An Act to amend the Canada Mortgage and Housing Corporation Act (profits distributed to provinces)

This bill was last introduced in the 38th Parliament, 1st Session, which ended in November 2005.

Sponsor

Christian Simard  Bloc

Introduced as a private member’s bill. (These don’t often become law.)

Status

Not active, as of April 13, 2005
(This bill did not become law.)

Elsewhere

All sorts of information on this bill is available at LEGISinfo, provided by the Library of Parliament. You can also read the full text of the bill.

Employment Insurance ActPrivate Members' Business

April 22nd, 2009 / 6:05 p.m.
See context

Conservative

The Deputy Speaker Conservative Andrew Scheer

I am now prepared to rule on the point of order raised by the parliamentary secretary to the government House leader on February 26, 2009, concerning the requirement for a royal recommendation for Bill C-241, An Act to amend the Employment Insurance Act (removal of waiting period), standing in the name of the member for Brome—Missisquoi. I would like to thank the parliamentary secretary, as well as the member for Joliette, for having brought this issue to the attention of the chair.

Bill C-241 seeks to amend the Employment Insurance Act by removing the waiting period that precedes the commencement of benefits after an interruption of earnings, and repeals provisions that refer to that waiting period.

At issue is whether the removal of the waiting period during the benefit period would require additional funds being disbursed from the consolidated revenue fund, or as a result of legislative changes flowing from the 2008 budget, from a separate account administered by the Canada Employment Insurance Financing Board.

This question is of critical importance, since matters related to the appropriation of moneys outside the consolidated revenue fund do not infringe on the financial initiative of the Crown and therefore do not require a royal recommendation.

In his intervention, the parliamentary secretary argued that the bill should be accompanied by a royal recommendation since it would require the expenditure of funds in a manner not authorized under the Employment Insurance Act. He further pointed out that the Department of Human Resources and Skills Development estimated that the removal of the two-week waiting period could cost as much as $1 billion per year.

The member for Joliette for his part, felt that the bill did not need to be accompanied by a royal recommendation since it does not have to do with monies within the control of the Crown but instead with monies in the account administered by the Canada Employment Insurance Financing Board. His position was based in particular on a ruling made on October 3, 2005 concerning C-363, which had to do with the use of the surplus in the Canada Mortgage and Housing Corporation reserve fund. The Speaker ruled at the time, on page 8294 of the Debates, that:

The transfer of monies from the CMHC reserve fund to the Consolidated Revenue Fund—or in this case to the provinces—is not a matter relating to the appropriation of monies from the Crown. Therefore, Bill C-363 does not infringe on the financial initiative of the Crown.

The Chair has carefully examined Bill C-241, as well as the arguments put forward by the parliamentary secretary and the member for Joliette. It should be noted at the outset that subsection 77(1) of the Employment Insurance Act makes it clear that EI benefits are disbursed from the consolidated revenue fund. It states:

There shall be paid out of the Consolidated Revenue Fund and charged to the Employment Insurance Account

(a) all amounts paid as or on account of benefits under this Act;

As the member for Joliette mentioned in his point of order, it is true that the Budget Implementation Act, 2008 made certain amendments to the Employment Insurance Act in addition to creating the Canada Employment Insurance Financing Board.

The object of the Board was, in particular, to set the premium rate under section 66 of the Employment Insurance Act and to maintain a reserve in accordance with that section. The specific purpose of the separate account in question is to make it possible to reduce premiums. There is no provision for using the account to pay for additional outlays that could result from eliminating the waiting period for the payment of benefits. The amendments to the Employment Insurance Act specified, among other things, the conditions for any interim payment to or by the Canada Employment Insurance Financing Board. It is important to note that these amendments did not remove the EI Account from the Consolidated Revenue Fund.

Therefore, it is clear that despite the creation of a new Canada Employment Insurance Financing Board, the payment of benefits to eligible workers continues to be made from the consolidated revenue fund through the EI account. Consequently, the chair is of the opinion that the provisions of Bill C-241 would authorize a new and distinct charge on the public treasury. Since such spending is not covered by the terms of any existing appropriation, I will therefore decline to put the question on third reading of this bill in its present form, unless a royal recommendation is received.

Today, however, the debate is on the motion for second reading, and this motion shall be put to a vote at the close of the second reading debate.

On debate, the hon. member for Saskatoon--Wanuskewin.

Private Member's Bill C-241Points of OrderGovernment Orders

March 3rd, 2009 / 4:20 p.m.
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Bloc

Pierre Paquette Bloc Joliette, QC

Mr. Speaker, last Thursday, the Parliamentary Secretary to the Leader of the Government in the House of Commons spoke in this House to indicate to you that Bill C-241 to remove the waiting period imposed on employment insurance recipients requires royal recommendation. You will not be surprised to hear that I not share that opinion at all.

Although I do recognize, as the parliamentary secretary has said, that you ruled on this matter during the 39th Parliament concerning Bill C-269, which also contained provisions for elimination of the waiting period, I am of the opinion that there are some new elements that need to be drawn to your attention.

In fact, there have been many changes since that ruling. In my opinion, it ought to be reviewed because the legislation surrounding the funding of employment insurance has changed. Bill C-50 to implement the February 26, 2008 budget, which was given royal assent on June 18, 2008, enacted the Canada Employment Insurance Financing Board Act.

In order to properly explain the purpose of that act, I would like to quote an except from page 71 of the 2008 budget plan.

To enhance the independence of premium rate setting and to ensure that EI premiums are used exclusively for the EI program, the government is creating a new, independent Crown corporation, the Canada Employment Insurance Financing Board (CEIFB). It will have the following key responsibilities:

Managing a separate bank account. Any annual EI surpluses going forward will be held and invested until they are needed for EI program costs.

Then, further down on page 71:

The CEIFB will be structured as a Crown corporation that will report to the Minister of Human Resources and Social Development. It will have an independent board of directors and be staffed with the experts needed to manage the financing of the EI program.

I would like to now draw your attention to a ruling by the Deputy Speaker of the House on October 3, 2005 concerning a bill which dealt with the use of the surplus in the reserve fund of the Canadian Mortgage and Housing Corporation. I will quote an excerpt from that ruling if I may:

Bill C-363 proposes that monies within the control of CMHC—not the Crown—be dedicated for a particular purpose. A royal recommendation is required when a bill seeks an authorization to withdraw monies from the Consolidated Revenue Fund. Is Bill C-363 seeking to withdraw monies from the Consolidated Revenue Fund? I would conclude that it is not. Bill C-363 is preventing CMHC monies from being placed in the Consolidated Revenue Fund by having them used for another purpose. The transfer of monies from the CMHC reserve fund to the Consolidated Revenue Fund—or in this case to the provinces—is not a matter relating to the appropriation of monies from the Crown. Therefore, Bill C-363 does not infringe on the financial initiative of the Crown.

The parliamentary secretary also cited a May 9, 2005 ruling, which among other things addressed the objects, purposes, conditions and qualifications of the royal recommendation. He argued that Bill C-363 is adding a new purpose which was not contemplated in the original legislation establishing CMHC and would therefore need a new royal recommendation. Again I wish to stress that the original royal recommendation strictly applied to matters concerning the objects, purposes, conditions and qualifications of an appropriation of monies within the control of the Crown; that is not the case with Bill C-363. As Bill C-363 does not appropriate from the Consolidated Revenue Fund, it cannot be considered as altering the purpose of the original royal recommendation.

