Human Resources Committee on Sept. 27th, 2023

[The Chair, Liberal, Bobby Morrissey]

Mr. Trudel, you have two and half minutes.

[Denis Trudel, Bloc, Longueuil—Saint-Hubert, QC]

Thank you, Mr. Chair.

Eliminating the GST will help stimulate housing construction, but that doesn't mean people will be able to pay rent on those units. There's an affordability problem. We need to build housing that the poorest people can afford. I think, right now, the middle and lower classes have a housing problem.

Why doesn't the GST break for builders come with an affordability requirement?

[Sean Fraser, Liberal, Central Nova, NS]

When I first heard the notion that we should remove the GST to build more apartments, my first reaction was that we might want to have some affordability criteria. I spent about five minutes digging into the issue before I realized how wrong that would have been.

When we actually address the supply challenge more broadly, it's one of the biggest things we can do to reduce, over time, the cost of homes. In fact, one of the developers mentioned by my colleague, as part of the 5,000 units, has one project that is 43% affordable. The way that most modern housing developments are being built in cities today involves a mix, in which you have some market homes and some non-market homes. I don't want to be building cheap homes in a bad part of town that are exclusively for low-income families, where they don't have access to the services they need. I want them to be integrated into communities and have full participation, living alongside people from different income backgrounds.

In addition to removing the GST to boost supply and having mixed developments, I also want to see continued direct support for non-market housing. We have existing programs like the rental construction financing initiative and the national housing co-investment fund. We had the rapid housing initiative through the pandemic. We've done more to build out affordable housing than any government in my lifetime has, and we need to continue to make those kinds of investments, because I agree with you that this is an enormous challenge we need to overcome.

[Denis Trudel, Bloc, Longueuil—Saint-Hubert, QC]

I would like to address another very specific point.

In Quebec, 72,000 social housing units were built before 1992, partly with provincial government funding and partly with funding from the federal government. As we speak, 4,481 units have been boarded up for lack of renovations. Currently, the Canada Mortgage and Housing Corporation, CMHC, is negotiating the cost of these renovations with the Société d'habitation du Québec, or SHQ.

Mr. Fraser, if, tomorrow morning, you were to write a cheque to Ms. Bowers, who is present, or give her the mandate to quickly conclude agreements, we could renovate these 4,481 units, which could be ready by next July 1st.

I don't understand what's holding up these negotiations.

[Sean Fraser, Liberal, Central Nova, NS]

Are you referring to negotiations on the housing accelerator fund?

[Denis Trudel, Bloc, Longueuil—Saint-Hubert, QC]

No, not at all.

Mr. Chair, please allow me to continue, this is important.

These are low-income housing units that were built by the federal government with the provincial government. There are 72,000 social housing units funded by Ottawa and Quebec. Each year, CMHC and SHQ negotiate the cost of repairs to these units.

Right now, in Quebec, 4,481 units are boarded up. These are real social housing units. They already exist.

If you agreed to immediately write a check to Quebec, these units could be repaired by July 1st of next year. We could house half of the 10,000 people currently on the street in Quebec.

[Sean Fraser, Liberal, Central Nova, NS]

I don't know if my colleague would want to chime in as well, but I agree with the member that we need to build not only new homes. We must build new homes but also make them available at an affordable price. I'd be happy to speak with him after the meeting to dig into more detail about the specific issues.

Ms. Bowers, I don't know if you want to supplement that answer with any more detail.

We can save it for after, Mr. Chair.

[The Chair, Liberal, Bobby Morrissey]

Time is up.

Ms. Kwan, go ahead for two and a half minutes.

[Jenny Kwan, NDP, Vancouver East, BC]

The Conservatives want you to believe that they will be the saviour of the housing crisis. Let's be clear. When the Conservatives were elected in 2006 and under the Liberals until 2021, Canada lost over 1,030,000 units of housing that were rented at $750 a month. That was under both the Liberals and the Conservatives. That's part of the housing crisis we're faced with today. Both of them created this problem.

