Human Resources Committee on Dec. 11th, 2023

[Sean Fraser, Liberal, Central Nova, NS]

Let me do my best to help put the conversation on track.

First of all, I do believe sincerely that it will take federal investment, as well as provincial and municipal investments, to get out of the housing crisis. I don't view this as being a strategy to spend our way out of the housing crisis. It's a recognition that it's going to take investments, particularly when you're dealing with non-market housing, to actually meet the needs of communities and the families who live within them.

I think we have a 30-year experiment of cuts to affordable housing in Canada that has proven conclusively that you cannot solve a housing crisis by making cuts, but you certainly can create one. I vow not to take that approach.

Despite our disagreement on the role of the federal government making investments versus cuts to escape the housing crisis, you'll perhaps surprisingly find that I have a lot of agreement with you on the use of federal land, particularly on the issue of the process of declaring as surplus certain properties.

I've seen the Canada Post office in Metrotown. I've gone to Burnaby, and I've seen the post office surrounded by towers that are 40 or 50 storeys. It could be providing homes to additional people. Of course, Canada Post operates as a Crown corporation, independent of decisions taken by the government of the day.

One of the policies I intend to review, in collaboration with my colleagues, is how we can better unlock opportunities for properties that have not yet been declared surplus. Let's not look only at Canada Post Corporation and other Crown corporations. There are government departments that conduct business that is not necessarily incompatible with housing. I've had a conversation with a number of my cabinet colleagues to identify some of those opportunities.

With respect to your other questions, you've noted a couple of other examples, in Whitehorse and with the agricultural farm. There may be unique nuances. If you're concerned about the issue that played out with shadows—largely a conversation between Ag Canada and the City of Ottawa—I have put on paper my objection to policies around shadow cover getting in the way of housing. There may be something that needs to be discussed for the operational needs of the agricultural farm, but I'll leave it to my colleague to work that out with the City of Ottawa.

My view is that we need to look at every opportunity to reform our policies, including properties that have not been declared surplus, to identify opportunities to build more housing.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Mr. Aitchison.

[Sean Fraser, Liberal, Central Nova, NS]

We should chat about this after the meeting as well.

[The Chair, Liberal, Bobby Morrissey]

Okay, the clock doesn't end after the meeting. Thank you, Minister. You can have lots of time then.

Mr. Collins, go ahead for five minutes.

[Chad Collins, Liberal, Hamilton East—Stoney Creek, ON]

Thanks, Mr. Chair, and thank you to the ministers for their attendance here this morning.

Minister Fraser, you've been very clear in terms of emphasizing the importance of working with other levels of government and other partners in this space to get us out of the housing crisis. You've also been very clear that making investments is important in terms of reaching the objectives and goals that we have as they relate to building new housing supply and, more importantly, new affordable housing supply.

I want to address the issue of the all-of-government approach and focus on the provinces very quickly.

When Ms. Gillis was here a couple of months ago, I had the opportunity to ask about creating the same healthy tension with provinces that we've created with municipalities—the accelerator fund is a great example—and incentivizing them with policies and/or finances to come to the table when they may be reluctant.

I'm in the unenviable position of living in a province that doesn't have an affordable housing policy. It doesn't have a housing policy. Much like the members opposite—their Conservative cousins federally—they have taken the trickle-down approach, where they just hope that these things happen philanthropically through the private development industry. That doesn't happen, as we know. As you pointed out, it didn't happen for 30 years.

Can I get an understanding in terms of what we're doing to create healthy tensions with the provinces, specifically the Province of Ontario? We're providing billions of dollars in infrastructure investments. I'll use transit as an example. How do we ensure that in this case the Province of Ontario is at the table at a minimum on the housing side of things to support the initiatives that we have and that municipalities are bringing to the table as well?

[Sean Fraser, Liberal, Central Nova, NS]

Thank you for the question. I think it's a really important one.

You'll appreciate that, from a technical point of view, other levels of government are listed in the Constitution as having jurisdiction over housing issues. We want to play a leadership role federally, because we see that there is a problem that has reached a national scale, despite the fact that it may not officially fall into section 91 of the Constitution. We have an opportunity to make a difference, and we can leverage the federal spending power to incentivize the kind of change that we want to see.