This precedent is extremely relevant in this case. We have already noted that the government's aim in creating the Canada employment insurance financing board was to set up a separate bank account in order to make sure that contributions would be used exclusively for the employment insurance program. Therefore, by the government's own admission, the purpose of creating the Canada employment insurance financing board is to make sure that the monies in this account are no longer available to the Crown for general appropriations.

Once this has been established, we must conclude that a royal recommendation cannot apply to Bill C-241, because it does not have to do with monies within the control of the Crown. The monies in question here are within the control of the Canada employment insurance financing board. Consequently, in our opinion, this bill does not require a royal recommendation.

Canada Mortgage and Housing Act—Speaker's RulingPoints of OrderOral Questions

November 8th, 2006 / 3:20 p.m.
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Liberal

The Speaker Liberal Peter Milliken

I am now prepared to rule on the point of order raised on October 3, 2006, by the Parliamentary Secretary to the Leader of the Government in the House of Commons and Minister for Democratic Reform concerning the need for a royal recommendation for Bill C-285, An Act to amend the Canada Mortgage and Housing Corporation Act (profits distributed to provinces), standing in the name of the hon. member for Québec.

I would like to thank the hon. parliamentary secretary for having raised this important matter as well as the hon. member for Québec for her comments.

In his presentation, the hon. parliamentary secretary noted that Bill C-285 seeks to require the Canada Mortgage and Housing Corporation (CMHC) to distribute any surplus from its reserve fund to the provinces.

He pointed out that the bill is similar in this regard to Bill C-363, introduced during the 1st Session of the 38th Parliament and acknowledged that, in a ruling given on October 3, 2005, at pages 8293-4 of the Debates, the Deputy Speaker had ruled that Bill C-363 did not require a royal recommendation.

The Parliamentary Secretary went on to make two points which he felt were relevant to the determination of whether or not Bill C-285 requires a royal recommendation. First, quoting from section 2 of the Financial Administration Act, he asserted that all of the revenues received by CMHC fall within the definition of “public money”.

He then went on to argue that, and I quote from Debates of October 3, 2006, at page 3589:

“—the accounts of CMHC are consolidated with the government’s revenue and available for future appropriations determined by Parliament. By transferring this money to the provinces, Bill C-285 is effectively an appropriation.

I have examined this matter with care because I recognize its importance both to the government and to all hon. members. I would also like to remind the House that my role here is restricted to ensuring that our rules are respected. It is not within the responsibilities of the Chair to deal with matters of legal interpretation.

The Chair continues to have difficulty with the assertion that the proposed amendment constitutes an appropriation. As I noted in my ruling of October 3, 2005, on Bill C-363, at page 8293 of the Debates:

--the reserve fund is an operational account that CMHC uses to conduct its corporate business. Until amounts from the reserve fund are actually transferred to the Consolidated Revenue Fund each year, they are not available to the Crown for general appropriations.

As I stated in my earlier ruling and as it is defined in section 2 of the Financial Administration Act, an appropriation is the approval by Parliament for a withdrawal of funds from the Consolidated Revenue Fund (CRF). Funds which have not been deposited in the CRF cannot be subject to appropriation.

Until such time as funds are paid over to the Receiver General, pursuant to section 29 (2) of the CMHC Act, they are not in the CRF and they cannot be appropriated. A bill which alters the Act to require that reserve funds not be paid to the Receiver General but be used for another purpose does not touch the CRF and does not require a royal recommendation.

As such, Bill C-285 does not seek to appropriate public funds and would not require a royal recommendation.

I would once again like to thank the hon. parliamentary secretary for having raised this matter. As I said earlier, it is a matter of some interest to all hon. members and one on which it is best to have as clear an understanding as possible.

Canada Mortgage and Housing Corporation ActPrivate Members' Business

October 3rd, 2006 / 6:10 p.m.
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Blackstrap Saskatchewan

Conservative

Lynne Yelich ConservativeParliamentary Secretary to the Minister of Human Resources and Social Development

Mr. Speaker, I am pleased to join the debate on Bill C-285, legislation that would require CMHC to transfer surpluses from its reserve to the provinces.

With some conviction, I can speak to a common belief among parliamentarians that Canadians ought to have a fair chance to own or rent their own home and that we acknowledge the importance of stable, affordable and good quality housing.

While the intent of Bill C-285 is commendable, in that it seeks to encourage the supply of affordable housing, it would, in truth, have the effect of negatively impacting on Canada's national housing system. It would make it harder for future governments to respond to the changing housing needs of Canadians.

Before discussing the specifics of Bill C-285, let me briefly provide some context regarding the role of CMHC. The main objective of CMHC is to assist Canadians obtain safe, quality and affordable housing. It accomplishes this through the provision of funding for affordable housing, as well as for renovations and repairs that benefit low income Canadians. It also accomplishes this through mortgage loan insurance.

CMHC mortgage loan insurance allows consumers to buy a home with as little as 5% down at interest rates comparable to those reserved for homebuyers with a down payment of 25% or more.

Since its initial offering in the 1950s, mortgage loan insurance has been used to facilitate the financing of nearly nine million homes. This helps many Canadians realize home ownership.

This brings me to why Bill C-285 is so problematic. The mortgage insurance business is characterized by long term, cyclical patterns. During strong housing markets, mortgage loan insurance sales rise and claims paid out decline.

However, the reverse is true during economic downturns, which was the case in the 1980s and the early 1990s. In order to manage the risks inherent in the insurance business, CMHC follows the prudent business practices set out by the Office of the Superintendent for Financial Institutions.

CMHC has earnings set aside for capitalization of $3.4 billion against the $274 billion worth of outstanding mortgages insured as of December 2005. These earnings set aside for capitalization represent 1.2% of its portfolio. This is consistent with OSFI directives.

CMHC's reserves provide a cushion to ensure its mortgage loan insurance business will not have to rely on additional taxpayer dollars to meet its obligations, even in bad economic times. This is why it is essential that CMHC continue to have adequate reserves. This will allow its mortgage insurance business to remain commercially viable and sustainable over the longer term rather than dependent on government subsidies.

Bill C-285 ignores the need for prudent business practices and would transfer CMHC's retained earnings that are set aside for capitalization, thus jeopardizing mortgage loan insurance's availability for future generations of Canadians. Parliament should not erode this cushion.

Another consideration is that all of CMHC's income is already included in the accounts of the Government of Canada. It is public money; that is to say that CMHC's net income has been recognized in the government's revenues dollar for dollar. CMHC is a federal crown corporation so its financial results are accounted for on a fiscal year basis and consolidated with the government's financial statements.

As I noted earlier, the federal government, through CMHC, provides approximately $2 billion each year for the ongoing support and management of assisted social housing for over half a million households. Through its mortgage loan insurance and assisted housing programs, CMHC helps respond to market circumstances as well as Canadians' evolving housing needs.

By taking the CMHC reserve out of the federal fiscal framework, Bill C-285 would tie the hands, not just of future Parliaments but also this one. Reducing the flexibility of both CMHC and Parliament to respond to developments in the housing market does not appear to be a wise way to secure the future of Canada's housing system.

I would remind the House that the former Liberal government echoed these sentiments in the previous Parliament by voting against a nearly identical private member's bill, Bill C-363. Speaking for the Liberal government, the current member for North Vancouver noted that legislation would tie the government and Parliament to an inflexible formula. The member further noted that CMHC's capital reserve helps ensure this crown corporation remains self-funding with no need for government subsidies.

As I alluded to before, Bill C-285 seeks to ensure funds transferred from CMHC to the provinces are utilized for both social and affordable housing purposes and to contribute to the creation and development of housing co-operatives.