To Ms. Bowers' answer, she should know that the housing benefit change came from the department. It told applicants that if their rent was paid directly by the government, it would not pay the housing benefit. That's why the most vulnerable people did not get the support they needed. That was a unilateral change by the Liberals.

On the GST, my question to the minister is this: Why is the GST exemption not being applied for co-ops? Would the minister support the NDP's suggestion to amend the bill so that housing co-ops could access the GST exemption? In addition, will the government also allow for existing social housing projects to qualify for the exemption?

[Sean Fraser, Liberal, Central Nova, NS]

Thanks very much for the question. Though I have many thoughts about the precursor around various governments' plans, I'll try to focus on the question you've asked.

First of all, I think co-ops actually have the potential to be a large part of the solution for non-market housing in Canada. The reason they weren't scoped into the GST rebate was.... There were a number of factors. First, there are other measures that provide a significant degree of tax exemptions for co-ops today. The measure was scoped for purpose-built rentals, and of course members of co-ops tend to own shares in the co-op. It's not quite the same as a rental, but it provides an opportunity for low-income people to find homes. We also have a program that had 1.5 billion dollars' worth of investments in co-ops, which is the largest in 30 years, so we want to support them. We decided to do it in a different way.

On the question of how we can improve this measure to scope in more kinds of projects, whether it's non-profits under construction or whether it might be expanding access to other forms of housing, I would actually value the feedback of this committee. However, I do want to make sure that I give myself the opportunity to conduct a proper analysis to understand and to ensure that we're getting the greatest degree of protection for low-income Canadians and growing the housing supply in the most cost-effective way.

If there are proposals to come from this committee on this subject, I would be more than happy to study them and come up with a formal response.

[The Chair, Liberal, Bobby Morrissey]

Thank you.

I have Mrs. Gray, and then Mr. Long will conclude the first round.

Mrs. Gray, you have five minutes.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Thank you, Mr. Chair.

Thank you, Minister, for being here.

Minister, you talked about a housing crisis. Is it the Government of Canada's official position that Canada is in a housing crisis?

[Sean Fraser, Liberal, Central Nova, NS]

I don't know that we establish official positions when we label something a crisis or not. It's my view that we are in a housing crisis, and I want to approach it from a policy point of view as though it is.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

During the time that you have been in government, which has been the entire time that you've been elected, did you at any point step back and say that “something isn't working and my government is responsible for this housing crisis”?

[Sean Fraser, Liberal, Central Nova, NS]

I don't think you can attribute the housing crisis that we're living in to any one government, any one level of government or any one political party. My sense is that it's driven by forces that exist in the market and a lack of investment over a generation, more than decisions of the government. I've been actually quite proud of a lot of the work that we have done to step back into the housing space. I think we've been on a good track and we need to be on a better track.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Thank you, Minister.

Are there any policies over the last eight years when your government has been in power that have contributed to the housing crisis? Are you willing to acknowledge that there have been policies that have actually contributed to the situation we're in, where people can't even afford rent, where people can't even afford to live in a home? Will you acknowledge that there are policies that have actually contributed to the crisis?

[Sean Fraser, Liberal, Central Nova, NS]

My sense is that the bigger challenge is a result of what has not been done over a much longer period of time, rather than a specific policy that's driving the crisis. If there's one in particular that you're thinking of, I'm happy to give you my thoughts.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Inflationary deficit spending has led to inflation going up, which has caused interest rates to go up, so there are a number of things. However, I'd like to move on to something else, Minister.

We know that people are having a really tough time, and the director of Viola's Place, which is a shelter in your riding in New Glasgow, told me that beds have been full all summer and that their services are increasingly being used by middle-income earners and seniors. I hear this in my riding, and I hear it across the entire country. Out of your roughly $82-billion national housing strategy, what program will get people out of the shelter and into a home they can afford?

