Good afternoon, Mr. Chair. Thank you for the opportunity to speak to the committee.
The Canadian Home Builders' Association represents the Canadian residential housing industry of builders, developers, trade contractors, and the like. I'm a home builder and land developer based in Burlington, Ontario, and with me today is Richard Lind, a renovator from Bridgewater, Nova Scotia.
We hope that you've had the opportunity to read our submission. I must say that it does touch on a broad range of topics. In our introduction we note that government mandated costs, regulatory burden, and skilled labour shortages are amongst our greatest challenges. In the context of those challenges we'd like to concentrate our remarks today on four key areas: the indexation of the GST rebate for new home buyers, skilled labour shortages, infrastructure investment, and the underground economy.
Turning first to the GST indexation, I must point out that as an industry we are pleased about the reduction of the GST from 7% to 6%, and we look forward to a further cut. Certainly this is a step in the right direction. But in 1991, when the GST was introduced, the government made a commitment that the GST rebate would be indexed, and this has not occurred. Over time, since 1991, prices have risen significantly and the rebates need to keep pace with those price increases. More and more home buyers are unable to receive the rebate.
In page 10 of our brief, we have a chart that gives you an indication of the significance of the problem. It's not just in major markets, although, of course, that's where the biggest jumps are occurring. As an example, in Vancouver in 1991, only 24% of the houses being purchased were priced at above $350,000. Today, in 2006, 97.6% of the houses were priced higher than $350,000. As a reminder for the committee, the GST rebate was a sliding scale between $350,000 and $400,000, so the effective tax over that $100,000 would eventually hit 7%. Just as another example, in Ottawa--taking this municipality--in 1991, 6.1% of all homes purchased were greater than $350,000; today 47.1% are greater than $350,000.
I should note, though, that it's not only new home buyers who are affected by this, because of course resale or used homes will keep pace with new home prices. So whether people are buying new or used, they are affected by this.
With respect to skilled labour shortages, all Canadians now understand the serious nature of the problem in all sectors of our economy. Of course, our industry is no exception, and we've made representations to this committee in the past in this regard. It's time to move past research and discussion and take real action.
Our industry has developed a human resource development action plan, and in this plan it calls for the federal government to play a key leadership role and to take forward action across the country to address the development and delivery of training in the residential trades through Canada's existing education and training system. This is all about capacity building. It's time to get on with doing the work.
Of course, related to this is the need to address immigration issues as a way of helping to address skilled labour shortages in the short term. Specific actions there would include changing the language and the range of employment requirements to remove barriers to ensure that skilled residential construction trades are included in the list of temporary foreign worker programs and to resolve the issue of undocumented workers without recourse to deportation.