However, Canada's new government is already taking concrete actions to strengthen our housing system. Budget 2006 contains several concrete examples of that commitment. The budget aims to support families, build safer communities and, indeed, a stronger country, including, by necessity, housing.

Accordingly, in Budget 2006 our new government made a one time strategic investment of up to $1.4 billion. This was for the establishment of three housing trusts with the provinces and territories for affordable housing, northern housing and for aboriginals living off reserve.

In addition, the budget announced an immediate one percentage point reduction of the GST, a measure which is already putting money back into the pockets of hard-working Canadians and stimulating the economy.

The reduction is also having a positive impact on the overall housing industry by making housing more affordable to Canadians. As Stephen Dupuis of the Greater Toronto Home Builders Association remarked, this reduction will have a tangible impact for prospective new homeowners. “On a $300,000 home, it could be as much as $2,000 in the buyer's pocket”.

Likewise, Dave Benbow, president of the Canadian Home Builders' Association called the GST cut a major benefit to new homebuyers, stating, “This action improves housing affordability for many Canadians”.

These measures complement existing Government of Canada initiatives to maintain the existing affordable housing stock. In that respect, funding for the residential rehabilitation assistance program and several related housing renovation and adaptation programs have been renewed for the fiscal year 2006-07, an extension which represented our commitment to $128.1 million.

Additionally, at a cost of almost $135 million, the Minister of Human Resources and Social Development also extended the national homelessness initiative, including the supporting communities partnership initiative until March 2007.

On top of those measures, the government is in the process of delivering on the $1 billion affordable housing initiative in collaboration with provincial, territorial and local partners. Thanks to this funding, new affordable housing is being created in communities across the country.

As I think all hon. members will realize, Canada's new government is moving forward on the objectives set out in Bill C-285 without embracing the flawed manner proposed in the legislation. Consequently, I call upon the House to consider the prudent course of action and reject the inflexible formula proposed in Bill C-285.

Canada Mortgage and Housing Corporation ActPrivate Members' Business

October 3rd, 2006 / 5:50 p.m.
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Bloc

Christiane Gagnon Bloc Québec, QC

Thus, Mr. Speaker, you are not allowing us to discuss this bill today or for as long as it takes to get an answer? Is that what you are saying?

Yet, a decision has already been made in the case of BillC-363 to the effect that the bill did not appropriate Crown funds and consequently, did not infringe on the financial initiative of the Crown. This decision was made with respect to a similar bill on May 5, 2005. The same questions were raised. We were told that the bill could not be tabled because it would change the conditions and qualifications of the royal recommendation. I believe that if we do not debate this bill today, it indicates—

Canada Mortgage and Housing Corporation ActPrivate Members' Business

October 3rd, 2006 / 5:45 p.m.
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Bloc

Christiane Gagnon Bloc Québec, QC

Mr. Speaker, we have already introduced this bill, as Bill C-363. At the time, we sought a ruling from the Speaker on this bill, and we were told that nothing was preventing CMHC monies from being transferred to the consolidated revenue fund and being used for another purpose. Thus, we have already had a ruling that Bill C-363 could not be prevented from being introduced, because this is not a matter relating to the appropriation of monies from the Crown and, accordingly, does not infringe on the financial initiative of the Crown. We had a Speaker's ruling concerning Bill C-363 during the previous Parliament .

In the same context, my colleague from the Conservative party would like to revisit a ruling that has already been given, and we were told that we were right: we could introduce Bill C-363.

Canada Mortgage and Housing Corporation ActPrivate Members' Business

October 3rd, 2006 / 5:40 p.m.
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Regina—Lumsden—Lake Centre Saskatchewan

Conservative

Tom Lukiwski ConservativeParliamentary Secretary to the Leader of the Government in the House of Commons and Minister for Democratic Reform

Mr. Speaker, I rise on a point of order on Bill C-285. Without commenting on the merits of this private member's bill, it is the government's view that this bill requires a royal recommendation.

Mr. Speaker, in the 38th Parliament you ruled that a similar bill, Bill C-363, did not require a royal recommendation. I would like to submit additional information on the issues raised during that ruling and I would ask you to review that decision based on this new information.

Bill C-285, like its predecessor, would require the Canada Mortgage and Housing Corporation to distribute its profits to the provinces. On October 3, 2005, Mr. Speaker, you noted that a royal recommendation is required only when an appropriation is made from the consolidated revenue fund and not from other sources. You disagreed with the assertion that:

--because moneys from the reserve fund are integrated into the consolidated revenue fund on an annual basis they may be considered to form part of the general revenues under the control of the Crown.

Mr. Speaker, I would ask you to consider two points. The first point is whether assets held by the crown corporations properly fall within the definition of “public revenue”, which is safeguarded by section 54 of the Constitution Act, 1867, and Standing Order 79. I would submit that the assets of the CMHC do fall within this definition.

Section 2 of the Financial Administration Act defines public money as follows:

“public money” means all money belonging to Canada received or collected by the Receiver General or any other public officer in his official capacity or any person authorized to receive or collect such money, and includes...

(c) money received or collected for or on behalf of Canada, and

(d) all money that is paid to or received or collected by a public officer under or pursuant to any act, trust, treaty, undertaking or contract, and is to be disbursed for a purpose specified in or pursuant to that act, trust, treaty, undertaking or contract....

The CMHC is a crown corporation and an agent corporation under the Financial Administration Act, the Canada Mortgage and Housing Corporation Act and the National Housing Act. It is responsible to Parliament through a minister of the Crown. CMHC's activities are directed by the government. Its finances are subject to an audit by the Auditor General of Canada and to parliamentary oversight.

While section 128 of the Financial Administration Act allows crown corporations to have a separate bank account rather than directly depositing their assets in the consolidated revenue fund, this does not make this crown corporation's revenue any less “public money”.

CMHC's net financial results are accounted for on a fiscal year basis and consolidated with the government's financial statements, which means that CMHC's net income is recognized in the government's revenues dollar for dollar. This income is still in the federal purse and is therefore available for future appropriations as determined by Parliament.

The second area of new information I would like to bring to your attention, Mr. Speaker, relates to your June 13, 2005 ruling, in which you noted that the key issue in determining whether a royal recommendation is required is whether a bill:

--does anything more than rearrange the method of accounting for public funds. If not, then no royal recommendation is required: how public funds are recorded in the government's ledgers does not constitute an appropriation for which a royal recommendation would be required.

In that case, Mr. Speaker, regarding the matter of transferring funds out of the consolidated revenue fund into a separate account with a specific and limited purpose, you found that a royal recommendation was required because:

--these moneys are no longer available for other appropriations Parliament may make. These funds would no longer be available because, in effect, they have been spent....

I would submit that the principles in that rule should apply in the case of Bill C-285. In this case the accounts of the CMHC are consolidated with the government's revenue and available for future appropriations determined by Parliament. By transferring this money to the provinces, Bill C-285 is effectively an appropriation. In other words, the passage of Bill C-285 would have the result that money which was previously part of the public revenue would be directly transferred to the provinces on an annual basis.

This is clearly more than a rearrangement of accounting for public funds, since the money would be out of reach of the government and Parliament. In short, Bill C-285 would result in a new expenditure for a new purpose not anticipated by the existing act. Accordingly, I believe the bill in its entirety requires a royal recommendation.

Mr. Speaker, I trust this additional information will be useful to you in considering this important financial issue.

Canada Mortgage and Housing Corporation ActPrivate Members' Business

October 5th, 2005 / 6:55 p.m.
See context

The Acting Speaker (Mr. Marcel Proulx)

The House will now proceed to the taking of the deferred recorded division on the motion for second reading of Bill C-363, under private members' business.

