Thank you, Mr. Chair and members of the committee, for this opportunity to present the British Columbia Real Estate Association's recommendations to the 2007 federal budget.
My name is Janet Cunningham. I'm a Lower Mainland realtor and I am chair of the BCREA's government relations committee. BCREA is the third largest professional trade association in B.C., representing the 12 real estate boards and their approximately 16,500 realtors. We are here today to offer a provincial perspective on the importance of the budget recommendations presented by the Canadian Real Estate Association, which is our national association.
The real estate sector's contribution to the economic health of our province and to the country overall is well documented. Here in B.C., housing is a key economic driver and a measure of the quality of life across the province. We are confident that the recommendations noted in our submission will provide housing opportunities for people in British Columbia and across Canada.
Our national association will examine several of these recommendations in detail when they appear before you later this month, but today I would like to draw your attention to three in particular: assistance for owners of leaky condos, an inflation adjustment to the home buyers' plan, and assistance for aboriginal housing.
The Government of Canada's commitment to work with the Government of British Columbia in pursuit of a fair program of relief for owners of leaky condos is critically important. It offers hope to thousands of people who have lost their homes and their investments. The Prime Minister has specified that the program will include a review of the handling of construction regulations and the role of Canada Mortgage and Housing in the leaky-condo situation. Recently, the Prime Minister and the federal minister responsible for housing stated that leaky-condo-related cases currently before the courts do not impede the government's ability to proceed on this commitment.
Therefore, BCREA recommends that the Government of Canada honour their commitment and work without further delay with the Government of B.C. in pursuit of a fair program of relief for owners of leaky condos.
Next are inflationary adjustments to the home buyers' plan. The home buyers' plan is a Canadian success story. Through this plan, since 1992 nearly 1.4 million people aged 25 to 64 have borrowed up to $20,000 from their RRSPs to purchase a first home. In dollar terms, approximately $14.2 billion has been withdrawn to help finance home purchases. Since that time, prices for all types of housing in B.C. have increased, due to market demand and inflationary forces. Unfortunately, the plan's withdrawal limit has not been adjusted to reflect these values, these factors. As a result, the plan accounts for a shrinking portion of the down payment required to purchase a home and forces users to finance larger mortgages, causing their debt burden to rise even while interest rates remain low.
The Canadian Real Estate Association's presentation to this committee will demonstrate that the maximum loan available under the plan has been losing ground as a percentage of rising average resale home prices for more than a decade. The average home price rose 51% nationally between 1992 and 2004. During the same period, the consumer price index climbed by 25%. If the maximum loan available under the plan were adjusted to account for inflation, it would stand at $25,000 today. In B.C. the real estate market continues to perform well in most areas. Although year-to-year dollar volumes are up more than 12% from this time last year, the number of homes sold is down by almost 5%. We feel that the erosion in housing affordability is one of the factors at the heart of this.
Therefore, we recommend that the Government of Canada update the home buyers' plan by raising the maximum withdrawal possible to $25,000, and adjust this amount every five years to account for consumer price inflation.
Next is assistance for aboriginal housing. In B.C. and across the country, aboriginal housing is in need of immediate remedial action. It is seriously deficient, both on and off reserve. Deteriorating housing units, the infestation of mould, and the absence of consistent and effective housing administration are just some of the issues.
In June 2006, CREA presented a paper at the World Urban Forum that provided an overview and explanation of current aboriginal housing conditions. It became clear that while aboriginal housing as a sector is in bad shape, models exist within aboriginal communities that can serve to turn it around and make good housing the norm rather than the exception. Measures to help address this situation in B.C. may be forthcoming, in part by our provincial government's new housing strategy, portions of which are being announced today in Victoria.
However, provincial efforts must be supported through actions undertaken by our federal government. Therefore, BCREA recommends that the Government of Canada commit increased funding to assist aboriginal housing, both on and off reserve; develop a plan to address the problem of mould in aboriginal housing; support a results-oriented conference to help improve first nations housing; demonstrate and expand the private sector's role in assisting the effort; and initiate consultations leading to the development and introduction of legislation to provide a modern alternative to the Indian Act for land ownership and management.
This concludes our presentation. I am happy to answer any questions you may have later.
Thank you.