That was the rationale for the housing accelerator fund, which you alluded to. We've incentivized municipal change by putting federal money on the table. Lo and behold, as the funding rolls out, you see the rapid adoption of new policies at a municipal level.

We can adopt a similar approach in dealing with provinces and territories. They absolutely must play a role, not only in the policies that will help get housing built, but in the policies that are going to help get infrastructure built, so the homes people live in are not storage units for their families at night, but a place where they can live as part of a thriving community where they can fully participate in life in Canada.

We're proposing, going forward, attaching housing conditionalities to certain federal transfers that go to provinces. You've mentioned the public transit funding that we've been investing in over the last number of years. Going forward, the model will include agreements with metro areas that may leverage provincial funding as well. You can bet your bottom dollar that we're going to see that there will be high density near large transit stations and more density near smaller ones.

You can look at opportunities like the Canada community-building fund, which we will be renewing in advance of the upcoming fiscal year. Primarily, that is a flow-through of federal money through provinces to municipalities. There are some exceptions where we deal directly with a municipality, like the City of Toronto, for example. However, we have an opportunity to attach housing conditionality to some of those transfers.

These are items that we are dealing with in real time. As we launch the next round of negotiations with metro region transit providers or provincial governments, we intend to say that it's not enough for them to put a certain number of dollars on the table. They need to demonstrate that this money is going to enable more housing.

Frankly, we need to do that internally to our own government as well, in working with Crown corporations and with different government departments. Maybe not as a condition of a funding transfer, perhaps for obvious reasons, but we need to constantly ask ourselves questions about what more we can be doing within our departments and within other levels of government to leverage a positive social outcome—in this case, when it comes to building more homes for Canadians.

[Chad Collins, Liberal, Hamilton East—Stoney Creek, ON]

Thanks, Minister.

[The Chair, Liberal, Bobby Morrissey]

You have 40 seconds.

[Chad Collins, Liberal, Hamilton East—Stoney Creek, ON]

The removal of GST from purpose-built rentals is one of the biggest issues we've raised in the last couple of months. We have a position that's in stark contrast to the Leader of the Opposition.

Can you outline the importance of that and how we differ in that regard?

[Sean Fraser, Liberal, Central Nova, NS]

If we don't build more supply, we will never escape the housing crisis. The decision to eliminate GST from new apartments is designed to build more supply. We have estimates that between 200,000 and 300,000 new apartments will come online as a result of that one policy change. It is a big deal. What gives me comfort that we're going to achieve that is that we saw provincial governments line up afterwards to say that they want to do this, too. In fact, some were out in front of us.

The key difference between what the parties were proposing is whether we're going to have a broad-based program to grow supply or whether we're going to cut it off for apartments above a certain value. That would have the unfortunate consequence of creating an enormous level of bureaucracy. It would slow down the process of building and it would also eliminate the ability of builders to build mixed-use developments, which I described in favourable terms earlier.

My view is that we need to do everything we can to build as many homes as possible, including a blanket waiver of the GST.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Mr. Collins.

Ms. Chabot, you have the floor for two and a half minutes.

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

Thank you, Mr. Chair.

I'll continue in the same vein. When we talk about supply and demand, we have to understand that this is based on the law of the market. However, the housing crisis is to some extent affecting students and, as we've seen recently, our military. These are low-income, modest-income people.

Is it the right approach to simply rely on supply and demand to guarantee that this supply of housing will grow faster than rental housing?

I'm not demonizing the private sector, but, in my constituency, there's no problem as far as rental housing is concerned. Where there are problems is with social and affordable housing.

Also, unfortunately, the conditions imposed on provinces or municipalities often mean that many projects are delayed. We saw this recently in connection with the Fonds d'acquisition québécois. Quebec decided to invest the same amount, but it took many months for the agreement to be concluded. In the meantime, no new housing is being built. Consequently, I think we need to redirect our way of seeing things and our priorities.