(The House divided on the motion, which was negatived on the following division:)

Canada Mortgage and Housing Corporation ActPrivate Members' Business

October 3rd, 2005 / 12:05 p.m.
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Bloc

Christian Simard Bloc Beauport, QC

Mr. Speaker, to close this debate, before I address Bill C-363 directly, I must comment on the wisdom of your decision to reject the necessity of a royal recommendation for this bill. That is a fundamental point.

This will also bring attention to what I would term the abusive practice of calling for royal recommendation for all private members' bills. It is really something.

We have also discovered—something we actually already knew—that CMHC's money stash falls outside the government's accounting perimeters and is part of the CMHC's own funds. It is, therefore, possible for Parliament to tell it how to dispose of this money, which is not new money. If CMHC is incapable of using its funding properly, if it finds things too hot, let it get out of the kitchen. The needs are enormous.

It is, moreover, important to point out, for the benefit of my eminent colleague from Souris—Moose Mountain, that Parliament unfortunately has no control over this money that is with CMHC. Bill C-363 will give it that control; it proposes that CMHC's ability to squirrel away surpluses be limited, as these amounts take on immoral and distasteful proportions. The bill would encourage reasonable management of the reserve. If these amounts are not used for fulfilling CMHC's mission, that is providing affordable housing and social housing to all Canadians and all Quebeckers, let it hand that money over to the provinces proportional to their population. They have jurisdiction over this area and acquit themselves very well of that responsibility.

Why a bill on CMHC surplus funds? Because of the huge proportions they have taken on. We have also learned through this debate that 1.7 million households allocate over 30% of their incomes to housing. Of that number, close to 400,000 are in Quebec. Another enlightening figure: 100,000 households in Quebec alone allocate over 80% of their incomes to housing. What does this leave them to feed and clothe themselves? This is a disgrace.

Add to this the fact that CMHC has a $4 billion surplus, and we have a disgrace that makes our hair stand on end. These surpluses are accumulating at a rate of nearly $1 billion per year and will exceed $8 billion in 2009. Something must be done. This is immoral.

My bill suggests that CMHC keep an over $1 billion reserve fund. However, if CMHC does not create social programs or home ownership programs, if it does not do its job, than it should let someone else do it. If it cannot stand the heat, it should get out of the kitchen. That is the sole aim of this bill.

I want to convince my Conservative Party colleagues that this bill deserves their unequivocal support, not their opposition. Why? Because it corrects the fiscal imbalance and, to a certain extent, it recognizes the areas under provincial jurisdiction. In my opinion, the Conservative Party officially opposes the fiscal imbalance and believes that each level of government must do the job it has been assigned to do. In terms of housing, the work is often done in the community, and the provinces are often the ones who do it best.

So, the Conservative Party should support this bill. Furthermore, it gives Parliament control over something that is not subject to any controls by CMHC. It would be easy to believe that CMHC is a good administrator, since it has a $4 billion surplus. I have even heard a Conservative MP congratulate CMHC on having a $4 billion surplus and say that, like the private sector, it had done a good job. However, this is a crown corporation that has a mission to fulfill, and that mission is not making a profit.

It would be easy to believe that CMHC is well managed. As I recall, the sponsorship scandal shed light on management practices that were far from beneficial to CMHC's image and logo. Contracts and other things were distributed through Mr. Guité and managers. So, CMHC suffers from mismanagement, astronomical surpluses and bureaucracy, and fails to provide solutions for those in need.

I thank the members of the NDP who have supported me with regard to this bill. I urge the Liberal members to think beyond party lines and consider the well-being of families and individuals.

Bill C-363 does not limit the role of CMHC but rather indicates that, if it does not have the know-how, it should ask for help.

Canada Mortgage and Housing Corporation ActPrivate Members' Business

October 3rd, 2005 / 11:50 a.m.
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Liberal

Don Bell Liberal North Vancouver, BC

Mr. Speaker, I would like to speak against Bill C-363 as proposed by the hon. member for Beauport—Limoilou to amend the CMHC act to require the distribution to the provinces by Canada Mortgage and House Corporation of surpluses from its reserve fund.

Housing is a fundamental priority of the federal government, as it is for the people of this country. We in the House have a responsibility to ensure that those Canadians who are in need of assistance are able to access a basic level of safe affordable housing.

Through CMHC the government is working to meet that need by helping to increase housing options and accessibility for low income families and individuals, aboriginal people, seniors, those living with a disability and Canadians with special needs. As the elected representatives of all Canadians, we also have an equal responsibility to all Canadians whose needs are met by the marketplace and who are likewise struggling to build a better life for themselves and for their families. To this end we must do everything we can to help our housing and financial markets work better and more efficiently and to ensure that the Canadian housing system remains one of the best in the world.

The ultimate test of our efforts in this regard is the percentage of Canadians who are able to meet their housing needs without having to rely on government assistance. Today, thanks in large part to the efforts of CMHC and its partners, more than 80% of Canadians are well and affordably housed. Sound financial management has resulted in eight balanced budgets, lower interest rates and a series of exceptionally strong housing markets.

A strong housing market combined with good corporate management and numerous public product innovations has allowed CMHC to enjoy several years of record earnings. The federal government and CMHC are already putting these benefits back into the pockets of Canadians through premium reductions and other enhancements to its mortgage loan insurance activities.

As Canada's national housing agency, CMHC is committed to helping Canadians access a wide choice of quality, affordable homes and making vibrant healthy communities in cities a reality across the country. CMHC's mandate as described in the National Housing Act is to promote housing construction, repair and modernization; housing affordability and choice; improvements to overall living conditions; the availability of low cost financing; and the national well-being of the housing sector.

Part of fulfilling that mandate includes building on its long history of innovation and mortgage loan insurance and securitization to offer a wide range of mortgage insurance products and services that help make home ownership more affordable for Canadian homeowners. These products and services continue to evolve to meet the ever changing needs and lifestyles of Canadians across the country and in all markets.

For example, in April, CMHC introduced a package of enhancements and benefits worth $200 million annually. This included a 15% reduction in mortgage loan insurance premiums for home buyers with as little as a 5% down payment. This is CMHC's second premium reduction for homeowners in two years. This means that a home buyer with a $120,000 mortgage and 5% down payment who obtains a CMHC insured mortgage will save a total of $600 on the purchase of his or her home. Combined with the premium reductions announced by CMHC two years ago, that homeowner is now saving 30%, or $1,200, on the purchase of his or her home.

To increase both the affordability and energy efficiency of Canadian homes, CMHC is offering a 10% refund on mortgage loan insurance premiums for homeowners who purchase an energy efficient home or who make energy-saving renovations to their existing homes.

CMHC also eliminated its mortgage insurance premiums on rental projects under both phases of the affordable housing initiative and other projects with rents that are low enough to meet the needs of households who qualify for social housing. This will result in significant savings to sponsor groups in the order of $300,000 on a $5 million loan with a loan to value of 95%.

For affordable rental housing projects that meet the criteria of CMHC's partnership flexibilities, CMHC implemented a further 15% reduction in mortgage loan insurance premiums. This follows on a 20% reduction announced in 2003, for a total reduction of 35% below the premiums that are charged for regular market housing. For a project with a $5 million loan and a loan to value ratio of 95%, the combined benefit of these premium reductions will amount to a savings of almost $100,000.

