House of Commons Hansard #108 of the 38th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was housing.

Topics

Supply
Government Orders

1:15 p.m.

Some hon. members

Agreed.

Supply
Government Orders

1:15 p.m.

The Acting Speaker (Mr. Marcel Proulx)

The House will now proceed to consideration of private members' business as listed on today's Order Paper.

Canada Mortgage and Housing Corporation Act
Private Members' Business

1:20 p.m.

Bloc

Christian Simard Beauport, QC

moved that Bill C-363, an act to amend the Canada Mortgage and Housing Corporation Act (profits distributed to provinces), be read the second time and referred to a committee.

Canada Mortgage and Housing Corporation Act
Private Members' Business

1:20 p.m.

Beauséjour
New Brunswick

Liberal

Dominic LeBlanc Parliamentary Secretary to the Leader of the Government in the House of Commons

Mr. Speaker, I rise on a point of order on a technical question concerning this bill, that is the need for royal recommendation.

In my opinion, Bill C-363 requires royal recommendation. This bill would require Canada Mortgage and Housing Corporation to distribute to the provinces any surplus from its reserve fund. A royal recommendation is needed in this case for two reasons.

First, the transfer of money to the provinces constitutes new spending. We could argue that the funds reserved by CMHC are not part of the government's funds and are an exception. Yet, earnings retained by CMHC are integrated annually into the Government of Canada's consolidated revenue fund.

Under Standing Order 79(1), royal recommendation is required for any bill for the appropriation of public revenue, and section 53 of the Constitution Act, 1867, is similar. The current interpretation of this section would include all the funds under the control of the crown and its officers.

According to sub-section 5(1) of the Canada Mortgage and Housing Corporation Act, CMHC is an agent of Her Majesty. By calling for a portion of the agency's assets to be transferred to the provinces, the bill affects public funds, that is to say moneys which would otherwise be allocated to the reserve fund or the Receiver General.

Secondly, in a ruling on May 9, 2005, the Acting Speaker indicated the need for a royal recommendation in order to change an allocation, saying:

As most members know, bills which involve new or additional spending for a distinct purpose must be recommended by the Crown. The royal recommendation is also required where a bill alters the appropriation of public revenue "under the circumstances, in the manner and for the purposes set out" in the bill. What this means is that a royal recommendation is required not only in the case where more money is being appropriated, but also in the case where the authorization to spend for a specific purpose is being significantly altered.

Now, a payment to the provinces does, obviously, constitute a purpose that was not set out in the original legislation, which stipulates that any surplus is retained by Canada.

For these two reasons I conclude—and I trust you will as well, Mr. Speaker—that this bill requires a royal recommendation. I hope that the Chair will look into all these elements carefully.

Canada Mortgage and Housing Corporation Act
Private Members' Business

1:20 p.m.

Bloc

Christian Simard Beauport, QC

Mr. Speaker, I challenge the interpretation here that royal assent is required in the matter before us. It involves no additional funds. We are talking about the allocation of existing funds of Canada Mortgage and Housing Corporation. This transfer to the provinces is for exactly the same purposes—for the same activities—as those of Canada Mortgage and Housing Corporation. In fact, it is as if existing funds were delegated—and so, no additional funding. As regards the funds in the CMHC reserve, according to Marleau and Montpetit, at page 655 of House of Commons Procedure and Practice ,

An amendment is therefore inadmissible if it imposes a charge on the public treasury.

The matter before us does not involve a charge on the public treasury, but rather existing CMHC funds distributed among the provinces for purposes identical to those of CMHC.

The Corporation has agreements of this type with the provinces with regard to affordable housing and uses similar agreements. So no new funding for new activities is involved, because the activities were planned by CMHC. All we are saying is that, under C-363, the additional funds would be used by the provinces, thus distributed among them. They would be distributed on the basis of population for CMHC purposes. All that has changed is the agent. There are no additional funds. The type of activity is the same. The money simply goes to the provinces and territories, which carry out the activities of CMHC as if they were delegated.

Let us go back to page 655 of Marleau and Montpetit's House of Commons Procedure and Practice . I have no doubt, Mr. Speaker, that you will reach the same conclusions. CMHC has generated huge surpluses. They would be used by the provinces for social housing, in order to make housing more accessible to all Quebeckers and Canadians. A royal recommendation is not needed at this point—no supplementary votes, no treasury money and no new activities.

Canada Mortgage and Housing Corporation Act
Private Members' Business

1:25 p.m.

The Acting Speaker (Mr. Marcel Proulx)

I thank the two hon. members for their comments. The chair shall take them into account and make a ruling before the second hour of debate.

Business of the House
Private Members' Business

June 3rd, 2005 / 1:25 p.m.