[Sean Fraser, Liberal, Central Nova, NS]

First, I categorically reject your assessment on inflationary deficits, because the counterfactual would have been that millions of Canadians would have lost their jobs and their homes during the COVID-19 pandemic. If you take objection to our supporting households and businesses and blame the inflationary pressures on COVID spending, I think I'd have that debate. I would also point out that I believe more of the inflation is being driven by supply-side factors than purely a government spending issue.

Viola's Place is a tremendous asset to our community. We recently dropped food off after one of our events with local volunteers to support the work they do—

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Thank you, Minister. I'll go back to my time here.

You can debate with the Parliamentary Budget Officer, because he actually put out a report stating that a lot of the spending didn't have to do with the pandemic.

I'll move on to another question. The deputy minister of housing in Nova Scotia said that the province needs 70,000 new units of all types in the next five years. Will your housing accelerator build 70,000 units in the next five years in Nova Scotia?

[Sean Fraser, Liberal, Central Nova, NS]

The housing accelerator fund on its own...? No. It will make a significant difference, but we hope that the complete suite of policies that we're going to introduce will help cure the supply gap. The exact time at which we will achieve the goal will be the result of factors that are beyond the control of any one level of government and that are subject to market forces, but my goal is to cure the supply gap and solve Canada's national housing crisis. It will be very difficult to do, and I can't tell you with certainty the exact number of homes that any one fund will result in for a particular community, but the housing accelerator fund will be a major part of the solution.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Thank you, Minister.

The Auditor General of Canada's damning report on homelessness says that your government can't show that your efforts have reduced homelessness. Halifax has seen a 60% increase in homelessness in the last year and a 500% increase since 2018. By what date will the housing accelerator program cause homelessness rates to decrease?

[Sean Fraser, Liberal, Central Nova, NS]

The point that I made...and this is really important. I'm not just trying to eat up time. If you need to extend 15 seconds, Mr. Chair, to accommodate this, it's really important. Each of the policies that we're putting forward is trying to solve different challenges. The housing accelerator fund is designed to change the way that cities build homes. It is not a program that is directed specifically at curing homelessness. We have other programs that are designed to do that. It will help by growing the housing supply, but the combined impact of the housing accelerator fund, the national housing strategy, Reaching Home and others is going to be meaningful.

I can't tell you the specific date with respect to that fund because it's not the only thing aimed at solving that problem.

[The Chair, Liberal, Bobby Morrissey]

Thank you. That's great.

Now we'll hear from Mr. Long for five minutes to conclude the first round.

[Wayne Long, Liberal, Saint John—Rothesay, NB]

Thank you, Chair.

Good afternoon to my colleagues.

Minister, thank you so much for coming to chat with us.

First and foremost, I'm really pleased to hear you say that we do have a crisis and that the lack of action by successive governments has gotten us to where we are.

I want to make a few points. My province of New Brunswick grew by 49,000 people last year. It grew by 49,000 people in the 29 years before that. That is something that is a good thing for growth, but obviously, when you bring in 50,000 people in one year, that is going to put a lot of pressure on housing stock.

In my province, we have a Conservative premier who boasts about having a billion-dollar surplus this year, yet what he has invested in housing wouldn't fill three streets. The lack of focus is unbelievable. I will say, too, Minister, before I get to my question, that I came in in 2015. I'm happy to be here. In 2016 I did some research on previous policies that the federal government before us had enacted, and what I got back was a blank sheet. I was shocked. I said, “Where are all the policies that the previous government enacted federally?” and there weren't any. I was shocked to see that.

I congratulate you. I think we've shown a lot of leadership by stepping up and recognizing that we need all levels of government to solve this crisis. We need the federal government. We need the provincial government. We need the municipal government, and let's not forget the private sector.

Minister, can you just talk about the importance of having all three levels of government and the private sector working together, and what we are doing to make that happen? Thank you.