More than 633,000 units of social housing are currently managed by CMHC provincial and municipal housing agencies or by local, non-profit organizations such as housing cooperatives and urban aboriginal groups. On behalf of the federal government, CMHC supports social housing by subsidizing these units on a cost shared basis with provincial and territorial housing agencies. If we are to successfully meet the housing challenges of tomorrow, we must continue to work in collaboration with all our partners, including all levels of government, industry and community groups, aboriginal peoples, and the social and private sectors, to build on what we have achieved so far.

Partnerships such as these are at the core of CMHC. It has only been through the active engagement of its partners and stakeholders that CMHC has been able to foster such an impressive housing legacy for the benefit of all Canadians.

Today, a wide spectrum of housing solutions in Canada involves both market and assisted housing. Through CMHC the government is demonstrating its commitment to making housing more affordable for both market and assisted housing needs on all parts of the housing continuum.

Canadians should be proud of their housing finance system. It is a system that provides low cost mortgage funds throughout the country with equal access for all Canadians in good economic times and bad.

Bill C-363 would tie the government and Parliament to an inflexible formula. Too often critics suggest that homeowners get no benefit from the purchase of mortgage insurance; that it is a cost borne by the homeowner to protect lenders. Clearly, the homeowners do benefit financially through lower interest rates, but they are also able to acquire their home earlier and benefit from the growth in home equity sooner. CMHC is also the only provider of mortgage loan insurance for rental housing, retirement and nursing homes in Canada, forms of housing that touch the lives of many Canadians.

CMHC pays claims from the premiums it charges and does this without government subsidy. As such, CMHC sets aside reserves for capitalization to ensure that it remains financially viable through good economic times and bad, and where CMHC has been able to gain efficiencies in its operations, it has passed this benefit back to Canadians through a reduction in mortgage insurance premiums.

In addition, CMHC's capital reserve helps ensure this important and effective crown corporation, which is at the heart of this country's housing finance system and remains self-funding with no need for government subsidies. Let us not deprive CMHC of its ability to do the job we have entrusted it to do for the benefit of all Canadians.

Canada Mortgage and Housing Corporation ActPrivate Members' Business

October 3rd, 2005 / 11:40 a.m.
See context

NDP

Jean Crowder NDP Nanaimo—Cowichan, BC

Mr. Speaker, I rise to support this bill. The NDP will be encouraging all members of the House to vote in favour of Bill C-363 in order to get it to committee for further debate and discussion. I thank the member from the Bloc for introducing this bill.

In part, this bill comes before the House because of the lack of action over the last several decades on the part of the Conservatives and the Liberals. This bill is asking for the profits from CMHC to be reinvested in social housing.

The National Housing and Homelessness Network has put together some figures. In the most recent fiscal year Canada Mortgage and Housing Corporation, our national housing agency, reported equity of $3.4 billion and a net income after taxes of $950 million. CMHC projects that its equity will go to $8.3 billion by 2009, with a net income of $1.2 billion.

The national housing and homelessness initiative acknowledges that it is critical that money be put aside for risk management, but it seems only reasonable that we reinvest this kind of money in social housing. We have a housing crisis in Canada. It is shocking that a nation as rich as Canada would have people sleeping on the streets.

One of the things that the National Housing and Homelessness Network has done over the last while is put together a report card on what has happened with housing in Canada. It also pointed out that this whole shameful situation in Canada started under the Conservative government of Brian Mulroney. It cut $2 billion from the national social housing program starting in 1984 and then cancelled entirely all new social housing spending in 1993. That is the legacy the current Liberal government stepped into.

I like this line out of the National Housing and Homelessness Network's press release dated September 21. It started its press release by saying, “Too much political spin, not enough truly affordable housing”. That speaks to the issue here.

It talks about the fact that four years ago, in September 2000, the federal, provincial and territorial housing ministers emerged from a meeting talking about having a working plan to create more desperately needed affordable houses. Six weeks after that meeting the federal Liberals promised to fund up to 120,000 new affordable homes over four years. Four years later in 2004, Canada has no comprehensive national housing strategy, just a loose patchwork of funding and programs that have delivered just 10%--I will repeat that number, just 10%--of the new homes that were promised.

The housing release goes on to talk about all the promises that have been made. It says that ministers have made promises, signed agreements, issued announcements and called press conferences but have failed to build new homes. That is why the National Housing and Homelessness Network has graded federal housing efforts over the past four years as a failure.

The network has done a very good job in its report. The National Housing and Homelessness Network went through a whole series of reports and basically graded the efforts over the last several years as D or F. We are just not making the kinds of inroads needed in housing. It talks about the fact that the best estimates from the national housing and homelessness initiative is less than 12,000 new homes, or 10% of the promise, have actually been committed. This is a shocking set of circumstances.

I want to talk for one moment about what is going on in my own riding of Nanaimo—Cowichan. Last week in the city of Duncan, which has a population of about 5,000 and the Cowichan Valley has around 70,000, a vacant building burned down. That vacant building was the only venue in the Cowichan Valley for people who do not have homes to live. Six people were in that building when it burned down. Two were seriously injured and four others had some minor injuries.

The shameful part is there is nowhere to send people who are homeless in the Cowichan Valley. People are couch surfing, sleeping under the local bridge and in a dangerous vacant building. Where are these people going? After the building burned down, four of the people were put into temporary shelters but because of some other issues, they have been evicted from them. There is nowhere for them to go and they are back on the street.

The local MLA, who is the housing critic for the provincial NDP, has called upon both the federal and provincial governments to get their acts together and build some new homes. He said, “We are seeing a combination of a lack of affordable housing and a total lack of treatment for addiction and mental illness. More and more people are living on the street in more and more desperate circumstances”. MLA Routley is calling on the provincial government to do an inventory of public buildings which could be used for emergency shelters for the homeless or converted to low income housing. We do not want to see people living in vacant buildings and then at risk should arson happen and the building burns down.

There are a number of other initiatives in my riding.

In April of this year a survey on homelessness was done in Nanaimo. The Nanaimo Working Group on Homelessness Issues interviewed 110 people. What is really frightening is that of those 110 people, 45% of the people living on the streets were women and many of those women had children. The study also found that women were far more likely to be homeless longer than men. Fifty-three per cent of the population interviewed were men, and the men were older than the women in general. Forty per cent of the income made on that day was from the sex trade and 11% from drug dealing.

This was a snapshot of the situation. People feel that this under-represents the number of people who are living on the streets in Nanaimo. It is a shameful situation. There is a lack of affordable housing and a lack of addiction treatment centres. There is nowhere for these folks to go.

Another initiative is being undertaken right now in Nanaimo called the Willow WAI, which is the wrap around initiative. This initiative is an integrated case management approach that uses flexible funds to assist the homeless or at risk individuals to remain in sustainable housing. This initiative draws on community partners and other professionals and existing resources. The initiative offers wrap around case management to participants in the community at large. It provides services and flexible funding to ensure access to housing. The sad thing about this initiative is that the funding runs out in 2006. At risk women and children will be back on the street.

The government talks about sustainability for affordable housing. It is very difficult to raise community funds. Three hundred thousand dollars are needed to keep those houses open, and the situation is getting desperate. It is now October and the participants have six months to raise that money before federal funds run out. It is criminal that more women and children will be put back on the streets.

Why should we have affordable housing? Why is social housing a good thing? The Nanaimo affordable housing group put together an evaluation which looked at a project that was taking place in Nanaimo. The group wanted to demonstrate that by having housing in place, it saves money in the system. They have undertaken a project for at risk individuals who have psychiatric problems or disabilities. This is a quote from the study:

Before moving into the building the participating tenants had 63 medical admissions totalling 703 hospital days. Since moving into the complex, there have only been 10 medical admissions totalling 54 days. Before moving into the building there were 31 psychiatric admissions totalling 729 days. Since moving into the complex, there have been 10 psychiatric admissions totalling 82 days.