Liberal

Paul Szabo Mississauga South, ON

Mr. Speaker, discussions have taken place between all parties concerning the recorded division requested earlier today on the motion to hold a take note debate pursuant to Standing Order 53.1 on June 7. I believe if you seek it you would find consent to deem the motion carried.

Business of the House
Private Members' Business

1:25 p.m.

The Acting Speaker (Mr. Marcel Proulx)

Does the hon. member have unanimous consent?

Business of the House
Private Members' Business

1:25 p.m.

Some hon. members

Agreed.

(Motion agreed to)

The House resumed consideration of the motion that Bill C-363, an act to amend the Canada Mortgage and Housing Corporation Act (profits distributed to provinces), be read the second time and referred to a committee.

Canada Mortgage and Housing Corporation Act
Private Members' Business

1:25 p.m.

Bloc

Christian Simard Beauport, QC

Mr. Speaker, I think that the cart was put before the horse in explaining why Bill C-363 did not require a royal recommendation. Allow me to take a moment to go over the background, content and purpose of this bill.

First and foremost, members should know that, in recent years, Canada Mortgage and Housing Corporation has accumulated a huge surplus, which is not part of its mission per se. This surplus is so huge that something has to be done about it. The fact is that CMHC's mission is not being respected. No effort is being made to house Canadians and Quebeckers through home ownership incentives. Accumulating in excess of $3.4 billion in surplus does nothing to help them.

It is important that hon. members be aware of the figures that I am about to quote concerning CMHC. In 1997, as I recall, CMHC had an accumulated surplus of $32 million. In 2001, its assets already totalled $1.265 billion; in 2002, $1.809 billion; in 2003, $2.476 billion; in 2004, $3.342 billion. It is also important to note that, unless something is done, by 2008, the CMHC surplus will have increased to $7 billion. That is an annual increase of more than $1 billion.

We are talking about a huge surplus. It is also important to know what the current $3.4 billion surplus represents. To give it concrete meaning, let us say that, with that amount, 60,000 new housing units could have been built to house 60,000 families. This is based on a $50,000 per unit subsidy.

Instead, a surplus was accumulated. There have been no program changes and no cost reductions to Canadians as whole. CMHC has accumulated a surplus which we feel is immoral and outrageous.

Huge surpluses have been hidden in foundations and in reserves, and in the government's general operating budget, and that was contrary to the spirit, the letter and even the ideal of natural justice that created this Canada Mortgage and Housing Corporation, whose purpose was to provide help to all Canadians.

This bill mainly seeks a debate on the surpluses hidden all over by the government. Those surpluses are being raked in while people's essential needs are not being met.

What could the government and Canada Mortgage Housing Corporation have done with such surpluses over the years? They could have done a lot of things.

I used to live in the world of housing co-ops. Canada Mortgage and Housing Corporation under-invested in that field for a very long period of time. In fact, it stopped investing between 1993 and 2002. Before 1993, in some places, it also applied modesty criteria, which is how a significant housing stock could be renovated with very little money being spent.

In Quebec alone, there was a shortfall of $555 million in investments made. The housing stock currently being financed by CMHC would need renovations in this amount. No investment was made in this project.

Canada Mortgage and Housing Corporation has generated this $3.4 billion by all kinds of means, for instance, by overcharging people who take out mortgage insurance when purchasing a house. I believe people know that when someone is purchasing a house for $100,000 and cannot come up with a $25,000 down payment, that person must have CMHC guarantee the loan. These fees are high and extremely profitable for CMHC.

CMHC is basically acting as a bank, not a cooperative or a social bank, but a real bank.

It is important to note that CMHC generated surpluses of some $3.4 billion even in its social program management. The government had given CMHC money for social housing programs, and when the interest rates went down, it pocketed the difference between the agreed and the actual rates. CMHC thus made a lot of money in social program management.

It is all the more odious that when a housing cooperative has problems, Canada Mortgage and Housing Corporation strips it of its autonomy. CMHC only guarantees second mortgage loans at high interest rates, with conditions that take away all its autonomy. To reach that point, the housing cooperative really has to be on the brink of bankruptcy. It is forced to readjust all its rents according to market prices, and it systematically loses the second stage of assistance, rent supplements.

We can therefore say that Canada Mortgage and Housing Corporation is an inhumane bank in the way it applies its programs. This is evidenced by the way it treats the cooperatives and the not for profit organizations that do not have enough money to help the poorest of their members. If these organizations need to invest to renovate their housing units because of underfunding, they are faced with foul and appalling conditions that profit Canada Mortgage and Housing Corporation.

Unfortunately, CMHC has failed in its mission. It chose to build up exorbitant surpluses now reaching $3.4 billion. If we do not do anything, these surpluses will reach $7 billion in 2008. There is no sign that CMHC will use this money to improve the housing situation for all Canadians and all Quebeckers.