Do you agree with this?

[Sean Fraser, Liberal, Central Nova, NS]

I agree if you take the position that it is essential for the federal government to invest in affordable housing.

In my view, it's also important to create the economic conditions necessary to ensure that the market works well for everyone. As for social housing, I think that after the negotiations surrounding the creation of the Fonds pour accélérer la construction de logements, the Province of Quebec chose to invest only in affordable housing by creating a fund equal to that of the trusts.

Based on the studies I've seen and the conversations I've had with experts, I believe it's important to make investments in affordable housing and to ensure that the market functions properly, because we mustn't forget that, for every new housing project that is built in the community, the people who move into one of these units have had to move out of another.

Just to wrap up in 10 seconds, we see a positive cascading impact. When you build more supply, it creates a new level of affordability in the market, in addition to building social housing for people who cannot afford to participate in the market.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Ms. Chabot.

Ms. Kwan, you have the floor for two and a half minutes.

[Jenny Kwan, NDP, Vancouver East, BC]

Thank you.

First, could I get the minister to provide to the committee a list of the municipalities that have received the accelerator fund and the terms associated with that as well?

[Sean Fraser, Liberal, Central Nova, NS]

I'll provide whatever we have. I will only hesitate in case there is anything that a municipality may have requested remain confidential—a request I would respect—but I have no problem providing whatever would not be subject to ordinary confidentiality provisions.

[Jenny Kwan, NDP, Vancouver East, BC]

On the issue of housing, it is one thing to build stock; it is another thing to actually stop the loss of stock. I've actually not heard the minister talk about that. The NDP has called for a variety of different measures, including a moratorium and including changing the special tax provision for real estate investment trusts, for example an acquisition fund.

Are any of the measures the NDP has called for to hold the stock and ensure that the housing crisis does not get worse being considered by the government?

[Sean Fraser, Liberal, Central Nova, NS]

Yes, thank you. You're absolutely correct to point this out as a problem. We can't just build our way out of this. We need to stop the loss of existing affordable units that may not be owned by a non-profit. I'm looking at different options right now on how to address this problem. I don't have an announcement to make at committee today, but I'm trying to determine the best way that the federal government can use its tools to prevent the loss of affordable housing stock by creating a more level playing field, in particular for non-profit actors.

[Jenny Kwan, NDP, Vancouver East, BC]

Time is of the essence. As we talk and as time passes, more stock is being lost right now.

I want to touch on the question of infrastructure. The minister talked about whole communities. Of course that's important. Increasing density and building more stock also means that infrastructure around the community needs to go with it.

FCM has raised this issue as a major concern. If you talk to municipalities, they've brought it up over and over again. That's on both hard infrastructure as well as soft infrastructure. What resources is the government making available in response to FCM's call and municipalities' calls for infrastructure to support the housing?

[Sean Fraser, Liberal, Central Nova, NS]

There will be a handful of programs that I won't be able to exhaust in the time I have, Mr. Chair, but suffice it to say that this is what motivated our investments, in part, going back to 2017, with the investing in Canada infrastructure program. As that comes to the tail of a significant record-setting series of investments in infrastructure, we now have a series of other programs designed to target different kinds of infrastructure.

We've locked in funding for the permanent public transit fund, which is going to help people move from where they live to where they need to be. We have the disaster mitigation and adaptation fund that is rolling out to make communities more resilient to climate change. We have the Canada community-building fund, which is designed to provide flexibility to municipalities to focus on their priorities, and we'll be looking to develop a next generation of infrastructure programs that will meet needs on a go-forward basis to ensure that communities are building complete communities and not just new buildings.

[Jenny Kwan, NDP, Vancouver East, BC]

Sewer and water—

[Sean Fraser, Liberal, Central Nova, NS]

Yes.

[The Chair, Liberal, Bobby Morrissey]

Thank you.

Does the committee agree to Mr. Morrice's asking one short question?

[Some hon. members]

Agreed.

[The Chair, Liberal, Bobby Morrissey]

Mr. Morrice, you have one question to the minister.