If we just want to talk about dollars and cents and nothing else, we know that by providing people with affordable, sustainable, good quality housing, we save money in our health care system.

I want to close with one more quote from the national housing initiative. It talked about the fact that federal and Ontario politicians have a habit of announcing the same units over and over again. Ontario promised 46,332 new homes, but delivered 63, and yet it had 11 major announcements involving the same units.

Part of the reason this bill has come before the House is that we are tired of hearing the rhetoric about building new houses and having nothing happen. I encourage all members of the House to support sending Bill C-363 to committee so that we can have further conversations about what is needed to protect the homeless in this country.

Canada Mortgage and Housing Corporation ActPrivate Members' Business

October 3rd, 2005 / 11:30 a.m.
See context

Conservative

Ed Komarnicki Conservative Souris—Moose Mountain, SK

Mr. Speaker, I too will speak to C-363. There is no question that the objective of the bill is laudable in the sense of social housing, providing quality homes and improving the quality of life.

However, the manner in which it proposes to do it is somewhat problematic when one looks at the composition of the Canada Mortgage and Housing Corporation. Essentially there are two functions to that corporation. One is the insurance and securitization part of CMHC. In that respect it is meant to be a commercial enterprise that competes in the private market with others, like Genworth Financial Canada, that provide mortgage insurance or financial institutions that provide loans.

The other aspect of CMHC relates to assisted housing or social objectives, research and information and international activities.

CMHC's business activities, which are financed from insurance premiums and fees, require it to be competitive in the marketplace. The bill looks at having those fees moved over to social housing.

The other aspect of CMHC, which deals with social housing initiatives like assisted housing, housing repair and improvement, aboriginal capacity programs, Canadian housing market research, emergency planning and so on, is funded by parliamentary appropriations, and rightly so.

Any of those initiatives that CMHC wishes to proceed with would need to go to the Prime Minister, the cabinet and ultimately Parliament for approval. We saw that happen for instance in Bill C-48, although it was ill-conceived and under perhaps trying circumstances. Nonetheless it was a type of bill that dealt with a parliamentary appropriation for a specific purpose and it was debated by the House and all parliamentarians had an opportunity to vote on it.

This bill proposes to have that happen automatically, have it happen without any consultation in Parliament and have it move as the funds develop. When we look at the bill, it indicates that when the ratio of 0.5% of housing loans are attained in terms of profits, they would automatically move to the CMHC reserve fund. At that point, if the reserve fund reached 10% of the equity of the corporation, the funds would automatically get disbursed to the provinces. Although the concept in itself may have some merit in that it is a per capita distribution to provinces, it all together bypasses parliamentary intervention.

The clause as it now reads intends to amend section 29 that establishes a reserve fund. It states that moneys get placed to a reserve fund after taking into account a series of events like bad debts, depreciation and anticipated future losses. We find that some of those are calculable, but the anticipated future losses are dependent in a large part on the economy, on the interest rates and on a whole series of factors. To arbitrarily fix it at 0.5% of the housing loans does not bear a relationship to those factors.

What we have is an independent body, an actuary, that would predict what, in the anticipation of the actuary, ought to be held in reserve to cover potential losses. In my view that is a prudent way to operate. However, in the event we find ourselves in a situation where either the risk that is intended to be covered is over covered or more income is earned than ought to be earned, then perhaps CMHC has charged too much on its commercial side of the business.

No doubt in order for it to be competitive with Genworth or other institutions that are operated privately to provide the same services, it needs to establish a reserve to properly capitalize its assets to ensure if there is an economic turndown that it can cover those losses and it must have a divided of some sort at the end of the day to be profitable. In this case, it would be anticipated these would go to the Receiver General, ultimately to general revenue and disposed of as the House may decide. If we find that CMHC is making too much money or is receiving too much income, we then have to look at those who are paying the moneys into it and who are not receiving the benefit, and they are first time homebuyers.

Currently, to purchase a home at a low of equity ratio of, say, 95%, those loans are insured by CMHC which is insured by the Government of Canada that has a stake in this matter. It can provide housing to first time homebuyers at a very low down payment of 5% in this case. However, they must pay an insurance premium of roughly $2,300 to $2,700 depending on the value of the home. All this goes into the CMHC revenues.

If we find that it is generating too much income, or more than is actuarially sound or more than it needs to, this should be taken into account in the amount that is charged to first-time homebuyers, and there are number of ways of doing that. We could reduce the insurance premium, as has been done the last couple of years, by 15% in each year. We could enhance the benefits of the insurance, as it has with respect to title defects or title defect insurance, whether it relates to unknown easements, or encumbrances or any other defect that might cause a concern to the consumer. There are two ways of dealing with excess revenues.

First time homebuyers should be given every opportunity to acquire a home. Five per cent may even be too much and we should work toward a 0% down payment to encourage people who are unable to get into a home. When we look at first time homebuyers, many of them are young people who do not have a lot of assets or money for down payments. We should look at other ways of arriving at how down payments may be achieved. We need to look at other ways at to reduce what it costs them upfront.

Currently, the CMHC insurance portion is financed through the term of the mortgage, which is 25 years. When we look at a 25-year amortization at current interest rates and an insurance policy of, say, $2,300 or $2,700, it amounts to a lot of money over the term of the mortgage. Profits should be utilized at making a better product, encouraging home buying with less down payment or zero down payment and ensuring that premium rates are low rather than using those moneys to cross-subsidize some other enterprises, such as social housing or any other project.

The minister has reduced the premiums twice now, but perhaps he could reduce them more. He has used the extra funding to waive the premiums on rental buildings in rental projects. He also has put in a program of a 10% reduction if the home is energy efficient or if the home is retrofitted. I worry about that because it is like cross subsidization of an insurance premium for purposes other than for what it was intended.

We would be better served if we operated CMHC as a commercial enterprise with sound commercial practices that could compete with other private sectors on an even keel basis to bring down the rate of insurance that individuals would have to pay.

In respect of social housing programs, it is not the business of CMHC to use commercially generated profits from either the insurance business or from the lending business to make social housing type initiatives. That is something the government as a whole needs to do. It is something that the government would need to project and stand the test of the House and ultimately stand the test of the electorate in the event of an election. It is a policy consideration and that needs to be made at the government level and tested through the public.

There is no question in my mind that these initiatives are important and they need to be proceeded with, but it is something that needs to stand the test of the House and of the public in a general election.

Something like this in Bill C-363 would circumvent all of that. It would arbitrarily assess these moneys to those projects without regard to the circumstances we find ourselves in, without regard to what our future economy may be like and without regard to all the circumstances involved in deciding what should be a safe and proper amount not only in the capitalization of CMHC but in the reserve fund.

Canada Mortgage and Housing Corporation ActPrivate Members' Business

October 3rd, 2005 / 11:20 a.m.
See context

Whitby—Oshawa Ontario

Liberal

Judi Longfield LiberalParliamentary Secretary to the Minister of Labour and Housing

Mr. Speaker, I would like to add my voice to those of my colleagues who will be speaking against the proposed Bill C-363, a bill that would amend section 29 of the CMHC Act to require Canada Mortgage and Housing Corporation to distribute surpluses from its reserve fund to the provinces.

Housing means more to Canadians than just four walls and a roof over their heads. It is one of the key building blocks around which most of us build our lives, like access to education, good health care and employment. Having a safe and affordable home is a cornerstone that enables us to go out into the world and to prosper in our jobs, support and care for our families, and build the vibrant communities and strong economy upon which this great nation is based.

