a lot of people own properties in Canada—individuals—but the scale of the financialization means there is no one landlord to talk to. There is no one to hold to account.

This makes a huge difference in that transaction—in the quality of housing, in the deterioration of the state of housing and, of course, in the evictions themselves.

[Jenny Kwan, NDP, Vancouver East, BC]

Thank you.

Should the federal government set up a national rental registry so that you can have access to this information, with a disclosure requirement?

[Marie-Josée Houle]

The rental registry would play multiple roles. It's easier to track who owns the buildings, track financialization and its mechanisms, and track the harm that some of these financial actors are causing in terms of the violation of the human right to housing, the result being evictions and issues in the habitability and accessibility of these units. It would also hold them a little more to account.

I believe the ACORN research points to having landlord licensing and a registry so that units are inspected and compliant with, again, the questions of habitability. That whole mechanism would play a bigger role in ensuring that people's right to adequate housing is fulfilled or realized in terms of the quality of housing, because there are a lot of people living in squalor right now.

[Jenny Kwan, NDP, Vancouver East, BC]

Thank you.

I gather you were suggesting—

[The Chair, Liberal, Bobby Morrissey]

Ms. Kwan—