An important signal has been given. Bill C-363 would transform into assets any amount exceeding a reasonable limit set at about $1 billion. This is an important measure. In fact, is exactly 0.5% of CMHC's assets. Today, according to the available information, that would be a little bit more than $1 billion. Bill C-363 would allow CMHC to keep a $100 million annual reserve. Let us be clear: out of its $3.4 billion, it could keep $1 billion for contingencies, such as major losses.

In fact, nothing forces the CMHC to produce a surplus. For years, CMHC did not produce any surplus but only did what it was intended to do. However, during that period, it was allowed to keep a $1 billion reserve fund or 0.5% of its assets, which is quite enough. Moreover, CMHC pays fees to the government each and every year to have its losses guaranteed. Last year it paid $21 million to the government. So, in fact, CMHC had two insurance policies: it kept a huge reserve fund for contingencies although it was impossible to lose that much, and it paid the government $21 million to be insured against possible losses. That was double insurance and double payments too, and the situation allowed CMHC to accumulate a completely outrageous surplus.

With Bill C-363 we are sending a message to CMHC to suggest that it retain $1 billion. Any other unspent money proves CMHC does not have the ability to spend it. CMHC must therefore pass it on to the provinces on a pro-rated basis. By the way, at the suggestion of my colleague, the leader of the NDP, I will be making an amendment to the bill, so that it will read “provinces and territories”. This we will do in committee if the bill is passed at second reading. I encourage all hon. members to vote accordingly, so that we may debate the bill thoroughly in committee and make improvements to it. We will also be able to make another little technical correction to the English, where the word “provide” is missing.

The signal is clear. CMHC can maintain a reserve that is more than reasonable at $1 billion. It cannot, however, accumulate profits to detriment of its mission. The needs in the provinces and territories are huge. Housing is their primary responsibility.

If it has not been true to its mission, then, right now, everything in excess of that $1 billion figure—we are talking about some $2.4 billion, which would mean $500 million for Quebec, more for Ontario and the rest on a pro-rated basis according to the population of the provinces or territories—should be handed over to the jurisdiction of those provinces and territories. This money is needed. These jurisdictions know what to do with it, and will. This does not prevent CMHC from correcting the situation subsequently and presenting balanced budgets.

The planned $1 billion per year for 2006 and 2007, plus another nearly $1 billion for 2005, could be used by CMHC to invest in social housing and to help cooperative housing.

Yesterday, the Minister of Labour and Housing was asked a question—I nearly called it a planted question—by one of his colleagues. He said that he, unlike the Bloc Québécois, was looking after cooperative housing. That was what we call a cheap shot, intended to denigrate me, when I have been involved in cooperative housing all my life.

Canada Mortgage and Housing Corporation could very well use the money that will be left to balance its budget. It should invest in housing cooperatives and in not-for-profit organizations, and it should also reduce the interest rates that it imposes on owners. It could also invest for the homeless. The SCPI program, which helps the homeless, will end in 2006. CMHC could easily use the money that it has left to renew this program, if the government is strapped for money.

This is very important: if after agreeing to go along with the New Democratic Party with Bill C-48, the Prime Minister—and this is from him—following some cold calculations, not because of convictions or principles, or because this was part of the initial budget, were to decide, in the next year or two, to invest $1.6 billion in social housing, then, perhaps it could be said that, because of convictions or principles, he could, over the past few years, have used the CMHC surpluses to fulfill its mandate and provide appropriate housing.

Currently, there are 1.7 million Canadians in Quebec and in all the provinces who do not have good housing conditions. They are spending too much money on housing. This phenomenon has been on the increase since the current minister of Labour published his report, in 1990, along with the current Prime Minister. Indeed, there are now 400,000 additional households experiencing that problem. At the time, there were 1.3 million, but there are now 1.7 million.

We are being told that something will be done later, because the government was forced to act following some cold calculations. Something can be done now. With this bill, I am proposing that something be done now.

If this government is not capable of doing it, if it does not have the integrity or the morals to spend money properly, if it prefers to accumulate billions of dollars at the expense of the poor, when it could have built 60,000 new housing units, if it does not know how to manage, if it cannot stand the heat, then it should get out of the kitchen. It should give those surpluses, or a good chunk of that money, to the provinces. They will know how to use it.

The bill states that this money would be used for social housing, to help all Canadians and Quebeckers find lodging and to improve their housing conditions. That is what the bill says and that is what will be done. It is an important political message. We cannot accumulate immoral surpluses without public debate, without talking about it in the House and without doing anything about it. We cannot get away with keeping people in poor housing conditions.

I also invite the Conservative Party to support this bill. In a way, it is also a Conservative bill, in that it tells the government to manage this money better and not to spend it. When there is a $3.4 billion surplus, internally there is a tendency to spend less carefully.