It is important to recognize, however, that housing needs of Canadians are as diverse as the faces of Canada itself: youth, new Canadians, single mothers, women escaping violence, young families, seniors, persons with disabilities, aboriginal peoples and individuals living in northern and remote communities. With all of these groups there is a wide range of needs.

Our government's approach is to view housing as a continuum. Through our national homelessness initiatives, communities are given the opportunity to build on their successes and focus on interventions to help prevent and break the cycle of homelessness. Through the Canada Mortgage and Housing Corporation, we seek to address a wide range of needs, from emergency shelter and assisted housing to access to market housing and independent, reliable information on the latest market trends and advances in housing technology.

Because of this need for diversity, we work with a wide range of partners. Playing a leadership role, CMHC collaborates with all levels of government, as well as with the private and non-profit sectors and community organizations, to develop workable solutions that speak to the needs of Canadians both today and tomorrow. Our vision of housing in Canada is broad and it is constantly evolving.

What does this mean for the young Canadian family looking to buy their first home or for the single mother hoping to get assisted housing with her children so she can go back to school for more training? What does it mean for the older couple living on a fixed income who need to make adaptations so that they can live in their homes independently? It means many things, but for starters it means an expanding range of mortgage insurance products that help make home ownership more affordable for Canadians. CMHC has a long history of innovation in mortgage loan insurance and in securitization that translates into products and services designed to meet the ever changing needs and lifestyles of Canadians across the country, as well as keeping financing for home ownership and rental development accessible and affordable.

In April of this year, CMHC introduced an impressive package of mortgage loan enhancements and benefits that continue to make it easier for homebuyers to take their first step into the market. This includes a further 15% reduction in mortgage loan insurance premiums for homebuyers with as little as 5% down. This is CMHC's second premium reduction for home owners in two years.

For that young family I mentioned a moment ago, these changes result in significant changes that may allow them to enter the housing market earlier and at interest rates comparable to those financing their homes with a down payment of 25% or more. This will help to get them started sooner on the path to financial security and to direct their resources toward other things, such as saving for their children's college or university educations.

As first time homebuyers assuming $125,000 CMHC-insured mortgage with a 5% down payment, a family will save $600 on the purchase of their new home thanks to the 2005 April announcements. If we were to combine the saving with the premium reduction CMHC announced two years ago, they stand to save a total of $1,200 on the purchase of their home.

The improvements do not stop there. CMHC also eliminated its mortgage insurance premiums on rental projects under both phases of the affordable housing initiative and other projects with rents that are low enough to meet the needs of households who qualify for social housing. This will result in significant savings to sponsor groups.

Housing sponsors, in addition to saving in the order of $300,000 on a $5 million loan with a value of 95%, will also be able to continue to benefit from the access of financing which mortgage insurance assures and corresponding lower interest rates.

Premium reductions of an additional 20% were also announced in April for affordable housing rental projects that met the criteria for CMHC's partnership flexibilities. On a project with a $5 million loan and on a loan to value ratio of 95%, this could amount to a savings of almost $100,000. These are substantial savings which sponsors can reinvest in quality housing projects or to use to make more units of assisted housing available.

These changes are in addition to the $1.8 billion our government is currently directly investing in housing projects for the benefit of all Canadians. In addition to the $1 billion for the federal affordable housing initiative, $405 million has been added to the supporting communities partnership initiative, or SCPI, and $384 million has extended the residential rehabilitation assistance program, RRAP.

Approximately $2 billion a year is spent on housing assistance, primarily in support of some 633,000 lower income households.

I am happy to say that for the single mother I described a few minutes ago, finding good quality assisted housing where she can afford to live safely with her children is more accessible, in part, through these programs. They can help her get on her feet and help her with her dream of picking up her education so she can work in a job she finds more fulfilling and to provide greater flexibility and security for her family.

We are also making excellent progress in moving the affordable housing initiative forward. Agreements have been signed with all jurisdictions for the first phase of the initiative, and eight provinces have now signed affordable housing agreements with the federal government.

What about those older low income couples who need to put new roofs on their houses? CMHC is making a difference for them as well. The funds available through the residential rehabilitation assistance program will help some of them, not all of them, with the costs of these repairs.

Because the housing challenges on reserves are unlike those faced by any other segment of our population, the government is also committed to improving on reserve housing conditions for aboriginal people by investing $295 million over a period of five years, of which $200 million will be invested in the first two years. The funding will help to build 6,400 new housing units and renovate 1,500 existing units.

The additional investment of $1.6 billion announced to assist Canadians, including aboriginal Canadians, in finding a safe and affordable place to call home will allow us to further address the housing gap faced by aboriginal Canadians. This will help us to begin the true transformative change that is required to help build a solid platform for longer term sustainable solutions from the Canada-Aboriginal Peoples Roundtable.

The federal government has a responsibility to help meet the housing needs of all Canadians.

Bill C-363 zeros in on only one part of the housing continuum, assisted social housing. It overlooks the real need to make housing more available and affordable for Canadians of all income levels, including those with special needs and those who need special housing.

In addition, the bill chooses only one delivery method, that of the provinces. In reality, it takes many partners to meet the diverse housing needs of Canadians. As I mentioned earlier, CMHC works in close partnership with a wide variety of industry, non-profit and community organizations to make a choice of innovative, affordable housing solutions available to all Canadians.

In fact, we have recently held a series of national consultations to gain a better understanding of the housing affordability challenges facing Canadians. These consultations will guide us in the development of a partnership based Canada housing framework that builds on the successes of our existing programs and introduces new initiatives.

Once in place, the framework will serve as a guiding plan for all new federal investments in housing, one that recognizes the housing needs of all Canadians, and which is based on the collaborations and successes we already have achieved. Most important, it will seek to build on and foster partnerships with all levels of government.

While the interest of the member opposite in housing is commendable, I would have felt a little happier if he had felt the necessity to support Bill C-48, which added $1.6 billion into the housing economy.

Canada Mortgage and Housing Corporation ActPrivate Members' Business

October 3rd, 2005 / 11 a.m.
See context

The Deputy Speaker

On June 3, 2005, at the commencement of debate on second reading of Bill C-363, an act to amend the Canada Mortgage and Housing Corporation Act (profits distributed to provinces), a point of order was raised by the Parliamentary Secretary to the Government House Leader concerning the need for this bill to be accompanied by a royal recommendation. A submission on this matter was also made by the sponsor of the bill, the hon. member for Beauport—Limoilou. The Chair thanks both members for having raised this matter at an early opportunity.

Bill C-363 proposes that the Canada Mortgage and Housing Corporation distribute any surplus from its reserve fund to the provinces for social housing purposes, for the supply of quality housing at affordable prices, and for an increase in housing choices for the people in the provinces.

The parliamentary secretary argues that the transfer of such monies to the provinces constitutes new spending for a new purpose and ought to be accompanied by a royal recommendation.

The Chair has carefully reviewed this matter, especially the details pertaining to the operation of the CMHC reserve fund. Currently, section 29 of the Canada Mortgage and Housing Corporation Act prescribes how profits made by CMHC are credited to the CMHC reserve fund, and how amounts in that fund exceeding limitations established by the Governor-in-Council are then transferred to the Consolidated Revenue Fund.

The reserve fund of the Canada Mortgage and Housing Corporation has a unique character. Subsection 29(2) of the act explains that the board of CMHC places its profits in this fund to cover costs related to its operations:

--the profits of the Corporation in each fiscal year remaining after such provision...as the Board thinks proper for bad and doubtful debts, depreciation in assets, anticipated future losses and all other matters whatever that in the opinion of the Board should be provided for in carrying out the purposes of the Corporation shall be credited to the reserve fund....

In other words, the reserve fund is an operational account that CMHC uses to conduct its corporate business. Until amounts from the reserve fund are actually transferred to the Consolidated Revenue Fund each year, they are not available to the Crown for general appropriations.

Although the parliamentary secretary acknowledged that the reserve fund is not part of the Consolidated Revenue Fund, he did argue that because monies from the reserve fund are integrated into the Consolidated Revenue Fund on an annual basis they may be considered to form part of the general revenues under the control of the Crown.

The Chair has some difficulty with that statement.

The narrow question which the Chair must decide is whether the financial initiative of the Crown is being infringed through the provisions of Bill C-363, that is, whether the bill seeks an authorization for appropriations to be made out of the consolidated revenue fund without being first recommended by the Crown.

The Chair is not convinced that this is the case. Bill C-363 proposes that monies within the control of CMHC—not the Crown—be dedicated for a particular purpose. A royal recommendation is required when a bill seeks an authorization to withdraw monies from the Consolidated Revenue Fund. Is Bill C-363 seeking to withdraw monies from the Consolidated Revenue Fund? I would conclude that it is not. Bill C-363 is preventing CMHC monies from being placed in the Consolidated Revenue Fund by having them used for another purpose. The transfer of monies from the CMHC reserve fund to the Consolidated Revenue Fund—or in this case to the provinces—is not a matter relating to the appropriation of monies from the Crown. Therefore, Bill C-363 does not infringe on the financial initiative of the Crown.

The parliamentary secretary also cited a May 9, 2005 ruling, which among other things addressed the objects, purposes, conditions and qualifications of the royal recommendation. He argued that Bill C-363 is adding a new purpose which was not contemplated in the original legislation establishing CMHC and would therefore need a new royal recommendation. Again I wish to stress that the original royal recommendation strictly applied to matters concerning the objects, purposes, conditions and qualifications of an appropriation of monies within the control of the Crown; that is not the case with Bill C-363. As Bill C-363 does not appropriate from the Consolidated Revenue Fund, it cannot be considered as altering the purpose of the original royal recommendation.

Therefore, in its present form, this bill can proceed through the normal stages in the legislative process without the need of a royal recommendation.

The Chair once again thanks the Parliamentary Secretary to the Government House Leader and the hon. member for Beauport—Limoilou for having raised this matter at an early opportunity. By doing so, they have provided the entire House with the clarity it needs to take an informed decision on this piece of legislation.

Canada Mortgage and Housing Corporation ActPrivate Members' Business

June 3rd, 2005 / 1:55 p.m.
See context

Conservative

Dick Harris Conservative Cariboo—Prince George, BC

Mr. Speaker, I am pleased to speak to Bill C-363. I am always pleased to be in the House at the same time as the hon. member for Glengarry—Prescott—Russell because he is such a great presenter. He never misses a chance to ensure that in his speech he manages to give the government some credit for jobs that are done actually by people who are at arm's length from the government.

I would like to congratulate the management of the CMHC who has been able to operate that institution despite the bad management of the government. Hats off to the CMHC and thumbs down to the Liberal Government of Canada. That applies in many jurisdictions across this country, in provinces and cities, that manage to operate in a fiscally sound with responsible manner despite the bad management of the Government of Canada.

While Bill C-363, an act to amend the Canada Mortgage and Housing Corporation with regard to distributing surplus profits from its insurance fund, is a noble bill, my party cannot support it because we think the direction of the CMHC to get into the social housing market is actually a little misguided. We do not believe the CMHC should be directing its surplus funding into the social housing market because it would take the planning by government departments, which are responsible for social housing, out of the picture. It would allow the CMHC to simply turn over surplus funding to social housing programs without having to bring that to Parliament.

I do not think social housing needs should be met by profits generated from the CMHC, particularly profits realized from the CMHC insurance fees. Funds for social housing investments of various types should originate from federal budgets and be appropriated by Parliament giving parliamentarians the right to vote on expenditures as opposed to making the expenditures a statutory requirement. The mortgage fund of course should be operated on a sound commercial basis in accordance with sound actuarial practices, and premiums should be set accordingly.

I noticed my hon. friend made some very nice points, one being that the CMHC had reduced its mortgage premium of 30% about two years ago and that it has another 15% premium reduction on rental development. That is a good thing because what it is doing is operating the CMHC insurance fund using prudence and taking the responsibility to pass those surpluses on to the users of the fund, the people who apply to CMHC to enable them to buy a house with little or no down payment where normally they would not be able to do that.

It is rather coincidental that I am speaking on this today because my son and his new bride who live in Calgary just bought their first house. Without the CMHC and the provisions that were made available to them they would not have been able to buy that house. Hurray for the CMHC again.

I have to do some comparisons. When CMHC applies surpluses to the lowering of premiums, it could teach a lesson to the EI people. It could also teach a lesson to the government. The government should take an example from CMHC and see how it has applied surpluses to a lower premium. If only it would understand that this is the proper way to do things, it might apply reductions to the EI premiums at both the employer and the employee level to bring the premiums down to a level that actually relates to the money needed to sustain EI as well as maintain a rainy day fund in case of a downturn in the economy.

Instead, the government has not done that. Over the past 12 years, because it has refused to lower premiums in the EI program, it has amassed a $40-some billion surplus which did was not returned to the payers of the premium. That $40 billion disappeared into the general revenue of the Liberal government.

Despite calls from every party in the House, working Canadians and employers across the country, the government is still maintaining an abnormally high premium rate and an abnormally high surplus. That is far above the rainy day fund needed in case of an economic downturn. It refuses to acknowledge that the people who are paying the bill deserve to have a break on premiums.

After all these years we, the Bloc and the NDP have been talking about it, but the Liberals in their arrogance and in their desire to have this pot of cash at their fingertips so that they can feed it out to their political whims, have ignored that.

Bill C-363 would impact on general revenues by reducing CMHC profits. It would go into social housing. That is not the place that these surpluses should go. Social housing is part of another department of the government and is accountable to Parliament. That is how it should be. Potentially, by passing this bill, it could easily allow for higher than necessary insurance premiums. That would be unfortunate and it is certainly not what we want in Canada.

CMHC would be allowed to make social housing policy decisions without the input of parliamentarians. It would have the potential to utilize higher than necessary premiums for purposes other than insurance risks. Let us be clear. CMHC has a mandate. It has worked very well, as was indicated by my colleague from Glengarry—Prescott—Russell, and certainly, members of the Bloc know that CMHC is an organization that is capable of generating excess revenue from its operations.

It appears to be prudently run with good management. But what is not realized is that the money should be returned in the form of lower premiums which would be even more help to young people such as my son and my daughter-in-law to enable them to buy their first house.

I spoke about the example that CMHC is setting by returning surplus funds into lower premiums. That is the thing to do. I would just mention again that the Liberals should take a lesson from the way CMHC has been responsible in recognizing who is providing the income to it, the premium payers. If the EI people would recognize that too, and recognize that by keeping artificially high premiums they are in fact decreasing the opportunity for the creation of new jobs, decreasing the opportunity for businesses to have the money to expand and create new jobs, and they are in a way putting blockades on the economy taking some leaps ahead.

We are going to oppose this bill because, while it is a noble thought, it simply does not work with the mandate or the successful operation of CMHC. I am sure that Parliament will see that Bill C-363 is not a bill that we must pass into legislation at this time.