Canada Mortgage and Housing Corporation was used as a screen in the sponsorship scandal. CMHC did not manage the $2 million advertising contracts, but the money came from CMHC and they had no say in the matter. On the inside they have a tendency to manage things poorly and to forget what their primary role is. It is inefficient and ineffective to allow a crown corporation to accumulate outrageous surpluses that go beyond its mandate.

I invite the Conservative members who have spoken out against the fiscal imbalance to support this important bill that respects provincial jurisdictions. Together we could improve it in committee, if necessary. As I said to the leader of the NDP and to the Conservative Party critic, I am prepared to improve the bill after second reading.

Let us debate, in this country, the importance of surpluses. That is what I invite my colleagues to do.

Canada Mortgage and Housing Corporation Act
Private Members' Business

1:40 p.m.

Bloc

Guy Côté Portneuf, QC

Mr. Speaker, it is always sad to hear such speeches which briefly but so eloquently summarize 10 years of federal government withdrawal from such areas, meaning 10 years of mismanagement.

I want to clarify something. Even without legislation such as Bill C-363, could the government have used available funds equal to the CMHC surpluses to meet the greatest needs in social housing, among other things, and in related areas?

Canada Mortgage and Housing Corporation Act
Private Members' Business

1:40 p.m.

Bloc

Christian Simard Beauport, QC

Mr. Speaker, I thank my colleague from Portneuf—Jacques-Cartier for his question. In fact, the government could have done that.

When the current Prime Minister was finance minister, he stopped all new funding for social housing, instead merely allocating the budgets in keeping with previous commitments. As a result, until 2002, no new money was allocated. Even in 2002, when the federal government started to reinvest, it was no longer under the responsibility of the finance minister, now Prime Minister. His insensitivity to social and cooperative housing is legendary to those in the field.

At the same time these commitments were being fulfilled, the surpluses were accumulating. So, the essential needs of the public are not being met, which has a direct impact on people's daily lives. There are housing cooperatives in Quebec City and Montreal that had to sell housing units to the private sector or even abandon them because they did not have the money to renovate them and the conditions CMHC was offering were impossible. People were living in social housing that had turned into slums. I could even give the addresses. I could invite the minister and the members of the party opposite to come and see these housing units.

At the same time that social housing projects were abandoned, people were left living in unacceptable conditions. I saw dwellings where water was leaking through light fixtures, which was extremely dangerous. Quebec City had to recommend that a housing coop be closed down not because it was badly run, but because the CMHC had not invested enough to begin with.

So, in response to the member for Portneuf—Jacques-Cartier's question, it is clear that the government could have used these surpluses to respect the CMHC's mission. It did not. Now, they are engaging in electoral blackmail with Bill C-48: if you want money, you will have to vote for the bill, when we know that $3.24 billion is hidden in the CMHC's coffers. We are asking the government to withdraw that money from those coffers with Bill C-363 and to give it to provinces, which will do the work and better respond to people's needs. It the federal government cannot stand the heat, it should get out of the kitchen.

Canada Mortgage and Housing Corporation Act
Private Members' Business

1:45 p.m.

Bloc

Yves Lessard Chambly—Borduas, QC

Mr. Speaker, first, I would like to thank the member for Beauport—Limoilou for his valuable intervention and his valuable information. I will ask him the following question.

We know that the money that the federal government earmarks for social housing or affordable housing is entrusted to a crown corporation, the Canada Mortgage and Housing Corporation. Under the circumstances, if we were to maintain the present administration, including the inappropriate reserves, would it not be preferable to transfer everything to Quebec and the provinces? The provinces, Quebec in particular, are already willing to take full responsibility for social housing.

Canada Mortgage and Housing Corporation Act
Private Members' Business

1:45 p.m.

Bloc

Christian Simard Beauport, QC

Mr. Speaker, negotiations, which began in 1997, are under way. We know that whenever we ask for something in Quebec, it generally takes ten years to get it, and sometimes longer. In this case, it will likely be more than 10 years.

We are talking about the transfer of the administration of social housing to the province, with full financial compensation. All co-op groups and non-profit organizations are demanding this transfer. And because it has not been done, there are consequences.

There has been no transfer, but at the same time, the Canada Mortgage and Housing Corporation directs municipalities not to subsidize housing cooperatives because it says they already benefit from its subsidies. I will be very brief on this topic.

Thus, the social housing stock should be transferred with full financial compensation. One day, it will be interesting to see provinces take back all their responsibilities. But that day has yet to come. We think that the Canada Mortgage and Housing Corporation can continue to operate, but on a smaller budget. It cannot continue piling up immoral surpluses without any action for housing. This is the goal of the bill.